2.23The journey of a share: from company to investor
1What is it?
Here is the complete path a share takes, from the company creating it to it sitting in your demat account.
2Why does it exist?
Seeing the whole picture ties together everything in this level: SEBI, exchanges, brokers, depositories and you.
3Diagram
- 1Company decides to raise money
- 2Files offer document with SEBI
- 3IPO: investors apply via broker/UPI
- 4Shares allotted & credited by NSDL/CDSL
- 5Listed on NSE & BSE
- 6Investors trade daily via brokers
- 7Clearing corporation settles (T+1)
- 8Shares move to buyer’s demat
4Quick revision
- Company → SEBI → IPO → depository → exchange listing → secondary trading → settlement → demat.
- Every step is regulated.
5Knowledge check
Q1. Who must approve the offer document before an IPO?Show answer
SEBI must review it (observations) before the IPO.
Q2. Who credits shares to your demat account?Show answer
The depository (NSDL or CDSL) through your DP.
Q3. What is the settlement cycle for Indian shares?Show answer
T+1 (next working day).
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