S1 E2 : WHAT IS A SHARE? WHY DO COMPANIES GIVE THEM?

🤔 Quick Flashback:

In Episode 1, you discovered that the stock market is like a mall where you can buy tiny pieces of companies like Reliance, Tata Motors, and Zomato.

But now the big question is:

❓What exactly is a share?
❓And why would a big company give you a part of itself?

Let’s find out — step by step.

🏢 Imagine a Company Like Zomato

You use Zomato to order food.
You’ve seen their ads, their delivery guys, and maybe even used Zomato Gold.

Now imagine you’re the person who started Zomato.

 - You built the app.

 - Got restaurants to join.

 - Hired people.

 - Started growing.

But now you want to expand faster — maybe into 100 more cities.

You need money.

💰 Where Can You Get That Money?

You have 3 main choices:

  1. Take a loan from a bank
    (But you’ll have to repay it with interest 💸)

  2. Find a private investor
    (Like a shark from Shark Tank)

  3. Or... Let the public invest and become co-owners

That third option is where shares come in.

🍕 Simple Analogy: Pizza Party Again

Let’s say you made a large pizza 🍕

- It’s too much to eat alone

- So you slice it into 8 pieces

- You sell each slice for ₹100

Now, 8 people each own a part of your pizza

You now have ₹800 to use — and your pizza is being enjoyed by more people

That’s exactly how shares work:

- The pizza = company

- The slices = shares

- The buyers = investors (like you)

- The ₹800 = money raised for growth

🧾 Real Company Example: TATA MOTORS

Tata Motors wants to:

- Launch a new electric car

- Build more factories

- Do more research

They decide to raise ₹5,000 crore.

But instead of borrowing from a bank, they:

- Divide the company into shares

- Sell those shares to the public through the stock market

Now:

- They get the money they need

- You get to own a piece of Tata Motors

- If Tata grows, you benefit too

🔁 So Why Do Companies Give Shares?

 

  1. They get money to grow — for new factories, better technology, more products.

  2. They share ownership with the public — making people feel like it's our company too.

  3. They gain trust — because public companies must follow strict rules and share their financials openly.

  4. They grow faster — by using public money instead of loans, they can expand more smoothly.

 

🧠 Recap in 6 Easy Points

✅ Shares = Small pieces of a company
✅ Companies like Zomato or Tata give shares to raise money
✅ Investors like you buy shares and become part-owners
✅ Companies use that money to grow
✅ If the company succeeds, your share value goes up
✅ The stock market is where this buying/selling happens

💡 Final Thought:

A share isn’t just a number on a screen.
It’s a real part of a real company.
When you buy shares, you’re putting your money to work — not just spending it, but growing it with the company.