Difference between NSE and BSE

India’s two main stock exchange markets are National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). To me, these words NSE and BSE sounded quite similar when I first heard of them. I thought that they might be synonyms with each other, but I was wrong. When I started learning about them and dug deeper into the information, I realized that although the purpose served is the same, they have quite a few differences. What were those differences? This is the question that will be answered here in detail today.

Stock exchanges like National Stock Exchange (NSE) or Bombay Stock Exchange (BSE) are electronic platforms. This is a platform where numerous financial instruments are listed, like Stocks, Bonds, ETF’s and Derivatives. All the listed companies of India are present on NSE and BSE. Although they assist the same purpose, they are a bit different from each other.

What is NSE?

If we talk about Market Capitalization in India, then National Stock Exchange comes first on the list. It was organized in 1992, approved as a stock exchange in 1993, and started operating in 1994. The trading industry of India was transformed with the introduction of electronic or screen-based trading. The benchmark Index of NSE is NIFTY 50.

Working for 20 years, the National Stock Exchange has accomplished several milestones and has earned the following awards lately. Some of the awards received are World’s Largest Derivative Exchange in terms of contracts traded, Index Provider of the year, and ETF Index Provider. NSE is located in Bombay. One thousand six hundred ninety-six companies are listed on the National stock exchange.

NSE offers Equity, Equity, Currency, and Commodity Derivatives, Exchange-Traded Funds, Mutual Funds, Security Lending & Borrowing Scheme, Corporate Bonds, Initial Public Offering (IPO), Institutional Placement Program (IPP), an Offer for Sale.

What is BSE?

BSE has been working for 140 years. It is famous as it was the first stock exchange in Asia formed in 1875 in Bombay. BSE allows trading in financial instruments like equity, currencies, debt instruments, derivatives, and mutual funds. It has many subsidiaries like BSE SME, BSE Star MFand BSE Bond. Five thousand seven hundred forty-nine companies are listed on the Bombay stock exchange.

BSE offers Equity, Equity, Currency, and Commodity Derivatives, Exchange-Traded Funds, Mutual Funds, Corporate Bonds, Initial Public Offering (IPO), and Offers for Sale.

The benchmark index of BSE is known as Sensex. Sensex means a sensitive index. Sensex is a term to track the top 30 well-established companies of India from different industrial sectors. These companies depict the Indian Economic Trends and Stock Market. The original meaning of Sensex from the financial dictionary:” A figure indicating the relative prices of shares on the Mumbai (Bombay) Stock Exchange.” Sensex traded internationally on Eurex and multiple preeminent exchanges of Brazil, Russia, China, and South Africa.

What is the difference between NSE and BSE?

• SME platform of NSE is NSE Emerge and BSE SME for Bombay.
• The market capital of NSE is 2.27 trillion, and BSE is 2.1 trillion.
• NSE has a high liquidity ratio, and BSE has a low liquidity ratio.
• The NSE has an index value of 12,848, whereas BSE has an index value of 43,834.
• NSE stands at the 11th position in global ranking BSE stands at 10th position. · The official website for NSE is www.nseindia.com and BSE is www.bseindia.com
• Current Market Value / Base Market Capital x 1000 is the formula to calculate NSE Index.
• Total free-float market capitalization / Base market capitalization x Base index value is the formula to calculate BSE Index.
• The Managing Director and CEO of BSE are Mr. Ashishkumar Chauhan, and Mr. Vikram Limaye is the managing director and CEO of NSE.
• The website of BSE states its mission as: ‘Emerge as the premier Indian Stock Exchange with best-in-class global practice in technology, products innovation, and customer service,’ while the vision of NSE is: ‘Continue to be a leader, establish a global presence, facilitate the financial well-being of people.
• NSE introduced the electronic exchange system in 1992, and BSE introduced an electronic system known as BOLT in1995.

Investors buy on NSE and sell on BSE.

Arbitrage trading is when investors buy on NSE and sell on BSE via intraday and delivered shares. The same stock on NSE and BSE have a slightly different price. For example, if an anonymous stock has a value of ₹ 55 on NSE, it might be trading at ₹ 54.5 at BSE. This price difference varies because of the liquidity of the stock.

Many people ask this question that whether is suitable for beginners, to begin with? Both are fine for a beginner to start with, but it is essential to know what kind of investor the beginner will be. NSE is a good option if you wish to trade Intraday. The reason is that it has a better volume and liquidity. BSE is an excellent option for experienced investors as such investors do not care much about liquidity and volume. The primary joining fee for a member at BSE is Rs. 90 Lakhs and 100 to 300 Lakh for an NSE member. This depends upon the description of membership one chooses.

Initial Public Offering

If you a company that wants to get listed on BSE or NSE, then you have to issue your shares via Initial Public Offering (IPOs). We came across a straightforward question when researching in the general public. It that whether a company can list in both NSE and BSE? Then yes, to your surprise, all big companies of India listed in both NSE and BSE.

9:15 am to 3:30 pm is the timing for equities in both BSE and NSE. Since we know that has slowly gained a lot of popularity lately compared to was because of the introduction of derivatives. NSE transformed the stock industry by offering screen-based trading. Along with that, NSE also has a higher liquidity ratio than BSE.

In short, the stock exchange has a very significant role in the Indian Capital Market. Whether it’s National Stock Exchange or Bombay Stock Exchange, thousands of agents and investors buy and sell on these stock exchanges daily.

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