The two big stock exchanges in the country are the Bombay Stock Exchange and the National Stock Exchange. More popularly these are known as the BSE and the NSE. BSE is Asia's first stock exchange. The Bombay Stock Exchange is located at Mumbai and it was established in 1875. The National Stock Exchange or NSE of India Limited is the leading stock exchange of India, located in Mumbai. It was established in 1992.
All of the listed companies in India are listed either on the BSE or the NSE.
What is listing of companies in BSE NSE?
Listing the term refers formal admission of a security to the trading platform of the Exchange. That is the company whose shares are traded on an official stock exchange. It should be in accordance with the listing requirements of that exchange. This may include how many shares are listed and a minimum earnings level.
In BSE, the securities can be of any public limited company, Central/State Government or quasi-governmental and other financial institutions or corporations, and municipalities, etc.
Why are we listing companies?
There are many objectives we aim while listing companies in BSE and NSE. The objectives of listing are mainly to
- Provide liquidity to securities
- Mobilise savings for our economic development
- Protect the interest of investors
How to list a company in BSE and NSE?
The Exchange has a separate Listing Department to grant approval for listing of securities of companies. The department functions in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Companies Act, 1956, Guidelines issued by SEBI and Rules, Securities Contracts (Regulation) Rules, 1957, and Bye-laws and Regulations of the Exchange.
There are listing fees applicable to the companies listed on BSE and NSE. The listing fees depend on the companies paid up capital at both NSE and BSE. The initial listing fee at NSE is Rs 7,500. The initial listing fee is Rs 20,000 at BSE.
The annual listing fees for a company with a paid-up capital up to Rs 5 Crores is Rs 10,000 at BSE. For NSE it is Rs 8,400. BSE charges Rs 15,000 for a company with paid up capital between 5 to 10 crores, and NSE charges Rs 10,000.
Take a look at how many companies are listed on the NSE and BSE
On the Bombay Stock exchange, which is the oldest stock exchange in the country, there are approximately 5000 companies listed. This is the highest number of companies. The BSE has a record of being the only bourse with highest number of listed companies in the world.
The National Stock Exchange or the NSE is a relatively new exchange as compared to the BSE. Therefore, it has lower number of companies listed which would be to the tune of around 2000 companies.
But, we must mention here that the exchange is the biggest in the country in terms of daily turnover. While, the number of companies listed is far lesser than BSE, in terms of share volumes and value of turnover it remains much bigger than the BSE.
What if shares are listed on the BSE and NSE, but not traded?
Out of the 5000 listed share on the BSE, only around 2000 could be actively traded. Most companies are hardly traded and some have been wound down and become sick units.
There are others that are thinly traded and you might even struggle to sell these shares due to lack of volumes in the counter.
In case you do not find the shares traded on the BSE and the NSE, you can contact the corporate directly. However, there could be many companies that have been referred to the Board of Industrial and Financial reconstruction.
Should you buy shares on the BSE or the NSE?
There is always a price difference in the share prices of the BSE and NSE. If you are buying you should check the rates at both the exchanges before buying. For example, if Reliance Industries is traded at Rs 970 on the BSE and Rs 971 on the NSE, you are better-off buying the share from the BSE. And, if you are holding shares and want to sell, you can sell on the NSE as the price is better in the above example.
Listed companies on the BSE and the NSE are high, but, the shares traded are a few thousands. NSE has far lesser number of companies traded. Generally, you can buy on the NSE or the BSE and a broker who has membership for both, provides you with the same brokerage charges. Most brokers are listed on the BSE and the NSE.
However, there maybe some brokers who are not listed on one of the exchanges. So, if you have an account with such a broker, you might lose out the opportunity of buying in another exchange, which offers cheaper rates.
But the diference is very insignificant.