Until a few years back we had a number of stock exchanges in the country, where companies after their successful IPOs or public issues got their shares listed.
What this meant was that if you were staying in the city of Bengaluru, you would have to place an order with the broker or sub broker who would visit the stock exchange and buy the shares for you.
The emergence of the National Stock Exchange completely changed all this. From trading in physical shares and going to the exchanges, investors were able to sit in their room and trade shares over the internet as the telecomunications revolutionized trading. This was possible because of electronic trading.
SAT or Very Small Aperture Terminal used by the National Stock Exchange helps investors to trade through a satellite network. The need for visiting the exchanges was not felt. So, you could buy a stock through the NSE sitting in any part of the country. This meant there was virtually no need for regional stock exchanges and most of them died a slow death.
Today, the exchanges that revolutionized or changed managed to survive. Today, the three popular exchanges in the country include.
The National Stock Exchange
The National Stock Exchange (NSE) is by far the largest stock exchange in the country with a solid network. The NSE was set up by a number of top domestic institutions in the country. NSE has leased lines and VSATs spread across almost every city in the country. This makes its network very expansive. One can trade in futures and equity shares through the exchange.
The NSE was also at the forefront in creating the National Securities Depository of India which helped in creating electronic share certificates and eliminated the disadvantages of the physical certificates.
Since starting operations in 2004, the NSE has completely revolutionized the way investors trade in the stock markets by helping to go electronic, create demat, reducing costs and bringing about transparency.
Bombay Stock Exchange
The Bombay Stock Exchange is the oldest stock exchange in the country established in 1875. It was the largest stock exchange in the country but over the years has ceded ground to the NSE. The BSE has the highest number of companies listed on the exchange at around 5500. No stock exchange across the globe has these many number of companies listed on their exchanges.
Over the years, BSE quickly adapted to changes and ensured that it changes along with the times and keeping in tune with the NSE.
The BSE also provides a host of services including clearing, settlement, education and market data services.
MCX Stock Exchange
The MCX Stock Exchange is the newest stock exchange in the country established a few years ago. It was promoted by the MCX, a commodity based stock exchange. It has still to catch up with peers like the NSE and BSE.