About the Indian Stock Market
India is a big country with a booming economy, and some of its firms are becoming international giants. It is therefore natural that interest in India's stock markets is growing. Securities trading in India is a wide-open business, with a few major and many medium-sized players.
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Identification
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There are a plethora of stock exchanges in India. The two major players are the Bombay Stock Exchange and the National Stock Exchange of India. However, there is also an independent stock exchange operating in many of India's other major cities, such as Madras, Calcutta and Bangalore. Although there is some interconnection, none of these are mere subsidiaries of the big two, and operate more or less independently. The Hyderabad Stock Exchange was de-certified by the Securities and Exchange Board of India.
The Bombay Stock Exchange (BSE)
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The BSE has a market capitalization of nearly $1.8 trillion USD, is the largest in India, and the tenth largest in the world: 6,000 companies are traded on the exchange, of which the leading 30 are tracked on the BSE SENSEX (the BSE's own index). The BSE owns 5 percent of the Calcutta Stock Exchange, and in turn the Singapore Stock Exchange owns 5 percent of the BSE (see Resources below).
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The National Stock Exchange of India (NSE)
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The NSE is also based in Mumbai, India's financial capital. It is the largest stock exchange in India in terms of daily activity (indeed, it is the third busiest market in the world), but not in terms of market capitalization: at just below $1.5 trillion USD, it is second to the BSE. NYSE Euronext and Goldman Sachs have both bought stakes in the NSE. The market index for the NSE is the S&P CNX Nifty (operated by Standard & Poor's) tracks the 50 leading companies on the exchange (see Resources below).
The Securities and Exchange Board of India (SEBI)
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The Securities and Exchange Board of India (SEBI) is the national oversight body and regulator for securities markets in India. It was set up in 1988, but did not become official until Parliament passed the relevant legislation in 1992. Like the two major stock markets, it is headquartered in Mumbai, with regional offices in Dehli, Kolkata, Ahmedabad and Madras. SEBI is interesting in that it combines semi-legislative and semi-judicial functions into its portfolio. It not only investigates and prosecutes cases, but also drafts new regulations and passes certain rulings (see Resources below).
The Hyderabad Stock Exchange (HSE)
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SEBI informed the HSE in 2005 that is had to sell 51 percent of its equity to the general public (i.e. giving access to those outside the existing traders) on or before August 28, 2007, as per section 5(2) of the Securities Contracts Regulation Act of 1956. The HSE failed to do this, resulting in SEBI withdrawing recognition of HSE. Following this, the stock exchange changed its legal name to "Hyderabad Securities and Enterprises, Ltd.," although it continues to call itself a stock exchange much of the time.
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