National Stock Exchange of India facts for kids

The National Stock Exchange building in the Bandra Kurla Complex in Mumbai

The National Stock Exchange of India Limited (NSE) is a very important stock exchange in India. It is located in Mumbai. A stock exchange is like a marketplace where people can buy and sell parts of companies, called shares or stocks. The NSE is owned by different banks and insurance companies.

It is one of the biggest stock exchanges in the world. In 2022, it was the world's largest for trading certain financial agreements called "derivatives." It was also the third largest for buying and selling company shares. By January 2024, it was the 7th largest stock exchange globally based on the total value of all companies listed there.

The NSE has a special index called the NIFTY 50. This index tracks the performance of 50 big companies. It helps investors in India and worldwide understand how the Indian stock market is doing. The NIFTY 50 index was created by NSE in 1996.

History of NSE

The National Stock Exchange was started in 1993. Its main goal was to make buying and selling stocks in India more open and fair. The Indian government asked for it to be set up. This was based on ideas from a special committee in 1991.

Before NSE, trading was mostly done by a small group of brokers. But NSE made sure that anyone with the right skills and money could trade. This made the market more accessible.

NSE began its operations on June 30, 1993. It first handled the wholesale debt market. Then, on November 3, 1994, it started its stock trading section. It was the first exchange in India to use a computer system for trading. This made trading much faster and easier. Within a year, NSE's daily trading was bigger than the BSE.

NSE also started trading in "derivatives" in June 2000. These are financial tools that get their value from something else, like a stock price. In August 2008, it added "currency derivatives," which are related to foreign money exchange.

NSE EMERGE: Helping New Businesses

NSE EMERGE is a special program from NSE. It helps small and medium-sized businesses (SMEs) and startup companies in India. These companies can list their shares on NSE without needing a big public offering.

This platform helps these smaller companies find investors. It allows them to raise money to grow their businesses. By August 2019, 200 companies had listed on NSE's SME platform.

How NSE Markets Work

NSE from 2000 to 2020. (Indices NIFTY 50)

Impact of COVID-19 on Indian stock markets, NIFTY 50 (1 Jan 2020 to 19 May 2020)

NSE from 2000 to 2023. (Indices NIFTY Next 50)

The National Stock Exchange started trading in derivatives on June 12, 2000. These include things like "index futures." The futures and options part of NSE is very well-known globally.

You can trade futures and options on different indexes. These include the NIFTY 50 Index, NIFTY IT index, and NIFTY Bank Index. You can also trade on single company stocks. There are also "Mini Nifty Futures & Options" and "Long term Options" on the NIFTY 50.

NSE has also worked with international markets. On May 3, 2012, NSE launched derivative contracts for the FTSE 100. This is a major stock index from the UK. It was the first time such a UK index was traded in India. The FTSE 100 includes the 100 largest companies listed in the UK.

On January 10, 2013, NSE made an agreement with Japan Exchange Group (JPX). They planned to launch NIFTY 50 Index futures in Japan. This would allow people in Japan to trade on the Indian NIFTY 50 index.

On May 13, 2013, NSE also launched India's first special platform for debt products. This platform makes it easier and clearer to trade different types of debt.

Market Facts

• A report once suggested that only about 3% of India's population invested in the stock market. This was much lower compared to countries like the United States (27%) or China (10%).
• By April 2018, about 60 million individual investors had put their money into stocks in India. They did this either by buying stocks directly or through mutual funds. Mutual funds are like a basket of investments managed by experts.
• Most households in India prefer to save their money in bank deposits. This includes things like fixed deposits and provident funds. Only a small percentage of savings goes into mutual funds or direct stocks.

Who Owns NSE?

Many different groups own a part of NSE. Key Indian investors include big companies like Life Insurance Corporation and State Bank of India. There are also important global investors. These include companies like Gagil FDI Limited and SAIF II SE Investments Mauritius Limited.

NSE's Other Businesses

NSE has several other companies that help it run. These are called subsidiaries. They include:

• NSE Indices Limited (which manages the stock indexes)
• NSE Clearing Limited (which helps clear trades)
• NSEIT and NSE Infotech Services Limited (which handle technology)
• NSE Academy Limited (which focuses on education)
• NSE International Exchange (which handles international trading)

Learning About Money

NSE works with many universities across India. They offer courses like MBA and BBA degrees. These courses help students learn about finance and markets.

NSE also provides a special computer program called NSE Learn to Trade (NLT). This program is like a game that lets students practice trading stocks. It helps them learn how to invest and manage money. The software is very similar to what real market professionals use.

NSE also offers online exams and certificates. These are part of its Certification in Financial Markets (NCFM) programs. These programs help people get certified in different areas of finance. There are 46 different courses available, from beginner to advanced levels. NSE has set up NSE Academy Limited to help more people learn about money and investing.

See also

In Spanish: Bolsa Nacional de Valores de India para niños