Stock Market Learning Blog


Monday, May 11, 2020

What is Share Market and How it works

What is Share Market and How it works

Hi, All in this post we will discuss what is share market and how its works most of the persons are interested in the stock market, but they have a fear and little bit confusion they don’t have any idea about it. So lets you have look at my article,

I think after reading my article you get a basic idea about what is stock market, how is the market in India. for example, all start with a company lets imagine an XYZ company is good performing in their sector the company owner discussed to expand their business but they won't have much money to invest in a new venture the biggest source to raise funds is to borrow money from banks and issued bonds but they want to pay interest that increases debt to the company along with an interest but the only way to raise their capital without paying interest is issuing shares to the public and the answer is public.

How it works

the company issue the little bit ownership to the public and here the begins the company in the stock market a stock market is a place where the company presents their ownership to the public in the form of stocks and the major people ask why we want to buy the stocks of the company is totally depends on the company revenue, profits, sales, earnings etc.. if the people think the company able to perform well in future then they will buy the stocks of the company and take the portion of ownership of the company then the company able to pool the capital or money to a new venture a part of the company in generally

I tell about how real owners or promoter issue their share the promoters keep some portion of ownership with them in hands for example in an understandable and simple way

    • the company total shares are 10000 shares they will issue the only 7000 shares to the public the remaining 3000 shares will keep us as a promoter shares the 70% of shares will issue a portion of raising funds from the public the promoters shares are 30% in the company in the product
    • total shares issue in public is 7000 each share value is ex 100rs the company receives the money                                                 
    •   7000*100= 700000

    the total market capitalisation is 1000000 included promotors shares now the company is structured and planned to issue the shares when first time the company enter into the stock market it has to provide an offering price of the shares this is called IPO (initial public offering ) is a primary market after selling all shares the company goes into the secondary market here the public exchanges their ownership of a company based on their performance haa it's over this a story how the company enters into the stock market stock market summary: stock: in general words the stock has defined the ownership of any company as u buy more shares of a company it may increase the ownership of the company. shares and equity are the same things

    Stock market

    A stock market is a place and platform where the buyers and sellers trade their shares to the public and where the company receives the money from the public throughout exchanges and stockbrokers in general stock market splits into two same sections related to the stock market is the primary and secondary market

    Primary market

    the primary market is a company enters into the stock market they issuing shares to the public in first-time initial public offering in the primary market only have a buyer who is directly purchasing a share from the company

    Secondary market

    The secondary market is a place where the buyers and sellers exchanges their ownership based on company past and future performance

    Market capitalization

    market capitalization and market cap both are same words its refers to the total share of the company and the market value of the shares and multiples the shares value than the total the market price of the share will define

    Initial public offering

    The IPO is the first time the stock of a company is offered to the public the most of the IPO's are young and smaller companies will issue the shares to raise the funds

    Happy Investing.....


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