National stock exchange is one of the leading stock exchanges in India. It is located in Mumbai, India. It was established in 1992, as a 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. National stock exchange was recognised 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 national stock exchange with which it was it up and they are as under:
- 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.
- It has established an effective communication network so that the investors throughout the country get an equal access.
- 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 transaction. The electronic system has improved the service and thus provides faster, safe and transparent transactions.
- It also enables the shorter settlement cycles.
- It was set up with the objective of meeting the international standards and the benchmarks.
Within this short span of time, 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 national stock exchange. They are:
- Whole sale 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.
- Capital market segment: the capital market segment of national stock exchange is a platform which provides free, fair and transparent trade of the securities like – equity shares, exchange traded funds, debentures, preference shares and retail government securities.
The nifty 50 is a flagship index of the national stock exchange of India. It is an index wherein, the behaviour of the lue chip companies is tracked. Blue chip companies are those companies well established, nationally recognised and financially strong. There are approximately 1600 companies which are listed on the national stock exchange. Out of these 1600, top 50 are selected and their behaviour is measured. These companies keep on coming in the top list and going based on their performance in stock market.
As on June 2020, the nifty 50 companies are as under:
- GAIL Ltd.
- Wipro limited
- Reliance industries limited
- HCL technologies limited
- Sun pharmaceutical industries limited
- Oil and natural gas corporation limited
- Reddy’s laboratories limited
- Cipla limited
- Mahindra and Mahindra limited
- Industries limited
- Britannia industries limited
- Tata consultancy services limited
- Nestle India limited
- Infosys limited
- Vedanta limited
- Bharti infratel limited
- Hindustan unilever limited
- Ultratech cement limited
- Asian paints limited
- Tech Mahindra limited
- Adani ports and special economic zones limited
- Maruti suzuki India limited
- Shree cement limited
- UPL limited
- Bharti airtel limited
- Zee entertainment enterprise limited
- Coal India limited
- Bajaj auto limited
- Power grid corporation of India limited
- Hero motocorp limited
- Eicher motors limited
- Housing development finance corporation limited
- Kotak Mahindra bank limited
- Indian oil corporation limited
- JSW steel limited
- Larsen and toubro limited
- State bank of India
- Titan company limited
- HDFC bank limited
- Grasim industries limited
- ITC limited
- Bharat petroleum corporation limited
- Bajaj finserv limited
- Tata steel limited
- NTPC limited
- ICICI bank limited
- Bajaj finance limited
- Axis bank limited
- Tata motors limited
- IndusInd bank limited
National stock is thus one of the important stock exchanges of India. It has several objectives which it fulfils and is running keeping those objectives in check from past so many years. It has revolutionised 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 flagship index where 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 time to time. Approximately 1600 companies are listed on the national stock exchange.