Resources

Difference Between NSE and BSE – Accurate Comparison

January 31, 2025

Being stock exchanges, the difference between NSE and BSE are among the most important financial platforms and intermediaries in India. These are also among the largest stock exchanges not just in India but globally as well.

Despite operating within the same industry, it would be a significant oversight to consider both companies as alike. They are as different as chalk and cheese. This article will delve into the features, history, and distinctions between the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). For traders and investors seeking a quick understanding of how these differences influence their activities, feel free to jump to the conclusion at the end of this article.

What are NSE and BSE in the stock market?

For those unfamiliar, NSE refers to the National Stock Exchange, while BSE stands for the Bombay Stock Exchange. It’s important to note that the name “Bombay” is still used despite the city being officially renamed Mumbai. However, there is much more to both BSE and NSE than just their acronyms, and we will explore their features and significance further in this article.

History of BSE

Established in 1875, BSE is the oldest stock exchange in Asia, originating from informal trading by stockbrokers under banyan trees in Mumbai. It was formally organized as “The Native Share & Stock Brokers Association” and later recognized as the primary stock exchange in India under the Securities Contract Regulation Act of 1956. Transitioning from a paper-based system to electronic trading in 1995 marked a significant modernization for the BSE. Additionally, it introduced the SENSEX index in 1986, which tracks 30 of the largest and most liquid stocks on the exchange, reflecting the growth and dynamism of India’s capital markets.

History of NSE

The National Stock Exchange of India was established in 1992 and began operations in 1994. It was recognized by the Securities and Exchange Board of India (SEBI) shortly after its incorporation. The NSE is notable for being the first fully electronic stock exchange in India, introducing a screen-based trading system that enhanced market accessibility and efficiency.

Over the years, the NSE has expanded its product offerings significantly. It launched the NIFTY 50 index in 1996, which tracks 50 major stocks across various sectors. Additionally, it has dominated the equity derivatives market, capturing over 90% market share in this segment. The exchange has also introduced various financial instruments, including derivatives and exchange-traded funds, further solidifying its position as a leading financial platform in India.

What is the difference between NSE and BSE – Key Statistics

	NSE	BSE
Year of Establishment	1992	1875
Number of companies listed***	2,498	5,862
Market Capitalization	INR 4,47,975 crore	INR 71,830 crore
Benchmark Index	Nifty 50	BSE Sensex
Global Ranking** (market capitalization December 2024)	7^th (USD 5 trillion)	6^th (USD 5 trillion)
Electronic Trading	1992	1995
Total Income*	INR 16,433.61 crore	INR 1,617.90 crore
Net Profit*	INR 8,305.74 crore	INR 771.66 crore
SME platform	NSE Emerge	BSE SME

* Figures represent data for FY 2024
** WFE Statistics
*** 31 January 2025

What is NSE?

As mentioned above, NSE came into being with a mandate of making securities transactions more transparent. The prevailing ecosystem in stock exchanges was quite archaic in almost every aspect. While trading was characterized by an open outcry system, it was not uncommon to see investors losing to the greed of intermediaries like brokers.

NSE changed all of this with its introduction of fully automated and dematerialized electronic trading which matched buyers and sellers. This naturally shrunk the buy-sell spreads and made the process more efficient. This is another key point in NSE and BSE difference i.e. the former started as an electronic trading platform while BSE followed much later.

NSE Clearing Limited (NCL) – a wholly-owned subsidiary of NSE – became the first clearing corporation to introduce settlement guarantees. In March 2022, NSE IFSC became the first international exchange at IFSC to physically settle US stocks.

Currently, NSE conducts transactions in the wholesale debt, equity, and derivative markets.

Major indices of NSE

Nifty 50 Index
Nifty Next 50 Index
Nifty 100 Index
Nifty 200 Index
Nifty Total Market Index
Nifty 500 Index
Nifty 500 Multicap 50:25:25 Index
Nifty500 LargeMidSmall Equal-Cap Weighted
Nifty Midcap150 Index
Nifty Midcap 50 Index
Nifty Midcap Select Index
Nifty Midcap 100 Index
Nifty Smallcap 250 Index
Nifty Smallcap 50 Index
Nifty Smallcap 100 Index
Nifty Microcap 250 Index
Nifty LargeMidcap 250 Index
Nifty MidSmallcap 400 Index
India Vix Index

NSE Market leadership

The largest exchange in India with a market capitalization exceeding USD5 trillion (as of December 2024).
Ranks as the 7th largest stock exchange globally.
Fourth largest in the world based on trading volume.
Dominates the global derivatives trading market with over 90% market share.
The first exchange in India to implement a fully electronic trading system (1994).
Introduced advanced settlement cycles, including a T+1 settlement cycle.
Home to the NIFTY 50 Index, which includes 50 major stocks and represents about 63% of total market capitalization.
Over 2,498 companies are listed, including those on its SME platform (NSE Emerge).
More than 10.9 crore unique registered investors, indicating extensive reach among retail and institutional investors.
Led by Ashish Kumar Chauhan, focusing on technological innovation and market expansion.

What is BSE?

BSE is not only the oldest stock exchange in India but in Asia too. As of 31 January 2025, there were 5,862 companies listed on the BSE with a market capitalization of INR 4,18,74,9212 crore. In its long history of over 100 years, BSE to has a lot of firsts to its name. In 1986, it launched India’s first equity index named BSE Sensex. It also pipped NSE in launching a dedicated platform for SMEs by introducing the BSE SME platform in March 2012 (here is a primer on the SME segment).

Fun Fact – It was a stock market analyst and columnist Deepak Mohoni who coined the term Sensex

BSE also has the distinction of being the first stock exchange in India to list itself in 2017.

As we noticed earlier, BSE was more of a traditional player while NSE started with a technology edge. Nevertheless, BSE has subsequently caught up with its rival.

Major indices of BSE

BSE SENSEX
BSE MidCap
BSE SmallCap
BSE 100
BSE 200
BSE 500
BSE Auto Index
BSE FMCG Index
BSE Healthcare Index
BSE IT Index

BSE Market leadership

BSE has a market capitalization of approximately INR 4,16,81,550 crores (as of January 27, 2025).
It is recognized as the 6th largest stock exchange globally by market capitalization, exceeding USD 5 trillion.
Over 5,862 companies are listed, including those on its SME platform.
BSE has a significant trading volume with over 5 crore shares traded daily.
The exchange plays a crucial role in the Indian economy by facilitating capital raising and providing liquidity to investors.
BSE’s SENSEX index tracks the performance of 30 major companies, serving as a key indicator of market trends.
The exchange has embraced technology with initiatives like electronic trading and real-time data access for investors.

NSE vs BSE – Which one is better?

This is a common question that investors and traders often grapple with in the BSE vs NSE debate. When placing an order and anticipating its execution, the investor’s focus is not on which stock exchange has a more extensive history.

As noted above, there is a massive difference between NSE and BSE stocks and the latter has an advantage in terms of absolute numbers. If you are interested in trading a stock that is listed on a specific exchange, you must trade on that particular exchange. While the BSE may have an edge in this context, it’s important to recognize that many stocks listed exclusively on the BSE tend to be illiquid.

Regular traders have also noted the difference between BSE and NSE share prices of the same security. This discrepancy is crucial for readers and investors seeking optimal prices with sufficient liquidity. In this context, the NSE generally outperforms its competitors.