The stock exchange in India functions as a market for financial instruments such as bonds and commodities. It is a platform where buyers and sellers can meet to trade financial instruments at specific times of the day while adhering to SEBI’s well-defined guidelines. However, only companies that are listed on a stock exchange are permitted to trade on it. Stocks that are not listed on a reputable stock exchange can still be traded in an ‘Over the Counter Market’. However, such shares would not be highly valued in the stock market.
History of Stock Exchange of India
The first organized stock exchange in India was established in 1875 in Bombay, and it is considered the oldest stock exchange in India and Asia. The Ahmedabad Stock Exchange was established in 1894 to facilitate trading in the shares of textile mills in the city. The Calcutta stock exchange was established in 1908 to provide a market for plantation and jute mill shares. In 1920, the Madras Stock Exchange was established and there are currently 24 stock exchanges in India, with 21 of them being regional exchanges with allotted areas.
The National Stock Exchange (NSE) and the Over the Counter Exchange of India (OICEI), both established during the reform era, have mandates to have a national scope. They have offices in Ahmedabad, Vadodara, Bangalore, Bhubaneswar, Mumbai, Kolkata, Kochi, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur’ Kanpur, Ludhiana, and Chennai. Mangalore, Meerut, Patna, Pune, and Rajkot.
The stock exchanges are run by governing boards and executive directors. The Ministry of Finance establishes policies governing its regulation and control. In April 1988, the government established the Securities and Exchange Board of India (SEBI) to oversee the development and regulation of the securities industry and stock exchanges. Below is the list of stock exchanges in India
- Bombay stock exchange (BSE)
- National stock exchange (NSE)
- Calcutta Stock Exchange (CSE)
- India International Exchange (India INX)
- Metropolitan Stock Exchange (MSE)
- NSE IFSC Ltd (NSE International Exchange)
The below exchanges have been granted exit by SEBI vide orders
|S.no||Name of Stock Exchange||Date of Exit|
|1||Hyderabad Stock Exchange||January 25, 2013|
|2||Coimbatore Stock Exchange Ltd||April 3, 2013|
|3||Saurashtra Kutch Stock Exchange Ltd||April 5, 2013|
|4||Mangalore Stock Exchange||March 3, 2014|
|5||Inter-Connected Stock Exchange of India Ltd||December 08, 2014|
|6||Cochin Stock Exchange Ltd||December 23, 2014|
|7||Bangalore Stock Exchange Ltd||December 26, 2014|
|8||Ludhiana Stock exchange Ltd||December 30, 2014|
|9||Gauhati Stock Exchange Ltd||January 27, 2015|
|10||Bhubaneswar Stock Exchange Ltd||February 09, 2015|
|11||Jaipur Stock Exchange Ltd||March 23, 2015|
|12||OTC Exchange of India||March 31, 2015|
|13||Pune Stock Exchange Ltd||April 13, 2015|
|14||Madras Stock Exchange Ltd||May 14, 2015|
|15||Uttar Pradesh Stock Exchange Ltd||June 09, 2015|
|16||Madhya Pradesh Stock Exchange Ltd||June 09, 2015|
|17||Vadodara Stock Exchange Ltd||November 09, 2015|
|18||Delhi Stock Exchange Ltd||January 23, 2017|
|19||Ahmedabad Stock Exchange Ltd||April 02, 2018|
|20||Magadh Stock Exchange||May 08, 2019|
|21||Ace Derivatives and Commodity Exchange Limited, Ahmedabad||December 31, 2018|
|22||Hapur Commodity Exchange Limited||June 29, 2018|
|23||Universal Commodity Exchange Limited (UCX)||March 16, 2018|
|24||Rajkot Commodity Exchange limited||January 09, 2018|
|25||The Spice and Oilseeds Exchange Limited, Sangli||April 12, 2017|
|26||Cotton Association of India (CAI)||December 29, 2016|
|27||Bombay Commodity Exchange Limited (BCEL)||October 28, 2016|
|28||India Pepper and Spice Trade Association, Kochi (IPSTA)||January 10, 2018|
Bombay Stock Exchange (BSE India)
BSE Limited, also known as the Bombay Stock Exchange (BSE), is a stock exchange in Mumbai, India. It is located on Dalal Street. It is the oldest stock exchange in Asia, as well as the tenth oldest in the world, and was founded in 1875 by cotton merchant Premchand Roychand, a Rajasthani Jain businessman. As of January 2022, the BSE is the ninth largest stock exchange in the world, with a total market capitalization of more than 276.713 lakh crore.
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National Stock Exchange of India (NSE)
The National Stock Exchange of India Limited (NSE) is India’s leading stock exchange, headquartered in Mumbai, Maharashtra. According to statistics maintained by the Futures Industry Association (FIA), a derivatives trade body, it will be the world’s largest derivatives exchange in 2021 by the number of contracts traded. According to World Federation of Exchanges (WFE) statistics for the calendar year 2021, the NSE is ranked fourth in the world in cash equities by the number of trades. It is owned by several major financial institutions, banks, and insurance companies.
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Calcutta Stock Exchange (CSE)
The Calcutta Stock Exchange (CSE), located in Kolkata’s Lyons Range, is Asia’s oldest government-owned stock exchange. It was established on December 1, 1863, by sixteen of Calcutta’s leading stockbrokers, and began operations in rented premises at 11 Strand Road. It was re-established in its current form in 1908 and is India’s second-largest bourse. SEBI has asked the Calcutta Stock Exchange to exit, but the matter is pending in the Calcutta High Court; thirteen other regional stock exchanges have closed in the last three years as a result of SEBI’s exit policy, including the Bangalore Stock Exchange, the Hyderabad Stock Exchange, and the Madras Stock Exchange. There has been no trading on the CSE trading platform since 2013.
In 1830, the Kolkata bourse was held beneath a neem tree. The trading of the British East India Company’s loan stock is the earliest record of dealings in securities in India. On December 1, 1863, sixteen leading stockbrokers established the exchange in rented premises on 11 Strand Road. The premises also included a public library that could be accessed after paying an admission fee. The stock exchange was reconstituted in its current form in 1908, with 150 members. The current Lyons Range structure was built in 1928.
The Government of India granted the Calcutta Stock Exchange Ltd permanent recognition on 14 April 1980, following the relevant provisions of the Securities Contracts (Regulation) Act, 1956. The open outcry system was used by the Calcutta Stock Exchange until 1997 when it was replaced by C-STAR (CSE Screen Based Trading and Reporting), an electronic trading platform. The Bombay Stock Exchange (BSE) has acquired 5% of the Calcutta Stock Exchange’s shares in a strategic investment.
India International Exchange (India INX)
The India International Exchange Limited (India INX) is a subsidiary of the Bombay Stock Exchange and India’s first international stock exchange. It is located in Gujarat at the International Financial Services Centre, GIFT City. It is a division of BSE Limited.
It was inaugurated on January 9, 2017, by Indian Prime Minister Narendra Modi. The trading operations started on January 16, 2017. It runs on the advanced technology platform EUREX T7. With a turnaround time of 4 microseconds, it is the world’s fastest exchange. It is open 22 hours a day, seven days a week. These timings allow international investors and non-resident Indians to trade from anywhere in the world at their convenience. Its daily turnover exceeds 74,509 crores.
The bonds are listed on the India International Exchange by the Asian Development Bank. Early in 2020, the bank raised $118 million through rupee-linked bonds to support the development of India’s financial market infrastructure.
Metropolitan Stock Exchange (MSE)
The Metropolitan Stock Exchange of India Limited (MSE) is a stock exchange that has been approved by the Securities and Exchange Board of India (SEBI) under Section 4 of the Securities Contracts (Regulation) Act, 1956. On December 21, 2012, the Ministry of Corporate Affairs, Government of India, notified the Exchange that it was a “recognized stock exchange” under Section 2(39) of the Companies Act, 1956. Some of India’s top public sector banks, private sector banks, and domestic financial institutions are among the exchange’s shareholders.
The chairman (Public Interest Director) on the Board is Mr. S.V.D. Nageswara Rao, Senior Faculty of Economics and Finance at the School of Management, IIT Mumbai. On March 12, 2020, Latika S Kundu took over as Managing Director & Chief Executive Officer of the exchange. Metropolitan stock exchange of India share price is 1.3054 per equity share
Shareholders include banks from both the public and private sectors, as well as exchanges, financial institutions, and private investors. State Bank of India, Union Bank of India, UCO Bank, Canara Bank, Punjab National Bank, Indian Overseas Bank, Bank of India, Bank of Baroda, HDFC Bank, Axis Bank, MCX, IL&FS, IFCI, and Mr. Radhakishan S Damani, Mr. Siddhartha Balachandran, Mr. Nemish Shah are among the shareholders.
Metropolitan Clearing Corporation of India Ltd. (MCCIL) was established as a new generation clearing and settlement corporation by Metropolitan Stock Exchange of India Ltd. (MSE), Multi-Commodity Exchange of India Limited (MCX), and Financial Technologies India Limited (FTIL).
On 2 January 2009, SEBI granted the company permission to perform clearing and settlement functions for trades executed on the MSE. The company began operations on February 16, 2009.
NSE IFSC Ltd (NSE International Exchange)
The National Stock Exchange’s International Financial Service Centre (NSE IFSC) is a wholly-owned subsidiary of the National Stock Exchange (NSE). This NSE subsidiary runs an international stock exchange in GIFT City, Gandhinagar, which was established to make it easier for NRIs and foreign investors to trade in Indian equities. Retail investors in India can now purchase US-listed stocks through the NSE IFSC exchange.
The GIFT City NSE IFSC exchange is an international exchange where all trades are conducted in a foreign currency, namely US dollars. Because investments in foreign exchange outside of India are made through the LRS (Liberalized Remittance Scheme), your investments in NSE IFSC US stocks will also be made through this scheme. LRS regulations allow you to invest a maximum of US$ 2.5 lakh in a fiscal year. As a result, this will be the upper limit for investing in US stocks listed on the NSE IFSC.
At the moment, you can purchase 8 US stocks on the NSE IFSC Exchange. Alphabet (Google), Amazon, Meta Platforms (Facebook), Netflix, Apple, Walmart, Tesla, and Microsoft are among them. This number will be increased to 50 US stocks, which will be phased into the exchange. The exchange’s trading hours will be the same as those of the NYSE (New York Stock Exchange). As a result, the NSE IFSC trading hours will be 8 p.m. IST to 2:30 p.m. IST.
The stock exchange is a place where buyers meet sellers to trade securities. Two large and popular stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
To get listed on the stock exchange, the companies must meet the basic requirements and guidelines. Further, Over the Counter (OTC) is a place where unlisted stocks can be bought or sold.
That’s all for this post. Hopefully, you have liked the article. Do let us know which stock and commodity exchange you use for investments. Happy Investing!