Stock Exchanges in India

  • by

The buying and selling of the shares and securities is done at the stock exchange which means a marketplace where the buyers and the sellers take their securities. Stock exchanges are floated as a body corporate or as the mutual organization which is specialized in the business of trading in securities. Various securities of the public and the private sector are listed at the stock exchange and all the activities of the stock exchange are controlled and monitored by SEBI.

In India, the two major stock exchanges are:

Stock exchanges in India

Bombay Stock Exchange (BSE)

Bombay stock exchange was the first stock exchange that was set up in Asia. In the year 1875, it was basically formed as the “Native Share and Stock Brokers Association”.

During the course of its journey, BSE has been highly responsible for the growth and development of Indian economy and the corporate sector as it has duly access to a mechanism for fund raising.

Presently, more than 6000 companies are listed at BSE and that makes it the biggest stock exchange when considering the size. While talking about the volume of the transactions, it is 5th largest in the world. In terms of listed companies’ market capitalization, it fall in the top 10 list globally.

Features of Bombay Stock Exchange

  1. BSE is the oldest stock exchange in India.
  2. It is 5th largest stock exchange globally.
  3. More than 6000 companies are listed at BSE.
  4. In India, BSE was the first stock exchange to introduce the concept of Equity Derivatives.
  5. It was the first one to launch Internet trading, US trading at the BSE index and the free float Index.

National Stock Exchange (NSE)

NSE is the largest stock exchange in India. The traders and investors are provided with the service of trading in multiple securities which includes the debt and equity that is issued by the central or the state government. Apart from this, trading can also be done in commercial papers,commercial bills, certificate of deposites, etc. Around 1000 members are listed at the NSE and the exchange is owned and managed by more than 20 financial and insurance institutions. Basically investors approach NSE for dealing in 3 types of segment i.e. capital markets, F&O, wholesale debt. The operations at NSE began in the year 1994.

The National Stock Exchange was promoted as a joint stock company under the companies Act, 1956 and was initially promoted by ICIC, IDBI,IFCI,LIC,GIC,SBI,capital Market Ltd., IL & FS,SHCIL. In 1993, it was initially given approval for a span of 5 years by Government of India. IDBI in regard was appointed as the lead promoter of the NSE. IDBI further appointed a Hong Kong based consulting firm in the infrastructure required for operations at the NSE.

Features of NSE

  1. NSE stands as the second largest exchange globally in terms of market capitalisation.
  2. The concept of screen based trading i.e. online trading was first adopted by NSE.
  3. NSDL was promoted by NSE to handle the demat activities.
  4. The headquarters of NSE is situated in Mumbai and Chenni holds the back office.
  5. NSE is basically professional managed which is not there with other stock exchanges and the management is different for the brokers.