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Stock exchanges are integral to the functioning of stock markets in India. They are platforms that allow companies to list their shares for being traded in the market. While there are many stock exchanges in India, the Bombay Stock Exchange or BSE stands out as the oldest and one of the most trusted ones in the country.
Published on 11 January 2022
In this article, we will talk about the Bombay Stock Exchange and look at some essential features of the exchange.
The Bombay Stock Exchange was the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. While it was founded in 1875 by Premchand Roychand, it has evolved into one of the largest stock exchanges in the world.
Here is a quick look at the history of BSE India:
BSE India uses an electronic system for accepting and executing trades. Investors can place orders directly in BSE Online by choosing the type of order based on their preference. However, transactions in BSE Online have to be entered via a registered stockbroker only.
While the Bombay Stock Exchange might offer direct access to some large-ticket preferential investors, all others have to go through a stockbroker. All transactions are settled within T+2 trading days as per the guidelines of the regulator, the Securities and Exchange Board of India (SEBI).
When a company wants to raise capital for its business by issuing shares, bonds, or any other securities, it creates them in the primary market. An Initial Public Offer (IPO) is an example of a primary market where a company issues shares to the public for the first time. Companies launching an IPO are mandatorily required to list them on a prominent stock exchange before making the shares available to the public. Once the shares are issued, they can be traded in the secondary market of the exchange.
The Bombay Stock Exchange is a popular and trusted exchange in the country. When a company lists its stocks on the BSE, the awareness of its upcoming stocks is spread across investors. This allows the company to attract investors and raise capital. On the other hand, investors prefer shares listed with exchanges like the BSE as they can encash their investment whenever needed.
Here are some quick facts about BSE India:
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