How is average buy price of your positions calculated?

The concept of average price arises when you buy same stocks but in multiple tranches. For example, say you buy 100 shares of ABC Ltd. for 

₹300 per share. Your total purchase value is ₹30,000 (100 shares multiplied by ₹300). 

Say you make another purchase of 150 shares of the same stock for ₹350 per share. The total purchase value for this tranche is ₹52,500 (150 shares multiplied by ₹350 per share). 

Now your average purchase price will be ₹30,000 (1st tranche) + ₹52,500 (2nd tranche) divided by total number of shares purchased i.e. 250 (100 – 1st tranche and 150 – 2nd tranche). That means, total buy value 

₹82,500 divided by the total qty 250 shares is ₹330/-.