Share Market

How to Purchase Shares in India?

How to Purchase Shares in India?

Ready to start investing in the vibrant Indian stock market? Whether you’re a seasoned investor or a newbie looking to dip your toes into the world of stocks, this guide will walk you through the process of purchasing shares in India. From obtaining a PAN card to selecting a reputable broker and placing your first trade, we’ve got you covered! So, let’s dive in and unlock the secrets to navigating the exciting realm of Indian stock trading.

How to Purchase Shares in India?

1. Obtain a PAN Card

How to Purchase Shares in India?

Obtaining a PAN card is the first step towards purchasing shares in India. This mandatory identification document, known as the Permanent Account Number (PAN) card, is required for any financial transaction in the country. To apply for a PAN card, you can visit the official website of the Income Tax Department of India.

The process to obtain a PAN card is relatively straightforward and can be done online. You will need to fill out an application form with your personal details, such as name, date of birth, and address. Along with the application form, you will also need to provide proof of identity and address documents.

Once your application is submitted, it will be processed by the Income Tax Department. After verification of your documents and information provided, you will receive your PAN card within a few weeks.

Having a PAN card not only allows you to invest in shares but also enables you to file income tax returns and conduct other financial transactions seamlessly. So make sure to complete this initial step before diving into the exciting world of stock market investing!

2. Choose a Broker

how to purchase shares in india

When it comes to purchasing shares in India, selecting a reliable stockbroker is crucial. You want someone who is registered with the Securities and Exchange Board of India (SEBI) to ensure they adhere to the necessary regulations. Luckily, there are several reputable brokers in India that you can choose from.

One well-known option is ICICI Direct. They offer a range of services and have been serving investors for many years. Another popular choice is Zerodha, which has gained popularity due to its low brokerage fees and user-friendly platform.

Before making your decision, consider factors such as brokerage charges, customer service support, research tools availability, ease of use of their trading platform, and any additional features or benefits offered by each broker.

Remember that choosing a broker should not be taken lightly, as it will impact your overall investment experience. Take your time to compare different brokers’ offerings before making your final decision.

3. Open a Demat and Trading Account

Open a Demat and Trading Account

Now that you’ve chosen a reputable stockbroker, the next step is opening a Demat and trading account. A Demat account digitally holds your shares, eliminating the need for physical certificates, while a trading account allows you to participate in the stock market actively.

Most brokers offer online registration, requiring an application form and necessary documents like proof of identity and PAN card. Once submitted, your application is verified before account activation.

Having both accounts sets you up for seamless investing in Indian stocks, providing secure shareholding and access to various investment options on exchanges like BSE and NSE. Open those accounts and embark on your investment journey!

4. Submit Required Documents

Submit Required Documents

When opening a Demat and trading account, you need to provide essential documents for identity verification and regulatory compliance. Start with proof of identity, such as your Aadhaar card, passport, or voter ID. This establishes your personal details.

Include proof of address, like a bank statement or utility bill, to confirm your residence. The PAN card, a unique identification number from the Income Tax Department, is crucial for financial transactions in India.

Include a passport-size photograph to ensure proper linkage with your physical appearance. Submitting these documents showcases your commitment to legal procedures and helps build trust with your chosen broker.

5. Fund Your Trading Account

Fund Your Trading Account

Once your trading account is set up and ready to go, the next step is funding it. This crucial step allows you to have the necessary capital to start investing in shares. Thankfully, there are various methods available for transferring funds to your trading account.

The most convenient option is online banking or net banking. With just a few clicks, you can transfer money from your bank account directly into your trading account. This method ensures quick and hassle-free transactions, allowing you to begin investing without any delays.

Another option is through a check deposit. Write a check with the desired amount and deposit it into your broker’s designated bank account. While this method may take slightly longer than online transfers, it still provides a secure way of funding your trading account.

Before making any transfers, ensure that you have sufficient funds available in your bank account and consider setting aside an amount specifically for stock market investments. It’s always wise to only invest some of your savings at once but rather diversify them across different assets.

6. Research and Select Stocks

Research and Select Stocks

Before investing money, conduct thorough research on intended stocks. Study financial statements for insights into a company’s performance and potential growth.

Stay updated with impactful news, monitoring developments, industry trends, and regulatory changes. Analyze market trends using indicators like moving averages and RSI for informed decisions.

Reading analyst reports from reputable sources can provide expert opinions on specific stocks and evaluate financial performance, industry positioning, and growth prospects. This comprehensive research equips you with the knowledge needed to make educated investment choices.

7. Place Orders

Place Orders

Placing orders to buy shares is a crucial step in investing in the Indian stock market. After researching and selecting stocks, you can take action through your trading account, specifying the quantity and price for your purchase. There are two types of orders: market orders and limit orders.

A market order buys shares at the prevailing market price for quick execution, suitable when immediacy is crucial. On the other hand, a limit order lets you set a specific price for your purchase, offering more control over pricing but potentially taking longer for execution.

Before placing an order, consider factors like liquidity, volatility, and current market conditions. Avoid impulsive decisions and carefully assess your choices.

Understanding these ordering options empowers investors to make informed decisions when buying shares in India’s dynamic stock market.


In conclusion, purchasing shares in India involves a few key steps. It begins with obtaining a PAN card and choosing a reputable stockbroker. Opening a Demat and trading account with the chosen broker is necessary to start investing.

After funding your trading account, you can research and select stocks to invest in. Placing buy orders through your trading account allows you to acquire shares. It is crucial to monitor your investments regularly and stay informed about market trends and company news.

Remember, investing in the stock market carries risks, so it’s essential to educate yourself and seek professional advice if needed. By following these steps and staying vigilant, you can begin your journey as a shareholder in the Indian stock market.

FAQs – How to Purchase Shares in India?

Do I need a PAN card to buy shares?

Yes, a PAN card is mandatory for all stock market transactions in India. It helps track your investments and ensures tax compliance.

What are Demat and Trading Accounts? What’s the difference?

  • Demat Account: Holds your purchased shares electronically, like a digital bank account for securities.
  • Trading Account: Used to place buy and sell orders for shares through your chosen broker. It would help if you had both for active trading.

Is there a minimum investment amount required to buy shares?

No, there’s no minimum investment required. You can start with any amount you’re comfortable with, but consider brokerage fees and market volatility when starting small.

What are brokerage fees and how are they charged?

Brokerage fees are commissions charged by your broker for each buy/sell transaction. They can be:

  • Flat fee: Fixed charge per trade, regardless of trade value.
  • Percentage fee: A small percentage of the trade value.

Choose a broker with competitive fees that suit your trading volume.

What are the risks involved in buying shares?

Stock market investments involve inherent risks, including:

  • Price fluctuations: Share prices can go up or down, leading to potential losses.
  • Company performance: A company’s performance can impact its share price.
  • Market conditions: Overall, market sentiment can affect all stocks.

Research thoroughly, invest cautiously, and understand your risk tolerance before entering the market.


This article is only for informational purposes and should not be considered financial advice. Always do thorough research before making any investment decisions.

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