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What Is The Difference Between BSE And NSE?

By Vaishali Parnami
|

BSE stands for 'Bombay Stock Exchange’, and NSE stands for 'National Stock Exchange’.

Although everybody understands that both BSE and NSE is something related to securities such as stock shares and bonds, what is the exact definition of the stock exchange? Let’s find out.

What Is The Difference Between BSE And NSE?
In India, we have two main stock exchange markets: National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
 

What is BSE?

In 1875, BSE or Bombay Stock Exchange was established, and it was formerly known as 'The native share and stock brokers association’. However, after 1957, Government of India recognized this stock exchange as the premier stock exchange of India, under the Securities Contract Regulation Act, 1956.

SENSEX was also introduced in 1986 as the first ever equity index of India to offer an identifying base for top 30 exchange trading companies.

In 1995, BSE on-line trading (BOLT) was established, and at that time, its capacity amounted to 8 million transactions per day.

BSE is the first stock exchange of Asia, and it offers varied services such as market data services, risk management, CDSL (Central Depository Services Limited) depository services, etc.

Bombay Stock Exchange is additionally 12th biggest stock exchange marketplace in the world, and as of July 2017, its market capitalization is over $2 trillion.

What is NSE?

NSE or National Stock Exchange is located in Mumbai, and it is India’s leading stock exchange market. It first came into existence in 1992 and brought with it an electronic exchange system in India, which led to the removal of the paper based system.

NSE introduced Nifty 50 in 1996 as the identifying base for top 50 stock index, and it is extensively utilized as Indian capital markets’ barometer and by Indian investors.

National Stock Exchange became a stock exchange recognized company by 1993, and in 1992, it was incorporated as a tax paying company under Securities Contracts Act, 1956.

Formation of NSDL (National Securities Depository Limited) took place in 1995 to offer investors a safe platform for transferring and holding their bonds and shares electronically.

 

National Stock Exchange is the 10th biggest stock exchange marketplace, and as of March 2017, its market capitalization reached over $1.41 trillion.

Key Differences

• Both National Stock Exchange and Bombay Stock Exchange are one of the top stock exchanges in India. However, the oldest is BSE and youngest is NSE.

• While Bombay Stock Exchange is 10th in top stock exchanges, National Stock Exchange is 11th in position.

• Electronic exchange system was first introduced by NSE in 1992 and BSE’s electronic system, BOLT, came into existence in 1995.

• While NSE’s index, Nifty 50, gives top 50 stock index, BSE’s index, SENSEX, gives top 30 stock index.

• BSE became a recognized stock exchange in 1957 and NSE was recognized in 1993.

Difference between BSE and NSE

1) NSE is the biggest stock exchange in India, while BSE is the oldest stock exchange in India.

2) The BSE was established in 1875, while the NSE was Established in 1992.

3) The benchmark index for the NSE is the Nifty, while for the BSE it is Sensex.

4) Global Rank is 11th and 10th

5) BSE promotes trading in equity, debt instruments, mutual funds, currencies, derivatives, while NSE promotes trading equity, equity derivatives, debt and currency derivatives segments.

6) The vision of BSE is to 'Emerge as the premier Indian Stock Exchange with best - in - class global practice in technology, products innovation and customer service', while NSE's vision is to 'Continue to be a leader, establish global presence, facilitate the financial well being of people'.

7) The BSE's Sensex comprises of 30 companies, while NSE's Nifty comprises of 50 companies.

8) Website reference for BSE is www.bseindia.com and for NSE it is www.nseindia.com

9) Index Value (as on October 21, 2019) for BSE is 39,298.38 and for NSE, it stands at 11,661.85.

10) The Managing Director and CEO of BSE is Mr. Ashishkumar Chauhan and for NSE it is Mr. Vikram Limaye.

11) The number of listed companies is 1696 for NSE and 5749 for BSE.

Conclusion

Both the stock exchanges, National Stock Exchange and Bombay Stock Exchange, are an important part of Indian Capital Market. Every day, hundreds of thousands of brokers and investors trade on these stock exchanges. And both are established in Mumbai, Maharashtra, and SEBI (Securities and Exchange Board of India) recognized.

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