The stock exchange is a marketplace where securities can be traded between investors/traders with the help of brokers. The BSE and NSE are the leading stock exchanges of the Indian market.
While many are familiar with these exchanges, there are a few differences between them.
Bombay Stock Exchange (BSE)
BSE is located at Dalal Street, Mumbai.
It is the oldest and the first stock exchange in Asia. It was established in 1875, and was formerly known by the name of –The Native Share & Stock Brokers Association.
In 1986, Sensex was introduced, as the first equity index. This is to provide a base for identifying the top 30 trading companies of the exchange, in more than 10 sectors.
Apart from Sensex, other important indices of BSE include BSE 100, BSE 200, BSE 500, BSE MIDCAP, BSE SMLCAP, BSE PSU, BSE Auto, BSE Pharma, BSE FMCG, and BSE Metal.
As of October 19, 2021, BSE has an overall market capitalization of over Rs 118.80 crore. It ranks amongst the 10 most valued exchanges globally. BSE also came out with an IPO and is listed in NSE.
Its product offerings includes equities, equity derivatives, commodities and currency derivatives.
National Stock Exchange (NSE)
While NSE is young when compared to BSE, it is still one of the largest exchanges in the country. NSE came into picture in the year 1992 with Vikram Limaye as its CEO.
It was recognised as a stock exchange by SEBI in 1993 and commenced operations in 1994. It started with the launch of the wholesale debt market, followed shortly after by the launch of the cash market segment.
In the year 1995-96, NSE launched NIFTY 50 Index and commenced trading and settlement in dematerialised securities. Nifty lists out top 50 companies which traded on the NSE stock exchange market.
Apart from Nifty, other key indices of NSE include Nifty Next50, Nifty500, Nifty Midcap150, Nifty Smallcap250 and Nifty MidSmallcap 400.
NSE expanded its product offerings as well. Among other services such as clearing and settlement, it also offers equity and equity derivatives instruments, commodities and currency derivatives.
NSE too plans to come out with an IPO and date is expected to be announced soon.
BSE vs NSE: difference
Here are some of the key differences between BSE and NSE:
|Basis for comparison||BSE||NSE|
|Brief Introduction||It is the oldest stock exchange||It is relatively young and is the biggest stock exchange. A front runner in the introduction of the fully automated, electronic trading system across the country|
|Benchmark index||Sensex 30||Nifty 50|
|Total listed companies||Around 7400||Around 1790|
|Market Capitalization||Around Rs 266 trillion||Around Rs 199 trillion|
|Network (trading terminals)||419 cities||Over 1500 cities|
|Liquidity||Comparably lower than NSE||In case of liquidity, NSE is a clear winner, since volumes traded in NSE are much higher compared with BSE.|
In which exchange should investors transact?
The selection of exchange purely depends on the companies listed. For instance, BSE as a stock is listed only on NSE. So if you want to trade in BSE, then your only choice is NSE.
But having said that, most of the stocks are listed in both BSE and NSE. So the choice isn’t that difficult.
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.