What is the Share Market?

By Dr. Dharmendra Mulherkar
Published on July 13, 2025

In the modern economic system, the share market (Stock Market) is an extremely important and influential medium. The share market is not merely a place for investment; it also serves as a mirror reflecting the country’s economic health. Many people perceive the concept of the share market as mysterious, complicated, and risky. However, in reality, an individual equipped with the right information and perspective can derive appropriate benefits from the share market.

In layman’s terms, the share market refers to a venue where companies offer their shares—essentially portions of “ownership capital”—for sale, and investors purchase them. Through these transactions, companies raise capital, while investors reap profits in the form of dividends or appreciation in share value over time.

What is a Share?

A “share” represents a small portion of ownership in a company. For example, if a company has a total of 10 lakh shares and you purchase 100 of them, you become a 0.01% owner of that company. Accordingly, you receive proportional benefits, losses, and voting rights.

Types of Share Markets

1. Primary Market:
   This is where companies introduce their shares to the public for the first time through an ‘IPO’ (Initial Public Offering). Here, the company directly raises capital from investors.
2. Secondary Market:
   In this market, previously sold shares are traded among investors. These transactions occur on stock exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Functioning of the Share Market

The share market operates digitally. Each company’s shares are available at a specific price in the market, which fluctuates constantly. Numerous factors influence this price, including the company’s performance, global events, political stability, inflation, interest rates, and more.

Buying and selling in this market are facilitated by brokers or online platforms. Some popular digital platforms include Zerodha, Groww, and Upstox. Through these platforms, you can open a Demat account and engage in share transactions.

Benefits of the Share Market

1. Opportunity for Capital Growth:
   Long-term investments can lead to an increase in share value.
2. Dividends:
   Certain companies regularly distribute profits to shareholders.
3. Liquidity:
   Shares can be sold at any time to obtain cash when needed.
4. Diverse Investment Options:
   A wide range of shares is available, from large corporations to startups.

Awareness of Risks is Essential

While the share market offers benefits, it also carries the risk of losses. Share prices can decline due to falling values, company losses, or market recessions. Therefore, investing with proper knowledge, research, and a long-term outlook is crucial.

Conclusion

The share market is not merely a game of money; it is a practice rooted in financial literacy, patience, and foresight. Understanding the share market can transform it into a pathway to financial independence. The wealth that a lifetime of employment may not yield can be achieved through disciplined and patient investments in the share market.

Thus, grasping the fundamental concepts of the share market, seeking reliable guidance, and becoming financially vigilant are duties every citizen must embrace in keeping with the times.

About the Author:
Dr. Dharmendra Mulherkar
M.Com, MA (Communication & Economics), Ph.D. in Commerce
An expert and author in economics, investment, and public awareness topics.

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