BSE - Bombay Stock Exchange

In India, most investors trust the Bombay Stock Exchange for stock trading. The exchange portal provides access to a diversified portfolio of stock options belonging to Indian conglomerates and multinational business clusters. Under the Finance Ministry, Government of India, the BSE ensures its investors' safety through advanced trading tools and services. 
 

What is the Bombay Stock Exchange?

Founded in 1875 by cotton merchant Premchand Roychand, the Bombay Stock Exchange is the oldest in India and Asia. Initially, the entity was called ‘The Native Share & Stock Brokers’ Association.’ Presently, the exchange boasts a variety of trading options in equity, fiat, debt instruments, derivatives, and mutual funds. In addition, it offers multiple trading services like clearing, settlement, risk management, and investor awareness. 

In 2017, BSE became the first listed Indian stock exchange. As of January 2022, the total market cap of BSE was above INR 276.713 lakh crore. Some prominent companies helmed by the BSE Group are Indian Clearing Corporation Limited, India International Exchange IFSC Limited, BSE Institute, Central Depository Services, BSE Technologies Pvt Ltd., BSE Administration & Supervision Ltd., etc. In addition, the BSE SME is a separate unit facilitating equity trading for the SME sector. 

The Bombay Stock Exchange helps in the easy sale and purchase of stocks, thus ensuring quick liquidity for investors. Using BSE’s primary index, SENSEX, stock traders can track the market prices of stocks of top-rated Indian companies. The data updated by the Bombay stock exchange live helps in accurate decision-making by investors. Other important indices in BSE are S&P BSE Bankex, S&P BSE Auto, S&P BSE Fast Moving Consumer Goods, etc. 
 

How does the Bombay Stock Exchange work?

The BSE employs an advanced, electronically-managed trading portal to facilitate financial trades. The exchange allows shareholders to place orders online without requiring external help from industry experts. This process is possible through direct BSE market access offered by the portal. 

Investors can trade on the BSE share market via a brokerage firm. For this, they need to pay a pre-determined price to the broker. The direct investment option is only for a section of investors with bulky BSE transactions to their credit. The BSE stock exchange has the Bombay Online Trading Platform (BOLT) to ensure a safe trading experience. 

The BSE Sensex stocks follow a T+2 transaction settlement scheme which implies that each transaction on the exchange takes two days to complete processing. In India, stock markets are controlled and managed by the Securities Exchange Board of India. Therefore, the BSE market has to comply with the regulatory guidelines imposed by SEBI to ensure investors’ safety and capital market efficiency. 
 

Most active Stocks on BSE by Trading Volumes

Top Companies on BSE by Market Cap

Here are the Top-30 companies in BSE by market capitalisation:

Top Indices in BSE

The History of the Bombay Stock Exchange

The Bombay Stock Exchange, popularly known as the BSE, is the oldest stock exchange in Asia. It was founded on 9th July 1875. BSE is also the world’s fastest stock exchange, offering trading speeds of an unbelievable 6 seconds. 

It is believed that the foundation of BSE was laid by a famous Jain businessman and cotton trader, Premchand Roychand, who established the Native Share and Stock Brokers Association under a banyan tree near Mumbai Town Hall in the mid-19th century. All traders gathered near the banyan tree to place bids and receive company stocks.

Unlike online trading, the entire process was paper-based then. Gradually, as the size and volume of the market started growing, the authorities sensed the need to establish an institution to handle the money and shares in an orderly way. This led to the establishment of the Bombay Stock Exchange (BSE) in 1875.  

Between 1875 and 1928, BSE was situated in a building near the Mumbai Town Hall. In 1928, the exchange acquired a plot near Horniman Circle. It took two years for the building to get constructed and the new BSE building became operational in 1930. To honour BSE and its activities, the street was renamed  Dalal Street. Dalal means broker in Hindi.   

In 1957, the Indian Government gave recognition to the BSE under the Securities Contracts Regulations Act. BSE’s popular index, the S&P BSE SENSEX index, was developed in 1986 to offer an insight into the exchange’s overall performance.

And, BSE’s derivatives segment was founded in 2000, offering investors access to the S&P BSE SENSEX index futures contracts. Furthermore, the options market was also opened by 2002, further expanding the BSE’s reach. 

They switched to an electronic trading system in 1995. The electronic trading system was developed by CMC Ltd. The exchange surprised everyone with the speed with which it facilitated the transition from offline to online.

Presently, the BSE is a Partner Exchange of the United Nations Sustainable Stock Exchange initiative. It joined the body in September 2012. BSE also set up the India INX, India’s first international stock exchange, on 30th December 2016. 

BSE enables trading in over 5,000 companies, making it one of the largest stock exchanges in the world. The other big stock exchanges in the world include the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations NASDAQ), the London Stock Exchange (LSE), the Shanghai Stock Exchange (SSE), and the Japan Exchange Group.  
 

The Stockholders of the Bombay Stock Exchange

The BSE Initial Public Offering (IPO) was launched on 23rd January 2017. The BSE stock is currently listed on the National Stock Exchange (NSE). The stock holding pattern of BSE ( as of 31st March 2020) is as follows:

● Mutual Funds - 4.41%
● Banks and Financial Institutions - 0.17%
● Insurance Companies - 0.83%
● Foreign Institutional Investors (including Foreign Portfolio Investors) - 10.57%
● FDI - 8.36%
● Alternate investment Funds - 0.19%
● Indian Non-Institutional Corporate Bodies -  6.70%
● Retail investors - 26.01%
● HUFs, NRIs, and CM Pool Position - 7.07%
● Trading Members and Associates of Trading Members - 32.44%

How Many Companies Are Listed on the Bombay Stock Exchange?

The total number of companies listed on the Bombay Stock Exchange is 5,246 (as of 8th February 2022). The All India market capitalisation of the stocks listed on BSE is INR 26,451,334.95 crore. And, the top-10 companies' market capitalisation is INR 7,319,611.40 crore. 

The total equity turnover of BSE stocks in the financial year 2020-21 was INR 10,45,089.56 crore in 249 trading days, a sharp jump from INR 6,60,896.03 crore in 2019-20 in 247 days. 

More than 250 stockbrokers are registered with BSE. These include Professional Clearing Member (PCM), Limited Trading Member (LTM), Trading Cum Clearing Members (TCM), Trading Member (TM), and Trade Cum Self Clearing Member (SCM). Click on this link to check the updated list of brokers associated with the BSE. 

What are the Services Offered by BSE?

The trading system of BSE is similar to NSE. Investors willing to trade in the share market need to approach a BSE-empanelled broker, such as 5paisa. After opening an account, investors can access the 5,000+ BSE stocks and place buy or sell trades. They can also trade in the derivatives segment. All investors trading in the BSE tracks the SENSEX closely. They use the SENSEX index to understand the market pulse and place trades. The SENSEX index also speaks volumes about the economy's health. 

BSE allows trading in two-time slots - the pre-opening market and the regular market. The pre-open session starts at 9 AM and ends at 9:15 AM. And, the regular trading hours start at 9:15 AM and end at 3:30 PM.

Why Do Companies List on BSE?

Listing on BSE is a commonly taken decision by companies for the following reasons:

● Get Funds For Business Expansion or Debt Consolidation - Listing on BSE helps you accept money from investors for expanding your business or consolidating your debt.

● Reputation - Listing increases a company’s reputation and makes it easy for getting funds. Also, a company’s shareholders can liquidate their shares to get money instantly.

● Safe Transactions - Since BSE oversees all trades and transactions, the money transfer process is 100% safe. 

What are the Top Indices on BSE?

Besides the S&P BSE SENSEX, there are many other indices on BSE. The following are a few:

● S&P BSE Bharat 22 Index
● S&P BSE Energy
● S&P BSE Infrastructure
● S&P BSE 100 ESG
● S&P BSE India Bond

What are the Trading Categories on BSE?

BSE facilitates trading in various categories, such as equity, futures & options, and fixed income instruments.