National Stock Exchange of India (NSE) Class 12 Notes

National Stock Exchange of India

The national stock exchange of India is one of the leading stock exchanges in India. It is located in Mumbai, India. It was established in 1992, as the first fully automated stock exchange in the country. Earlier, the trading membership was limited to the brokers but after its emergency, the right to trade was given to all those who were having knowledge about the trade and met minimum financial requirements. The paper-based settlement i.e. share certificate was replaced by the electronic depository-based accounts.

It was set up by the leading financial institutions, insurance companies, and banks.  The national stock exchange of India was recognized as a stock exchange in April 1993. The equity segment commenced in November 1994 and the derivatives segment commenced in June 2000.

Objectives of National Stock Exchange

There are certain objectives of the national stock exchange of India with which it was it up and they are as under:

1. It was established for establishing a country-wide trading facility so that a connection can be built with the investor base throughout the country for all types of securities.
2. It has established an effective communication network so that the investors throughout the country get equal access.
3. It is an electronic trading securities system. The previous paper-based securities exchange was not so up to the mark. Paper-based transactions were not efficient because of the possibility of theft, and delay in transactions. The electronic system has improved the service and thus provides faster, safe, and transparent transactions.
4. It also enables shorter settlement cycles.
5. It was set up with the objective of meeting the international standards and the benchmarks.

Within this short span of time, the national stock exchange of India has performed so well and has fulfilled the objectives for which it was set up. It has ensured that the service is provided to the investors at the lowest cost possible. It has removed all the geographical barriers and thus helped in improving the transparency in the transactions.

Market segment of National stock exchange (NSE)

There are two segments of the national stock exchange. They are:

1. Wholesale debt market segment: this segment deals with the securities that are – treasury bills, commercial paper, mutual funds, certificate of deposit, floating-rate bonds, index bonds, zero-coupon bonds, central government securities, state developmental loans, bonds of public sector undertakings (PSUs), and corporate debentures.
2. Capital market segment: the capital market segment of the national stock exchange is a platform that provides free, fair, and transparent trade of securities like – equity shares, exchange-traded funds, debentures, preference shares, and retail government securities.

NIFTY 50

The nifty 50 is a flagship index of the national stock exchange of India. It is an index wherein, the behavior of the blue-chip companies is tracked. Blue-chip companies are those companies well established, nationally recognized, and financially strong. There are approximately 1600 companies that are listed on the national stock exchange of India. Out of these 1600, the top 50 are selected and their behavior is measured. These companies keep on coming in the top list and going based on their performance in the stock market.

As of June 2020, the nifty 50 companies are as under:

1. GAIL Ltd.
2. Wipro limited
3. Reliance industries limited
4. HCL technologies limited
5. Sun pharmaceutical industries limited
6. Oil and natural gas corporation limited
7. Reddy’s laboratories limited
8. Cipla limited
9. Mahindra and Mahindra limited
10. Industries limited
11. Britannia industries limited
12. Tata consultancy services limited
13. Nestle India limited
14. Infosys limited
15. Vedanta limited
16. Bharti infrared limited
17. Hindustan Unilever limited
18. Ultratech cement limited
19. Asian paints limited
20. Tech Mahindra limited
21. Adani ports and special economic zones limited
22. Maruti Suzuki India limited
23. Shree cement limited
24. UPL limited
25. Bharti airtel limited
26. Zee entertainment enterprise limited
27. Coal India limited
28. Bajaj auto limited
29. Power grid corporation of India limited
30. Hero motocorp limited
31. Eicher motors limited
32. Housing development finance corporation limited
33. Kotak Mahindra bank limited
34. Indian oil corporation limited
35. JSW steel limited
36. Larsen and Toubro limited
37. State bank of India
38. Titan company limited
39. HDFC bank limited
40. Grasim industries limited
41. ITC limited
42. Bharat petroleum corporation limited
43. Bajaj finserv limited
44. Tata steel limited
45. NTPC limited
46. ICICI bank limited
47. Bajaj finance limited
48. Axis bank limited
49. Tata motors limited
50. IndusInd bank limited

National stock is thus one of the important stock exchanges of India. It has several objectives which it fulfills and is running keeping those objectives in check from past so many years. It has revolutionized the securities market of India. It has two main segments where the securities such as shares, debentures, bonds or government loans, commercial paper, etc are dealt with.

The national stock exchange of India also has a flagship index where the top 50 companies are recorded and tracked so that the information can be updated for the general public to make an informed decision. These 50 companies are not fixed but keep on changing from time to time. Approximately 1600 companies are listed on the national stock exchange.

BST Chapter 10 – Financial Markets

1. Financial Market
2. Money Market
3. Capital Market
4. Stock Exchange
5. National stock exchange of India (NSE)
6. Securities and exchange board of India (SEBI)