The term stock market can be used to denote individual

stock exchanges at various places or one market

comprising all individual stock exchanges in the country.

The industrial securities market, particularly the equities

market, occupies a disproportionately large space in the
discussion in the print and electronic media.

The industry , rich &middle classes tend to be highly

preoccupied with this market, and regard it as the
barometer of the health of the economy.
Organization and culture
Number of SEs in India increased from 9 in 1979-80
to 23 at the end of Mar 2003.
India has largest num of recognized SEs in the world
, and all are regulated by SEBI.
All SEs have two parts

NIM(for fresh or additional capital)

SM(the securities issued in NIM are traded on SM)
The role of SM is only indirect as it
encourages investors to invest in
industrial securities by making them
liquid i.e by providing facilities for
continuous ,regular ,ready buying
and selling of those securities
It is the premier or apex SE in India , oldest and
recognised permanently.
It is biggest in size(in terms of fresh capital

raised, secondary market turnover and

capitalisation and the total listed co; and their
paid up capital)
The trading in securities has been vogue in India

since 1793.
BSE was estd in 1857
BSE introduced BOLT(Bombay Online Trading
System) on Jan 19,1995.
BSE started both equity and debt trading on

BOLT system
BSE’s business no longer confined to

Mumbai ,by the end of 1997,there were 100

cities in which it had set up business.
 Apart fro BSE,2 other SEs in Mumbai namely
NSEI(National Stock Exch of India Ltd)
OTCEI(Over the Counter Exch of India Ltd)
Fully automated ,electronic ,screen based trading system
Sponsored by IDBI ,LIC ,GIC ,Commercial banks ,financial
institutions etc

Objectives:
a) To provide nation wide equal access and fair
,efficient , completely transparent securities trading sys to
investors by using suitable communication network

b) To bring Indian stock market in line with international

markets.

c) To promote sec market in debt instruments such as

govt and corporate bonds.
 Whole sale debt market  Capital market
segment(WDMS) segment(CMS)
 Started functioning  Started trading from 3
from 30 June 1994 Nov,1994
 Caters to banks ,fin  Deals in equities,
inst , other institutional convertible debentures
participants and which
etc
deals in PSU bonds,  Include securities that
 TBs, govt sec , call
money, CPs, CDs etc are traded in other SE s
also.

NSEI introduced trading in

Repos with effect from 23 jun
1995
•Set up in 1992,headquarters is at Mumbai.

•FirstSE to introduce screen based automated

trading system.

•Promotedby UTI,ICICI,IDBI,IFCI,LIC,GIC,
CANBANK as a co; under section 25 of the
companies act 1956
Obj of OTCEI:
To help co; to raise capital from market at
the cheapest costs.

To cater to the needs of co; which cannot be

listed on other official exchanges.

To eliminate the problems of illiquid

securities ,delayed settlements and unfair
practices faced by the investors.
The securities which are traded on OTCEI are divided
in to 3 categories.

They are 1) listed 2)permitted 3) initiated

These securities cannot be traded on other SEs

Theycan be bought and sold at any of the OTCEI

counters all over India

It
has two players-members and dealers(instead of
brokers)

Scheduled banks ,mutual funds ,banking

subsidiaries ,FIs ,merchant bankers , venture capital
funds ,NBFCs other than finance and leasing co;
having a min net worth of Rs 2.5 crore can become
members of OTCEI
Itallows domestic and foreign institutional
investors also to trade on it by offering them
netting facilities for both intra-custodian and
inter custodian transactions.

The trading on OTCEI is based on rollover

concept which means all trading done on any
day is settled on the same day itself and
netting with the previous or subsequent day’s
transactions is not permitted.
National and Regional exchanges in India
3 SEs has brought certain problems
Apart from the SEs in Mumbai , there are
20 other national and regional exchanges

located in metropolitan centres and cities in India.

The relative position of the BSE has declined

over the years

In addition to official SEs, currently there are

about 40 unofficial exchanges operating as

brokers’ association in India ,which are not
recognised by SEBI
8746 brokers
1476 merchant bankers
425 registrar to issues
429 financing and advertising agencies
271 issue stationery printers
117 collecting bankers
2100 underwriters
113 portfolio managers
23 debenture trustees
Only those securities are traded which are listed
.
From May 27,1996,the listing requirements are
made more stringent in order to broaden the
shareholder base of the co; and to avoid large chunk
of shares being held by a few individuals close to co;
managements.

Itis now stipulated that ,in case of offer for sale ,

there will have to be at least 10 public shareholders
for every Rs 1 lakh if equity offered to the public
For listing on BSE, the min equity capital of a
co; is 10 crore rupees.

The non manufacturing co; cannot make a

public issue unless they have track record of
dividend payments for at least 3 years out of
5 preceding years.