What is exchange?
An exchange is a platform where various financial instruments, including stocks, bonds, commodities, and derivatives, are bought and sold. Its primary role is to maintain a fair and transparent trading environment, ensuring that prices are accurately and efficiently disseminated. Exchanges provide a venue for companies, governments, and other entities to raise capital by offering their securities to investors.
How Exchange Works
To be listed on an exchange, companies must adhere to specific requirements set by that exchange, including regular financial reporting, audited accounts, and minimum capital standards.
Exchanges provide a forum for companies to raise capital for growth and expansion. The initial public offering (IPO) is when a private company first offers its shares to the public on an exchange.
Companies listed on a stock exchange typically have greater autonomy and control, as investors who purchase their shares have limited ownership rights.
Stock exchanges in India
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Bombay Stock Exchange (BSE): The oldest stock exchange in Asia, BSE is known for its Sensex index, which tracks the performance of top 30 companies listed on the exchange.
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National Stock Exchange of India (NSE): A leading electronic stock exchange, NSE is known for its Nifty 50 index, which tracks the performance of the top 50 companies listed on the exchange.
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Calcutta Stock Exchange (CSE): One of the oldest regional stock exchanges in India.
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Metropolitan Stock Exchange of India (MSE): A regional stock exchange based in Mumbai.
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India International Exchange (IIE): A global exchange based in Gujarat, India.