Capital Markets
Stock Markets
India's stock market is now the 4th largest in the world with ₹442.5 lakh crore market cap. From BSE (Asia's oldest exchange) to NSE (world's largest derivatives market), explore how millions of Indians invest.
What is the Stock Market?
- Stock Market(शेयर बाज़ार)
- A marketplace where shares (small ownership pieces) of companies are bought and sold. When you buy a company's share, you become a part-owner of that company and share in its profits and losses.
Companies list their shares on stock exchanges to raise money from the public. In return, investors get a chance to grow their wealth as the company grows. The two main exchanges in India are BSE and NSE.
BSE vs NSE
India has two major stock exchanges. Most stocks are listed on both, but they have different strengths.
National Stock Exchange
राष्ट्रीय शेयर बाज़ार
2,266
Listed Companies
93%
Trading Volume
Flagship Index: Nifty 50
- •World's largest derivatives exchange by contracts
- •First fully electronic exchange in India
- •Processes 50,000+ orders per second
Bombay Stock Exchange
बम्बई शेयर बाज़ार
5,245
Listed Companies
7%
Trading Volume
Flagship Index: Sensex
- •Asia's oldest stock exchange (150 years)
- •More listed companies than NSE
- •Sensex is India's most tracked index
Key Difference
Sensex & Nifty Explained
- Stock Index(शेयर सूचकांक)
- A number that represents the overall value of a group of stocks. When the index goes up, it means most stocks in that group are doing well. It's like a "health score" for the market.
S&P BSE Sensex
सेंसेक्स
76,500
Current Value
85,978
All-Time High
30 companies | Base: 100 (1978)
Sensitive Index — tracks the 30 largest and most traded companies
Nifty 50
निफ्टी
23,200
Current Value
26,277
All-Time High
50 companies | Base: 1000 (1995)
National + Fifty — broader representation of the market
Nifty 50 Sector Composition
Stock Market History
Key Milestones
BSE founded as 'Native Share & Stock Brokers Association'
Sensex launched with base value 100
NSE established; Harshad Mehta scam rocks markets
Sensex crosses 5,000 for first time
Dot-com crash; Ketan Parekh scam
Sensex crosses 10,000
Global financial crisis; Sensex falls 60%
Modi government elected; markets rally
Sensex crosses 30,000
COVID crash; fastest recovery in history
Sensex crosses 60,000
Sensex crosses 85,000; India becomes 4th largest market
SEBI: The Market Regulator
- SEBI(सेबी)
- Securities and Exchange Board of India — the watchdog of Indian capital markets. It protects investors, regulates stock exchanges, and ensures fair trading practices.
SEBI's Key Roles
Recent Reforms
Who Invests in the Market?
The stock market has three main types of investors: Foreign Institutions (FIIs), Domestic Institutions (DIIs), and Retail Investors like you and me.
FII/FPI
विदेशी संस्थागत निवेशक
17.2%
of market cap
AUM: ₹68.5 lakh crore
Top sources: USA, Singapore, Luxembourg
FY24: ₹25,400 Cr sold
DII
घरेलू संस्थागत निवेशक
15.8%
of market cap
AUM: ₹85.2 lakh crore
Includes: Mutual Funds, Insurance Companies
FY24: ₹1,85,688 Cr bought
Retail
खुदरा निवेशक
9.2%
of market cap
Demat: 17.1 crore accounts
Growth since 2020: 310%
Avg trade: ₹15,000
DIIs vs FIIs
IPOs: How Companies Go Public
- IPO(आई.पी.ओ.)
- Initial Public Offering - when a company sells shares to public for first time. It's the first time the general public can buy shares of a company that was previously privately owned.
IPO Process
DRHP Filing
Company files Draft Red Herring Prospectus with SEBI
SEBI Review
SEBI reviews and approves after due diligence
Price Band
Company sets price range for shares
Bidding Period
Investors bid for shares (usually 3 days)
Allotment
Shares allotted based on subscription
Listing
Shares start trading on exchange
IPO Categories
| Category | Quota | Max Investment |
|---|---|---|
| Retail | 35% | ₹2 lakh |
| HNI/NII | 15% | Above ₹2 lakh |
| QIB | 50% | Institutional only |
Recent Large IPOs
| Company | Year | Size (₹ Cr) | Listing Day |
|---|---|---|---|
| LIC | 2022 | 21,000 | -8% |
| Hyundai Motor India | 2024 | 27,870 | -1.3% |
| Paytm | 2021 | 18,300 | -27% |
| Zomato | 2021 | 9,375 | +66% |
| Nykaa | 2021 | 5,352 | +96% |
How Trading Works
Market Timings
Monday to Friday (except holidays)
Settlement
T+1
Trade settles next business day
Changed from T+2 in January 2023
Order Types
Market Order
बाजार आदेश
Buy/sell immediately at current price
Limit Order
सीमा आदेश
Buy/sell only at specified price or better
Stop Loss
स्टॉप लॉस
Sell automatically if price falls below limit
Trading Charges
| Charge | Rate | Note |
|---|---|---|
| Brokerage | 0 - 0.5% | Many brokers offer zero brokerage |
| STT | 0.1% | Securities Transaction Tax |
| Exchange Fees | 0.00345% | NSE/BSE charges |
| GST | 18% | On brokerage and fees |
| Stamp Duty | 0.015% | State government tax |
Large, Mid & Small Cap
Companies are classified by their market capitalization (total value of all shares). This classification helps investors understand the risk and growth potential.
Large Cap
लार्ज कैप
Top 100 companies by market cap
₹20,000 Cr+
Examples: Reliance, TCS, HDFC Bank
Mid Cap
मिड कैप
101st to 250th company
₹5,000 - 20,000 Cr
Examples: AU Bank, Coforge, Persistent
Small Cap
स्मॉल कैप
251st company onwards
Below ₹5,000 Cr
Examples: Many smaller companies
India vs The World
| Rank | Country | Exchange(s) | Market Cap |
|---|---|---|---|
| #1 | USA | NYSE + NASDAQ | $50.8T |
| #2 | China | Shanghai + Shenzhen | $10.1T |
| #3 | Japan | Tokyo | $6.2T |
| #4 | IndiaYou are here | NSE + BSE | $5.3T |
| #5 | UK | London | $3.4T |
| #6 | France | Euronext Paris | $2.9T |
| #7 | Canada | Toronto | $2.8T |
Key Takeaways
- •India overtook Hong Kong to become 4th largest stock market in 2024
- •Retail investor participation tripled since COVID (2020)
- •DIIs have been net buyers for 8 consecutive years, offsetting FII selling
- •Monthly SIP inflows crossed ₹26,000 crore - highest ever
- •Sensex has grown from 100 (1979) to 76,000+ (2025) - 760x in 45 years
- •NSE handles 93% of India's equity trading volume