The Indian economy is growing rapidly and is expected to emerge as one of the leaders in the international arena very soon. This boom in the economy is stimulated by the growth of the financial markets in India. The stock market plays a pivotal role in the Indian financial market. The first modern stock trading market was created in Amsterdam when the Dutch East India Company was the first publicly traded company. To raise capital, the company decided to sell stock and pay dividends of the shares to investors. Then in 1611, the Amsterdam stock exchange was created.
The history of the share market of India dates back to 1875. The name of the first share trading association in India was “Native Share and Stock Broker’s Association” which later came to be known as the Bombay Stock Exchange. This association began with 318 members. The NSE, on the other hand, was founded in 1992 and started trading in 1994. These two are the major exchanges in India. Other than these two, India has 4 permanent exchanges. In total India has 6 permanent Exchanges. They are listed below:
BSE also known as “The Bombay Stock Exchange” is the oldest stock exchange in India. BSE is located at Dalal Street, Mumbai. It was founded by Mr. Premchand Roychand, famously known as the Cotton King, the Bullion King, or the Big Bull. Today BSE is one of the world’s largest exchanges with a market capitalization of about ₹208 trillion by 2023.
In 1986, Sensex was introduced as the first equity index 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. BSE has introduced derivative instruments like futures and options for trading.
NSE also known as “The National Stock Exchange” is one of the leading stock exchanges in India. National Stock Exchange was incorporated in the year 1992 to bring about transparency in the Indian equity markets. It was recognized as a stock exchange by SEBI in 1993 and commenced operations in 1994. It was the first exchange in India to introduce an electronic trading facility also known as an online trading platform. Operations in the derivatives segment commenced on 12 June 2000.
In August 2008, NSE introduced currency derivatives. Today NSE has become one of the big exchanges with a market capitalization of about US$3.27 trillion by 2023. In the year 1995-96, NSE launched the NIFTY 50 Index and commenced trading and settlement in dematerialized securities. Nifty lists the 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 EMERGE is NSE’s new initiative for start-up companies in India. These companies can get listed on NSE without an IPO. This platform will help SMEs & Startups connect with investors and help them with the raising of funds. In August 2019, the 200th company was listed on NSE’s SME platform.
MCX is one of the largest commodity exchanges in the country. As the name suggests, this exchange is only for trading in commodities, including agri and non-agri products. These include cotton, crude palm oil, rubber, and cardamom. Non-agri includes base metals (lead, aluminum, nickel, zinc, and copper), bullion (gold and silver), and energy (crude oil and natural gas).
MCX is the first listed (both BSE and NSE) commodity exchange in India and started its operations in 2003. It is based out of Mumbai. While it offers both futures and options contracts across its products, it also started to offer index futures contracts. These include MCX BULLDEX (bullion index), MCX METLDEX (metal index), and MCX ENRGDEX (energy index).
NCDEX is another largest commodity exchange in the country that started its operations around the same time as MCX. NCDCEX, unlike MCX, only offers agri products for trading. These include cereals and pulses (including Chana, Barley, and Moong), Oil and Oil seeds (including Castor seeds, Soybean, Mustard seed, and crude palm oil), Fibres (including Kapas and cotton), and Spices (including Turmeric and Coriander).
The Calcutta Stock Exchange is the second oldest stock exchange in Asia. It was founded on 1 December 1863 by sixteen of Calcutta’s leading stockbrokers, beginning its work in rented premises at 11 Strand Road. It is located at the Lyons Range, Kolkata. This stock exchange is under the ownership of the Ministry of Finance, Government of India. It was reconstituted in its current form in 1908 and is the second-largest bourse in India.
The Calcutta Stock Exchange has been asked to exit by SEBI, but the matter is sub judice before the Calcutta High Court. Since 2013, there has been no trading on the CSE trading platform.
Indian Commodity Exchange Limited is a SEBI-regulated online Commodity Derivative Exchange, headquartered in Mumbai. ICEX provides a nationwide trading platform through its appointed brokers for commodity trading in India. While it was incorporated in 2009, its trading was suspended in 2014. It started its operations again in 2017. After a year, on August 2018, the exchange launched its steel-long contract.
ICEX launched the world’s first-ever Diamond derivatives contract of 1 carat in August 2018. ICEX offers trading in various commodities like spices, oil, seed, plantation, fiber, and metals.
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