How to invest in stock market in India

Steps to invest in stock  market in India ,Open a demat and trading account, Transfer amount in  demat account, Stock selection to buy or sell ,Perform buy or sell activities in trading account, Regular monitor your portfolio

“How to invest in stock market in India “ has become the most hot topic in the finance space . These days in  stock market not only renowned and established investors are performing, rather youngsters and newbies as  retail investors are trying their luck.

These new investors are learning and using this art in the stock market. 

As per the  recent reports from NSDL and CDSL, the number of demat accounts in India has crossed 10 crores in Aug,2022  .The figure of the demat account was 4.09 crore in March,2020 before COVID outbreak which has doubled now.  

How to invest in stock market in India

How to invest in stock market in India

Though investing in the stock market looks simple  but it is not as  easy as it seems .

Investing is a complex subject to understand and acquiring only superficial knowledge can result in huge losses to the retail investors . If you follow the system of investing ,investing  becomes a set of easy rules. 

Steps to invest in stock market in India 

The whole investing process in stock market needs concrete planning and implementation . The steps to be followed for investing in the stock market may be summarised in 5 steps .

Steps to invest in stock market in India

Open a demat and trading account

The beginning  step to step in the field of  investing in the stock market is to select the best demat account . The criteria for selecting a demat account can vary for individual persons like low brokerage ,service or security etc.

Nowadays ,you may start your demat account online on a click .The demat account is activated on the same day or next day.

The broker needs a KYC application form to be filled by you. The required information is to be provided by you to the broker for validation .The documents needed for opening demat account are :


      1. Identity proof : Passport ,Voter ID, Driving Licence ,PAN card or Aadhar 

      1. Latest passport size photographs

      1. Address proof like Passport, Voter ID, Ration Card,, Driving Licence, Bank Passbook, Electricity Bill etc

      1. PAN card copy

    Once these documents are submitted along with the application form ,the broker will open a trading and demat account in your name. 

    Transfer amount in  demat account

    Once the demat account is activated ,you may connect the demat account with your bank account .

    The amount can be transferred in demat account only through your linked bank account .However ,you may change the linked account later as per your requirement .

    The amount can be transferred to your demat account through net banking /NEFT or UPI from your bank account . The amount will start showing once the amount transfer completed 

    Stock selection to buy or sell

    This is the most important step to invest in the stock market . For researching the stock selection ,

    as per criteria of holding time period you may have two methods 


        1. Fundamental analysis

        1. Technical analysis

      Normally for long term investment, an investor should shortlist fundamentally strong companies with high conviction for future growth . These companies are having high ROCE and high profit growth just like coffee can portfolio .

      These stocks are to be held for long terms for creating wealth. 

      There are other ways to screen the stocks for long term investments. However to get the best results ,technofunda investing i.e blend of both technical as well as fundamental strategies works best for the investors. 

      On the basis of market cap, the stock selection criteria can be based on 3 categories :


          1. Small cap companies

          1. Mid cap companies

          1. Large cap companies

        As per personal finance goals ,the stock investing can be classified in 


            1. Growth stocks investing

            1. Dividend paying stocks

          As per type of market place the investing is divided into two parts: 

          Primary Market

          In the primary market, companies get listed for the first time launch an initial public offering (IPO). In this procedure ,you have to apply for the IPO lot and the amount id blocked in your bank account .

          Once the lot of these shares is allotted in your name ,the amount is debited from your bank account  and shares are credited in your demat account 

          Secondary Market

          Once the stocks of any company are listed in stock market ,further transaction are carried out in the secondary market . All the stocks are traded in NSE or BSE or any other exchange in the secondary market .

          Perform buy or sell activities in trading account

          As per your investing strategies ,you may start trading stocks in your trading account .Methods for You can select the stock and click on the buy option. You can buy stocks at the market price or set a limit price of your choice.

          Make sure you have sufficient funds to buy the stock otherwise your order will be cancelled by the stock exchange.

          Role of broker to help you in trading .Your broker will : 


              1. Guide you regarding day to day transactions and troubleshooting in trading in the stock market.

              1. Help  buying and  selling stocks.

              1. Arrange required information and research regarding investment options currently  available at the stock market.

              1. Provide  regular reports and MIS for your market transactions 

            Regular monitor your portfolio

            As an  aware investor, you should keep a track on your performance on the portfolio . You should regularly check  your buy and sell order book and transaction history . 

            The complete portfolio will be visible in your demat account .

            As per criteria on stocks ,you may have portfolio of two criteria :


                1. Concentrated portfolio

                1. Diversified portfolio 

              Both the strategies work as per your financial targets and knowledge of the stock market .

              Renowned investor and youtuber Pranjal Kamra has explained knowledge of stock market beautifully in this video.

              How to invest in stock market in India

              Conclusion : Key Takeaways

              Though I have tried to answer the question -How to invest in stock market in India? ,but still lot of things can be added in this subject. Th

              Investing in stock market is not the speculation but it is the serious system of earning decent return .

              Investing in stock market is to be learned and the skill is required to invest in stocks.

              Through investing ,an investor puts his money to work for him and he can earn passive income.

              The investing is to be done under guidance of a mentor or financial advisor to protect the capital .

              To avoid risk and losses, an investors should start investing in mutual funds with small amounts and later on he /she can increase the portfolio .

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