The Bombay Stock Exchange (BSE) is one of India's premier stock exchanges, trusted by millions of investors for trading in stocks, bonds, and other securities. Established in 1875, it is Asia’s oldest stock exchange and continues to be a vital part of India’s financial ecosystem. Operating under the guidance of the Finance Ministry, Government of India, BSE ensures transparency, efficiency, and investor safety through cutting-edge technology and regulatory compliance.
What is BSE?
Founded by Premchand Roychand, the BSE originally operated under the name ‘The Native Share & Stock Brokers’ Association.’ Over the years, it has evolved into a sophisticated platform offering trading in equities, derivatives, mutual funds, debt instruments, and more.
The exchange also provides essential services like clearing, settlement, and risk management, ensuring smooth market operations.
BSE became the first publicly listed Indian stock exchange in 2017. As of January 2024, its market capitalization exceeded INR 400 lakh crore. Prominent subsidiaries under the BSE Group include Indian Clearing Corporation Limited, India International Exchange IFSC Limited, BSE Institute, Central Depository Services, and BSE Technologies Pvt Ltd. Additionally, BSE SME caters to the equity trading needs of small and medium enterprises.
The benchmark index of BSE, SENSEX, tracks the top-performing Indian companies, providing crucial market insights for investors. Other notable indices include S&P BSE Bankex, S&P BSE Auto, and S&P BSE FMCG, among others.
How Does the Bombay Stock Exchange Work?
BSE functions through an advanced, fully automated electronic trading system, ensuring a seamless and efficient trading experience. The Bombay Online Trading (BOLT) platform allows investors to place market orders directly, eliminating the need for intermediaries in many cases. Investors typically trade through SEBI-registered brokerage firms, paying a designated brokerage fee. However, direct market access is available to large-scale institutional investors making high-volume trades.
The exchange follows a T+1 settlement cycle, meaning all transactions are settled within one business day. SEBI (Securities and Exchange Board of India) oversees BSE operations, enforcing stringent regulations to maintain transparency and investor protection.
The Bombay Stock Exchange was officially established on 9th July 1875, evolving from informal gatherings of stockbrokers under a banyan tree near Mumbai’s Town Hall. As trading volumes expanded, the exchange moved to Dalal Street in 1930, which remains its headquarters today.
BSE played a crucial role in modernizing India's financial markets, shifting from manual to electronic trading in 1995 with the introduction of BOLT (Bombay Online Trading System). Over the decades, it has achieved several milestones:
● 1957: Officially recognized under the Securities Contracts Regulations Act
● 1986: Launched SENSEX, India’s first stock market index
● 2000: Introduced derivatives trading
● 2002: Rolled out options trading
● 2012: Became part of the UN Sustainable Stock Exchange initiative
● 2016: Launched India INX, India’s first international exchange
Today, BSE facilitates trading in over 5,000 companies, ranking it among the world’s largest stock exchanges alongside NYSE, NASDAQ, LSE, SSE, and JPX
Effortless Fundraising and Business Expansion - Companies listed on BSE gain access to a vast pool of investors, enabling them to raise capital through equity and debt instruments. The enhanced visibility attracts stakeholders, allowing businesses to secure funds for growth, expansion, and operational improvements.
Market Liquidity and Efficient Trading - Securities listed on BSE benefit from high liquidity, enabling investors to buy and sell shares effortlessly. The electronic trading system ensures fast transactions, providing companies and investors with quick access to funds when needed.
Regulatory Oversight and Investor Protection - BSE operates under strict SEBI regulations, ensuring compliance with legal frameworks. This oversight minimizes fraudulent activities, enhancing investor confidence in the companies listed on the exchange.
Transparent Pricing Mechanism - The pricing of securities on BSE is governed by market forces of supply and demand. This reflects the true market value of shares, ensuring fair valuations and enabling businesses to secure funding efficiently.
Collateral Benefits for Businesses - Listed securities can be used as collateral when securing loans from financial institutions. Banks and lenders often accept BSE-listed equity shares as a guarantee, offering businesses financial flexibility.
Equity Trading - Equity shares are the primary mode of raising capital. Investors can buy and sell stocks in the primary and secondary markets.
Debt Instruments & Government Securities - Companies issue bonds and debentures to raise capital while maintaining ownership control. Government securities such as zero-coupon bonds, capital-indexed bonds, and floating rate bonds are actively traded.
Derivatives Trading - BSE offers futures and options trading, allowing investors to hedge risks and maximize profits.
Mutual Funds & ETFs - BSE facilitates investment in mutual funds and exchange-traded funds (ETFs), catering to both retail and institutional investors.
The Sensex serves as the benchmark index of the Bombay Stock Exchange (BSE). It is a free-float market-weighted index that tracks the performance of the top 30 companies listed on the exchange.
This index acts as a key indicator of India's stock market trends. Movements in the Sensex reflect the overall direction of the equity market, helping investors gauge whether the market is in an uptrend or downtrend based on the price fluctuations of these leading companies.
Apart from the benchmark index, BSE also offers various indices, like:
● S&P BSE Consumer Durables
● S&P BSE Auto
● S&P BSE Bharat 22 Index
● S&P BSE Energy
● S&P BSE Infrastructure
● S&P BSE 100 ESG
● S&P BSE India Bond
Additionally, indices based on market capitalization, such as the BSE MidCap and BSE SmallCap indices, classify companies into mid-cap and small-cap segments.
Top Companies on BSE by Market Cap
Here are the top 30 companies in BSE by market capitalisation:
BSE (Bombay Stock Exchange) is India’s oldest stock exchange, offering trading in stocks, derivatives, mutual funds, and other securities.
Yes, BSE operates under the regulatory framework of SEBI (Securities and Exchange Board of India).
BSE was founded on 9th July 1875.
BSE facilitates trading in over 5,000 companies.
Major shareholders include Deutsche Boerse AG, Life Insurance Corporation of India, Siddharth Balachandran, IDFC Mutual Fund, and State Bank of India.
SENSEX is the benchmark index of BSE, tracking the performance of 30 top-performing companies.
Trading hours are 9:15 AM - 3:30 PM, with a pre-opening session from 9:00 AM - 9:15 AM.
BSE is India’s oldest stock exchange, established in 1875.
Investors can trade through SEBI-registered brokerage firms by opening a Demat and trading account.
BSE and NSE are India’s top stock exchanges. BSE is older and has more listed companies, while NSE has higher trading volumes and liquidity.