NSE vs BSE: Similarities and Differences Explained
Written by Pradnya Surana
4 min read | Updated on November 26, 2025, 10:59 IST
Stock Exchange of India
A stock exchange is a marketplace where shares of publicly listed companies are bought and sold. It’s a platform where buyers and sellers of stocks and securities meet. The entire trading mechanism is transparent and is undertaken with robust regulation. In India, there are two main exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). They both play a vital role in the country’s overall financial ecosystem.
Understanding Stock Exchanges
When a company wants to raise money, it can sell pieces of ownership called ‘stocks’ or a ‘share’. (A ‘stock’ refers to general ownership in a company, while a ‘share’ is a specific unit of that ownership. However, both are used interchangeably and often mean the same.)
Whenever a company wants to raise money to expand its business, the company lists itself on the stock exchange and sells its shares. The first allotment of shares to common public is known as ‘Initial Public Offering (IPO)’. So, buyers purchase shares through an IPO and gain ownership in the company, while the company receives the funds.
These shares are then traded on a stock exchange. When you decide to buy shares, you are not directly approaching sellers. Instead, you place orders through trusted stockbrokers like Upstox. These brokers execute trade on these exchanges during pre-decided trading hours. The exchanges match buy and sell orders and ensure smooth settlement of transactions.
About the Bombay Stock Exchange (BSE)
The BSE was established in the year 1875 and holds the distinction of being Asia's oldest stock exchange. It has stood steady in both the pre-independence and post-independence eras, witnessing economic transformations and serving as a constant driver in India's growth story.
As of today, 5,500+ companies are listed on BSE, making it one of the world's largest exchanges by number of listings.
The BSE's benchmark index, the Sensex, tracks the top 30 companies of India. Through this index, investors, both Indian and global, gauge India’s economic health. Though there are no specific regulations for this, smaller companies and retail investors favour BSE as their go-to exchange.
About the National Stock Exchange (NSE)
The NSE, founded in 1992, is much younger and newer than the BSE. Despite being recent, it has grown rapidly to become India's largest stock exchange by trading volume. It was the first exchange in India to introduce electronic trading and has revolutionised how Indians invest. This technological advancement brought efficiency and transparency to Indian markets.
The NSE's flagship index, the Nifty 50, represents 50 large-cap companies. Due to its relatively larger base than the BSE, it is widely used by traders and investors for benchmarking portfolio performance. The NSE has approximately 2,000 listed companies and handles a major chunk of equity trading in India. NSE accounts for roughly 90% of the country's total trading volume.
Differences Between NSE and BSE
Both work similarly, but they have some clear differences; they are
| Aspect | NSE | BSE |
|---|---|---|
| Age of Exchange | Newer (started in 1992). | Very old (started in 1875). |
| Number of Listed Companies | Around 2700+ companies. | Around 5500+ companies. |
| Who Invests More | Big investors, foreign investors, and large institutions. | More small retail investors and long-time traders. |
| Trading Activity | Very high trading; buying and selling happen faster. | Lower trading compared to NSE; slower but steady. |
| Technology Level | Very advanced technology; fast systems. | Improving technology, but traditionally slower. |
| SME Platform | NSE Emerge (used by growing companies). | BSE SME (popular among small and regional businesses). |
| Which Companies Prefer It | Big companies from finance, tech and manufacturing. | Many small and mid-sized companies. |
| Large IPOs | Most big IPOs list on both NSE and BSE. | Also chosen for dual listing to reach more retail investors. |
| Why Companies Choose It | For more liquidity (easy to buy/sell) and more big investors. | For a wider retail reach and strong market trust. |
| Good For Investors Who Want | Fast trading and quick price movement. | Stable prices and long-term investment comfort. |
Which Exchange Should You Choose?
For most investors, this question is largely irrelevant. Major stocks are available on both exchanges and your stockbroker usually provides access to both platforms. Professional traders might prefer the NSE for its superior liquidity, while long-term investors can comfortably use either exchange.
Both the NSE and BSE are well-regulated, secure platforms that have contributed immensely to India's economic growth. Both these exchanges have facilitated companies to raise capital and have given investors a chance to earn returns.
About Author
Pradnya Surana
Sub-Editor
is an engineering and management graduate with 12 years of experience in India’s leading banks. With a natural flair for writing and a passion for all things finance, she reinvented herself as a financial writer. Her work reflects her ability to view the industry from both sides of the table, the financial service provider and the consumer. Experience in fast paced consumer facing roles adds depth, clarity and relevance to her writing.
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Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.