Bombay Stock Exchange

BSE Full Form in English, letter by letter

BSE is the Bombay Stock Exchange (now BSE Limited), Asia's oldest stock exchange, set up in Mumbai in 1875 and home of the SENSEX.

BSE Full Form in Indian Languages

BSE, the Bombay Stock Exchange, is the Mumbai exchange behind the SENSEX. See how its name reads in six Indian languages.

From a banyan tree to Dalal Street

The exchange began in 1875 as the Native Share and Stock Brokers' Association. Its roots go back to a few Bombay brokers who met informally under a banyan tree near the Town Hall in the 1850s, and cotton trader Premchand Roychand was among its early leaders. The brokers later moved to Dalal Street, which has been their address since the 1870s.

In 1957 it became the first stock exchange in the country to receive permanent recognition under the Securities Contracts (Regulation) Act, 1956. The company is now officially called BSE Limited, though most people still say Bombay Stock Exchange. Its head office is in Phiroze Jeejeebhoy Towers on Dalal Street.

Why it is called Dalal Street

The street in the Fort area of Mumbai has hosted brokers for generations. Newspapers use 'Dalal Street' as shorthand for the Indian stock market, in the way 'Wall Street' stands for American markets.

The SENSEX and the BSE index family

The SENSEX is the best-known benchmark: 30 large, actively traded companies, weighted by free-float market capitalisation, with a base value of 100 for 1978-79. It was first published in 1986. The index was named S&P BSE SENSEX for several years and is now called BSE SENSEX again. Its level crossed 80,000 in July 2024.

BSE also runs the BSE 100, BSE 200 and BSE 500, plus sector indices such as BANKEX. When a news bulletin says the market rose or fell, it usually quotes the SENSEX and the NIFTY 50 together.

A worked example shows how weighting works. If a company's free-float value is 1,000 units and the whole basket is worth 10,000, it counts for 10 per cent of the index movement. This is why a few heavyweight stocks, mainly large banks, energy and technology companies, can swing the index on a day when most other stocks barely move.

How a company lists on the BSE

A company lists through an IPO, filing a draft offer document with SEBI and clearing its review. Larger companies go to the main board. Smaller ones can list on the BSE SME platform, launched in 2012, which has lower entry thresholds.

Once listed, shares trade in electronic form through demat accounts held with a depository such as NSDL or CDSL, and trades settle on a T+1 cycle, meaning the next working day. Individual stocks have price bands, and market-wide circuit breakers pause trading if the index falls sharply.

Services behind the index

BSE moved to fully screen-based trading in 1995 with its BOLT system, ending open outcry on the floor. Its StAR MF platform lets distributors place mutual fund orders, so the exchange touches ordinary SIP investors too, not just share traders.

BSE became a listed company itself in February 2017, the first Indian exchange to do so. An investor protection fund covers certain losses if a broker defaults.

BSE and NSE compared

NSE began trading in 1994 and leads in equity derivatives turnover by a large margin. BSE has more listed companies, over 5,000, though many trade rarely. A retail investor's broker and demat account reach both exchanges, and the SENSEX and NIFTY 50 move closely because they hold many of the same large companies.

If you are comparing the two for study, remember: BSE is older, NSE is bigger in daily trading volume, and both are regulated by SEBI.

Investing through the exchange in practice

You cannot buy shares from the exchange directly. Open a demat and trading account with a SEBI-registered broker after completing KYC, add funds, and place orders through the broker's app. Your order may be routed to BSE or NSE depending on price and liquidity.

For first-time investors, an index fund tracking the SENSEX is one simple way to start, while the SME segment is riskier because those shares are thinly traded.

Check a company's filings on the BSE website before investing. Every listed company must publish quarterly results, shareholding patterns and announcements there, and these documents are the primary source for what a company has actually said. Use your broker's terminal for live trading rather than relying on website quotes.

From brokers shaking hands under a tree to fully electronic trading, BSE's story tracks India's markets. When you read the SENSEX in the news, you are reading the pulse of 30 of the country's largest listed companies.

BSE Full Form: Common Questions