Can I trade or invest Rs 100 in the share market of India?

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Short Answer

You can definitely trade or invest Rs 100 in Indian stock markets. There are no monetary requirements to enter the stock market hence you can buy any share that is trading under Rs 100. Apart from direct stock investing/ trading, there are some indirect ways to own shares over Rs 100. This can be done through Mutual Funds.

Detailed Answer

What are Stock Markets?

Stock markets are a marketplace where stocks of companies are traded (bought and sold). Here individuals like you and I can buy any number of shares for trading as well as for investment purposes. In India there are two primary markets, they are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The NSE has over 1600 companies whereas the BSE has over 5400 companies listed on it.

You can buy and sell any stock from these exchanges with the help of a Trading Account and store them in your Demat Account. Stock markets houses traders, speculators, hedgers as well as investors. Traders and speculators buy and sell stocks frequently to main a quick gain between the spread. Similarly, investors buy and hold to these stocks with a long-term view of the company as well as the sector. Now the question remains how much money do you require in order to enter the stock market. Find it out in the next part.

Can you start trading or investing with Rs 100?

In a word, YES! you can trade or invest in the Indian stock market with as little as Rs 100 but there are some limitations to that. In the Indian stock markets, there are no minimum funds required to enter. Therefore an individual with a Demat & Trading account can start to take trades with a capital of as low as say Rs 100. But the main limitation to that is he can only buy companies that are less than Rs 100/ per share.

In the U.S there is a concept of fractional shares where you can buy any fraction of a share. For example, if you want to buy half of a share of Apple, that is possible in the U.S. but that is not the case in India.

In the Indian markets, the minimum number of shares that you need to purchase is 'one'. So with a capital of Rs 100, you can buy any stock which is currently trading below Rs 100. For example, the stock of Vodafone Idea is trading around Rs 10, so you can buy as many as 10 shares, excluding the brokerage or other charges.

Similarly, if you want to buy a stock of Reliance Industries, which is the biggest company in India, in terms of market cap, you cannot do that. As one stock of Reliance Industries is worth more than Rs 2,300.

The alternative ways to invest with Rs 100.

By now you have learned that with Rs 100, you cannot buy shares of any company whose shares are more than Rs 100. But owning a part of the stock that is more than Rs 100 is possible by an alternative route.

This can be done through Mutual Funds. A mutual fund is a professionally managed fund, which has multiple stocks of companies within itself. For example, if you buy one unit of a ‘Nifty50 Mutual Fund’ for Rs 90, it will contain all the 50 stocks of the Nifty in the same proportion. Hence you will indirectly own the stocks and get the same kind of returns but at a much lower price. With Mutual Funds, you are not limited with the stocks that are trading below Rs 100 or a certain price point and get a better-diversified portfolio of stocks altogether.

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