Bombay Stock Exchange (BSE), now known as BSELimited, is an old stock exchange company headquartered in Mumbai, India. The BSE logo is known to most investors in India. Being the first stock exchange company in Asia and a pioneer in the Indian share market business, BSE Ltd has gained prestigious awards over the years as recognition for its contribution to India and the world’s financial market. The BSE share market is perfect for investors who want to trade in debt instruments, currencies, equities, mutual funds, and derivatives.
History of the Bombay Stock Exchange
BSE was officially established in 1875, but according to Wikipedia, its stockbrokers started the firm way back in the 1850s. During that time, the stockbrokers held their meetings and business transactions only under a banyan tree, situated right in front of the then Mumbai Town Hall. Despite the lack of an office, the BSE continued to grow, with more stockbrokers joining the firm as years passed.
As the business grew and more stockbrokers joined the enterprise, BSE had to constantly look for the best places to do business. Finally, in 1928, the firm acquired a site near Horniman Circle, where they built a building that now houses their current office. The address by which the BSE building has been sitting for decades now is called Dalal Street, which is a Hindi word that means “Broker Street”.
Despite its humble beginnings, the BSE achieved several milestones and reaped numerous awards. Some of the milestones and awards gained are the following:
- Permanent recognition by the Government of Ind. under the Securities Contracts Regulation Act (SCRA) in August 1957.
- Launch of India’s first stock index, S&P BSE SENSEX (1986).
- Introduction of the trade guarantee fund (TGF) in 1997.
- Launch of stock options in 2001.
- Introduction of overnight investment product in 2015.
- Officially became India’s first listed stock exchange company in 2017.
The BSE Online Trading System (BOLT) was also introduced in 1995. BOLT is connected to and designed to interact with other information vendors, such as Reuters, Bridge, and Bloomberg. It disseminates information, provides index computation, and allows investors to monitor the position of stocks. The BSE trading portal shows investors which stocks are at an all-time high, which stocks can be bought cheap, which are best for intraday trading, and many more. The information shown by the BOLT system helps investors make the right decisions and act on their investments on a real-time basis.
Top 15 companies in BSE
As of February 2022, over five thousand companies are listed on the BSE stock exchange. Of this number, the top 15 based on market capitalization include the following in no particular order:
- Reliance Industries Ltd.
- HDFC Bank Ltd.
- State Bank of India
- Asian Paints Ltd.
- ICICI Bank Ltd.
- Bharti Airtel Ltd.
- Bajaj Finance Ltd.
- Housing Development Finance Corporation Ltd.
- Hindustan Unilever Ltd.
- Infosys Ltd.
- Tata Consultancy Services Ltd.
- Adani Green Energy Ltd.
- Life Insurance Corporation of India (LIC).
- Kotak Mahindra Bank Ltd.
Top BSE Indices
With the thousands of companies listed in BSE and other stock exchange companies, it can be nearly impossible to monitor all of them at once. In light of this, stock indices are created. The meaning of stock market indices may seem quite ambiguous for novice investors. Still, as they get better in the online trading and investing venture, they will probably understand how it works.
Currently, the top BSE indices are the following in no particular order:
- BSE SENSEX;
- BSE midcap;
- BSE 200;
- BSE smallcap;
- BSE 500;
- BSE Bankex.
Stock indices refer to a group of selected stocks that have certain similarities. They are grouped based on the industry of the companies they belong to, the size of the company, and market capitalization, to name a few.
Pros and cons of BSE
Investing in stock exchanges is known to provide investors with a number of benefits. But it is also decked with many shortcomings. Therefore, investing in stocks may not be for everyone. BSE trading itself is no exception. While the BSE model may seem attractive to investors, it is just the same with its competitors – there is no guarantee that investors will make a profit on each of the assets bought. Hence, before investing any amount in BSE, it is important to know first its various advantages and drawbacks.
BSE Ltd. remains an excellent portal to gaining extra revenues in the long term. Here are some pros of using the BSE for trading in stocks:
- The official website provides investors with comprehensive information about the current status of the stock market, BSE share prices, and many more. It even allows investors to be updated about current trends and to know the latest company plans and events through corporate announcements found on its website.
- Investors with complaints or need support and troubleshooting may contact BSE customer care via phone or email.
- The BSC website is easy to navigate. Vital information can be accessed directly on its homepage.
- BSE provides novice traders with an easy way to learn how to invest in assets and trade stocks.
- All trade executions cost the same.
- Companies listed in the BSE can raise additional capital through an Initial Public Offering or IPO.
- BSE facilitates transaction transparency. Through the BSE listing centre, companies can get the following instruments listed for transparency purposes: equity shares, mutual funds, debts, REITS, and many more.
- The BSE website is available in other language versions, including Hindi and Gujarati.
- Anyone who wants to trade in stocks can use BSE.
- BSE allows investors to monitor live market movements and analyze market indices.
- Investors have access to quarterly results and reports.
BSE India is also known to follow good corporate practices, which is one of the characteristics that investors often look for in a stock exchange.
There are two major disadvantages to trading in BSE Ltd. Firstly, BSE is not a good choice for investors looking to participate in intraday trading. Also, BSE has poor or low liquidity.
How does BSE work?
BSE is known as one of the best stock exchanges for several reasons: its use of technology to serve its patrons better. BSE uses a fast online trading system that allows investors to trade in stocks and securities and learn more about the share market online. Investors can find almost everything they need on the BSE online trading platform.
BSE is a good starting platform for novice investors. They can use the trading terminal to:
- Learn how to read data in a technical chart. It may also be learned from the BSE website itself under Training & Certification.
- Learn to use statistical measures, such as Beta, to compare and monitor the volatility of securities and stocks.
- Understand the use of a Pivot table as a trading strategy.
- Get a quote for stocks intended for buying or selling.
Plus, investors who use BSE’s online trading system can enjoy the following benefits:
- Monitor market data in real-time. It means that they can watch live the stock prices and monitor their movements. For instance, if an investor wants to know the status of the Bel or the BSC share price, they can analyze the stock prices of these companies without having to search for them in some other trading applications, such as Upstox.
- Use the ticker to monitor today’s top gainers or losers or to monitor the movement of assets.
- Search for the best assets to buy on the platform or information about the company to see how it performs compared to others. For instance, if they want to know how the stocks of the National Insurance Co are doing in the market, they can type the company’s abbreviation or code used in the stock exchange, which is NIC, in the search bar. It will take them directly to the page containing every data they need about the company.
Even those with zero knowledge about share trading can learn a thing or two about it at BSE.
How to trade in BSE online?
To start trading with the platform, users need to download the BSE Electronic Smart Trader app (BEST) on their devices. Once downloaded, they can then proceed with registration. Note that there may be a system requirement for download. Login to BEST will allow users to trade in BSE.
But can they trade directly with BSE? Yes, but in some cases. Such access to direct investment is provided to certain preferential users who make large transactions on the BSE. Others must trade on the BSE stock market through a brokerage agency for an agreed fee. To do this, they need to open a trading account.
Most stockbrokers offer a demo account, where users can first try to learn different trading timings and strategies before they trade in an actual account. It helps keep their losses low and helps them gain confidence in trading.
What else does BSE India offer?
Apart from BEST, BSE offers other platforms for investors. One such platform is the BSE StAR MF, which is created for those who invest in mutual funds.
Take note that BSE may work differently for companies that want to get listed in the BSE. These companies do not use BEST to get themselves listed. Instead, they need to submit a certain requirement to BSE’s online portal listing centre, where online filing for companies that want to get listed on the stock exchange is allowed. Companies that are successfully listed are given a scrip ID, a number given by BSE to all listed public companies. The scrip numbers are often visible in Google Finance, in the company’s trade terminal, and in public data streaming services.
Note! The BSE helpline is available for any problems that occur during or after registration.
If you are wondering whether BSE is indeed a good medium for you to earn money in the long run, remember that there are no guarantees in the stock market. Stocks in the likes of Pivotree Inc (PVT), ITC, Infosys, Odisha Cement Ltd., and even those who are known to have given significant profits to some investors can dip to their lowest from time to time.