Understanding Stock Exchanges in India
India’s stock market has seen a transformation over the past few decades. At one point, India had more than 20 stock exchanges spread across different cities. However, due to issues like low trading volumes, lack of transparency, and poor technological infrastructure, SEBI took steps to rationalize and regulate the number of exchanges.
As of Now: Total Number of Stock Exchanges in India
Currently Recognized by SEBI (2024):
There are 7 stock exchanges currently recognized by SEBI under the Securities Contracts (Regulation) Act, 1956:
1. NSE (National Stock Exchange)
- India’s largest and most liquid stock exchange
- Known for NIFTY index
- Fully electronic, highly automated
2. BSE (Bombay Stock Exchange)
- Asia’s oldest stock exchange
- Known for SENSEX
- High number of listed companies
3. Metropolitan Stock Exchange of India (MSEI)
- Focuses on SMEs and currencies
- Lesser-known but SEBI-recognized
4. Calcutta Stock Exchange (CSE)
- Historically important, now largely inactive
- Still SEBI-recognized, but very low trading volumes
5. India International Exchange (India INX)
- Located at GIFT City, Gujarat
- Caters to global investors
- Trades in foreign currency-denominated products
6. NSE IFSC Ltd.
- A subsidiary of NSE at GIFT City
- Enables global securities trading
- Works under the International Financial Services Centre (IFSC)
7. BSE IFSC Ltd.
- A subsidiary of BSE at GIFT City
- Focuses on international trading and alternative products
De-recognized Stock Exchanges
SEBI, in 2015, de-recognized 18 regional stock exchanges due to lack of compliance, poor infrastructure, and negligible trading. These included:
- Ahmedabad Stock Exchange
- Delhi Stock Exchange
- Madras Stock Exchange
- Cochin Stock Exchange
- Ludhiana Stock Exchange
(and others)
These no longer function as active trading platforms and have exited the stock exchange business.
Why Only a Few Exchanges Remain Active?
- Technology Shift: Centralized, high-speed electronic trading systems like NSE and BSE made regional exchanges obsolete
- Regulatory Pressure: SEBI’s strict rules around minimum net worth, infrastructure, and volumes led to closures
- Liquidity & Trust: Traders prefer platforms with high liquidity and transparency, which smaller exchanges couldn’t offer
Example for Better Understanding:
If you’re a retail investor looking to buy shares of Tata Motors, you will likely use NSE or BSE via your broker’s app. You cannot buy the same on Delhi Stock Exchange because it no longer exists. Even if you're an NRI looking to invest in global markets, India INX or NSE IFSC can be used through the GIFT City route.
Conclusion: Only the Strongest Survived the Cleanup
“From over 20 stock exchanges to just a handful—India's stock market has become leaner, smarter, and more investor-friendly.”
Today, India has 7 recognized stock exchanges, but only a few of them—primarily NSE and BSE—handle the majority of equity trading. Others serve niche or international markets. This evolution reflects a focus on efficiency, technology, and global competitiveness.
