How the stock market works in India

When you buy a share, you buy a small part of a company. In India, shares are bought and sold on stock exchanges under the eye of a regulator.

Who is who

• SEBI, the Securities and Exchange Board of India, regulates the market under a 1992 law: exchanges, brokers, mutual funds, listed companies and investment advisers.
• The exchanges: BSE (founded in 1875, Asia’s oldest) and the National Stock Exchange (trading since 1994).
• The indices: the Sensex tracks 30 large companies on BSE; the Nifty 50 tracks 50 on the NSE. When the news says “the market rose”, it usually means these.
• Depositories — NSDL and CDSL — hold shares electronically in demat accounts, opened through a depository participant, usually your broker.

How a trade works

• Shares are traded from 9.15 a.m. to 3.30 p.m. on weekdays, after a short pre-opening session.
• Since January 2023 every share trade in India settles on T+1: the shares and the money change hands the next working day.
• Companies first sell shares to the public in an IPO (the primary market); after listing they trade between investors (the secondary market).
• If the indices fall or rise very sharply, circuit breakers halt trading for a while.

Protect yourself

• Deal only with SEBI-registered brokers and advisers — the registration can be checked on SEBI’s website.
• Be wary of “sure-shot tips” and investment groups on WhatsApp or Telegram; many are frauds.
• Complaints against a registered entity can be filed on SEBI’s SCORES portal.