How To Invest In Indian Stock Market

November 20, 2023 - 3:27 am - 9 min read

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How To Invest In Indian Stock Market – Investing in the stock market can be tricky, especially for people who are new to this investment world. The investment process has become hassle-free these days as individuals can allocate their money to stocks through various digital platforms.

In case you are not up to date with the process, here is a complete guide on how to invest in the stock market online.

How To Invest In Indian Stock Market

Here are the steps you need to follow to buy shares easily from the comfort of your home:

Why You Should Invest In Indian Stock Market

For individuals who want to learn how to invest money in the stock market, it is essential to keep certain points in mind.

If you are wondering how to start investing in the stock market or any other investment avenue in India, you should first identify your financial goals. Investment objective is not universal and varies with each investor.

Therefore, you should choose stocks after taking into account your financial goals. Determine your investment horizon before investing.

Another important factor to consider while investing in stocks is your risk appetite. Investors with low risk appetite can consider investing in defensive stocks that provide stable returns and are less affected by market volatility.

How Can Nris Invest In Indian Stock Market?

By building a diversified portfolio, you can mitigate risks. In other words, the more spread your investment is across different sectors, the lower the financial risk associated with your investments.

Now that you know how to invest online in the stock market in India, open a demat account with a broker of your choice and follow the steps discussed above to start investing. Also, remember various essential factors while choosing which stocks to add to your portfolio for best results.

Stocks mentioned in this article are not recommendations. Please do your own research and due diligence before investing. Investment in securities market is subject to market risks, read all relevant documents carefully before investing. Please read the risk disclosure documents carefully before investing in equity shares, derivatives, mutual funds and/or other instruments traded on stock exchanges. Since investments are subject to market risks and the risk of price fluctuations, there can be no assurance or guarantee that investment objectives will be achieved. NBT does not guarantee any guaranteed return on any investment. Past performance of securities/instruments is not indicative of their future performance.

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Others: NSE | BSE| Terms and Conditions | Policies and Procedures | Regulatory and Other Information | Privacy Policy | Disclosure | Bug Bounty | Download Forms | Investor’s Charter and Grievance | Redressal of Investor Grievances If you are an NRI and want to choose the best investment avenues in India, shares may be the right thing for you. Indian stock markets have the third largest investor base globally – after the USA and Japan. The Foreign Exchange Management Act (FEMA) lays down several rules for NRIs to invest in Indian stock markets through the Portfolio Investment Scheme (PIS), which is regulated by the RBI.

To come under the NRI category, you must be a Person of Indian Origin (PIO), or an Indian citizen living abroad. Your stay in India should be more than 60 days, but less than 182 days in a given financial year. Subject to this being fulfilled, even if you have stayed in India for a period of 365 days or more during the previous four financial years, you will be treated as an NRI. You can also have NRI status if you are posted to a foreign country for more than six months.

As an NRI, you can invest in stock markets after opening a non-resident external (NRE) account with an RBI-approved bank or you can have a single PIS account to invest in stock markets.

NRE account is an external and repayable account. The money you deposit in this account is converted into Indian Rupees which means you can deposit money in any currency and withdraw in Indian Rupees. You can open an NRE account in various formats like Savings, Current or Recurring Deposits which are subject to currency fluctuations.

Nri Investing In Indian Stock Markets Looking For Advice In Rebalancing.

What is the difference between NRE and NRO accounts? Do NRIs need both accounts to invest in stock markets?

The main difference between NRE and NRO accounts is that the latter does not allow free withdrawals. An NRO account is suitable for NRIs who have sources of income in India. The government has made it mandatory to open an NRO account as depositing money earned in India leads to tax-free transfer of money outside the country.

As per the latest government regulations, you do not need a non-resident ordinary (NRO) account to invest in stock markets through PIS as any investment made through an NRO account is treated as a resident Indian investment.

Just like a resident Indian bank account, a PIS account holds the investment amount of NRIs and is linked with a demat account and business account.

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Thus, as an NRI, you can invest in Indian stock markets through the RBI-regulated PIS platform. Before investing in Indian stock markets, it is very important to open an NRI trading account with a trusted financial partner. IIFL’s award-winning NRI financial advisory services provide you with a wide range of investment options with dedicated relationship managers and a hassle-free online account opening process. Indian stock markets have evolved significantly in the last 20 years in terms of risk management, operations. , and penetration too. However, retail participation is still low. But given the improvement in technology and infrastructure, it is increasing.

Indian investors are turning to the view that only stocks can generate wealth in the long run.

But what is the minimum amount required to get maximum benefits? What is the qualification? Which stocks to invest in? How to choose?

How To Invest In Indian Stock Market

There is no minimum or maximum amount to invest in Indian stock markets. It depends on which stock or ETF (exchange-traded funds) you want to invest in. For example, a share of Company A may cost you Rs 100, while a share of Company B may cost Rs 1,000.

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The Indian stock market is predominantly represented by two stock exchanges that facilitate the trading (buying and selling) platform of shares. These are:

Company shares traded on these exchanges range from Rs 1 to Rs 70,000.

Also, note that the broker involved in the transaction will charge you a brokerage fee. They levy certain taxes as mandated by the Government of India.

A share of Company A is Rs 20. And you have Rs 1,000 (capita) that you want to invest. Then, you may not be able to buy 50 shares of Company A as you thought. Because, with Rs 1,000 you have to pay taxes and brokerage charges (if any) and margins (if any). So taking additional charges, you can buy 47 or 48 shares of Company A.

How To Invest In Stock Market?

Indian stock markets are specifically for Indian citizens to trade. But there are ways for foreigners to invest too.

The Portfolio Investment Scheme (PIS), developed by the RBI, allows eligible entities such as Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs), Individuals of Indian Origin (PIOs) and Qualified Foreign Investors (QFIs) to invest in shares. and convertible debentures of Indian companies.

NRIs and PIOs are eligible to trade in shares and convertible debentures of Indian institutions through a registered broker.

How To Invest In Indian Stock Market

Anyone who has been in India for more than 182 days in a financial year and for more than 365 days in the previous four financial years qualifies as an NRI. According to the Finance Bill, 2020, this period will be reduced to 120 days if the total annual Indian income of such person is more than Rs.15 lakh.

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NRIs can enjoy non-resident status if their presence in the country is 60 days or more but less than 182 days in any financial year, even if their stay in India is more than 365 days in the last four financial years.

Anyone posted abroad for more than 6 months is eligible for non-resident status in India

A foreigner

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