Manish owns a chocolate company in Delhi. Some time back, he wanted to expand his business, but to do so, he required 10 lac rupees. Manish had 5 lac rupees with him but still needed another 5 lac for implementing the planned expansion.
To raise this sum, Manish gave up 50% of the company ownership & issued 500 shares priced at Rs. 1000 each.
50 people decided to buy 10 shares each, by investing Rs. 10,000. This made each of them 1% share-holder in Manish’s company.
After 5 years, Manish’s company has grown multi-fold. With branches in Jaipur & Lucknow it is now valued at Rs. 1 crore. Each investor who bought 10 shares has also multiplied his 10,000 rupees investment to 1 lac.
Shares are portions of a company, which can be bought by an individual. Any investor can buy shares of publicly traded companies by opening a demat account with Angel Broking.