• HDFC securities
• 27 Mar 2023
• Knowledge Centre

The modern economy is largely based on capital. In order to do any business, you need capital. There are various ways to raise capital and one of the ways is to approach institutional and retail investors. But, you cannot go to each of them separately – it will be cumbersome. This is where stock exchanges and share market apps become crucial. Stock exchanges offer a regulated marketplace for trading shares and bonds, while share market apps provide convenient access to these markets, aiding in investment management and capital monitoring.

shares exchanges are a marketplace where entrepreneurs and investors meet to trade shares of the company (called a primary market). It is also where investors trade shares among themselves (called the secondary market). Some corporate bonds are also traded on stock exchanges.

The stock market is a highly regulated marketplace. The Securities and Exchange Board of India (Sebi) is the regulator of markets in India that has statutory powers provided by an act of parliament. Its primary objective is to protect the interest of investors.

Stock exchanges in India

Stock exchanges have existed in the country since the 19^th century. The country houses Asia’s oldest stock exchange – BSE. It also houses the largest derivative exchange. Earlier, stock exchanges used to be a physical marketplace where investors would gather to exchange shares through an open outcry system. But now most trading happens electronically.

There used to be a number of stock exchanges across the country catering to local investors. But, as the trading went online, such local physical exchanges lost their relevance and the market consolidated. As of September 2022, there are seven Sebi-recognized stock exchanges and six of them are based in Mumbai. A few of them facilitate trading in commodities only.

Check out the list of stock exchanges in India:

National Stock Exchange of India (NSE)

It is the largest exchange in India in terms of the trading volume. Established in 1994, NSE was the first exchange in India to implement electronic or screen-based trading. As of March 2022, about 2,000 companies were listed for trading on the exchange.

NSE is permitted to facilitate trading in equities, equity derivatives, currency derivatives (including interest rate derivatives), commodity derivatives and debt. Nifty50 is its flagship equity index, comprising the top 50 large-cap stocks listed on the exchange.

NSE's fully-integrated business model comprises exchange listings, indices, trading services, clearing and settlement services, market data feeds, and financial education offerings, among others.

NSE also has a subsidiary NSE IFSC Limited (NSE International Exchange) at Gujarat International Finance Tech City (GIFT City) in Gandhinagar. It offers trading in securities in any currency other than the Indian rupee.

BSE

Formerly Bombay Stock Exchange, BSE is the second most popular stock exchange in the country and is Asia’s oldest exchange. Established in 1875, the exchange has a long history. It is also the first recognized stock exchange in independent India and is also the first listed stock exchange in India as BSE shares can now be traded among investors.

BSE is permitted to facilitate trading in equities, equity derivatives, currency derivatives (including interest rate derivatives), commodity derivatives and debt. BSE Star MF facilitates buying ans selling of mutual fund units as well. More than 5,200 companies are listed on BSE. BSE S&P Sensex is its flagship equity index, comprising top 30 large-cap stocks.

BSE also has a subsidiary exchange -- India INX -- India's first international exchange. It is also located at GIFT City IFSC in Ahmedabad.

Metropolitan Stock Exchange of India (MSE)

MSE is one of the youngest stock exchanges in the country, receiving approvals in 2012 and starting trading in 2013. The exchange facilitates trading in the capital market, futures & options, currency derivatives and debt market segments.

The exchange is largely owned by various banks including SBI, Axis Bank, HDFC Bank, Bank of India, Indian Bank and Punjab National Bank.

SX40 is its flagship index comprising 40 large-cap stocks.

Calcutta Stock Exchange (CSE)

CSE is another recognized and one of the oldest stock exchanges in the country. Established formally in the early 20^th century. The exchange has a long and checkered history.  

Trading at the exchange has been suspended since 2013. Sebi has asked the exchange to exit the business however the matter is sub judice now.

Other erstwhile exchanges

Sebi believes the business model of regional exchanges is obsolete now. Thus the market regulator has approved the exit of as many as 28 exchanges in India under its policy in the last 10 years. Key among them include Hyderabad Stock Exchange, Bangalore Stock Exchange, Magadh Stock Exchange, Delhi Stock Exchange, Madras Stock Exchange, and Ahmedabad Stock Exchange.

You can go through the full list of stock exchanges in India here: https://www.sebi.gov.in/stock-exchanges.html