National Stock Exchange of India Limited, also known as the National Stock Exchange (NSE), is an Indian

stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...

based in

Mumbai Mumbai ( ; ), also known as Bombay ( ; its official name until 1995), is the capital city of the Indian state of Maharashtra. Mumbai is the financial capital and the most populous city proper of India with an estimated population of 12 ...

. It is the 5th largest stock exchange in the world by total

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

, exceeding $5 trillion in May 2024. NSE is under the ownership of various financial institutions such as banks and insurance companies. As of 2024, it is the world's largest

derivatives exchange A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or ...

by number of contracts traded and the third largest in cash equities by number of trades for the calendar year 2023.

History

National Stock Exchange was incorporated in 1992 to bring about transparency in the Indian equity markets. NSE was set up at the behest of the

Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...

, based on the recommendations laid out by the Pherwani committee in 1991 and the blueprint was prepared by a team of five members (Ravi Narain, Raghavan Puthran, K Kumar, Chitra Ramkrishna and Ashishkumar Chauhan) along with R H Patil and SS Nadkarni who were deputed by IDBI in 1992. Instead of trading memberships being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced, and met the minimum financial requirements was allowed to trade. NSE commenced operations on 30 June 1994 starting with the wholesale debt market (WDM) segment and equities segment on 3 November 1994. It was the first exchange in India to introduce an electronic trading facility. Within one year of the start of its operations, the daily turnover on NSE exceeded that of the BSE. Operations in the derivatives segment commenced on 12 June 2000. In August 2008, NSE introduced currency derivatives. In 2012, NSE launched the NSE EMERGE platform for the listing of

small and medium-sized enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by many national agencies and international organiza ...

(SME) and

startup A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses that do not intend to ...

companies in India. In May 2013, NSE launched India's first dedicated trading platform for debt-related products. In 2023, NSE launched the Social Stock Exchange to allow

social enterprise A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners. Social enterprises ha ...

s, including non-profit organisations, raise funds from the public.

Trading

Listings

As of December 2024, NSE has 2,671 companies listed, with 2,084 companies listed on the mainboard and 587 companies listed on its SME platform− NSE EMERGE. Total market capitalization of NSE-listed companies was 438.9

lakh A lakh (; abbreviated L; sometimes written lac) is a unit in the Indian numbering system equal to one hundred thousand (100,000; scientific notation: 105). In the Indian 2, 2, 3 convention of digit grouping, it is written as 1,00,000. F ...

crore Crore (; abbreviated cr) denotes the quantity ten million (107) and is equal to 100 lakh in the Indian numbering system. In many international contexts, the decimal quantity is formatted as 10,000,000, but when used in the context of the India ...

(US$5.13 trillion), as of 31 December 2024. As of December 2023, there were 190 ETFs listed on the NSE, including ETFs on equity, debt and commodity asset classes. The first InvIT listed on the NSE in 2017 and the first

REIT A real estate investment trust (REIT, pronounced "reet") is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of real estate, including office and apartment buildings, studios, warehouses, hos ...

in 2019. As of January 2025, NSE has over 11

unique registered investors.

Indices

NSE Indices operates NSE's broad-based, sectoral, thematic, strategy and fixed-income indices. The flagship index

NIFTY 50 The NIFTY 50 is an Indian stock market index that represents the Capitalization-weighted index#Free-float weighting, float-weighted average of 50 of the largest Indian companies listed on the National Stock Exchange of India, National Stock E ...

was launched on 22 April 1996, with a base value of 1,000 on the base date of 3 November 1995.

Derivatives

The NSE allows trading of futures and options contracts of indices and single stock contracts. On 3 May 2012, the National Stock exchange launched derivative contracts (futures and options) on FTSE 100, a widely tracked index of the UK equity stock market. On 10 January 2013, the National Stock Exchange signed a letter of intent with the Japan Exchange Group, Inc. (JPX) for the launch of NIFTY 50 index futures on the Osaka Securities Exchange (OSE).

Corporate affairs

Stakeholders

As of March 2025, state-owned Indian investors in NSE include

Life Insurance Corporation The Life Insurance Corporation of India (LIC) is an Indian public sector life insurance company headquartered in Mumbai. It is India's largest insurance company as well as the largest institutional investor with total assets under management wo ...

(10.7%),

State Bank of India State Bank of India (SBI) is an Indian Multinational corporation, multinational Public sector undertakings in India, public sector bank and financial service body headquartered in Mumbai. It is the largest bank in India with a 23% market shar ...

(3.23%), SBI Caps (4.33%) and Stock Holding Corporation of India Limited (4.40%). Private equity investors include Aranda Investments Mauritius Pte Ltd (

Temasek Holdings Temasek Holdings (Private) Limited ( ) is a Singaporean State ownership, state-owned multinational investment firm. Incorporated on 25 June 1974, Temasek has a net portfolio of US$288 billion (S$389 billion) as of 2024. Headquartered at Orchard ...

), PI Opportunities Fund I ( PremjiInvest) and MS Strategic Mauritius Pte Ltd (

Morgan Stanley Morgan Stanley is an American multinational investment bank and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in 42 countries and more than 80,000 employees, the firm's clients in ...

Leadership

The list of CEO and MDs of NSE includes:

Subsidiaries

* NSE Indices Limited * NSE Clearing Limited * NSE NSEIT * NSE Infotech Services Limited * NSE Cogencis Information Services Ltd * NSE IFSC Clearing Corporation Limited (NICCL), or simply NSE International Clearing * NSE IFSC Limited, or simply NSE International Exchange * NSE Investments Limited * NSE Data & Analytics * NSE Academy Limited

Financial literacy

NSE has collaborated with several universities like Gokhale Institute of Politics & Economics (GIPE) - Pune, Bharati Vidyapeeth Deemed University (BVDU) - Pune,

Guru Gobind Singh Indraprastha University Guru Gobind Singh Indraprastha University, formerly Indraprastha University (IP or IPU), is a state university located in Dwarka, Delhi, India. The university is organised around fourteen university schools and three university centers that f ...

- Delhi, RV University - Bangalore, the Ravenshaw University - Cuttack and

Punjabi University Punjabi University is a collegiate state public university located in Patiala, Punjab, India, Punjab, India. It was established on 30 April 1962 and is only the second university in the world to be named after a language, after Hebrew Universit ...

- Patiala, among others to offer MBA and BBA courses. NSE has also provided mock market simulation software called NSE Learn to Trade (NLT) to develop investment, trading, and portfolio management skills among the students. The simulation software is very similar to the software currently being used by the market professionals and helps students to learn how to trade in the markets. NSE also conducts online examinations and awards certification, under its Certification in Financial Markets (NCFM) programs. NSE has set up NSE Academy Limited to further financial literacy. At present, certifications are available in 46 modules, covering different sectors of financial and capital markets, both at the beginner and advanced levels. The list of various modules can be found at the official site of NSE India. In addition, since August 2009, it has offered a short-term course called NSE Certified Capital Market Professional (NCCMP).

Criticism and controversies

Market manipulation

The Indian stock exchanges BSE and NSE have witnessed several corruption scandals. At times, the

Securities and Exchange Board of India The Securities and Exchange Board of India (SEBI) is the Regulatory agency, regulatory body for securities and commodity market in India under the administrative domain of Ministry of Finance (India), Ministry of Finance within the Government ...

(SEBI) has barred several individuals and entities from trading on the exchanges for

stock manipulation In economics and finance, market manipulation occurs when someone intentionally alters the supply or demand of a security to influence its price. This can involve spreading misleading information, executing misleading trades, or manipulating ...

, especially in

illiquid In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the ...

smallcaps and

penny stocks Penny stocks are common shares of small public companies that trade for less than five dollars per share. The U.S. Securities and Exchange Commission (SEC) uses the term "penny stock" to refer to a security, a financial instrument which represe ...

Market operators illegal activity

Market operators continue to operate in the Indian stock market, albeit within a regulatory framework aimed at ensuring transparency and fairness. Market operators are individuals or entities that actively engage in buying and selling securities to influence their prices for profit. They operate through various strategies, such as arbitrage,

short selling In finance, being short in an asset means investing in such a way that the investor will profit if the market value of the asset falls. This is the opposite of the more common Long (finance), long Position (finance), position, where the inves ...

high-frequency trading High-frequency trading (HFT) is a type of algorithmic trading in finance characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools.Lin, Tom C. W. " ...

front running Front running, also known as tailgating, is the practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transactio ...

, churning,

scalping Scalping is the act of cutting or tearing a part of the human scalp, with hair attached, from the head, and generally occurred in warfare with the scalp being a trophy. Scalp-taking is considered part of the broader cultural practice of the taki ...

, wash trading, spoofing, and layering, often leveraging sophisticated technology and large capital. Regulatory bodies like the Securities and Exchange Board of India (SEBI) oversee market activities to curb malpractices such as

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider informati ...

, price rigging, and

market manipulation In economics and finance, market manipulation occurs when someone intentionally alters the supply or demand of a security to influence its price. This can involve spreading misleading information, executing misleading trades, or manipulating ...

. SEBI has implemented measures, including surveillance systems, to detect and penalize unethical practices. Despite these regulations, market operators exploit loopholes to gain an edge, necessitating continuous vigilance and regulatory updates. Market operators in India often use the "

pump and dump Pump and dump (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements (pump), in order to sell the cheaply purchased stock at a higher price (dump). O ...

" strategy, despite strict regulations against such practices. The "pump and dump" scheme involves artificially inflating the price of a stock (pump) through false or misleading positive statements. Once the price has been significantly raised, the operators then sell off their holdings (dump) at the inflated prices, leading to a sharp price decline and substantial losses for other investors who bought in at the higher prices. Their activities have continued to impact market volatility, liquidity, and price discovery, playing a significant role in the dynamics of the Indian stock market.https://www.researchgate.net/profile/Chakrapani-Chaturvedula/publication/311446941_The_Effectiveness_of_Trade_for_Trade_Segment_as_a_Surveillance_Effort_to_Prevent_Price_Manipulation_Evidence_from_India/links/58f7a2094585158d8a6c176e/The-Effectiveness-of-Trade-for-Trade-Segment-as-a-Surveillance-Effort-to-Prevent-Price-Manipulation-Evidence-from-India.pdf Prabu, A.E., Bhattacharyya, I. & Ray, P. Impact of monetary policy on the Indian stock market: Does the devil lie in the detail?. Ind. Econ. Rev. 55, 27–50 (2020).

NSE co-location scam

On 8 July 2015, Sucheta Dalal wrote an article on Moneylife alleging that some NSE employees were leaking sensitive data related to high-frequency trading or co-location servers to a select set of market participants so that they could trade faster than their competitors. NSE alleged defamation in the article by Moneylife. On 22 July 2015, NSE filed a suit against the publication. However, on 9 September 2015, the Bombay High Court dismissed the case and fined NSE in this defamation case against Moneylife. The High Court asked NSE to pay to each journalist Debashis Basu and

Sucheta Dalal Sucheta Dalal (born 1962) is an Indian business journalist and author. She has been a journalist for over two decades and was awarded a Padma Shri for journalism in 2006. She was the Financial Editor for the ''Times of India'' until 1998 when ...

and the remaining to two hospitals. The

Bombay High Court The High Court of Bombay is the High courts of India, high court of the States and union territories of India, states of Maharashtra and Goa in India, and the union territory of Dadra and Nagar Haveli and Daman and Diu. It is seated primarily ...

has stayed the order on costs for a period of two weeks, pending the hearing of the appeal filed by NSE. The board also passed orders against 16 individuals including former managing directors and CEOs Ravi Narain and Chitra Ramakrishna ordering them to disgorge 25% of their salaries during that period along with interest. All money is to be paid into the Investor protection and education fund. These individuals have also been debarred from the markets or holding any position in a listed company for a period of five years. In 2024, SEBI dropped the case.

Notes

References

External links

* {{DEFAULTSORT:National Stock Exchange Of India 1992 establishments in Maharashtra Financial services companies based in Mumbai Financial services companies established in 1992 Stock exchanges in India