Home Investment Guide To Invest In Share Market in India for beginners 2021

Guide To Invest In Share Market in India for beginners 2021

Guide To Invest In Share Market in India for beginners 2021
Guide To Invest In Share Market

How To Invest In Share Market in India is a beginner guide. Now a day’s many people are asking about the share market. I mean they want to start the investing but they don’t know from where to start.

Financial security and independence has become more important than ever and investment in share/stock market can be good way to achieve financial goals. When you invest , you don’t work for money  rather your money work and make more money for you. Investment can fight for you against inflation. I believe that you already have decided to invest in share market. Before you actually start this adventurous journey as an investor ,  you need to understand some basic concepts related to the stock  market.

The topic is wide we are not only talking about as beginner guide but also some other information on how to invest in share market.

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Let’s start with basic requirements. This is a starter guide.

Here is a 5 step guide to help you out:

1. Basic Requirement

Nowadays government linking everything with Aadhaar card and that’s why the requirement of the UID is on top.  It’s a 12 digit numerical unique identification number. Issued by Govt. of India.

Nowadays Aadhaar is required to Open Bank account, investing in mutual funds, filling Income Tax returns etc.

Also, the first thing you will need to be able to invest in shares in India is an Aadhaar card, so get it first.

PAN or Permanent Account Number is an essential prerequisite for entering into any financial transaction in our nation.

It is one of a kind 10 digit Alpha-Numeric number allotted to a person by the Tax Authorities for evaluating their duty liabilities.

PAN is anyway required for opening a Bank Account, putting resources into common assets, Mutual Fund investment,  filling Income Tax returns and so forth.

Also, the first thing you will need to be able to invest in shares in India is a PAN card, so get it first.

You might wonder is PAN first or Aadhaar first, Off-course PAN Is first but Aadhaar is also Mandatory nowadays.

2. Share Brokers

The broker is a middleman between You & Mr. Market. You can not go directly and invest share market in India. Before selecting broker it is important to understand the types and services provided by the brokers.  Mainly two types of brokers include discount brokers and full-service brokers.

Things should be kept in mind while selecting the stockbroker 

  • Requirements- While selecting the broker one should be very clear, whether he wants to do trading or investing. Your selection of brokerage firm depends on theses as well. Fees and Charges are very on both the cases.
  • Cost & Efficiency- There are different kinds of fees associated with a broker.
    • There are account opening fee, transaction fee, maintenance fee etc. Look for fewer transaction fees if you trade more often, and low maintenance fee if you hold the stock for a longer duration.
  • Software / Platform- Software is nothing but the thing will be used while buying and selling the shares. Basic things software should be user-friendly. Brokerages are increasing capacity to utilize advanced technology through software development and market research tools. The main use of software to help you in uniform decision making.
    • Time is also important in share market. in conclusion, two things to rememberer One is Ease of use and second accuracy provided by the software. Must have the latest technology.
    • The main use of software to help you in uniform decision making.
  • Research facilities- Different brokerage house have the different platform for trading.
    • Each one has different research facility. Nowadays many software is coming with the Artificial Intelligence (AI). AI is still in developing phase but you can use as a backup for your research.
    • How To Invest In Share Market in India needs a lot of data to do the research.
    • Make sure your broker has access to past data of the share market. Past data will not give any kind of guarantee but it will help you to understand the patterns.
  • The reputation of the broker- Why reputation? because you don’t get the cheat.
    • Many small brokers and so has the history of cheating. You need to give them the Power of attorney while opening the account. So, he has all rights to do with your account. He can sell or buy on your behalf.
    • Therefore reputation of the broker is very important. Through reputation research, you will be able to see any issues complaints that exist against a broker or browse their personal experience working with investors in the market.
    • Choose a broker who is highly experienced and has an up to date knowledge of the inner workings and trends of the market.

Types of Brokers

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Mainly there are two Types,  Discount Broker and Full-Service Broker.

Discount Broker-

nowadays they are playing a very important role.. They are giving very tough competition to our traditional/ full-service brokers.  Discount brokers basically provide the trading platform to investors/traders. No advisory service provided by them. why they famous because  Discount brokers charge low brokerage.

Derivatives, currencies and commodities at Rs 10/per trade (lowest in the industry), irrespective of the invested amount. Over the last few years, discount brokers have established themselves in the market and are giving a neck-to-neck competition to full-service brokers who have been in the industry for quite a long time.

Major Indian Discount Brokers :

Name of the BrokersAccount Opening FeesMaintenance ChargesBrokerage
ZerodhaRs. 300Rs. 3000.01% or Rs. 20/executed order whichever is lower
RKSVRs 200Rs 150 per yearRs 20/trade or 0.01% whichever is lower
Wisdom CapitalFreeLifetime Free0.00 % & or Rs. 9 Per Trade
SAS OnlineRs. 300Rs. 200Rs 9/trade
5PaisaRs. 650(1 time)Rs. 400/yearRs 10 /executed order
Full-Service Broker

Full-service brokers or traditional brokers are brokers who provide advisory and trading facilities in stocks, commodities and currencies. Traditional “full-service” brokers do more than just facilitate the buying and selling of a stock or bond. Since you are getting personalised recommendations and service, traditional brokerages often come with higher fees, generally charging 1-2% on the assets managed.

These brokers charge commission in percentage terms on the total amount of trade clients execute. Full-service brokers operate out of many offices and branches across the country,

Traditional brokerage fees are something to carefully consider, especially if you are investing and planning for your retirement. But if you really don’t want to invest on your own—instead preferring personalized advice and guidance—then a traditional brokerage could be the right choice.

Major Indian Full-Service Brokers :

Name of the BrokersAccount Opening FeesMaintenance ChargesBrokerage
Angel BrokingRs. 350Rs. 3000.50%
AXIS Direct BrokerageRs 999Rs. 4000.50%
HDFC SecurityRs 999Rs. 550Higher of 25 or .5%
ICICI DirectRs 975Rs. 500(mail statement) or Rs 450 (email)0.55% & for Intra day 0.05%

This is the Second Step for in, how to invest in share market in India.

3. Depository Participant

Now you must ready with the application form for your favourite broker. Wait we have someone to be intermediaries between you and Mr. Market. Guess who? calledDepositary Participant.

They are the intermediaries between the depository and the investors.

In India, there are two depositories: NSDL and CDSL  which stands for National Securities Depository Limited and Central Depository Services Limited.

These two have their agents in the form of Depository Participants who will provide an account to store the shares you hold. It’s either NSDL or CDSL  no more options here.

4. Get a Demat and Trading Account

We are at 21 century and here we are not allowed to hold shares in Paper format. So share must be held in Dematerialised from. This is next step in how to invest in share market in India. Once you selected your broker and DP.

You need to open a Demat and Trading account.

So Your Trading account will be at either in Discount broker or Full-service broker. You need to open the trading account with them. To hold the share you bought you need a Demat account.

The Demat account will be opened at Depository participant mentioned in the third step of this article. It will be NSDL or CDSL as the case may be.

The Demat and Trading accounts will be opened simultaneously as it is one without the other is useless for investing in shares in India.

In a nutshell to buy or sell you need a trading account. To keep your shares which you bought you need a Demat account. So they are together only.

5. Get Ready to Buy and Sell

How to invest in share market. We started from basic requirements, where we look for PAN & UID. Next step was selecting the correct broker.

Hope you selected the correct broker based on your requirements in step Two. You do not have more choice in selecting Depository Participants in India.

So now we are on the field. First, you need to upload money on your broker wallet. I mean you can not buy unless you have funds in your account. You need to communicate the buy quantity with the broker.


Before you start to buy and sell you need to understand few Basic things here. Each broker has this minimum four kind of buying or selling order option.

  • Market Order
    • Here you do not have the option to select the price. when you place an order and select Market. The system will automatically place an order at market rate.  So it is the best price available to buyer or seller.
    • If you see in bellow image, price tab is non-editable. as a result, the system will buy or see at best match price.
    • You can see if you want to buy HDFC Shares at market price, The tab for a price is not active.

Limit order

  • Here you have the option to select the price and
  • it will be executed only when it reaches the limit given by you.
  • See bellow as an illustration, for how to buy or sell limit order in Zerodha.
  • You must be noticed, the price tab is active now hence you can place the

Stop Loss (SL) order and Stop Loss Market (SL-M) Order- 

  • When you are holding a particular stock/F&O/commodity. Fear the losses that can happen when the price starts moving against you.
  • You place an order to limit such a loss it is called as a Stop Loss order.
  • In fact, the difference between a stop loss (SL) and a normal order is the trigger price
  • In a stop loss order you choose limit or market, but with a trigger price.
  • What a trigger price does is that it activates your order which otherwise is inactive. (Ref- Zerodha.com)
  • In a normal order, you get to choose either limit order or market orders.
  • See below images for each one as an illustration.

Let’s say you want to buy 10 shares of Maruti when it reaches a price of Rs. 9000, you have to inform the same to you broker; Share of Maruti. Quantity: 10, Price: 9000. In case of online broker too, they usually have customer care numbers where you can place your order if you do not have access to the internet at that point. Alternatively, you can log in to the portal via Userid and Password.


Let’s say now you want to sell the shares. Sell: Maruti: 10 Shares, Price: 9110. Once share price reaches to given limit, sell order will be executed.

However, the buy and sell orders remain valid only up to a certain time, usually the same day or the next. Your broker will inform you of the same.

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