Chapter 1: The Basics
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Day 3: What Is a Share?
You own a tiny slice of a massive pie — and that slice can make you rich
3 min read
📖 The Pizza Analogy That Actually Works
Imagine Robert's Tea Ventures Ltd is a giant pizza. The whole pizza = the whole company.
Robert owns 6 slices (60%). Investors own 4 slices (40%).
If the pizza gets bigger (company grows), everyone's slice is worth more. If the pizza shrinks (bad business), everyone suffers equally. If Robert makes a brilliant move and doubles the company's profits, your 1 slice might now be worth 2 slices' original value.
That's a share. You own a piece of the pizza. 🍕
Imagine Robert's Tea Ventures Ltd is a giant pizza. The whole pizza = the whole company.
Robert owns 6 slices (60%). Investors own 4 slices (40%).
If the pizza gets bigger (company grows), everyone's slice is worth more. If the pizza shrinks (bad business), everyone suffers equally. If Robert makes a brilliant move and doubles the company's profits, your 1 slice might now be worth 2 slices' original value.
That's a share. You own a piece of the pizza. 🍕
The Official Definition
A Share (also called Stock or Equity) = A unit of ownership in a company.
When you buy 1 share of Infosys, you legally own a tiny fraction of Infosys. You are, technically, a co-owner of one of India's largest IT companies.
You have the same rights as the founders — just proportionally smaller! You get to vote in shareholder meetings, receive dividends, and benefit from the company's growth.
When you buy 1 share of Infosys, you legally own a tiny fraction of Infosys. You are, technically, a co-owner of one of India's largest IT companies.
You have the same rights as the founders — just proportionally smaller! You get to vote in shareholder meetings, receive dividends, and benefit from the company's growth.
Types of Shares
| Type | What It Means | Who Gets It First? |
|---|---|---|
| Equity Shares | Regular ownership — full upside, full risk. Voting rights included! | Last (after everyone else) |
| Preference Shares | Fixed dividend, limited upside. Like a "safer" version. | Before equity shareholders |
| Bonus Shares | Free extra shares given by company to existing shareholders | Existing shareholders only |
Key Share Terminology (Memorise These!)
📊 Face Value
The original printed value of a share (usually ₹1, ₹2, or ₹10). Nothing to do with current market price. It's like the sticker price on a used car versus what it actually sells for.
💰 Market Price
What buyers are actually paying RIGHT NOW on the stock exchange. This changes every second during trading hours. This is what you watch nervously on your phone.
📈 Book Value
Total assets minus total liabilities, divided by number of shares. What the company is theoretically "worth" if you sold everything today.
🏢 Market Cap
Share Price × Total Number of Shares = Total market value of the company. How the market values the entire business.
🎉 Did You Know?
When Infosys went public (IPO) in 1993, shares were priced at ₹95. If you had bought 100 shares for ₹9,500 and never sold, those shares (after all the splits and bonuses) would be worth crores today. Stock splits mean your 100 shares became thousands. That's the power of holding quality companies. 💰
When Infosys went public (IPO) in 1993, shares were priced at ₹95. If you had bought 100 shares for ₹9,500 and never sold, those shares (after all the splits and bonuses) would be worth crores today. Stock splits mean your 100 shares became thousands. That's the power of holding quality companies. 💰
🎯 Today's Takeaway:
A share = a unit of ownership in a company. Equity shares = full rights + full risk. Face value ≠ market price. Market cap = how the world values the whole company. Tomorrow: Where do you actually BUY these shares? Welcome to the Stock Market!
A share = a unit of ownership in a company. Equity shares = full rights + full risk. Face value ≠ market price. Market cap = how the world values the whole company. Tomorrow: Where do you actually BUY these shares? Welcome to the Stock Market!