What is National Stock Exchange (NSE) of India Limited? | Espresso

What is National Stock Exchange (NSE)?

There are around 9 stock exchanges in India offering a secure trading platform to investors. These include the National Stock Exchange (NSE India), Bombay Stock Exchange (BSE), Calcutta Stock Exchange (CSE), India International Exchange (India INX), Multi Commodity Exchange of India (MCX), National Commodity and Derivates Exchange (NCDEX), Indian Commodity Exchange Limited (ICEX), Metropolitan Stock Exchange of India Limited (MSE), and National Stock Exchange IFSC Limited.

 

Published on 01 March 2023

In this article, we will talk about the National Stock Exchange and look at some essential features of the exchange.

NSE India

The National Stock Exchange is the youngest stock exchange in India. It was established in 1992 as the first dematerialized electronic exchange in India. It was the first exchange that offered a fully automated screen-based trading system across the country. The NSE stock exchange allows investment and trading in the following segments:

  • Equity
  • Indices
  • Mutual Funds
  • ETFs or Exchange Traded Funds
  • IPOs
  • Borrowing and Lending of Securities
  • Equity Derivatives
  • Commodity Derivatives
  • Currency Derivatives
  • Interest Rate Futures
  • Corporate Bonds, etc.

Since its launch nearly two decades ago, the NSE stock exchange has taken giant strides in technology and developed the capability to handle more than 1.6 lakh orders or requests per second.

How does NSE India work?

When stock market investors place an order in the NSE, the exchange matches the order using a computer. There is no manual intervention, and a market order is electronically and automatically matched with a limit order. This process offers more transparency to share market investors as every buy and sell order is displayed in the trading system.

NSE Emerge

NSE India started an initiative called NSE Emerge for small and medium-sized enterprises and startups in India. According to this initiative, these companies can get list themselves on the NSE without having to launch an IPO.

NSE Academy by the NSE stock exchange

NSE India conducts workshops to develop a new and informed generation of investors via its NSE Academy. The Academy partners with schools at the national and state levels, conducts interactive courses on personal finance, conducts certification programs, and introduces capital markets to non-finance professionals and homemakers to create new investors.

It conducts the NCFM (NSE Academy Certification in Financial Markets) program to test the knowledge and skills required by professionals to operate in the financial markets.

Salient features of the National Stock Exchange

  • Since the trading volumes are high, the exchange has a lower impact cost. Hence, the trading cost of the investor in the stock market reduces too.
  • The NSE offers comprehensive information allowing investors to know the depth of the market and details about the company.
  • The exchange has a broadcast facility for announcements to be made by companies to shareholders
  • Listed companies get access to monthly trade statistics. The listing fee is lower compared to other exchanges.

Some additional information about the National Stock Exchange

A quick look at some interesting information about NSE India:

  • There are around 2000 companies listed on the NSE
  • The market capitalization of the National Stock Exchange is around $3 Trillion
  • NSE is present in more than 1500 cities across India
  • It is the youngest stock exchange in India
  • The NSE stock exchange set up the first clearing corporation of India – National Securities Clearing Corporation Ltd.
  • The vision of NSE India is: ‘To continue to be a leader, establish a global presence, and facilitate the financial well-being of people.’
  • The NSE stock exchange co-promoted and set up the first depository of India – National Securities Depository Limited
  • The exchange is open for trading from 9:15 AM to 3:30 PM
  • The NSE was the pioneer of internet share market trading that commenced in February 2000.
Chandresh Khona
Team Espresso

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