Securities Market - An Overview
Although India has as many as 23 stock exchanges, two of these bourses, namely NSE and BSE, virtually dominate the market. Trading is fully computerised and India is one of the few markets (along with South Korea, Hong Kong, Germany and Taiwan) following a T+2 (two business days after the transaction date) settlement period. Indian companies raise funds overseas through the issue of ADRs, GDRs, ECBs and FCCBs. The total turnover of all the exchanges was to the tune of Rs 50.8 trillion. Derivatives trading has grown exponentially since being launched in mid-2000 as the number of instruments available has increased during the last couple of years. Derivatives trading in NSE amounted to Rs 25.47 trillion during 2004-05. A record was reached on Oct 27 '05 when the total futures and options turnover amounted in excess of Rs 328 bn. Companies listed on Regional stock exchanges can trade their stocks in the BSE and regional bourses initiated IndoNext segment. This would improve the liquidity of many of the scrips listed on the RSEs. Companies with the largest market capitalisation¹ include Reliance (Rs 3.94 trillion), ONGC (Rs 2.92 trillion), Minerals & Metals Trading Corp (Rs 2.12 trillion),National Mineral Dev. Corp (Rs. 1.99 trillion), Bharti Airtel (Rs 1.70 trillion), Reliance Communications (Rs 1.61 trillion), DLF (Rs 1.59 trillion), ICICI Bank (Rs. 1.48 trillion) and Bharat Heavy Electricals (Rs 1.33 trillion).
Foreign Institutional Investors' (FII) monetary inflow into the Indian market increased greatly to USD 38.8 (USD 4.8 bn in Nov '10) in the Jan-Nov '10 period. There were 1,713 registered FIIs as of June '10. Assets under management by mutual funds have increased to over Rs 5.5 trillion (end of Oct '07). NSE and BSE rank third and fifth respectively in the world on the basis of trading transactions. A sum of USD 7.23 bn was raised through 78 public issues in 2006. India leads the world in single-stock futures, followed by EURONEXT which is four times smaller in size. Index futures volumes are also huge, next only to Chicago Mercantile Exchange, Eurex, Korea and EURONEXT.
India's foreign exchange reserves has crossed USD 300 bn by the beginning of March '08 placing India in the fifth position after China, Japan, Russia and Taiwan. FDI (ca USD 15 bn) has increased by 250 per cent during 2006-07 compared to the previous year. The major investing countries include Mauritius, USA, UK, Germany, Singapore and Japan.
The mutual fund sector is growing at a rapid pace as assets under management (AUM) reached USD 93 bn in 2007.
The IPO market raised USD 3.8 billion in 2016 through 83 IPOs.
The BSE Sensex Index is the most widely used and referred stock index, although the trading volumes in BSE are lower than in NSE. The NSE S&P CNX Nifty is the primary index of NSE, the National Stock Exchange of India.
- Securities And Exchange Board of India
- SEBI was established in 1992 as a statutory autonomous regulator.
- Forward Markets Commission
Nationwide Stock Exchanges
- The National Stock Exchange of India Ltd. (NSE)
- India's largest stock exchange processed almost two billion trades in 2016/17 while over 1800 companies are listed on the NSE. The capital market capitalisation amounted to Rs 142 trillion at the end of Oct '17. NSE was ranked in 2015 as the 4th largest exchange in the number of equity share trades, 2nd largest in single stock futures / single index options, 3rd largest stock index futures and the seventh largest derivatives exchange in the world in 2009.
- Bombay Stock Exchange Ltd. (BSE)
- Bombay Stock Exchange Ltd., now corporatised, was established in 1875 thus making BSE Asia's oldest stock exchange. BSE is India's second largest stock exchange (7 829 trader workstations in 417 cities across India). BSE witnessed its highest turnover of 55.3 billion Rupees (114.5 million shares in 518,000 trades) on 8/2/00. Over 750,000 trades were recorded on 25/7/00. Approx. 5,000 scrips are listed on the Mumbai Stock Exchange. BSE's turnover in FY 2003-04 amounted to Rs 5.15 trillion. BSE has the largest number of listed companies among all the bourses in the world at 4,796 tradable scrips in 2006.
Regional Stock Exchanges
- The Uttar Pradesh Stock Exchange Association Ltd. - Kanpur
- UPSE is India's third largest stock exchange in terms of turnover (Rs 117.5 bn in FY 2003-04).
- The Ahmedabad Stock Exchange Association Ltd.
- ASE is India's fourth largest stock exchange in terms of turnover (Rs 45.4 bn in FY 2003-04).
- The Calcutta Stock Exchange Association Ltd.
- CSE is India's fifth largest stock exchange in terms of turnover (Rs 19.3 bn in FY 2003-04).
- ISE - Inter-Connected Stock Exchange of India Ltd.
- Pune Stock Exchange Ltd.
- Trivandrum Stock Exchange Ltd.
- Bangalore Stock Exchange Ltd.
- Coimbatore Stock Exchange
- Madras Stock Exchange Ltd.
- OTC Exchange of India - Mumbai
- Cochin Stock Exchange Ltd.
- Bhubaneswar Stock Exchange Association Ltd.
- The Delhi Stock Exchange Association Ltd.
- The Guwahati Stock Exchange Ltd.
- The Hyderabad Stock Exchange Ltd.
- Jaipur Stock Exchange Ltd.
- The Ludhiana Stock Exchange Ltd.
- Madhya Pradesh Stock Exchange Ltd. - Indore
- The Magadh Stock Exchange Ltd. - Patna
- Mangalore Stock Exchange Ltd.
- Saurashtra Kutch Stock Exchange Ltd. - Rajkot
- Vadodara Stock Exchange Ltd.
Central Securities Depositories
- NSDL - National Securities Depository Ltd.
- India's largest securities depository has over almost 20.6 million investor accounts with 278 depository participants.
- CDSL - Central Depository Services (India) Ltd.
- The BSE promoted CDSL has close to 28 million investor accounts with 589 depository participants.