Indian Securities Market

0
3562
Securities Market

INTRODUCTION

India ranks second after United States in the terms of number of listed companies which has the security market and this includes the volume of transactions also.[1] The National Stock Exchange of India Limited ranks third in the world in the number of equity transactions. It comes after New York stock exchange and NASDAQ[2].

The financial instruments in financial strategies are innovating and they are the key players in the Indian capital markets. The Indian companies have really improved a lot and with the passage of time they have listed themselves overseas on Singapore exchange, London Stock Exchange, AIM[3]. These instruments have really helped Indian companies to acquire the larger multinational profiles like Aditya Birla Group acquiring Novelis Inc and the Columbian Chemicals Company whereas Tata Motors acquiring Jaguar and Landrover and Bharti Telecom acquiring Zain all few famous examples of how the Indian companies are growing up in the coming year.[4]

In India the companies are mostly reliable on the non banking funding sources which includes capital markets, internal generation of funds and external commercial borrowings. In the year of 2010 among Asian countries India rank after Japan and China in the equity share issuances.

THE BSE AND NSE

The trading of Indian Stock Market takes place on his to stock exchanges which are Bombay Stock Exchange and National Stock Exchange.[5] The Bombay Stock Exchange was started in 1875 and where as National Stock Exchange was founded in 1992 and it started its trading in 1994. Both of the stock exchanges follow the same trading hours, same settlement process and same trading mechanism. The Bombay Stock Exchange has near about 4700 listed firms whereas National Stock Exchange has 1200.[6]

TRADING MECHANISM

There is an open electronic book which helps in the trading of securities which is done by trading computer. There are no market makers and this entire process is done by order-driven. The buyers and sellers in trading mechanism remains anonymous and this leads to transparency which is done by displaying all the buying and selling orders in the trading system.[7]

SETTLEMENT CYCLE AND MARKET INDEXES

There is T+2 rolling settlement which is followed by equity spot markets. It means that if any trade is taking place on Monday it will get settled on Wednesday and Exchange takes place between 9:55 am to 3:30 pm (IST), Monday to Friday. Sensex and Nifty are the two prominent intern market indexes.

SECURITIES REGULATIONS

The securities and exchange Board of India was formed in 1992. With the formation of securities and exchange Board of India with capital markets and securities sector grew up miserably. The main function of SEBI is to protect its investor’s interest and develop their regulations of the Indian securities market. SEBI has power to examine and investigate any company and it can also visit their promises and inspect the records.[8]

SEBI has regulated market and has issued a number of regulations and guidelines for the securities market which is related to corporate governance for listed companies. This leads to increasing market capitalisation and proper allocation of resources.[9]

INTERNATIONAL OFFERINGS

The Indian companies are growing up buy getting the investments such as “such as ADRs[10] GDRs, FCCBs, and ECBs, Euro Issues, AIM[11] listings, foreign currency exchangeable bonds and other such new and hybrid instruments”.[12] There are 13 companies which are already listed on NYSE whereas there are 66 Indian focused companies which are on London Stock Exchange.

RESERVE BANK OF INDIA

The RBI has given power for issuing of licences to the commercial bank to open branches and this has been stated under Banking Regulation Act, 1949.[13] RBI has the power to control and manage every Bank. In the year 1994, a board for financial supervision was constituted which was comprised of selected members of RBI board and included a variety of professionals for exercising “undivided attention to supervision”.


BIBLIOGRAPHY

* www.moneycontrol.com
* www.bseindia.com
* www.nseindia.com
* www.sebi.gov.in
* www.capitalmarket.com
* www.trendwatch.com
* http://en.wikipedia.org/wiki/Primary_market
* http://www.investopedia.com/terms/s/shortselling.asp

 3rd year student of the W.B. National University of Juridical Sciences (NUJS), Kolkata.

[1] Joseph Pookkatt & Awantika Manohar, An Overview of the Indian Securities MarketAn Overview of the Indian Securities Market, http://www.apjslg.com/index.php?option=com_content&view=article&id=62&Itemid=68 (last visited Jun 11, 2017).

[2] The Nasdaq Stock Market is an American stock exchange. It is the second-largest exchange in the world by market capitalization, behind only the New York Stock Exchange.

[3] Alternative Investment Market.

[4] An Introduction to the Indian Stock Market, , http://www.investopedia.com/articles/stocks/09/indian-stock-market.asp (last visited Jun 13, 2017).

[5] http://www.indiainfoline.com/markets/overview/.

[6] Indian Stock Market Overview., , http://www.icicidirect.com/newsiteContent/institute/equities/basics_on_stock_market_2.html?height=450&width=650 (last visited Jun 13, 2017).

[7] Dr. Vijay Pithadia, Overview of Stock market and Stock exchanges in India, Overview of Stock market and Stock exchanges in India, http://www.indianmba.com/Faculty_Column/FC316/fc316.html.

[8] OVERVIEW OF INDIAN STOCK MARKET , , http://shodhganga.inflibnet.ac.in/bitstream/10603/71685/8/08_chapter%203.pdf.

[9] K.S. Chalapati Rao , An Overview of the Indian Stock Market with Emphasis on Ownership Pattern of Listed Companies, http://isidev.nic.in/pdf/03_ksc2.pdf.

[10] American Depositary Receipt Business.

[11] Alternative Investment Market

[12] Joseph Pookkatt & Awantika Manohar, An Overview of the Indian Securities MarketAn Overview of the Indian Securities Market, http://www.apjslg.com/index.php?option=com_content&view=article&id=62&Itemid=68 (last visited Jun 11, 2017).

[13] INDIAN STOCK MARKETS, INDIAN STOCK MARKETS, https://www.slideshare.net/manshbalwani/overview-of-indian-stock-market (last visited Jun 13, 2017).