In India, the stock market gained its widest popularity—and the craze of becoming a millionaire overnight—largely due to Harshad Mehta. Otherwise, more than half the country did not even know why shares existed in the first place. Hearing about Harshad Mehta’s wealth ignited a strong desire among people to participate in the stock market.
Later, with the advent of the internet and terminal-based trading—primarily an American trading model—day trading emerged as a full-fledged profession. For those unfamiliar with the term, day traders are people who engage exclusively in stock trading as their full-time occupation.
When liberalization reshaped the banking system and business environment, American models of stocks, stakeholders, and corporate ownership began to take root in India as well. The internet played the most significant role in this transformation; otherwise, executing and canceling trades over the phone was not so easy in India.
Broadly speaking, stocks represent a portion of a company’s ownership offered to the market to raise capital. For example, suppose a company offers 10% of its ownership to the market and issues 1 crore shares for this purpose. This is because a company’s valuation is usually such that a single individual cannot buy the entire 10% stake.
In India, shares are typically issued with a face value of ₹10. This is merely a nominal value and is different from the market valuation and the price band or offer price. Even if the valuation fluctuates, shares cannot be issued below ₹10. This limit applies only at the time of issuance.
Beyond this, the real value of shares—that is, the stock price—reflects the company’s credibility or market trust. Daily trading does not directly benefit the company; its real earnings come from market valuation and overpricing during book-building bids. Everything beyond that is determined by fundamentals.
Fundamentals include the company’s accounts, history, and future plans—such as where investments are being made or what expansion the equity issue is intended for. Equity, shares, and stocks are broadly the same thing, with minor distinctions—such as whether they represent company ownership or a debt instrument. Otherwise, their function remains the same.
Whenever a company’s stock price rises, its valuation increases. Think of it this way: suppose I own a company with no tangible assets at all, yet its per-share market value ranges between ₹500 and ₹5,000. The company will be assessed based on this valuation.
On this basis, I can secure loans, tenders, and other opportunities using a risk-to-reward assessment (which we will discuss later), allowing my business to continue operating. It is entirely possible that all my funds are locked in the market, I may not even own a house, and yet no one is aware of this reality. Such situations are quite common.
Many times, companies adjust their reported profits or losses by showing market-linked funds, running costs, or other expenses in their accounts. By the time the truth comes to light, a company may collapse in a single day—or everything may appear perfectly fine. This phenomenon exists in every market-driven economy.
Because trading—especially stock trading—appears like magic or a shortcut in our country, our dreams often shatter quickly. In trading, a rising stock price is called a bull move, while a falling price is called a bear move. At least this much knowledge everyone must have gained from the series made on Harshad Mehta.
In a market economy, a company, its suppliers, and its outsourcing partners are all interconnected within the same market. For example, consider a car manufacturer: its engine may come from China, the fuel pump may be made in India, and the steel and paint may also be sourced domestically.
Assembly services may be handled by another company, while marketing is done by the parent company. From screws to plastic parts, dozens of companies are involved—and many of them are often listed in the market, meaning their stocks are traded.
Now imagine that a ship belonging to a shipping company sinks while carrying engines meant exclusively for a particular company. What happens then? The entire industry—and even cross-industry networks—will be shaken. When the balance sheet deteriorates in the next quarter, the turmoil will be massive. You might think it’s no big deal because insurance will cover the loss.
But this is exactly where bulls and bears come into play. They will exaggerate the loss and shipment delays in that quarter. Bears, in particular, will dump large quantities of stock into the market and sell at any available price. As a result, prices will fall and panic will spread across the market.
This pressure will affect everyone—from small investors to mutual funds—and stocks will begin to crash. The company may not suffer an immediate operational loss, but the biggest beneficiaries will be market speculators who profit from the price difference created by the fall. In many cases, companies themselves are involved in such activities.
Ultimately, the stock market is like any other marketplace—where many factors depend on things beyond anyone’s control. Everyone is here to seize opportunities. The presence of corporate lifestyles and American trading terminology merely makes it appear more professional. We will discuss bulls, futures, and options later.
About the Writer
This article is written by Harishankar Shahi, a journalist with in-depth knowledge of finance, politics, and science. He is known for presenting complex topics in a clear, factual, and reader-friendly manner. His writing focuses on analysis, context, and real-world impact, helping readers better understand issues that shape the economy, governance, and society. His Facebook profile link:
https://www.facebook.com/harishankar.shahi
More details about Hrashad Mehta:
https://www.tickertape.in/blog/facts-about-harshad-mehta/
Read More on finance and economic issues:
https://inkindianews.com/business
Know more about Indian Stock Market
https://www.washingtonpost.com/world/2025/12/26/india-ai-google-microsoft-amazon
This article is written by Harishankar Shahi, a journalist with in-depth knowledge of finance, politics, and science. He is known for presenting complex topics in a clear, factual, and reader-friendly manner. His writing focuses on analysis, context, and real-world impact, helping readers better understand issues that shape the economy, governance, and society. His Facebook profile link:
https://www.facebook.com/harishankar.shahi
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