Stock Exchange is a place where securities are traded between investors with the help of a broker. It’s a platform where companies come to raise capital and investors and traders come to invest in them. India has two main Stock Exchanges BSE and NSE. BSE stands for Bombay Stock Exchange and NSE stands for National Stock Exchange.
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Difference Between NSE and BSE
Both NSE and BSE are listed under the Securities and Exchange Board of India (SEBI). Companies get listed on these stock exchanges by issuing IPOs or Initial Public Offering in the primary market. Then its shares are bought and sold in the secondary market. In this post, we will discuss about “What is the difference between NSE and BSE?”
The National Stock Exchange was established in 1992. It is India’s biggest Stock exchange in terms of market capitalization. BSE was established in 1875. BSE is not only India’s but Asia’s oldest stock exchange. Both NSE and BSE are located in Mumbai in the Bandra Kurla complex and Dalal Street respectively. Their timings are also the same – 9:15 to 3:30.
In order to trade in these Stock exchanges, a trader needs to have a Demat account. Demat account services are provided by many companies like – HDFC Demat Account, ICICI Direct, Zerodha, Sharekhan, etc. These Demat accounts facilitate buying, selling, and storing of shares. The customers are then required to transfer funds from their bank account to the Demat account. The Demat account holders can now start trading and investing.
Major Stock Exchanges of the Country
1. BSE or the Bombay Stock Exchange in Mumbai
2. NSE or the National Stock Exchange in Mumbai
3. CSE or the Calcutta Stock Exchange in Kolkata
4. MSE or the Metropolitan Stock Exchange in Mumbai
5. India INX or India International Exchange in Gandhinagar
6. NSE IFSC Limited – a subsidiary of NSE in Ahmedabad
India has 6 major stock exchanges but NSE and BSE are the biggest in market capitalisation. In terms of companies listed and the volumes of trade, they stand out in these six biggest stock exchanges of the country.
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National Stock Exchange (NSE)
NSE was founded by a group of financial institutions to introduce transparency in the Indian capital market. It is equipped with a fully automated trading system. NSE recognized by the government of India as a premier stock exchange in 1993. It has been a paperless establishment right from the beginning. In 1995 National Securities Depository Limited (NSDL) established to facilitate the investors to hold and transfer their shares electronically. It has a fully automatic screen-based trading system called NEAT (National Exchange for Automatic Trading).
It has more than 1600 companies listed under it. Its benchmark index is NIFTY, which gives the stock index of the top 50 companies listed on the National Stock Exchange and was launched in the same year as NSDL. Currently, NSE handles 1,60,000 orders per second which is a quantum jump from the time NSE started in 1994 and used to handle just 2 orders per second.
In addition to NIFTY, NSE’s other indices are CNX Nifty Junior, CNX 100, S&P CNX 500, CNX Midcap, etc.
It stands in the 10th position in the Top Exchanges. NSE’s Market capitalization is around $3.1 trillion as of May 2021. The investors come and trade in equity, debts, and currency derivatives. Currently, Mr. Vikram Limaye is the Managing Director and CEO of NSE. Its official website is www.nseindia.com.
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Bombay Stock Exchange (BSE)
BSE is Asia’s oldest Stock Exchange that has been providing high-speed trading to its investors. Formerly, it was called – “The Native Share Brokers Association”. In 1956 the Government of India recognized it as the premier Stock Exchange under the Securities Contract Regulation Act, 1956. BSE has traded securities in the paper since it established in 1875. Right after the establishment of fully electronic NSE, BSE also switched to electronic trading to reduce the dependency on paper. It uses BOLT (BSE’s Online Trading), BSE online trading software, to execute the transactions.
BSE has more than 5000 companies listed under it. BSE is itself listed on its rival stock exchange that is Bombay Stock Exchange. The forces of demand and supply determine the prices of stocks on the BSE. It uses SENSEX as a benchmark Index that gives the stock index of the top 30 listed companies.
Apart from Sensex, BSE has other Indices – BSE 500, BSE100, BSE 200, BSE Midcap, BSE Smallcap, BSE PSU, BSE Auto, BSE Pharma, BSE Fast Moving Consumer Goods (FMCG), BSE Consumer Durable (Cons Dura), BSE Metal, etc.
Subsidiaries of BSE
Bombay Stock Exchange has many subsidiaries also namely – BSE SME, BSE Star MF, and BSE Bond market.
- BSE SME is the country’s largest SME (small and medium enterprises) platform with 250 listed companies.
- BSE Star MF is India’s largest mutual fund platform.
- Finally, the BSE Bond Market is India’s largest bond market. All three of the subsidiaries are the biggest in the market in their field.
BSE promotes trading instruments like mutual funds, equity, equity derivatives, currencies derivatives. It stands in the 9th position in the Top Exchanges. The constant buying and selling of stocks on the BSE flow the capital in the market. BSE’s Market capitalisation is around $3.1 trillion The BSE’s Managing Director and CEO is Mr. Ashish Kumar Chauhan. Its official website is www.bseindia.com.
Key Differences in NSE and BSE
| Features | NSE | BSE |
| Incorporated in | 1992 | 1875 |
| Location | Mumbai | Mumbai |
| Also known as | Largest stock exchange | Oldest stock exchange |
| Benchmark Index | NIFTY | SENSEX |
| Index Value | 15,722 | 52,484 |
| Listed Companies | 2,000 | 5,400 |
| Market Capitalisation | $ 3.1 trillion (May 2021) | $ 3.1 trillion (May 2021) |
| Geographical Spread | 1,486 cities | 417 cities |
| Global Ranking | 10th | 9th |
| Official Website | www.nseindia.com | www.bseindia.com |
| MD / CEO | Mr. Vikram Limaye | Mr. Ashish Kumar Chauhan |
Which Stock Market to Invest in?
The NSE and BSE are the premier stock market exchanges of India. Both of them are contributing to the financial market of the country and have a global ranking of 11th and 10th respectively. Both of the exchanges provide excellent services. Hundreds and thousands of traders and investors come and trade on these stock exchanges daily.
Certain companies are listed on both the exchanges and many companies are listed only in either of the exchanges. Therefore the choice between the exchanges should be made completely on the deep study, research, analysis, performance of the company and its stocks, and the possible dividend the investor is expecting from a stock.
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