Indian stock market is one of the oldest and most robust markets among emerging economies. With the rapid improvement in the exchange infrastructure and better investor protection by the market regulator (SEBI), the trade volume is on the rise. The technological advancement such as trading via mobile apps, the traders and trade volume has shot up recently.
In this regard, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are well-known exchanges in the country. But beyond these two, India has four other permanent exchanges. This takes the tally to a total of six exchanges.
List of Stock Exchanges in India
A stock exchange is a place or platform which hosts a market where buyers and sellers come together to trade for specific hours during business days. The trade could be stocks, commodities or even currencies.
As per SEBI’s data (as on January 2020), there are about nine exchanges in India, but only a few are active and permanent.
Bombay Stock Exchange (BSE)- BSE is the oldest stock exchange in Asia. It is the first exchange as well. It was established in 1875 and was formerly known by the name of –The Native Share & Stock Brokers Association.
BSE is located at Dalal Street, Mumbai and is one of the two large stock exchanges in the country. It was founded by Mr Premchand Roychand, famously known as the Cotton King, the Bullion King or the Big Bull.
But the story of BSE starts back in the 1850s when 22 stockbrokers would gather under banyan trees in front of Mumbai’s Town Hall. The group eventually moved to Dalal Street in the year 1874.
In 1986, Sensex was introduced as the first equity index to provide a base for identifying the top 30 trading companies of the exchange in more than 10 sectors.
Apart from Sensex, other important indices of BSE include BSE 100, BSE 200, BSE 500, BSE MIDCAP, BSE SMLCAP, BSE PSU, BSE Auto, BSE Pharma, BSE FMCG, and BSE Metal.
It ranks amongst the 10 most valued exchanges globally. BSE also came out with an IPO and is listed in NSE.
Further, BSE not only offers trading in equities but also in derivatives instruments, including futures and options.
In recent years, it has expanded its product base and offers commodities derivatives too. Commodities include gold, silver, almond, crude oil, steel and cotton.
National Stock Exchange (NSE)- While NSE is young when compared to BSE, it is still one of the largest exchanges in the country. NSE came into the picture in the year 1992 with Vikram Limaye as its CEO.
It was recognised as a stock exchange by SEBI in 1993 and commenced operations in 1994. It started with the launch of the wholesale debt market, followed shortly after by the launch of the cash market segment.
NSE introduced the advanced electronic trading system, which removed the paper-based settlement system from trading. It offered an easy trading facility and emerged as a competitor for BSE.
In the year 1995-96, NSE launched the NIFTY 50 Index and commenced trading and settlement in dematerialised securities. Nifty lists out the top 50 companies which traded on the NSE stock exchange market.
Apart from Nifty, other key indices of NSE include Nifty Next50, Nifty500, Nifty Midcap150, Nifty Smallcap250 and Nifty MidSmallcap 400.
National Securities Depository Limited (NSDL) was formed to provide depository services to investors.
NSDL allows investors and traders to securely hold and transfer their stocks electronically.
Soon after, NSE expanded its product offerings as well. Among other services such as clearing and settlement, it not only offers equity and equity derivatives instruments but also offers commodities and currency derivatives.
Multi-Commodity Exchange (MCX)- MCX is one of the largest commodity exchanges in the country. As the name suggests, this exchange is only for trading in commodities, including agri and non-agri products. These include cotton, crude palm oil, rubber, and cardamom. Non-agri includes base metals (lead, aluminium, nickel, zinc and copper), bullion (gold and silver) and energy (crude oil and natural gas).
It is the first listed (both BSE and NSE) commodity exchange in India and started its operations in 2003. It is based out of Mumbai.
While it offers both futures and options contracts across its products, it also started to offer index futures contracts. These include MCX BULLDEX (bullion index), MCX METLDEX (metal index) and MCX ENRGDEX (energy index).
Though these are predominantly used by hedgers, traders, businessmen and even by companies, the volumes are growing. But the commodities market is yet to make a mark like the equities market.
National Commodity and Derivates Exchange (NCDEX)- NCDEX is another largest commodity exchanges in the country that started its operations around the same time as MCX.
NCDCEX, unlike MCX, only offers agri products for trading. These include cereals and pulses (including Chana, Barley, and Moong), Oil and Oil seeds (including Castor seeds, Soybean, Mustard seed and crude palm oil), Fibres (including Kapas and cotton), and Spices (including Turmeric and Coriander).
In recent years, NCDEX also started to offer index products such as AGRIDEX.
India International Exchange (India INX)- A relatively new entrant in the exchange market in the country. Opened in January 2017, India INX is India’s first international stock exchange. It is also a subsidiary of BSE and is located at the International Financial Services Centre (IFSC), GIFT City, in Gujarat.
It is claimed to be the world’s most advanced technology platform with a turn-around time of 4 microseconds which operates 22 hours a day and six days a week.
There are two sessions: 04:30:00 Hours to 17:00:00 Hours and 17:00:01 Hours to 02:30:00 Hours.
India INX also launched the Global Securities Market, an international primary market platform in India that connects global investors with Indian and foreign issuers.
Currently, INX offers only derivative products, including equity, currency and commodities derivatives and debt instruments, including masala bonds and foreign currency bonds. As per recent media reports, INX will soon facilitate buying and selling of shares of foreign stocks, including major US and Europe-listed companies, through its platform.
NSE IFSC- NSE IFSC Limited (NSE International Exchange), incorporated on 29th November 2016, is a wholly-owned subsidiary of the National Stock Exchange (NSE) and is located at the International Financial Services Centre (IFSC), GIFT City in Gujarat.
Products offerings are similar to India INX.
NSE IFSC usually conducts 16 hours of daily trading over two trading sessions. Currently, there are two trading sessions, the first between 8 am and 5 pm and the second between 5.30 pm and 11.30 pm.
Indian Commodity Exchange (ICEX)- ICEX is a commodity derivative exchange in India. Registered with SEBI, it is a permanent exchange and the only exchange that offers derivatives trading in diamond contracts.
While it was incorporated in 2009, its trading was suspended in 2014. It started its operations again in 2017.
In addition to diamond contracts, ICEX also offers agri derivatives, including spices, oilseeds, plantations, and cereals.
But ICEX is mired with controversies and allegations and is expected to come out of the situation soon.
Calcutta Stock Exchange (CSE)- CSE, which started under Neem Tree in the 1830s has come a long way now. It is among the oldest stock exchange and was once considered among the largest stock exchanges in the country.
It was incorporated in 1908 and had been occupying building 7 in Lyons Range, Calcutta.
In the year 1980, it was granted permanent recognition by the Government of India under the relevant provisions of the Securities Contracts (Regulation) Act, 1956.
CSE also had an index called CSE-40, similar to Nifty50 and Sensex.
CSE was once a competitor to both NSE and BSE. While it is a permanent (licensed) stock exchange registered with SEBI, it now faces an uncertain future. Its trading had been suspended for nearly nine years by SEBI due to non-compliance with certain norms. Though nearly 20 regional stock exchanges have voluntarily exited the business, CSE continues to fight its battle.
Metropolitan Stock Exchange (MSE)- The Exchange was notified as a ‘Recognized Stock Exchange’ under the Companies Ac by the Ministry of Corporate Affairs on December 21, 2012.
MSE products are similar to any other stock exchange. It offers futures and options, currency derivatives, and debt market instruments.
Benefits of Listing with Stock Exchange
Being listed on a reputed stock exchange is deemed beneficial for companies, investors and the public in general and they tend to benefit in these following ways –
Increased Value- Only stocks listed with a reputable stock exchange are considered to be higher in value. Companies can cash in on their market reputation in the stock exchange market by increasing their number of shareholders. Issuing shares in the market for shareholders to acquire is a potent way of increasing shareholder base and base, which in turn increases their credibility.
Accessing capital- One of the most effective ways of availing cheap capital for a company is by issuing company shares in the stock exchange market for shareholders to acquire. Listed companies can generate comparatively more capital through share issuance owing to their repute in a stock exchange market and use it to keep their company afloat and its operations running.
Collateral value- Almost all lenders accept listed securities as collateral and extend credit facilities against them. A listed company is more likely to avail a faster approval for their credit request; as they are deemed more credible in the stock exchange market.
Liquidity- Listing helps shareholder avail the advantage of liquidity better than other counterparts and offers them ready marketability. It allows shareholders to estimate the value of investment owned by them.
Additionally, it permits share transactions with a company and helps them to even out the associated risks. It also helps shareholders to improve their earnings from even the slightest increase in overall organisational value.
Fair price- The quoted price also tends to represent the real value of a particular security in a stock exchange in India.The fact that the prices of listed securities are set as per the forces of demand and supply and are disclosed publicly, investors are assured to acquire them at a fair price.
Investment Methods
Investors can invest in a stock exchange of India through these two ways –
- Primary market – This market creates securities and acts as a platform where firms float their new stock options and bonds for the general public to acquire. It is where companies enlist their shares for the first time.
- Secondary market – The secondary market is also known as the stock market; it acts as a trading platform for investors. Here, investors trade in securities without involving the companies who issued them in the first place with the help of brokers. This market is further broken down into – auction market and dealer market.
FAQs
What is a stock exchange?
stock exchange is a regulated marketplace where securities like stocks, bonds, commodities, and derivatives are bought and sold.
How many registered stock exchanges are there in India?
As of my last update, there are several registered stock exchanges in India. However, the major ones include the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Practice area's of B K Goyal & Co LLP
Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online
Company Registration Services in major cities of India
Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida | Company Registration in lucknow
Complete CA Services
RERA Services
Most read resources
tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password | internal audit applicability | preliminiary expenses | mAadhar | e shram card | 194r | ec tamilnadu | 194a of income tax act | 80ddb | aaple sarkar portal | epf activation | scrap business | brsr | section 135 of companies act 2013 | depreciation on computer | section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013 | rtps | patta chitta