Your Piece of the pie: Fractional ownership in stock markets
MRF, Page Industries, or Nestle India is common among investors. However, the high cost of acquiring a whole stake often proves to be a significant hurdle for many aspiring investors.
In India, the Securities and Exchange Board (SEBI) is contemplating a "fractional ownership" solution that promises to make stock investments accessible to a broader audience.
The Concept of Fractional Ownership
The concept of fractional ownership is simple but powerful. It allows investors to purchase a fraction of a share, aligning with their budget and financial capacity.
For instance, envision aspiring to own a share of a company like MRF, valued at approximately Rs 1,08,500 per share. Fractional ownership makes it possible to own a portion of that share with an investment as modest as Rs 25,000, thereby democratising stock ownership.
Advantages of Fractional Ownership
Breaking Down Cost Barriers
Fractional ownership not only breaks down the barrier of high costs but also promotes diversification of investments.
By owning fragments of shares from various companies, investors spread their financial resources, minimising the risk associated with concentrating all assets in a single entity. This approach mirrors the age-old wisdom of not placing all one's eggs in a single basket.
Promoting Diversification
Countries like the United States have already embraced fractional ownership through various platforms, allowing individuals to invest in substantial companies such as Apple without requiring significant capital.
