Another question asked repetitively is – How many types of stock exchange in India?
Although most traders know only about NSE and BSE as the stock exchanges, India has various exchanges for different financial securities.
The stock exchanges of India can be divided into two categories:
Stock Exchanges working at the National Level
Stock Exchanges working at the Regional Level
Let’s discuss them in detail.
How Many National Stock Exchange In India
The national stock exchanges have a presence across India with various stock market types. They list a variety of financial segments, some permit trade in multiple segments while others allow trading in a particular product. The popular and most known exchanges among these are NSE and BSE.
In brief, learning about them is necessary to understand which stock exchange suits your requirements and is the best for you.
Bombay Stock Exchange Limited (BSE)
It is the first stock exchange in Asia, located on Dalal Street, Mumbai. It has the vision to emerge as a premier Indian stock exchange with the best in class global practice in technology, customer service, and product innovation.
It was founded by Premchand Roychand in 1875, then known as the “Cotton King,” “Big Bull,” or “Bullion King.” BSE was formerly known as the Native Share & Stock Brokers Association. The recognition by SEBI is permanent for this exchange.
SENSEX (Stock Exchange Sensitive Index), the index of BSE, got introduced in 1986. Do you know that Sensex is a combination of two words – Sensitive and Index.
The first equity index provided a mechanism to identify the top 30 companies trading on this stock exchange. The index’s base value is 100 and is reported by international and domestic markets regularly using electronic and print methods.
Additionally, other indices by BSE are BSE 100, BSE 200, BSE 500, BSE SMLCAP, BSE MIDCAP, BSE PSU, BSE Metal, BSE Pharma, etc.
The criteria to select stocks for the index are Quantitative factors like Market Capitalization, Listing History, Frequency of Trading, Average Daily Turnover, Average Daily Trades, and Qualitative factors.
Today, BSE permits trading in equity, derivatives (equity, commodity, currency), and debt. With a market capitalization of over $4.9 trillion, this exchange ranks 10th in stock exchanges worldwide.
Some of the top brokers registered with BSE are
ICICI Securities Limited
Edelweiss Securities Limited
SBICAP Securities Limited
IIFL Securities Limited
CNB Finwiz Pvt. Limited
Aditya Birla Money Limited
Nirmal Bang Equities Pvt. Limited
2. National Stock Exchange (NSE)
NSE was founded in 1992, and trading commenced in 1994. Thus, it is the youngest of all exchanges in India. It is working for the vision of becoming a leader, facilitating people’s financial well-being, and establishing a global presence.
The SEBI recognition of NSE is permanent.
NSE was the first exchange to introduce an advanced trading system and subsequently added facilities like trading in the wholesale debt market and cash segment.
The fast executing systems installed by the exchange makes the process transparent and eases the calculation for accurate prices of the shares and other financial instruments listed on the exchange.
These features have enhanced the exchanges’ ranking as it ranks 4th in terms of the trade volume in equity. NSE has an index for setting a benchmark.
It is called NIFTY 50, which tracks the most considerable assets of the equity segment.
NIFTY 50 companies list is created on a few parameters like – Liquidity, Listing History, and Futures & Options Category. Today, NSE facilitates trading for traders in equity, derivatives (commodity, currency, equity), and debt.
The first international exchange of India, India INX, was inaugurated by the then Prime Minister Narendra Modi in January 2017.
It is a subsidiary wholly owned by the Bombay Stock Exchange, located at the International Financial Services Centre (IFSC) in GIFT city, Gujarat.
The recognition of this international exchange is valid up to 28th December 2020.
India INX got introduced to set up a substitute for the offshore banking activities done by Indian companies. These offshore transactions take place in Singapore, Dubai, and Hong Kong.
Currently, if a company requires to raise capital in a foreign currency, they head out to the exchanges worldwide. This phenomenon causes a loss of investments domestically.
The launching of India INX has simplified this process by making it inexpensive and faster. India INX is a small step towards easing the process of raising public investments and ensuring that the domestic investments stay in the country.
The government expects an increase in the trade volume to $120bn in the upcoming decade, from $48bn. It facilitates trading in the equity, currency, and commodities segment.
It is the most technologically advanced platform globally as it has a turn around time of 4 seconds. This system operates for facilitating NRIs to trade in the Indian stock market with ease and at their preferred time.
Trading in this exchange begins when the markets in Japan open and closes alongside the US stock market. This window is 22 hours long and is available six days a week.
Some of the top brokers listed with India INX are:
Like India INX, NSE IFSC is a wholly-owned NSE subsidiary located in the International Financial Services Centre at GIFT City, Gujarat. The SEBI recognition is valid till May 2021.
The aim behind launching this subsidiary of NSE is to expand India’s financial market and enhance the capital brought to the Indian markets. It offers to trade in all currencies other than the Indian Rupee.
It has two trading sessions – 8 A.M. to 5 P.M. and the second is from 5:30 P.M. to 11:30 P.M. It conducts trading for 16 hours and is working on expanding this period.
ICEX is a SEBI regulated commodity derivative exchange headquartered in Mumbai. It facilitates the appointed brokers to trade in the mentioned financial instrument across the nation. The recognition of ICEX is permanent.
ICEX has been registered at the SEBI since August 2017 and is the first and the only exchange in the world to launch a Diamond derivative contract. It extends the opportunity to trade in mutual funds and commodity derivatives.
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The products available for trading under the commodity segment are the following:
Non-agricultural products – Diamonds, Steel
Agricultural products – Spices, Plantations, Cereals, etc.
Further, in the financial year 2018-19, the NCLT ordered the amalgamation of the National Multi Commodity Exchange of India Limited (NMCE). This union led to the automation of trade for commodities on ICEX.
6. National Commodities and Derivatives Exchange Limited (NCDEX)
NCDEX, as the name suggests, is a commodity trading exchange. It was established in 2003 and headquartered in Mumbai. Many significant companies are a shareholder in this exchange. It is a permanently recognized stock exchange.
Some of these are the National Bank for Agricultural and Rural Development (NABARD), National Stock Exchange of India Limited (NSE), and LIC (Life Insurance Corporation of India).
This exchange trades significantly in agricultural commodities. Barley, Soybeans, Wheat, etc. are a few of the leading agricultural commodities traded on NCDEX. This exchange has not only facilitated trade in agrarian items but also helped in improving agricultural practices.
With India being the largest producer of various crops, NCDEX eases its trading and promotes viable growth for the people associated with the agriculture sector. This platform pays back by growing the industry as a whole.
Trading time for NCDEX is 10 A.M. to 11:30 P.M. and is open from Monday to Friday. It is well equipped with technology to reduce errors and fasten the trading process.
Since NCDEX deals with commodities, it is a must to have godowns and warehouses to store the stock. Thus, 400+ approved warehouses with a capacity of 2 million MT (metric ton) and 7+ assaying laboratories were set up to accommodate the various items.
Some of the significant brokers registered with the exchange are:
7. Multi Commodity Exchange of India Limited (MCX)
MCX is a stock exchange under the regulatory body FMC (Forwards Market Commission), later merged with SEBI (Stocks and Exchanges Board of India), established in 2003. It has permanent recognition from the SEBI.
With the completion of 15 years in the market, this exchange touched the heights of trading by generating a whooping $50tn turnover. This achievement helped the exchange to rank 7th among the global commodity exchanges.
MCX is an independent and the largest commodity exchange in India. This exchange got publicly listed on BSE (Bombay Stock Exchange) in 2012, making it the first exchange to be listed.
MCX is an exchange dominantly traded for non-agricultural products like metals, bullion, and energy. But agricultural commodities also get traded.
The best thing about this exchange is the partial payment for buying a commodity.
Yes, you read that correctly!
For instance, a trader or investor can buy gold after paying the entire price upfront. You can pay 10% – 20% in the case of derivatives or options and pay the rest before the contract’s expiry.
The contract can last for a month or more, depending on the buyer and seller. If the trade doesn’t get sold by the expiry date, the trade gets automatically squared off.
Some of the popular stockbrokers affiliated to this exchange are:
Motilal Oswal Securities
8. Metropolitan Stock Exchange of India Limited (MSE)
The Metropolitan Stock Exchange of India came into existence in December 2012. It facilitates a trader or investor trading in financial segments like equity derivatives, equity, debt, and currency derivatives (including Interest Rate Futures).
It has an electronic platform that is hi-tech and transparent. It has more than 1500 companies to trade in and has prominent financial institutions as shareholders. This stock exchange has recognition until September 2020.
How Many Regional Stock Exchange In India?
There used to be 21 regional exchanges before the regulations of SEBI started tightening. These stringent regulations eventually led to regional stock exchanges getting shut down. Twenty of them have shut down, Calcutta Stock Exchange being an exception.
The list of 20 regional exchanges that got shut is as follows:
Former Stock Exchanges
Ahmedabad Stock Exchange
Delhi Stock Exchange
Guwahati/Gauhati Stock Exchange
Jaipur Stock Exchange
Madhya Pradesh Stock Exchange
Madras Stock Exchange
Pune Stock Exchange
Vadodara Stock Exchange
Bangalore Stock Exchange
Cochin Stock Exchange
OTC Exchange of India
Inter-connected Stock Exchange of India
Ludhiana Stock Exchange
Bhubaneswar Stock Exchange
Coimbatore Stock Exchange
Magadh Stock Exchange
Trivandrum Stock Exchange
Mangalore Stock Exchange
Hyderabad Stock Exchange
UP Stock Exchange
Since Calcutta Stock Exchange remains operative, let’s discuss it briefly.
Calcutta Stock Exchange (CSE) is a regional stock exchange (RSE) established in 1908. It is located at Lyons Range, Kolkata, and is the second-largest stock exchange of India. Although it is the second oldest exchange of Asia, the Government of India gave it permanent recognition in 1980.
An advanced computerized system was incorporated into the daily operations in 1997. This software is called C-STAR (CSE Online Screen-based Trading And Reporting System).
All regional exchanges have voluntarily shut down, and CSE is fighting a lone battle as SEBI has asked CSE to exit. The matter is sub judice in the Calcutta High Court.
Some top brokers working with CSE are:
Nation Lanka Equities Pvt Limited
S C Securities Pvt Limited
Asia Securities Pvt Limited
Asha Securities Pvt Limited
Somerville Stockbrokers Pvt Limited
From the above listings, we learned that India has 8 National Stock Exchanges and 21 Regional Stock Exchanges, of which only one (Calcutta Stock Exchange) is operative currently. The list of National exchanges also consists of the sole international exchange of India.
The eight national exchanges are as follows –
Bombay Stock Exchange
National Stock Exchange
Indian International Stock Exchange
Indian Commodity Exchange
National Commodity and Derivatives Exchange
Multi Commodity Exchange
Metropolitan Stock Exchange of India
Every exchange extends the facility to trade in various financial segments like equity, commodity, debt, currency, derivatives, etc. Some of them operate in a particular financial instrument.
The relevant exchange gets chosen by the traders, investors, and promoters based on the guidelines set by the respective exchanges and SEBI.
As mentioned above, knowing the top brokers permitted to trade in the related securities is necessary to select the right broker to open a Demat account.
Choose the financial segment wisely, select an exchange intelligently, and invest attentively!
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