Bombay Stock Exchange

The Bombay Stock Exchange (BSE), which was established in 1875, is not only India�s first stock exchange but also one of India�s foremost exchange groups. Earlier known as Bombay Stock Exchange Ltd, it is now recognized as BSE Ltd. BSE serves as an important and most sought after capital raising platform by the corporate sector. BSE is a demutualized body, with a wide shareholder base extending globally, which comprises of two chief global exchanges, Deutsche Bourse and Singapore exchange as the major strategic partners. BSE renders a proficient and transparent market for trading in debt instruments, equities, mutual funds and derivatives. BSE also provides an efficient trading platform for trading in equities of small-and-medium enterprises (SMEs).

BSE is the largest stock exchange in the world in terms of number of members listed on it; more than 5,000 companies are listed on the BSE. The total market capitalization attained by all the companies listed on the BSE accounts for USD 1.32 Trillion as of January 2013.

BSE also provides allied services like risk management, clearing, settlement, market data services and education. The BSE systems and processes protect market integrity, foster growth of the Indian Capital Market and boost innovation and competition across all the segments of the market. BSE is India’s first Exchange and the world�s second that has attained Information Security Management System Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT).

The BSE came out with a stock index in 1986, which is known as BSE Sensex. The S&P BSE SENSEX is India’s most extensively tracked stock market benchmark index. Bombay Stock Exchange Sensitive Index is a value weighted stock market index, which follows the performance of the 30 largest stocks on the Bombay Stock Exchange. These 30 stocks are selected at random times, every time the market shows significant changes, and are selected by their value of free-float shares. Various other BSE indices are BSE Midcap, BSE Smallcap, BSE AUTO, BSE Metal, BSE FMCG, BSE IT, BSE Oil and Gas and several others.

List of BSE Indices along with their Details

Index Methodology No. of Constituents Base year Base Value Calculation Frequency
Sensex Free Float 30 1978-79 100 Real – time
BSE Midcap Free Float Variable 2002-03 1000 Real Time
BSE Small cap Free Float variable 2002-2003 1000 Real Time
BSE AUTO Free Float Variable 1st Feb 1999 1000 Real Time
BSE BANKEX Free Float Variable 1st�Jan� 2002 1000 Real Time
BSE Capital Goods Free Float Variable 1st�Feb 1999 1000 Real Time
BSE Consumer Durables Free Float Variable 1st�Feb 1999 1000 Real Time
BSE FMCG Free Float Variable 1st�Feb 1999 1000 Real Time
BSE IT Free Float Variable 1st�Feb 1999 1000 Real Time
BSE Metal Free Float Variable 1st�Feb 1999 1000 Real Time
BSE Oil and Gas Free Float Variable 1st�Feb 1999 1000 Real Time

Trading system
Trading at BSE is done using an open electronic limit order book, in which order matching takes place by the trading computer. In this type of trading there exist no market makers or specialists and the complete process is order-driven, this implies that market orders placed by investors are automatically matched with the best limit orders. Thus here the buyers and sellers remain unnamed. The benefit of such a kind of order-driven market is that it incorporates more transparency by presenting all buy and sell orders in the trading system. But since the market makers aren�t there, so there is no guarantee that orders will be executed. Trading on the BOLT System is normally carried out from Monday to Friday between 9:15 a.m. and 3:30 p.m.

Classification of scrips
On the basis of some qualitative and quantitative considerations, and for the benefit of the investors, BSE has classified the scrips in the Equity Segment into ‘A’, ‘B’, ‘T’ and ‘Z’ groups.
• The A group are those which have a rank within the top 200 companies continuously for the preceding three rolling quarters.
• All companies not included in group �A� or �Z� constitute group �B�.
• The “F” Group consists of the Fixed Income Securities.
• The “T” Group comprises scrips which are settled on a Trade-to-trade basis as a surveillance measure.
• The �G� group involves Government securities which are traded by the retail investors.
• The ‘Z’ group was launched by BSE in July 1999 and comprises of those companies which have failed to abide with its listing requirements and/or have failed in settling down the investors complaints and/or have not made the mandatory arrangements with both the depositories, viz., (CDSL) and (NSDL) for dematerialization of their securities.

Last Updated on : 17th Oct. 2013

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