Over time, the investment realm has witnessed an exponential surge in its trading activities worldwide. India has been a significant economy and an active respondent to economic shifts. With many firms going public, the country needed a well-structured system that readily catered to the requirements of the share issuers and purchasers. The National Stock Exchange of India came into existence to fulfil this purpose.
Established by a group of financial institutions, both Indian and global, the exchange offers a dedicated portal for a safe, transparent, and easy stock trading experience.
NSE, or National Stock Exchange, is one of the premier stock exchanges of India located in Mumbai. It is the largest stock exchange in India and the second largest globally by the number of trades in equity shares. NSE was established in 1992 as the first demutualized electronic exchange.
Leading institutions set up NSE to provide a modern, fully automated screen-based trading system with a national reach. It started operations in the Wholesale Debt Market segment in 1994. Nifty & Bank nifty are benchmark indices of NSE.
NSE's flagship index, the NIFTY 50, the 50 stock index, is used extensively by investors in India and worldwide as a barometer of the Indian capital markets. The National Stock Exchange has a total market capitalization of more than INR49480.97 crore, making it the world's 09th-largest stock exchange as of Dec 2021.
What is NSE?
The National Stock Exchange of India, or NSE, is one of the country's leading financial markets, offering a unified trading interface for stockholders. Founded in 1992, the NSE evolved as a joint effort by top-tier business entities to promote safe stock trading for the burgeoning Indian investment market. The institute takes pride in being the first demutualised electronic exchange and thrives as the second-largest network globally in equity share trading.
NSE stock exchange provides its customers seamless access to an advanced, fully automated screen-supported trading channel. The corporate ventured into the wholesale debt market in 1994 with its dedicated services in the stated field. Headquartered in Mumbai, the NSE boasts a diversified portfolio comprising stocks/shares of top-ranked multinational conglomerates.
The two flagship indices of NSE are Nifty and Bank Nifty. Investors worldwide rely on the NIFTY 50 index to study the dynamics of the Indian stock markets. The exchange stood as the world’s largest derivatives exchange in 2019, 2020, and 2021. Per the 2021 records, the NSE stock exchange recorded 5.5 crore investors to its credit.
What is the objective of NSE?
● To establish an all-encompassing national trading facility for securities.
● To offer equitable access to the stock market to Indian investors.
● To establish a transparent, efficient, and fair market for share trading.
● To facilitate book-entry settlements and quicker NSE stock settlement cycles.
● To meet trading standards fixed by global financial organisations.
Most active Stocks on NSE by Trading Volumes
Here are the most active stocks by trading volumes (in Crores) on NSE (as of 29. 01. 2024):
- Company Name
- ₹ Price
- Bajaj Auto
- 384.7 (5.3%)
- Tech Mahindra
- -85.9 (-6.1%)
- SBI Life Insuran
- -29.6 (-2.1%)
- JSW Steel
- 3.5 (0.4%)
- Kotak Mah. Bank
- -20.2 (-1.1%)
Top Companies on NSE by Market Capitalisation
Here are the Top-10 companies in NSE by market capitalisation:
What are the services offered by NSE?
NSE works similarly to other stock exchanges around the world. Some brokers deal with orders from their clients (buy/sell-side). Brokers send these orders to the exchange for matching. Orders are matched based on price-time priority (better-priced orders get priority). Once an order is filled, the counterparty information is sent to both parties for settlement. The trade is settled through a clearing corporation, ensuring there is no default from either party.
The exchange offers trading, clearing and settlement services in equity, equity derivatives, debt and currency derivatives segments. It is the first exchange in India to introduce an electronic trading facility, thus connecting the investor base of the entire country.
NSE has a fully-integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions and financial education offerings. NSE also oversees compliance by trading and clearing members with SEBI regulations through various departments, including surveillance, arbitration and risk management.
NSE offers trading and clearing services through an electronic, fully automated screen-based trading system that adopts an order-driven market principle. It also provides a settlement guarantee through its clearing corporation. NSE has launched several new products like currency derivatives, interest rate futures (IRFs) and debt products like corporate bonds and Government Securities (G-Secs).
Why do companies list on NSE?
The most significant benefit of listing on the NSE is giving a company access to capital. It allows companies to raise money by offering investors equity ownership in exchange for cash.
Listing on NSE also provides liquidity to shareholders. Investors can buy or sell shares of a company listed on the exchange at any time during trading hours. The price at which an investor can buy or sell shares is determined by supply and demand, but there is an orderly market for most traded securities.
Benefits of listing on NSE:
1) Raising funds through the issue of shares, debentures and bonds
2) Providing liquidity and marketability to the existing shareholders by enabling them to trade their shares
3) Attracting investors and potential investors who buy shares in companies listed on NSE
4) Attracting good talent as they prefer working with listed companies.
5) The efficient market structure that facilitates the trading process in a fast and hassle-free manner
6) Assured transparency as the trading process is entirely computerized
What are the top indices on NSE?
The National Stock Exchange is a large and well-diversified bourse that offers various products in all market segments such as equity, equity derivatives, currency derivatives, debt, mutual funds, IPO etc. Nifty is the most crucial benchmark index for the Indian stock market.
Below is the List of Top NSE Indices -
- ●Nifty 50
- ●Nifty Next 50
- ●Nifty Midcap 50
- ●Nifty 100
- ●CNX Nifty
The Nifty 50 is a well-diversified 50 stock index accounting for 23 sectors. It is used for various purposes such as benchmarking fund portfolios, index-based derivatives and index funds.
The Indian benchmark indices, BSE Sensex and NSE's CNX Nifty, are calculated on a free-float market capitalization methodology. The free float methodology includes only those publicly issued shares that are readily available for trading in the marketplace.
In the case of equity shares, this would comprise only those in public hands, excluding promoters holding, holding of any person who is not resident Indian and strategic holding by Government. Free float excludes locked-in shares held by promoters, employees, and other long-term shareholders. Shares locked-in as margin against buyback of securities or pledges with lenders have also been excluded from a free float.
What are the trading categories on NSE?
Leading financial institutions set up the NSE at the government's behest to bring transparency to the Indian capital market. It attempted to bring down information asymmetry between investors and issuers so that pricing could reflect actual market dynamics.
Equity markets in India are regulated by the Securities and Exchange Board of India (SEBI). India has a dual listing system for companies, allowing them to list their shares in both the primary and secondary markets simultaneously from the same company address. Investors can trade on NSE through Internet, Brokers or directly from the primary market (New Delhi Stock Exchange) or Secondary market (National Stock Exchange), which could have different prices and ask/bid price differences.
There are three types of trading on NSE – Equity, F&O and Debt instruments (gold bonds, T-bills, SDLs etc.).
Equity Trading – The leading equity trading is through NSE's share market. In NSE, the transactions are carried out between buyers and sellers. The primary motive of investors is to sell or purchase shares that they want to buy or sell, depending upon their investment requirements.
F&O Trading – F&O stands for , which refers to assets that are traded electronically. These are financial derivatives that can be used to speculate on the price of stocks or other financial instruments. These derivatives are standardized contracts traded like stocks on an exchange, but they can be purchased at a discount (called 'F&O') and later sold at a premium (called 'O').
ETFs- exchange-traded funds (ETFs), equity ETFs and debt ETFs open for trading on NSE, i.e., you can buy and sell them anytime during market hours through your broker or any other mode of buying stocks, i.e., Demat account/trading account etc.
Debt Instruments such as T-Bills, State Development Loans (SDL), Gold Bonds etc., will be traded on this platform.
Which is India's largest stock exchange market in terms of volume?
National Stock Exchange (NSE)
What is the trading time for stock exchanges in India?
Stock exchanges in India follow a three-tier time slot system.
● Pre-opening slot: From 9.00 AM to 9.15 AM, you can place orders to purchase and sell shares in this time slot.
● Regular slot: This period starts from 9.15 AM to 3.30 PM. It is the primary trading time slot for the Indian stock market. The transactions in this timeframe follow the bilateral order matching procedure where price depends on the demand and supply.
● Post-closing slot: The Indian stock market closes at 3.30 PM. You cannot make transactions post this period.
Which is the regulatory body responsible for regulating the Indian stock market?
The principal regulator for stock exchanges in India is the Securities & Exchange Board of India (SEBI). Established under the SEBI Act 1992, the organisation promotes the Indian stock markets and protects the interests of investors. All stock exchanges in India follow the regulations set by SEBI.
Which body regulates the NSE?
The Securities & Exchange Board of India (SEBI) regulates the National Stock Exchange of India.
What is the trading technology that NSE uses?
The NSE uses satellite communication to facilitate seamless securities trading across the country. In addition, the exchange has a powerful screen-based automated NSE stock trading solution called the National Exchange for Automated Trading (NEAT).
What are the main functions of NSE?
The main functions of the NSE are:
● To set up a robust trading solution for equity, debt, and other securities for investors in India
● To work as a link network between investors and the global capital market
● To satisfy the regulatory standards set by financial regulators worldwide
I am an experienced financial market analyst and enthusiast, well-versed in the intricacies of global stock exchanges, with a particular focus on the National Stock Exchange of India (NSE). My expertise is grounded in years of research, analysis, and hands-on experience navigating various financial instruments and trading platforms.
The NSE, or National Stock Exchange, holds a significant position in India's financial landscape, serving as a vital hub for stock trading activities. Established in 1992, the NSE revolutionized the Indian capital markets by introducing a demutualized electronic exchange, setting new standards for transparency, efficiency, and accessibility.
One of the NSE's flagship offerings is the NIFTY 50 index, a widely recognized benchmark for Indian capital markets. This index, along with other key indices like Bank Nifty, provides investors with valuable insights into market trends and performance.
With a market capitalization exceeding INR 49,480.97 crore as of December 2021, the NSE ranks among the world's largest stock exchanges, reflecting its substantial influence and robust infrastructure.
The NSE offers a comprehensive range of services, including trading, clearing, and settlement across various segments such as equity, derivatives, debt, and currency. Its fully automated screen-based trading system, supported by advanced technology solutions, ensures seamless transactions and enhanced market efficiency.
Companies listing on the NSE gain access to capital markets, liquidity for shareholders, and heightened visibility among investors. Moreover, NSE's stringent compliance with regulatory standards, overseen by the Securities & Exchange Board of India (SEBI), instills trust and confidence in market participants.
The exchange's trading categories encompass equity, derivatives, and debt instruments, catering to diverse investor preferences and risk profiles. Whether through equity trading, F&O derivatives, or ETFs, investors can engage in a variety of trading strategies tailored to their financial goals.
NSE's role extends beyond facilitating trades to promoting financial education, fostering transparency, and upholding market integrity. Through its robust infrastructure, innovative products, and adherence to global standards, the NSE continues to shape India's evolving financial landscape while connecting investors to opportunities worldwide.