Investing in the Indian Stock Market

Today India and China are two countries that are very much in the news as two of the world’s fastest growing economies. The Indian stock market is booming and has attracted the attention of fund managers all over the world.

Investing in the stock market by Indians has in the past few years become popular. Stock brokers are now common all over India.

Most new issues of stocks, even of new companies just going public are often oversubscribed.

India’s first stock exchange was established in 1875 in Bombay. The Bombay stock Exchange is now called the Mumbai Stock Exchange. As Mumbai is considered the financial capital of India. The Mumbai stock exchange is the most popular stock exchange in India.

India's Flourishing Economy

While many think that India’s economy is booming today because of outsourcing and call centers.  Manufacturing and research sectors are also adding to India’s economic wellbeing.

Present day India is also in a slow down due to the trickle down affect of the western economies and depression like environment and media hype all over North America.

Economists world wide don't expect much improvement in the year 2009 and some even go as far as not seeing a recovery until well into 2010. However India is one of the countries at the moment where they appear to be weathering the slow economic news better than many other countries.

Investment is flowing into India because of liberal rules of the Government of India. Talk about a economic growth today and India and China are the two countries that comes to mind. India being a democracy and for many investors this is a plus point for India. If India had opened its market to foreign investment earlier quite a bit of foreign investment that ended up in China would have perhaps been invested in India.

The Indian government has also finally taken note of the poor state of infrastructure. Some progress is now being made in Highway improvement, power sectors  as well as  telecommunications. Improved infrastructure will certainly add to India’s economic growth and wellbeing in the years to come. 

Investing in India's Stock Market

Laws have now changed in India and allow foreigners to invest in the Indian stock market. In some specific industries foreigners can even hold up to 100 per cent of shares.

Many Non Resident Indian’s (NRI’s) are today investing or contemplating to purchase stock in the Indian stock market. Many Indian companies have been posting record profits and some paying out high dividends. Regulations today make it easier for foreign residents to buy stocks on the Indian stock exchanges.
 

Is the Indian stock market a good market to invest in? News reports of enormous profits made by people are quite common in India.

 

However news reports of stock market manipulation are also more common in India. The Indian stock markets regulatory agency is called the Securities and Exchange Board of India (SEBI). The offices of SEBI are located in Mumbai. Over the last few years SEBI has taken to task several companies and groups of people and charged them with stock manipulation offences.

Stock purchases in the Indian stock market can be quite rewarding if purchases are made after proper research and sound advice from reputed stock advisors or business consultants.

 

There are some excellent companies in India that have generated immense profits for their shareholders. As with any other stock markets worldwide, careful research is required before buying stocks in India.

When investing in the Indian stock market, I would stay away from what are known as penny stocks. Unless a company has built a reputation I would not buy their stock, especially new companies who do not have enough information available for the public. Research a company before investing in it.

 

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Pan Card - Compulsory for Investing

PAN NUMBER REQUIREMENT FOR STOCK INVESTMENT

Non Resident Indians who wish to invest in the Indian stock market need an income tax account number called the 'PAN NUMBER'

Pan number applications are now available on the internet and a request for a new PAN number can be made online. If you reside abroad the fee for new pan card including mailing overseas is Indian Rupees 717.

Step by step instructions on how NRIs can apply for a PAN Card are also given on our 'PAN CARD' pages.

Investing today in the stock market requires a good understanding on what can be expected going forward. Some people are of the opinion that when people buy stocks in large numbers the price always shoots up. However they fail to realize the other side of the equation. If people are buying a particular stock in large numbers, then equally someone is also selling the same stock.

Speculation is part of buying stocks. When we make a stock purchase we are all usually speculating that the stock will go up. Speculating after some form of careful research may help avoid disappointment to some degree for stock purchasers. If you have done your homework and researched your purchases well, you will stand a much better chance of meeting your investing goals. Stock brokers, stock analyst, business advisors and financial newspapers are excellent sources of information for those choosing to invest in the Indian market. 

New Stock Issues in India