Top 12 Differences Between NSE and BSE (with infographics)

Investment Banking Tutorials

Top Differences Between NSE and BSE

The stock exchange is an intermediary that facilitates an investor to purchase and sell shares, bonds, debentures, and other financial instruments. BSE (Bombay Stock Exchange) and NSE (National Stock exchange) are amongst the eminent and vital stock exchanges in India.

What is BSE?

BSE was established as “The Native Share & Stock Brokers’ Association” in 1875 and has been the oldest stock exchange of Asia. This stock exchange provides a transparent and systematic mechanism for trading in equity, currencies, debt instruments, derivatives, and mutual funds. The other facilities provided by the exchange involve clearing, settlement, risk management, market data services, and education. The S&P BSE SENSEX which we term as the SENSEX is the benchmark index that comprises of the 30 most actively traded and financially strong Indian companies listed on BSE.

What is NSE?

NSE was incorporated in 1992 and was recognized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956. This leading stock exchange of India caters a variety of services to the capital market participants that include trading, clearing, and settlement in equity, equity derivatives, debt and currency derivatives segments. The benchmark index of NSE is NIFTY which represents a weighted average of the 50 most highly liquid and frequently traded Indian companies listed on NSE.

BSE vs NSE Differences Infographics

Here we provide you with the top 12 difference between NSE and BSE

BSE and NSE Key Differences

It is important to gauge the key difference between NSE and BSE. This will give us additional clarity on the subject matter.

BSE is Asia’s oldest stock exchange and has been recognized as the fastest stock exchange in the world. Incorporated in 1875, BSE has been the first to be granted permanent recognition under the Securities Contract (Regulation) Act, 1956. The exchange had designed the screen based automated trading mechanism termed as the BSE On-Line Trading (BOLT) in 1995. NSE has been affiliated with being the leading stock exchange of the country and was the first to have launched an electronic screen-based automated trading system in 1994.
The benchmark index of BSE named SENSEX includes the top 30 well-established companies. The index of NSE termed as Nifty depicts the 50 most actively traded companies. The stocks belong to diversified sectors such as FMCG, Banking and Finance, Auto, Healthcare, Oil & Gas and so on. The Sensex is currently trading at a P/E ratio of 22.03x. The Nifty is trading at a P/E ratio of 24.83x as on October 2018.
Some of the tops traded companies on BSE with high market capitalization are Reliance Industries Ltd, Tata Consultancy Services Ltd, HDFC Bank Ltd, ITC Ltd, Hindustan Unilever Limited etc. Some of the actively traded securities on NSE as per the October 2018 transactions involve Indiabulls Housing Finance Ltd, Reliance Industries Ltd, HDFC Ltd, Infosys etc.
BSE provides various facilities such as depository services through the Central Depository Services Ltd. (CDSL), risk management, clearing, and settlement. The BSE Institute Limited is the acclaimed capital market educational institute of the exchange. NSE played a vital role in the establishment of the first depository in India called as the NSDL (National Securities Depository Limited). The clearing and settlement process of NSE transactions are undertaken by National Securities Clearing Corporation Ltd. (NSCCL).
Arbitrage is a strategy implemented by traders to make use of the price difference between two or more markets with an aim to earn the profit. The price of a security may differ on BSE vs NSE. An arbitrageur will buy the security in the exchange where it is quoted at a lower price and simultaneously sell the same in the other exchange where it is traded at a higher price. The trader must follow the rules outlined for engaging in an arbitrage.

BSE and NSE Head to Head Differences

Let’s now look at the head to head difference between NSE and BSE

Basis of Comparison between BSE and NSE	BSE (Bombay Stock Exchange)	NSE (National Stock Exchange)
Date of Establishment	BSE was founded in 1875	NSE was founded in 1992
Brand Identity	BSE	NSE
Position Ascertained	BSE has been the most ancient stock exchange of Asia.	NSE is considered to be the largest stock exchange in India.
Products Offered	BSE facilitates trading in equity, currencies, debt instruments, derivatives, and mutual funds.	NSE facilitates trading equity, equity derivatives, debt and currency derivatives segments.
Vision of the Exchange	The vision of the exchange is to “Emerge as the premier Indian stock exchange with best-in-class global practice in technology, products innovation, and customer service”	The vision of the exchange is to “Continue to be a leader, establish a global presence, facilitate the financial well-being of people”
Managing Director and CEO	Mr. Ashishkumar Chauhan	Mr. Vikram Limaye
Benchmark Index	Sensex is the benchmark index and comprises of 30 companies.	Nifty is the benchmark index and comprises of 50 companies.
Market Capitalization (Rs.Cr.)	1,38,63,853.49	1,37,06,270.10
Total Number of Listed Entities	5,089	Around 2,000
Position in the World	10th largest stock exchange	11th largest stock exchange
Index Value (19th October 2018)	34,315.63	10,303.55
Website Reference	www.bseindia.com	www.nseindia.com

Final Thoughts

Though BSE has been the oldest stock exchange of India, NSE was the first to launch an automated electronic screen-based trading system in India. The stock exchanges have been recognized by the Securities and Exchange Board of India (SEBI). The corporate office of BSE and NSE the exchanges are located in Mumbai. BSE and NSE have a nation-wide existence and have been also able to cater to the customers located across the globe.

BSE and NSE both plays an extremely crucial role in providing an effective, formalized and transparent mechanism to the market participants for trading in diversified financial securities. The processes have been designed with an aim to provide high-quality services, protect the market ethics and drive the development of the Indian capital market.

Differences Between NSE and BSE