NSE and BSE are India’s two largest stock exchanges, and they are the key components of the Indian Capital Market. Established in 1875, BSE is India’s oldest stock exchange, and its benchmark index is SENSEX. Established in 1992, BSE is India’s largest exchange, and its benchmark index is NIFTY. Furthermore, Sensex and Nifty represent India’s stock market trend and development.
What is BSE?
Founded in the year 1875, BSE was formerly known as the Bombay Stock Exchange. It is one of the two principal stock exchanges in India, located in Dalal Street, Mumbai. With a speed of 6 microseconds, it is Asia’s first and fastest stock exchange. In addition, the BSE was India’s first stock exchange to be listed.
- Also, BSE promotes trading with efficiency and transparency in stock, mutual funds, derivatives, debt instruments, and currencies. It also offers risk management, clearing & settlement, and investor education in addition to trading. Furthermore, BSE’s vision is to “Emerge as the premier Indian stock exchange with best-in-class global practice in technology, product innovation, and customer service.”
- Also, BSE has played a vital role in establishing and expanding Indian financial markets by offering a platform for raising capital.
- BSE SME is a variant of BSE that serves as a trading platform for more than 250 small and medium-sized businesses. Through BSE StAR MF, it also offers mutual fund services. It is also the largest mutual fund platform in India. BSE Bond is a transparent electronic book mechanism method for the private placement of debt securities. It also has India INX, which is India’s first foreign exchange.
- The Indian Clearing Corporation Limited is a wholly-owned subsidiary of BSE. It acts as a central counterparty to all trades that take place on the exchange and also settles the trades that are executed. BSE Institute Limited, another subsidiary of BSE, is a capital market educational institution in the country.
- BSE Sensex is the most popular and also widely tracked equity index of BSE. Following are the other widely tracked indices of BSE are BSE100, BSE200, BSE SMALLCAP, BSE MIDCAP, BSEMetal, BSEAuto, etc. Furthermore, internationally, BSE trades on EUREX and the exchanges of Brazil, Russia, China and South Africa (BRCS nations).
What is NSE?
Incorporated in 1992, the National Stock Exchange (NSE) is one of the largest financial markets in India. Also, it is the first dematerialized electronic exchange in India. NSE has the highest average daily turnover of equity shares in India compared to any other stock exchange.
Furthermore, NSE is the first exchange in India to offer a fully-automated screen-based trading system to facilitate easy trading.
- NSE’s business model is vertically integrated. Moreover, NSE believes technology is the critical component of financial markets that helps in increasing market transparency. Furthermore, NSE’s vision is “to continue to be a leader, establish a global presence, facilitate the financial well-being of people.”
- For trading purposes, the National Stock Exchange (NSE) categorizes its products into the following three asset classes: stocks, derivatives, and fixed-income securities. The equity category includes the following: Mutual funds, stocks, ETFs, closed-ended mutual funds, and Indian Depository Receipts (IDRs). Derivatives include the following: contracts for equities, currencies, commodities and interest rates. Fixed-income securities include the following: sovereign gold bonds, corporate bonds, tri-party repo and other debt securities.
- Furthermore, with the introduction of index futures in the year 2000, the NSE began trading in derivatives. Futures and options have come a long way since then and are a popular financial tool. Also, in the Futures and Options segment, trading in indices and single stock future is available.
- NSE offers the following services across all its products: Trading, clearing and settlement, exchange listing, financial education, and technical solutions.
- NIFTY50 is the most popular and widely tracked equity indices of NSE. Following are the other popular indices are the NIFTY IT Index, NIFTY Bank Index, etc. Furthermore, internationally, Nifty50 trades as SGX Nifty and CME Nifty on the Singapore and Chicago Mercantile Exchanges, respectively.
Difference Between BSE and NSE
Following are the key difference between BSE and NSE:
|Basis of Difference||BSE||NSE|
|Full-Form||Bombay Stock Exchange||National Stock Exchange|
|Stock Exchange||Oldest stock exchange in Asia.||Biggest stock exchange in India in terms of the number of trades and also daily average turnover.|
|Vision||Emerge as the premier Indian stock exchange with best-in-class global practice in technology, product innovation, and customer service.||To continue to be a leader, establish a global presence, facilitate the financial well-being of people.|
|Electronic Trading||In 1995, BSE switched to electronic trading. Prior to which it was following paper trading.||NSE was established as a fully electronic and paperless trade.|
|Products||Equity, Mutual Funds, Exchange-Traded Funds, Security Lending & Borrowing Scheme, Corporate Bonds, Initial Public Offering (IPO), Institutional Placement Program (IPP), Offer for Sale, and also Equity, Currency, and Commodity Derivatives.||Equity, Mutual Funds, Exchange-Traded Funds, Corporate Bonds, Initial Public Offering (IPO), Offer for Sale, and also Equity, Currency, and Commodity Derivatives.|
|Number of Listed Companies||More than 4500||More than 1600|
|Market Capitalization||~$3 Trillion (May 2021)||~$3 Trillion (May 2021)|
|Index Value||60,546 (November 8, 2021)||18,069 (November 8, 2021)|
|Geographical Presence||419 cities||More than 1500 cities|
|Trading Volume||Low despite having more than 4500 companies.||High in spite of having more than 1600 companies.|
|Liquidity||Less liquid in comparison to NSE.||Highly liquid, and also has large volumes of trade.|
|SME Platform||NSE Emerge||BSE SME|
|Key Persons||Ashishkumar Chauhan (MD & CEO)||Vikram Limaye (MD & CEO)|