Understanding the Fundamentals of Stock Market: Structure, Functions, and Role in Economic Growth - A Study Based on Secondary Data
The stock market is a vital component of the financial system that facilitates capital formation and wealth creation. It provides a platform for companies to raise long-term funds and offers investment opportunities for individuals and institutions. Despite its growing importance in India, a significant portion of the population still lacks basic awareness of how the stock market functions. This study aims to explain the basics of the stock market, its structure, key participants, and its contribution to economic growth using secondary data sources. Data was collected from National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Securities and Exchange Board of India (SEBI), RBI reports, and published academic literature from 2019 to 2025. The analysis indicates that market capitalization of Indian stock markets crossed USD 4.5 trillion in 2024, making India the 5th largest stock market globally, while the number of demat accounts exceeded 16 crore. However, retail participation remains concentrated in urban areas, with limited financial literacy in rural regions. The paper concludes with suggestions to improve investor awareness and promote safe investing practices. **Keywords:** Stock Market, BSE, NSE, SEBI, Equity, Demat Account, Sensex, Nifty, Financial Literacy, Secondary Data