Stock Exchanges of India

Stock exchanges in India are regulated platforms where securities such as stocks, bonds, and other financial instruments are traded. They play a critical role in the Indian economy by enabling companies to raise capital and providing a marketplace for investors to buy and sell securities.

Major Stock Exchanges in India

1. Bombay Stock Exchange (BSE):
   • Established: 1875 (Asia’s oldest stock exchange).
   • Location: Mumbai.
   • Index: SENSEX (Sensitive Index) – Tracks the performance of 30 large, financially sound companies.
   • Key Features:
     • First exchange in India to be recognized by the government.
     • Offers equity, derivatives, mutual funds, and debt instruments.
     • Pioneered internet-based trading in India.
   • Role: Facilitates small and medium enterprises (SMEs) through the BSE SME platform.
2. National Stock Exchange (NSE):
   • Established: 1992.
   • Location: Mumbai.
   • Index: NIFTY 50 – Tracks the performance of the top 50 companies.
   • Key Features:
     • First stock exchange in India to introduce electronic trading.
     • Offers equity, derivatives, currency, and debt markets.
     • Known for advanced technology and high trading volumes.
   • Role: Promotes transparency and efficiency in trading through digital platforms.
3. Calcutta Stock Exchange (CSE):
   • Established: 1908.
   • Location: Kolkata.
   • Key Features:
     • One of the oldest stock exchanges in India.
     • Focused on regional trading activities.
   • Current Status: Its trading platform is less active compared to BSE and NSE.
4. Metropolitan Stock Exchange of India (MSE):
   • Established: 2008 (formerly known as MCX-SX).
   • Location: Mumbai.
   • Key Features:
     • Operates in equity, debt, and derivative segments.
     • Focuses on inclusive growth by catering to a broader segment of participants.
5. India International Exchange (India INX):
   • Established: 2017.
   • Location: GIFT City, Gujarat.
   • Key Features:
     • India’s first international exchange.
     • Operates for 22 hours a day, allowing global investors to trade across time zones.
     • Offers trading in equity derivatives, commodity derivatives, and currency derivatives.

Role of Stock Exchanges in India

1. Capital Formation:
   • Companies raise funds by issuing shares and bonds through the stock exchange.
2. Liquidity:
   • Provides investors with a platform to buy or sell securities, ensuring liquidity.
3. Price Discovery:
   • Market forces of supply and demand determine the price of securities.
4. Investment Opportunities:
   • Allows investors to participate in the growth of companies by buying shares.
5. Economic Growth:
   • Facilitates the mobilization of funds for productive purposes, leading to economic development.
6. Regulated Environment:
   • Ensures transparency, reducing the risk of fraud, through the supervision of regulatory bodies like SEBI.

Regulation of Stock Exchanges

• Securities and Exchange Board of India (SEBI):
  • Established in 1988 and given statutory powers in 1992.
  • Regulates stock exchanges to ensure fairness and transparency.
  • Protects the interests of investors by monitoring market practices.