A

RESEARCH REPORT
ON
COMPARATIVE STUDY OF NSE AND BSE

SUBMITTED
MASTER OF BUSINESS ADMINISTRATION
UNIVERSITY OF LUCKNOW
GUIDED BY
NISHANT KUMAR
(ASSISTANT PROFESSOR, MBA)

PREPARED BY
SHIVLI CHHABRA
(STUDENT 4TH SEM, MBA, FINANCE)

DECLARATION
I hereby declare that the project entitled A Research Report on comparative study of NSE
and BSE submitted for the M.B.A. Degree is my original work and the dissertation has not
formed the basis for the award of any degree, associate ship, fellowship or any other similar
titles.
Place:
Date:
SHIVLI CHHABRA
MBA 4th sem

(FINANCE)

PREFACE
Being Management students, we need to understand about stock exchanges. Therefore, we
are required to identify the value stocks and the growth stocks to conduct a thorough analysis.
This helps us as the students to develop a sense of awareness around us to keep the details of
the stock market. Such an analysis helps to understand the stock market which is highly
useful for investors .Indian stock market is going through a rapid growth and investors need
to know which kind of stocks are there to invest. Globalization is the most important factor
shaping todays world. India is no exception. The investors are also becoming global and try
to invest in stocks that give them more return on their portfolio. This research report offers an
insight into the investing pattern of all the investors. Such a work had never been carried out
earlier and Im confident that this study will be useful not only to academician but actual
investors in addition to students. I am sure this work will be useful to many and can serve as
guide to many who want to invest in India stock market .It is a pleasure to keep this report in
front of you. Project report is vitally important for M.B.A students because it develops the
feeling among the students about investors to develop the practical base. Theoretical
knowledge is true only when we apply the same in the practical.

ACKNOWLEDGEMENT
A part of the real essence of learning; in conducting this fruitful exercise many key persons
had shown an appreciable role in my unforgettable journey. When emotions are profound
words sometimes are not sufficient to express our thanks and gratitude. At this moment I
would like to take this opportunity and declare the moral share of all those stakeholders in the
project property.
I convey heartly thanks and deep sense of gratitude towards the followings:

To almighty God, whose external blessings and divine presence helps us to fulfill all

our goals.
To Nishant Sir for giving his suggestions and his valuable time in the completion of

my project.
I would also like to express my thanks and gratitude to all my colleagues, friends,
teaching and non-teaching staff members and all those who contributed directly or
indirectly through suggestions, thoughts and presence for creating a congenial
environment and encouraging me in every way during the project.

EXECUTIVE SUMMARY

The purpose of the research was to make comparision of most prominent stock
exchanges of India on the basis of financial performances and also to make comparative
analysis of profitability of Bombay stock exchange and National stock exchange .The
investors try to maximize their profits by investing wisely. Few investors prefer the value
stocks and few of them prefer growth stocks. It might also happen that many of the investor
doesnt know the difference between the value and the growth stocks and might have
invested just by looking at the scenario of the company. Apart from the data gathered and the
test applied for the conducting the research, there were few limitations which I have taken
into consideration.

TABLE OF CONTENT

SR. NO.

CONTENT

PAGE NO.

INTRODUCTION

LITERATURE REVIEW

35

RESEARCH METHODOLOGY

36

DATA COLLECTION

37

ANALYSIS

38

Analysis and interpretation

6

Hypothesis test
LIMITATION OF THE STUDY

57

CONCLUSION AND RECOMMENDATION

58

REFERENCES

59

INTRODUCTION

Stock exchanges are intricately inter-woven in the fabric of a nations economic life.
Without a stock exchange, the saving of the community the sinews of economic progress
and productive efficiency would remain underutilized .The task of mobilization and
allocation of savings could be attempted in the old days by a much less specialized institution
that the stock exchanges. But as business and industry expanded and the economy assumed
more complex nature, the need for permanent finance arose. Entrepreneurs needed money
for long term whereas investors demanded liquidity the facility to convert their investments
into cash at any given time. The answer was a ready market for investment and this was how
the stock exchange came into being .The health of the company is reflected by the growth of
stock market market .Over the years, the Indian Stock Market have become stronger.
Presently ,the Bombay stock exchange of India ltd. and National stock exchange of India ltd.
together account for 99%of the total turnover s compared to 1%by the other stock
exchanges .So there is need to compare these two prominent stock exchanges of India that
which beats other.Stock exchange means anybody of individuals, whether incorporated or
not, constituted for the purpose of regulating or controlling the business of buying, selling, or
dealing in securities.
These securities include:
Shares, Scrips, Stocks, Bonds, Debentures stock or other marketable securities of a
like

nature in or of any incorporated company or other body corporate ,Government

securities; and Rights or interest in securities.

FUNCTIONS OF STOCK EXCHANGES

The stock exchanges are the exclusive centers for trading of securities. At present, there are
23 operative stock exchanges in India. Most of the stock exchanges in the country are
incorporated as Association of Persons of section 25 companies under the Companies Act.
The three newly set up exchanges over the counter Exchange of India (OTCEI), National
Stock Exchange of India (NSE) and Inter-connected Stock Exchange of India (ICSE) were
permitted since their inception to have nation-wide trading. Listing on these exchanges was
considered adequate compliance with the requirement of listing on the regional exchange.The
stock exchanges in India have an important role to play in the building of a real shareholders
democracy. Aim of the stock exchange authorities is to make it as nearly perfect in the social
and ethical sense as it is in the economic .They provide ready continuous market for purchase
and sale of securities.They accelerates the process of capital formation.To protect the interests
of the investing public, the authorities of the stock exchanges have been increasingly
subjecting not only its members to a high degree of discipline, but also those who use its
facilities joint stock companies and the other bodies in whose stocks and shares it deals.There
are stringent regulations to ensure that directors of joint stock companies keep their
shareholders fully informed of the affairs of the company.In fact, some of the conditions that
the stock exchange imposes upon companies before their shares are listed are more rigorous
and wholesome than the statutory provisions such as those contained in the Companies Act.

CAPITAL MARKET
The capital market consists of these segments.
Primary Segments

Secondary Segments

The primary market deals with the issue of new instruments by the corporate sector
such as equity shares, preference shares, and debentures. The public sector consisting of
central and state governments, various public sector industrial units (PSUs) and statutory and
other authorities such as state electricity boards and port trusts also issue bonds. The primary
market in which public issue of securities is made through a prospectus is a retail market and
there is no physical location. Direct mailing, advertisements and brokers reach the investors.
Screen based trading eliminates the need trading floor.

The Secondary Market or Stock Exchange where existing securities are traded is an
auction arena. It may have a physical location like a stock exchange or a trading floor. Since
1995, the trading in securities is screen-based. Screen-based training eliminates need for a
trading floor. And, since the last few years Internet-based trading has also made an
appearance in India.

The Secondary Market consists of 23 stock exchanges including the National Stock
Exchange (NSE) and the Over-the Counter Exchange Of India (OTCEI) and also Bombay
Stock Exchange (BSE). The secondary market provides a trading place or terminals for the
securities already issued to be bought and sold. It also provides liquidity to the initial buyers
in the primary market to re-offer the securities to any interested buyer at any price, if
mutually accepted. An active secondary market actually promotes the growth of the primary
market and capital formation because investors in the primary market are assured of a
continuous market and they can liquidate their investments in the stock exchange.

There are several major players in the primary market. These include the merchant
bankers, mutual funds, financial institutions, foreign institutional investors (FIIs) and
individual investors. R & T agents, Custodians and Depositories are capital market
intermediaries that provide important infrastructure services for both primary and secondary
markets.It is important to ensure a smooth working of this market, as it is the arena where the
players in the economic growth of a country interact. Various laws have been passed from
time to time to meet this objective. The financial market in India was highly segmented until
the initiation of reforms in 1992-93 on account of a variety of regulations and administered
prices include barriers to entry. The reform process was initiated with establishment of
securities and exchange of India (SEBI).

10

TOP STOCK EXCHANGES OF WORLD

1 NEW YORK STOCK EXCHANGE:

This is located in one of the Wall Street,New York and it was established in the year of
1792.Unlike NASDAQ stock exchange the physical buying and selling of stocks are also
available.Now mostly electronic transaction happens and this happens to be the worlds
largest stock exchsnge. NYSE is the premier listing venue for the worlds
leading large- and medium-sized companies. Operated by NYSE Euronext,
the holding company created by the combination of NYSE Group, Inc. and
Euronext N.V., NYSE offers a broad and growin array of financial products
and services in cash equities, futures, options, exchange-traded products
(ETPs), bonds, market data, and commercial technology solutions.
Featuring more than 8000 listed issues it includes 90% of the Dow Jones
Industrial Average and 82% of the S&P 500 stock market indexes volume.
2.NASDAQ STOCK EXCHANGE:

This stock exchange was constituted in the year of 1971.This is the second largest stock
exchange in North America .NASDAQ stands for National Association of Security Dealers
Automated Quotations. This stock exchange is maintained by NASDAQ OMX group.Second
largest stock exchange in the world by market capitalization and trade value. The exchange is
owned by NASDAQ OMX Group which also owns and operates 24 markets, 3
clearinghouses and 5 central securities depositories supporting equities, options, fixed
11

invoice, derivatives, commodities, futures and structured products. It is a home to

approximately 3,400 listed companies and its main index is the NASDAQ Composite, which
has been published since its inception. Stock market is also followed by S&P 500 index.

3 TOKYO STOCK EXCHANGE:

TSE is the third Headquartered in Tokyo. Third

largest stock exchange market in the world by
aggregate market capitalization of its listed
companies. It had 2,292 companies which are
separated into the First Section for large companies,
the Second Section for mid-sized companies, and the
Mothers section for high growth startup companies.
The main indices tracking Tokyo Stock Exchange are
the Nikkei 225 index of companies selected by the Nihon Keizai Shimbun, the TOPIX index
based on the share prices of First Section companies, and the J30 index of large industrial
companies. 94 domestic and 10 foreign securities companies participate in TSE trading. The
London Stock Exchange and the Tokyo Stock Exchange are developing jointly traded
products and share technology.
4 LONDON STOCK EXCHANGE:

This is the oldest stock exchange in the world which was established in the year of 1801.This
is the real international market .Among the European countries . Headquartered in London.
The Exchange was founded in 1801 and its current premises are situated in Paternoster
12

Square close to St Pauls Cathedral. It is the most international of all the worlds stock
exchanges, with around 3,000 companies from over 70 countries admitted to trading on its
markets. The London Stock Exchange runs several markets for listing, giving an opportunity
for different sized companies to list. For the biggest companies exists the Premium Listed
Main Market, while in terms of smaller SMEs the Stock Exchange operates the Alternative
Investment Market and for international companies that fall outside the EU, it operates the
Depository Receipt scheme as a way of listing and raising capital.

5 HONG KONG STOCK EXCHANGE:

During the year of 2011,this stock exchange at sixth position in terms of market capitalization
.Now marched to fifth position .There is no stringent controls on outside investors unlike
Shanghai Stock Exchange.Headquartered in Hong Kong.It is the third largest stock exchange
in Asia and the sixth largest in the world in terms of market capitalization. Hong Kong Stock
Exchange (SEHK) has about 1,477 listed companies and it operates securities market and a
derivatives market in Hong Kong and the clearing houses for those markets. The three largest
stocks by market capitalisation in Hong Kong Stock Exchange are PetroChina, Industrial &
Commercial Bank of China, and China Mobile.

6 SHANGHAI STOCK EXCHANGE:

13

His is the third largest stock exchange in the Asian continent and second largest in the People
Republic of China. Formed in the year of 1990 and these organizations were not entirely open
to the foreign investors and there are strict regulation issued by China Securities Regulatory
Commission. Headquartered in Shanghai .It is the worlds 5th largest stock market by market
capitalization and one of the two stock exchanges operating independently in the Peoples
Republic of China. Unlike the Hong Kong Stock Exchange, the SSE is not entirely open to
foreign investors. The main reason is tight capital account controls by Chinese authorities.
The securities listed at the SSE include the three main categories of stocks, bonds, and funds.
Bonds traded on SSE include treasury bonds, corporate bonds, and convertible corporate
bonds.
7 TORONTO STOCK EXCHANGE:

Toronto Stock Exchange is maintained by TMX group of Canada .It is located at Toronto
,Canada .This is third largest in North America. Headquartered in Toronto. It is the largest
stock exchange in Canada and the third largest in North America. Toronto Stock Exchange is
owned by and operated as a subsidiary of the TMX Group for the trading of senior equities. A
broad range of businesses from Canada, the United States, Europe, and other countries are
represented on the exchange. The exchange lists conventional securities, exchange-traded
funds, split share corporations, income trusts and investment funds. Toronto Stock Exchange
is the leader in the mining and oil & gas sector, including such companies like Cameco
14

Corporation, Canadian Natural Resources Ltd., EnCana Corporation, Husky Energy Inc.,
Imperial Oil Ltd., and others.
8 DEUTSCHE BORSE STOCK EXCHANGE:

This is the stock exchange of Germany . Headquartered in Frankfurt. This is one of the
largest stock exchanges which envolvs in charity organisationd.Deutsche Brse is one of the
worlds leading exchange organisations providing investors, financial institutions and
companies access to global capital markets. The exchange covers the entire process chain
from securities and derivatives trading, clearing, settlement and custody, through to market
data and the development and operation of electronic trading system. Deutsche Brse has an
approximately 765 listed companies with a combined market capitalization of 1,185 trillion
USD.
9AUSTRALIAN SECURITY EXCHANGES:

15

The first stock market of Australia was formed in the year of 1861 at Malbourne.Then it
underwent numereous changes throughout the 19th century .Finally Australian Securities
Exchanges was created in the year of 2006. Headquartered in Sydney.They do offer all
products such as bonds ,stocks,commodities and other premium stocks.The Australian
Securities Exchange is Australias primary securities exchange and it was created back in
2006 when the merger of Australian Stock Exchange and the Sydney Futures Exchange took
place. Today Australian Securities Exchange is 9th largest stock exchange in the world by
market capitalization and has an average daily turnover of 4,685 billion dollar. Products and
services available for trading on ASX include shares, futures, exchange traded options,
warrants, contracts for difference, exchange-traded funds, real estate investment trusts.

NATIONAL STOCK EXCHANGE

The National Stock Exchange (NSE) is India's leading stock exchange covering various cities
and towns across the country. NSE was set up by leading institutions to provide a modern,
fully automated screen-based trading system with national reach. The Exchange has brought
about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up
facilities that serve as a model for the securities industry in terms of systems, practices and
procedures. NSE has played a catalytic role in reforming the Indian securities market in terms
of microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and
settlement mechanism, and has witnessed several innovations in products & services viz.
demutualization of stock exchange governance, screen based trading, compression of
settlement cycles, dematerialization and electronic transfer of securities, securities lending
and borrowing, professionalization of trading members, fine-tuned risk management systems,
emergence of clearing corporations to assume counterparty risks, market of debt and
derivative instruments and intensive use of information technology.
THE ORGANISATION
The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of
a National Stock Exchange by financial institutions (FIs) to provide access to investors from
all across the country on an equal footing. Based on the recommendations, NSE was
promoted by leading Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the
country. On its recognition as a stock exchange under the Securities Contracts (Regulation)
Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment commenced operations in
November 1994 and operations in Derivatives segment commenced in June 2000.
MISSION
NSE's mission is setting the agenda for change in the securities markets in India. The NSE
was set-up with the main objectives of:

16

establishing a nation-wide trading facility for equities, debt instruments and hybrids,

ensuring equal access to investors all over the country through an appropriate
communication network,

providing a fair, efficient and transparent securities market to investors using

electronic trading systems,

enabling shorter settlement cycles and book entry settlements systems, and

meeting the current international standards of securities markets.

LOGO
The logo of the NSE symbolizes a single nationwide securities trading facility ensuring equal
and fair access to investors, trading members and issuers all over the country. The initials of
the Exchange viz., N, S and E have been etched on the logo and are distinctly visible. The
logo symbolizes use of state of the art information technology and satellite connectivity to
bring about the change within the securities industry. The logo symbolises vibrancy and
unleashing of creative energy to constantly bring about change through innovation
PROMOTERS
NSE has been promoted by leading financial institutions, banks, insurance companies and
other financial intermediaries:
1.

Industrial Development Bank of India Limited

2.

Industrial Finance Corporation of India Limited

3.

Life Insurance Corporation of India

4.

State Bank of India

5.

ICICI Bank Limited

6.

IL & FS Trust Company Limited

7.

Stock Holding Corporation of India Limited

8.

SBI Capital Markets Limited

9.

The Administrator of the Specified Undertaking of Unit Trust of India

10.

Bank of Baroda

11.

Canara Bank

12.

General Insurance Corporation of India

13.

National Insurance Company Limited

17

14.

The New India Assurance Company Limited

15.

The Oriental Insurance Company Limited

16.

United India Insurance Company Limited

17.

Punjab National Bank

18.

Oriental Bank of Commerce

19.

Corporation Bank

20.

Indian Bank

21.

Union Bank of India

LISTING
Listing means admission of securities of an issuer to trading privileges on a stock exchange
through a formal agreement. The prime objective of admission to dealings on the Exchange is
to provide liquidity and marketability to securities, as also to provide a mechanism for
effective management of trading .Listing on NSE provides qualifying companies with the
broadest access to investors, the greatest market depth and liquidity, cost-effective access to
capital, the highest visibility, the fairest pricing, and investor benefits. NSE trading terminals
are now situated in various cities and towns across the length and breath of India .Securities
listed on the Exchange are required to fulfill the eligibility criteria for listing. Various types of
securities of a company are traded under a unique symbol and different series .NSE plays an
important role in helping an Indian companies access equity capital, by providing a liquid and
well-regulated market. NSE has about 800 companies listed representing the length, breadth
and diversity of the Indian economy which includes from hi-tech to heavy industry, software,
refinery, public sector units, infrastructure, and financial services. Listing on NSE raises a
companys profile among investors in India and abroad. Trade data is distributed worldwide
through various news-vending agencies. More importantly, each and every NSE listed
company is required to satisfy stringent financial, public distribution and management
requirements. High listing standards foster investor confidence and also bring credibility into
the markets. NSE lists securities in its Capital Market (Equities) segment and its Wholesale
Debt Market segment.

LISTING PROCEDURE
An Issuer has to take various steps prior to making an application for listing its securities on
the NSE. These steps are essential to ensure the compliance of certain requirements by the
Issuer before listing its securities on the NSE. The various steps to be taken include:

18

1.

Initial Discussions

2.

Approval of Memorandum and Articles of Association

3.

Approval of draft prospectus

4.

Submission of Application

5.

Listing conditions and requirements

INITIAL DISCUSSIONS
Authorized persons of the concerned Issuer should hold discussions with NSE personnel
regarding various requirements to be fulfilled by the Issuer for listing its securities. The
discussions should particularly cover the qualifications of the Issuer which are required for an
Issuer to be admitted for listing on the NSE and to understand all the conditions that are
precedent to listing on the NSE. The proposed Memorandum & Articles of Association and
the draft prospectus may be presented to the NSE for examination before finalizing.
Approval of Memorandum and Articles of Association
Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 requires that the Articles
of Association of the Issuer wanting to list its securities must contain provisions as given
hereunder.
The Articles of Association of an Issuer shall contain the following provisions namely:
a.
that there shall be no forfeiture of unclaimed dividends before the claim becomes
barred by law;
b.

that a common form of transfer shall be used;

c.
that fully paid shares shall be free from all lien and that in the case of partly paid
shares the Issuer's lien shall be restricted to moneys called or payable at a fixed time in
respect of such shares;
d.
that registration of transfer shall not be refused on the ground of the transferor being
either alone or jointly with any other person or persons indebted to the Issuer on any account
whatsoever;
e.
that any amount paid up in advance of calls on any share may carry interest but shall
not in respect thereof confer a right to dividend or to participate in profits;
f.
that option or right to call of shares shall not be given to any person except with the
sanction of the Issuer in general meetings.
g.

permission for Sub-Division/Consolidation of Share Certificate.

19

Note: The Relevant Authority may take exception to any provision contained in the Articles
of Association of an Issuer which may be deemed undesirable or unreasonable in the case of a
public company and may require inclusion of specific provisions deemed to be desirable and
necessary.
If the Issuer's Articles of Association is not in conformity with the provisions as stated above,
the Issuer has to make amendments to the Articles of Association. However, the securities of
an Issuer may be admitted for listing on the NSE on an undertaking by the Issuer that the
amendments necessary in the Articles of Association to bring Articles of Association in
conformity with Rule 19(2)(a) of the Securities Contract (Regulation) Rules, 1957 shall be
made in the next annual general meeting and in the meantime the Issuer shall act strictly in
accordance with prevalent provisions of Securities Contract (Regulation) Act, 1957 and other
statutes.It is to be noted that any provision in the Articles of Association, which is not in tune
with sound corporate practice, has to be removed by amending the Articles of Association.
APPROVAL OF DRAFT PROSPECTUS
The Issuer shall file the draft prospectus and application forms with NSE. In case NSE is not
the Regional Stock Exchange then the draft prospectus and application forms have to be filed
simultaneously with the NSE when the same is filed with the Regional Stock Exchange
pertaining to the issue, for the perusal of NSE. The draft prospectus should have been
prepared in accordance with the statutes, notifications, circulars, guidelines, etc. governing
preparation and issue of prospectus prevailing at the relevant time. The Issuers may
particularly bear in mind the provisions of Companies Act, Securities Contracts (Regulation)
Act, the SEBI Act and the relevant subordinate legislations thereto. NSE will peruse the draft
prospectus only from the point of view of checking whether the draft prospectus is in
accordance with the listing requirements, and therefore any approval given by NSE in respect
of the draft prospectus should not be construed as approval under any laws, rules,
notifications, circulars, guidelines etc. The Issuers shall file a copy of the draft prospectus
given by the respective Regional Stock Exchange with NSE. The Issuer should also submit
the SEBI acknowledgment card or letter indicating observations on draft prospectus or letter
of offer by SEBI

Submission of Application

For Issuers listing on NSE for the first time

Listing of further Issues by Issuers already listed on NSE

Listing Fees

Security deposit (for new & fresh issues and when NSE is the Regional Stock
Exchange)

Supporting documents
20

Submission of Application (For Issuers listing on NSE for the first time)
Issuers desiring to list existing/new securities on the NSE shall make application for
admission of their securities to dealings on the NSE in the forms prescribed in this regard as
per details given hereunder or in such other form or forms as the Relevant Authority may
from time to time prescribe in addition thereto or in modification or substitution thereof.
Appendix 'A' - Clauses of Articles of Association.
Appendix 'B'- Application Letter for Listing.
Appendix 'C-1' - Listing Application providing pre-issue details of securities.
Appendix 'C-2' - Listing Application providing post-issue details of securities.
Appendix 'D'- Checklist for supporting documents ( as applicable to the issuer)
Appendix 'E' - Schedule of Distribution
Appendix 'F'- Listing Agreement
Submission of Application (Listing of further Issues by Issuers already listed on NSE)
SCHEDULE FOR LISTING FEES

Particulars

Amount (
)

Initial Listing Fees

50,000

Annual Listing Fees (based on paid up share, bond and/or debenture

capital)
90,000
Upto 10 Crore
Above

10 Crore and upto

25 Crores

1,20,000

Above

25 Crore and upto

50 Crores

1,40,000

Above

50 Crore and upto

100 Crores

2,40,000

Above

100 Crore and upto

Above

200 Crores and upto

Above

300 Crore and upto

400 Crores

4,90,000

Above

400 Crore and upto

500 Crores

6,50,000

200 Crores
300 Crores

3,15,000
4,05,000

Companies which have a paid up share, bond and/or debenture and/or debt capital, etc of more than
500
crores will have to pay a minimum fees of
6,50,000/- and an additional listing fees of 4,250/- for every
increase of
5 crores or part thereof in the paid up share, bond and/ debenture and/or debt capital etc.
Companies which have a paid up share, bond and/or debenture and/or debt capital, etc. of more than
1,000 crores will have to pay minimum fees of
10,75,000/- and an additional listing fees of
4,625/- for

21

every increase of
5 crores or part thereof in the paid up share, bond and/or debenture and/or debt capital
etc.
The listing fees depend on the paid up share capital of the Company.
More investment concepts

SUBMISSION OF APPLICATION (SUPPORTING DOCUMENTS)

Issuers applying for admission of their securities to dealings on the NSE shall submit to the
NSE the following:

Documents and Information

The documents and information prescribed in Appendix D or Appendix I (as the case may be)
to this Regulation or such other documents and information as the Relevant Authority may
from time to time prescribe, in addition thereto or in modification or substitution thereof
together with any other documents and information which the Relevant Authority may
require in any particular case;

Distribution Schedules

Distribution Schedules duly completed in respect of each class and kind of security in the
form prescribed in Appendix E (Table I, II & III) to this Regulation or in such other form or
forms as the Relevant Authority may from time to time prescribe in addition thereto or in
modification or substitution thereof.
LISTING CONDITIONS AND REQUIREMENTS
All Issuers whose securities are listed on the NSE shall comply with the listing conditions
and requirements contained in the Listing Agreement Form appearing in Appendix F to this
Regulation or such other conditions and requirements as the Relevant Authority may from
time to time prescribe in addition thereto or in modification or substitution thereof.
After fulfilling these criteria, a company has to send the following information for further
processing:

1. A brief note on the promoters and management.

2. Company profile.
3. Copies of the Annual Report for last 3 years.
4. Copies of the Draft Offer Document.
5. Memorandum & Articles of Association.
ELIGIBILITY CRITERIA FOR LISTING
An applicant who desires listing of its securities with NSE must fulfill the following prerequisites:

22

A.

For Initial Public Offerings (IPOs)

B.

For Securities of Existing Companies

NSE staff welcome the opportunity to discuss a companys eligibility to list before a formal
application is made. On fulfillment of the eligibility criteria, the company is required to fill in
the listing application form.
IPOs by Companies
Qualifications for listing Initial Public Offerings (IPO) are as below:
1.

Paid up Capital

The paid up equity capital of the applicant shall not be less than Rs. 10 crores * and the
capitalisation of the applicants equity shall not be less than Rs. 25 crores**
In respect of the requirement of paid-up capital and market capitalisation, the issuers shall be
required to include, in the disclaimer clause forming a part of the offer document that in the
event of the market capitalisation (Product of issue price and the post issue number of shares)
requirement of the Exchange not being met, the securities of the issuer would not be listed on
the Exchange.
* For this purpose, the post issue paid up equity capital for which listing is sought shall be
taken into account.
**For this purpose, capitalisation will be the product of the issue price and the post issue
number of equity shares.
2.

Conditions Precedent to Listing

The Issuer shall have adhered to conditions precedent to listing as emerging from inter-alia
from Securities Contracts (Regulations) Act 1956, Companies Act 1956, Securities and
Exchange Board of India Act 1992, any rules and/or regulations framed under foregoing
statutes, as also any circular, clarifications, guidelines issued by the appropriate authority
under foregoing statutes.
3.

At least three years track record of either:

a. The applicant seeking listing; or

b. The promoters*/promoting company, incorporated in or outside India
For this purpose, the applicant or the promoting company shall submit annual reports of three
preceding financial years to NSE and also provide a certificate to the Exchange in respect of
the following:

23

 The Company has not been referred to the Board for Industrial and Financial Reconstruction
(BIFR).
The net worth of the company has not been wiped out by the accumulated losses resulting in
a negative net worth.
The company has not received any winding up petition accepted by a court.
* Promoters mean one or more persons with minimum 3 years of experience of each of them
in the same line of business and shall be holding at least 20% of the post issue equity share
capital individually or severally
4.
The Project/ Activity plan of the applicant must have been appraised by a financial
institution u/s 4 A of the Companies Act, 1956 or a state finance corporation or a scheduled
commercial bank with a paid up capital exceeding Rs.50 crores or a category I Merchant
Banker with a net worth of atleast Rs.10 crores or a venture capital fund with a net worth of
atleast Rs. 50 crores.
or
The applicant should have working capital arrangements with a bank having a Networth of
not less than Rs.50 crores.
Provided that this Clause 4 shall not be applicable for listing of:
a) Equity shares and securities convertible into equity issued by
1.
a banking company including a local area bank (i.e. Private Sector Banks) set up
under sub-clause (c) of Section 5 of the Banking Regulation Act, 1949 and which has
received license from the Reserve Bank of India or
2.
a corresponding new bank set up under the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970, Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980, State Bank of India Act, 1955 and the State Bank of India
(Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks) or
3.
an infrastructure company (a) whose project has been appraised by a Public
Financial Institution or Infrastructure Development Finance Corporation (IDFC) or
Infrastructure Leasing and Financial Services Limited (IL&FS) and (b) not less than 5% of
the project cost is financed by any of the institutions referred to in clause (a) above, jointly or
severally, irrespective of whether they appraise the project or not, by way of loan or
subscription to equity or a combination of both.
b) Securities other than equity shares or securities convertible into equity shares at a later date
issued by Government Companies, Public Sector Undertakings, Financial Institutions,
Nationalised Banks, Statutory Corporations, Banking Companies and subsidiaries of
Scheduled Commercial Banks.

24

5) The applicant desirous of listing its securities should satisfy the exchange on the following:

No disciplinary action by other stock exchanges and regulatory authorities in past

three years
The applicant, promoters/promoting company(ies), group companies, companies promoted
by the promoters/promoting company(ies) have not been in default in payment of listing fees
to any stock exchange in the last three years or has not been delisted or suspended in the past,
and has not been proceeded against by SEBI or other regulatory authorities in connection
with investor related issues or otherwise.

Redressal mechanism of Investor grievance

The points of consideration are:

The applicant, promoters/promoting company(ies), group companies, companies

promoted by the promoters/promoting 11company(ies) track record in redressal of investor
grievances

The applicants arrangements envisaged are in place for servicing its investor.

The applicant, promoters/promoting company(ies), group companies, companies

promoted by the promoters/promoting company(ies) general approach and philosophy to the
issue of investor service and protection

defaults in respect of payment of interest and/or principal to the debenture/bond/fixed

deposit holders by the applicant, promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies) shall also be considered
while evaluating a companys application for listing. The auditors certificate shall also be
obtained in this regard. In case of defaults in such payments the securities of the applicant
company may not be listed till such time it has cleared all pending obligations relating to the
payment of interest and/or principal.

Distribution of shareholding

The applicants/promoting company(ies) shareholding pattern on March 31 of last three

calendar years separately showing promoters and other groups shareholding pattern should
be as per the regulatory requirements.

Details of Litigation

The applicant, promoters/promoting company(ies), group companies, companies promoted

by the promoters/promoting company(ies) litigation record, the nature of litigation, status of
litigation during the preceding three years period need to be clarified to the exchange.

Track Record of Director(s) of the Company

25

In respect of the track record of the directors, relevant disclosures may be insisted upon in the
offer document regarding the status of criminal cases filed or nature of the investigation being
undertaken with regard to alleged commission of any offence by any of its directors and its
effect on the business of the company, where all or any of the directors of issuer have or has
been charge-sheeted with serious crimes.
Note: In case a company approaches the Exchange for listing within six months of an IPO,
the securities may be considered as eligible for listing if they were otherwise eligible for
listing at the time of the IPO. If the company approaches the Exchange for listing after six
months of an IPO, the norms for existing listed companies may be applied and market
capitalisation be computed based on the period from the IPO to the time of listing .

BOMBAY STOCK EXCHANGE

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage.
Popularly known as "BSE", it was established as "The Native Share & Stock Brokers
Association" in 1875. It is the first stock exchange in the country to obtain permanent
recognition in 1956 from the Government of India under the Securities Contracts
(Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the development of
the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide.
Earlier an Association of Persons (AOP), the Exchange is now a demutualized and
corporatized entity incorporated under the provisions of the Companies Act, 1956, pursuant
to the BSE(Corporatization and Demutualization) Scheme, 2005 notified by the Securities
and Exchange Board of India (SEBI).With demutualization, the trading rights and ownership
rights have been de-linked effectively addressing concerns regarding perceived and real
conflicts of interest. The Exchange is professionally managed under the overall direction of
the Board of Directors .The Board comprises eminent professionals, representatives of
Trading Members and the Managing Director of the Exchange. The Board is inclusive and is
designed to benefit from the participation of market intermediaries .In terms of organization
structure, the Board formulates larger policy issues and exercises over-all control. The
committees constituted by the Board are broad-based .The day-to-day operations of the
Exchange are managed by the Managing Director and a management team of professionals
.The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The
systems and processes of the Exchange are designed to safeguard market integrity and
enhance transparency in operations. During the year 2004-2005, the trading volumes on the
Exchange showed robust growth .The Exchange provides an efficient and transparent market
for trading in equity, debt instruments and derivatives. The BSE's On Line Trading System
(BOLT) is a proprietory system of the Exchange and is BS 7799-2-2002 certified. The
surveillance and clearing & settlement functions of the Exchange are ISO 9001:2000
certified.
BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the
benchmark equity index that reflects the robustness of the economy and finance. At par with
26

international standards, BSE has been a pioneer in several areas. It has several firsts to its
credit even in an intensely competitive environment.

First in India to introduce Equity Derivatives

First in India to launch a Free Float Index

First in India to launch US$ version of BSE Sensex

First in India to launch Exchange Enabled Internet Trading Platform

First in India to obtain ISO certification for Surveillance, Clearing & Settlement

'BSE On-Line Trading System (BOLT) has been awarded the globally

LISTING OF SECURITIES
Listing means admission of the securities to dealings on a recognised stock exchange. The
securities may be of any public limited company, Central or State Government, quasigovernmental and other financial institutions/corporations, municipalities, etc.
The objectives of listing are mainly to :

provide liquidity to securities;

mobilize savings for economic development;

protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listing of securities of
companies in accordance with the provisions of the Securities Contracts (Regulation) Act,
1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued
by SEBI and Rules, Bye-laws and Regulations of the Exchange.A company intending to have
its securities listed on the Exchange has to comply with the listing requirements prescribed by
the Exchange. Some of the requirements are as under: -

1.

Minimum Listing Requirements for new companies

2.
Minimum Requirements for companies delisted by this Exchange seeking relisting of
this Exchange
3.
Minimum Requirements for companies delisted by this Exchange seeking relisting of
this Exchange
4.

Permission to use the name of the Exchange in an Issuer Company's prospectus

5.

Submission of Letter of Application

27

6.

Allotment of Securities

7.

Trading Permission

8.

Requirement of 1% Security

9.

Payment of Listing Fees

10.

Compliance with Listing Agreement

11.

"Z" Group

12.

Cash Management Services (CMS) - Collection of Listing Fees

MINIMUM LISTING REQUIREMENTS FOR NEW COMPANIES

(A) Minimum Capital:
1.
New companies can be listed on the Exchange, if their issued & subscribed equity
capital after the public issue is Rs.10 crores. In addition to this the issuer company should
have a post issue networth (equity capital + free reserves excluding revaluation reserve) of
Rs.20 crores.
2.
For new companies in high technology ( i.e. information technology, internet, ecommerce, telecommunication, media including advertisement, entertainment etc.) the
following criteria will be applicable regarding threshold limit:
i.
The total income/sales from the main activity, which should be in the field of
information technology, internet, e-commerce, telecommunication, media including
advertisement, entertainment etc. should not be less than 75% of the total income during the
two immediately preceding years as certified by the Auditors of the company.
ii.

The minimum post-issue paid-up equity capital should be Rs.5 Crores.

iii.
The minimum market capitalisation should be Rs.50 Crores. (The capitalisation will
be calculated by multiplying the post issue subscribed number of equity shares with the Issue
price).
iv.
Post issue networth ( equity capital + free reserves excluding revaluation reserve) of
Rs.20 Crores.
(B) MINIMUM PUBLIC OFFER:
As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957, securities of a
company can be listed on a Stock Exchange only when at least 25% of each class or kind of
securities is offered to the public for subscription.

28

In case of IPOs by unlisted companies in the IT & entertainment sector, at least 10% of the
securities issued by the company may be offered to the public subject to the following:

Minimum 20 lac securities are offered to the public (excluding reservation, firm
allotment and promoters contribution)

The size of the offer to the public is minimum 50 crores.

For this purpose, the term "offered to the public" means only the portion offered to the public
and does not include reservations of securities on firm or competitive basis.
SEBI may, however, relax this condition on the basis of recommendations of stock
exchange(s), only in respect of a Government company defined under Section 617 of the
Companies Act, 1956.

MINIMUM LISTING REQUIREMENTS FOR COMPANIES LISTED ON OTHER

STOCK EXCHANGES
The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended the
direct listing norms for companies listed on other Stock Exchange(s) and seeking listing at
BSE. These norms are applicable with immediate effect.
1.

The company should have minimum issued and paid up equity capital of Rs. 3 crores.

2.
The Company should have profit making track record for last three years. The
revenues/profits arising out of extra ordinary items or income from any source of nonrecurring nature should be excluded while calculating distributable profits.
3.
Minimum networth of Rs. 20 crores (networth includes Equity capital and free
reserves excluding revaluation reserves).
4.
Minimum market capitalisation of the listed capital should be at least two times of the
paid up capital.
5.
The company should have a dividend paying track record for the last 3 consecutive
years and the minimum dividend should be at least 10%.
6.
Minimum 25% of the company's issued capital should be with Non-Promoters
shareholders as per Clause 35 of the Listing Agreement. Out of above Non Promoter holding
no single shareholder should hold more than 0.5% of the paid-up capital of the company
individually or jointly with others except in case of Banks/Financial Institutions/Foreign
Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians.
7.
The company should have at least two years listing record with any of the Regional
Stock Exchange.
8.

The company should sign an agreement with CDSL & NSDL for demat trading.
29

[III] Minimum Requirements for companies delisted by this Exchange seeking relisting of
this Exchange.The companies delisted by this Exchange and seeking relisting are required to
make a fresh public offer and comply with the prevailing SEBI's and BSE's guidelines
regarding initial public offerings.
[IV] Permission to use the name of the Exchange in an Issuer Company's prospectus
The Exchange follows a procedure in terms of which companies desiring to list their
securities offered through public issues are required to obtain its prior permission to use the
name of the Exchange in their prospectus or offer for sale documents before filing the same
with the concerned office of the Registrar of Companies. The Exchange has since last three
years formed a "Listing Committee" to analyse draft prospectus/offer documents of the
companies in respect of their forthcoming public issues of securities and decide upon the
matter of granting them permission to use the name of "Bombay Stock Exchange Limited" in
their prospectus/offer documents. The committee evaluates the promoters, company, project
and several other factors before taking decision in this regard.
SUBMISSION OF LETTER OF APPLICATION
As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on
the Exchange is required to submit a Letter of Application to all the Stock Exchanges where it
proposes to have its securities listed before filing the prospectus with the Registrar of
Companies.
ALLOTMENT OF SECURITIES
As per Listing Agreement, a company is required to complete allotment of securities offered
to the public within 30 days of the date of closure of the subscription list and approach the
Regional Stock Exchange, i.e. Stock Exchange nearest to its Registered Office for approval
of the basis of allotment.
In case of Book Building issue, Allotment shall be made not later than 15 days from the
closure of the issue failing which interest at the rate of 15% shall be paid to the investors.
TRADING PERMISSION
As per Securities and Exchange Board of India Guidelines, the issuer company should
complete the formalities for trading at all the Stock Exchanges where the securities are to be
listed within 7 working days of finalization of Basis of Allotment.A company should
scrupulously adhere to the time limit for allotment of all securities and dispatch of Allotment
Letters/Share Certificates and Refund Orders and for obtaining the listing permissions of all
the Exchanges whose names are stated in its prospectus or offer documents. In the event of
listing permission to a company being denied by any Stock Exchange where it had applied
for listing of its securities, it cannot proceed with the allotment of shares. However, the
company may file an appeal before the Securities and Exchange Board of India under Section
22 of the Securities Contracts (Regulation) Act, 1956.

30

REQUIREMENT OF 1% SECURITY
The companies making public/rights issues are required to deposit 1% of issue amount with
the Regional Stock Exchange before the issue opens. This amount is liable to be forfeited in
the event of the company not resolving the complaints of investors regarding delay in sending
refund orders/share certificates, non-payment of commission to underwriters, brokers, etc.
PAYMENT OF LISTING FEES
All companies listed on the Exchange have to pay Annual Listing Fees by the 30th April of
every financial year to the Exchange as per the Schedule of Listing Fees prescribed from time
to time.
The schedule of listing fees for the year 2004-2005, prescribed by the Governing Board of the
Exchange and approved by the Securities and Exchange Board of India is given hereunder:

SHEDULE OF LISTING FEES

Initial Listing Fees

Annual Listing Fees
Companies with paid up share capital
a) Upto Rs. 50 Crores
b) Above Rs. 50 Crore and upto Rs.100 Crores
c) Above Rs. 100 Crore and upto Rs.150 Crores
d) Above Rs.1 50 Crore and upto Rs.200 Crores
e) Above Rs.200Crore and upto Rs250Crores
f)
Above Rs.250Crore and upto Rs.300Crores
g)

Above Rs.300Crore and upto Rs.250Crores

20,000
100,000
1,66,250
1,99,000
228,000
2,61,250
2,94,500
3,23,000

All CSE listed companies which are also listed at BSE and/or NSE will continue to
pay the annual listing fees as per the existing listing fee structure.

COMPLIANCE WITH LISTING AGREEMENT

The companies AGREEMENT desirous of getting their securities listed are required to enter
into an agreement with the Exchange called the Listing Agreement and they are required to
make certain disclosures and perform certain acts. As such, the agreement is of great
importance and is executed under the common seal of a company. Under the Listing
Agreement, a company undertakes, amongst other things, to provide facilities for prompt
transfer, registration, sub-division and consolidation of securities; to give proper notice of
closure of transfer books and record dates, to forward copies of unabridged Annual Reports
and Balance Sheets to the shareholders, to file Distribution Schedule with the Exchange
annually; to furnish financial results on a quarterly basis; intimate promptly to the Exchange
the happenings which are likely to materially affect the financial performance of the
31

Company and its stock prices, to comply with the conditions of Corporate Governance,
etc.The Listing Department of the Exchange monitors the compliance of the companies with
the provisions of the Listing Agreement, especially with regard to timely payment of annual
listing fees, submission of quarterly results, requirement of minimum number of
shareholders, etc. and takes penal action against the defaulting companies.

NEW DIRECT LISTING NORMS

The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended the
direct listing norms for companies listed on other Stock Exchange(s) and seeking listing at
BSE. These norms are applicable with immediate effect.
1.

The company should have minimum issued and paid up equity capital of Rs. 3 crores.

2.
The Company should have profit making track record for last three years. The
revenues/profits arising out of extra ordinary items or income from any source of nonrecurring nature should be excluded while calculating distributable profits.
3.
Minimum networth of Rs. 20 crores (networth includes Equity capital and free
reserves excluding revaluation reserves).
4.
Minimum market capitalization of the listed capital should be at least two times of the
paid up capital.
5.
The company should have a dividend paying track record for the last 3 consecutive
years and the minimum dividend should be at least 10%.
6.
Minimum 25% of the company's issued capital should be with Non-Promoters
shareholders as per Clause 35 of the Listing Agreement. Out of above Non Promoter holding
no single shareholder should hold more than 0.5% of the paid-up capital of the company
individually or jointly with others except in case of Banks/Financial Institutions/Foreign
Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians.
7.
The company should have at least two years listing record with any of the Regional
Stock Exchange.
8.

The company should sign an agreement with CDSL & NSDL for demat trading.

CASH MANAGEMENT SERVICES (CMS) - COLLECTION OF LISTING FEES

As a further step towards simplifying the system of payment of listing fees, the Exchange has
entered into an arrangement with HDFC Bank for collection of listing fees, from 141
locations, situated all over India. Details of the HDFC Bank branches, are available on our
website site www.bseindia.com as well as on the HDFC Bank website www.hdfcbank.com
The above facility is being provided free of cost to the Companies.

32

Companies intending to utilise the above facility for payment of listing fee would be required
to furnish the information, (mentioned below) in the Cash Management Cash Deposit Slip.
These slips would be available at all the HDFC Bank centres.

33

LITERATURE REVIEW
MounaAbdelhedi, 2009 in their research analyzed the risk factor and investor sentiment
effecting cross section variations in return and came to a conclusion that using sample of
stocks traded on Tunisian stock exchange, there are common return factors related to market
and size factors that help capture the cross section stock returns.
MayankJoshipura, 2009 studied the presence of any abnormal returns on surrounding the
bonus announcement and execution; and the effect of bonus offer on trading volume. He
concluded that Indian markets have the semi strong form of market efficiency, as any
information content with the bonus announcement is absorbed on the announcement day and
nothing is seen on the effective day. And bonus announcement leads to improvement in
liquidity permanently, but positive wealth effect is concentrated just prior to and on the day of
bonus announcement.
Anamika Sharma 2009, studied an empirical analysis of public announcement of open offer
on the stock performance of target company against S&P CNX Nifty; public announcement
creates value for investors of target company; and gauge whether motives of open offer have
any significant impact on the efficiency of capital market and came to conclusion that public
announcement of open offer has significant impact on investors behavior while selecting
securities.

34

RESEARCH METHODOLOGY
The Research methodology of the selected topic follows in these dimensions-

OBJECTIVE OF STUDY
The broad objective of the study are.The objective of study is very clear as the Indian stock market is largest stock market in the
Asian stock .
.To make comparative analysis of the financial performances of Bombay Stock Exchange and
National Stock Exchange over the period the period of time.
POPULATION OF THE STUDY
In this study ,all Indian Stock Exchanges are the census for the study .All the 23 stock
exchanges in India are as the population for the study.
THE PERIOD OF THE STUDY
The study is covered for ten years 2004-2005 to 20013-14 .This period is selected for the
study so as to have an overview of the current scenario of the performances of the Indian
Stock Exchanges. This period covers the major fluctuations in the Indian capital and financial
markets as well as Indian economics.
TYPE OF THE STUDY
The study done is empirical in nature .As the statistical tools have been used to analyze the
financial data it is also quantitative study .It focuses on the functional aspects of the stock
exchanges.
SCOPE OF THE STUDY
This study is based on census of all stock exchanges of India for the period of ten years from
2004-2005 to 2013-2014.It covers the evaluation and comparision of financial performance
(profitability) of NSE and BSE for ten years. The tool for appraisal of financial
performances is mean ,standard deviation ,co-efficient of variance and trend analysis.
35

DATA COLLECTION
This study is based on secondary data.
For this purpose the referred material used by me arebooks , newspapers,
journals ,articals,
reports and surveys published on Capital Markets.
The annual reports of NSE from BusinessBecon website monitored by Centre for Monitoring
Indian economy(CMIE).

TOOL TO DATA ANALYSIS

For the comparasion between the two major stock exchanges some statistical tests have been
used according to the nature and objective of the study.The collected information are suitably
classified and tabulated and analyzed with the help of statistical tools likeMean ,Standard deviation ,co-efficient of variance ,trend analysis ,t-test
The hypothesis have been analyzed by t-test and conclusions have been drawn on the basis of
5% level of significance.

36

DATA ANALYSIS ,INTERPRETATION AND FINDINGS

NET CUURENT ASSETS
(Rs. in crores)
BSE

NSE
Trend

Year

Trend

AMOUNT(Rs.)

percentag
e

AMOUNT(Rs.)

percentag
e

2004-05

320.3468386

100

187.9913

100

2005-06

403.9309663

126

215.1607

114

2006-07

230.9891626

72

266.3620

142

2007-08

29.2808830

390.6900

208

2008-09

168.1246173

52

673.3048

358

2009-10

-1129.8876001

-353

625.9273

333

2010-11

-303.6133180

-95

754.1293

401

2011-12

-482.8326514

-151

1307.9687

696

2012-13

768.0716256

240

1948.2700

1036

2013-14

168.9984962

53

2688.2200

1430

Mean

17.34

905.80

SD

533.93

833.16

CV%

3079.00

91.98

Source:Computed

from

(1)annual

reports

of

NSEIL,Mumbai(Annual

reports

purchasedonlineefromhttp://www.businessbeacon.com/kommon/bin/sr.php?

37

kall=wcos&tab=6010&cocode=155676&ttype=entire_text,maintained by Centre for

Montoring Indian Economy (CMIE)accessed on Jan.15,2015.)
(2) annual reports of BSE Limited ,Mumbai downloaded from http://www.bseindia.com
/qresann/resultarch.aps accessed on Jan.7,2015.

INTERPRETATION
It shows a drastic difference between means of Net Current Assets of BSE and
NSE .BSE is having very low mean score and NSE is having a very high ,52 times
of mean score of BSE .These negative amounts have reduced the value of the
mean .Though the standard deviation of data of BSE is lower than that of NSE ,it
is 31 times the mean .Due to this percentage of dispersion is 3079 which shows
high intensity of fluctuations .While co-efficient of variation in NSE is
comparatively very much lower ,representing more consistency in net current
assets.

38

NET CURRENT ASSETS

INTERPRETATION
The above chart shows comparatively higher indices of net current assets of NSE and BSE
.NSE Net Current assets have upward trend only in the year 2009-10 it decreased a bit .Trend
of BSE is mixed and in middle years the decrease is so intensive that it reduced to negative
values by intersecting x-axis .This is due to increased amounts of current liabilities and lower
amounts of total current assets in the years in the years 2009-10, 10-11 and 11-12. This may
be due to mismanagement of working capital.

HYPOTHESIS TESTING
H0: H0: 1= 2 There is no significant difference between mean scores of Net Current Assets
of Bombay Stock Exchange and National Stock Exchange over the period of time.
H1: 1 < 2 The mean score of Net Current Assets of Bombay Stock Exchange is higher than
the mean score of Net Current Assets of National Stock Exchange over the period of time.
t-test
39

NET CURRENT ASSETS

S.E.

SAMP
LE

MEAN STANDARD

POOLED

(X)

STANDA
RD

SIZE

DEVIATION
(SD)

(n)

d
f

DEVIATI
ON

BSE

10

17.34

533.93

NSE

10

905.80

833.16

737.58

18

tLeve t-table
calculat l
value(ttv)
ed
Of
(tcal)
Sig.

2.69

0.05

1.734

0.01

2.552

This table indicates the calculated value of t is 2.69,which is more than the alpha/critical/table
value of t at 5% as well as 1%level of significance .tcal>ttv(18, 0.05) and tcal > ttv(18,0.01).
Which means tcal is in the rejection region hence H0 is not accepted at 5% as well as 1%
level of significance. On this base it can be concluded that 1 <2. The mean score of Net
Current Assets of Bombay Stock Exchange is higher than the mean score of Net Current
Assets of National Stock Exchange over the period of time.

TOTAL INCOME
TOTAL INCOME (Rs. in Crores)
YEAR

BSE
AMOUNT(Rs.)

NSE
TREND
PERCENTAGE

AMOUNT(Rs.) TREND
PERCENTAGE

40

2004-

186.1944706

100

270.9950

100

150.1278850

81

175.3108

65

121.8498674

65

177.4409

65

151.5066993

81

295.8374

109

153.1270372

82

327.5951

121

214.9780457

115

472.5055

174

05
200506
200607
200708
200809
200910
2010-

248.0086165

133

623.5334

230

420.4489498

226

1038.7030

383

11
201112
2012-

421.0943126

226

1024.2800

378

485.2140493

261

1266.3800

467

13
201314
MEA

255.25

567.26

SD

135.06

402.29

CV%

52.91

70.92

Source: Computed from (1) annual reports of NSEIL

Mumbai(Annualreportspurchasedeonlineefromehttp://www.businessbeacon.com/komm
on/bin/sr.php?kall=wcos&tab=6010&cocode=155676&ttype=entire_text, maintained by
Centre for Monitoring Indian Economy (CMIE) accessed onJan. 15, 2011)(2) annual
reports

of

BSE

Limited,

Mumbai

downloaded

from

http://www.bseindia.com/qresann/resultarch.aps accessed on Jan. 7, 2015.

41

INTERPRETATION
This Table highlights that the difference between the means of Total Income of BSE and
NSE over the period of time. The Total Income of both the stock exchanges mostly in
increasing manner but in NSE the total income is higher rather than BSE. Standard deviation
is also higher in total income of NSE which shows, NSE is having more deviations and range
is also greater than that of BSE. Co-efficient of Variation of NSE total income is also higher
than that of BSE. The percentage of deviation is higher in NSE which shows that total
income of BSE is more stable and consistent over the period of time.

TOTAL INCOME INDICES

42

INTERPRETATION
This chart shows the Total Income Indices of both the stock exchanges are going upward in
most of the years. This shows a good revenue inflow in both the stock exchanges. the growth
in the total income is higher in NSE, while BSE shows lower growth but consistent total
income.
Hypothesis Testing
H0: 1= 2
There is no significant difference between mean scores of Total Income of Bombay Stock
Exchange and National Stock Exchange over the period of time.

H1: 1 > 2
The mean score of Total Income of Bombay Stock Exchange is higher than the mean score of
Total Income of National Stock Exchange over the period of time.
t-test

43

(TOTAL INCOME)
S.E.

SAMPL
E

MEA
N

SIZE(n)

(X)

STANDARD

POOLED

DEVIATION(SD)

STANDARD

df

tcalculated(tcal

DEVIATION

BSE

10

255.25

135.06

NSE

10

567.26

402.29

316.30

1
8

2.20

ttable
value

Leve
l of
sig.
(ttv)

0.05

1.734

0.01

2.552

INTERPRETATION
This Table indicates that calculated value of t is 2.20, which is more than the
alpha/critical/table value of t at 5% level of significance tcal > ttv(18, 0.05) but less than 1%
level of significance tcal < ttv(18, 0.01).Which means that at 5% level of significance H0 is
in the rejection region and cannot be accepted. Hence 1 > 2. The mean score of Total
Income of Bombay Stock Exchange is higher than the mean score of Total Income of
National Stock Exchange over the period of time. At 1% level of significance H0 is in the
acceptance region and it can be accepted. Hence there is no significant difference between
mean scores of Total Income of Bombay Stock Exchange and National Stock Exchange 1=
2. In short at 5% level of significance H0 is not accepted but at 1% level of significance H0
is accepted.

Total Expenditurec (Rs. in Crores)

44

YEAR

BSE
AMOUNT(Rs.
)

NSE
TREND

AMOUNT(Rs.)

PERCENTAGE

TREND
PERCENTAGE

2004-05

133.4754352

100

166.1211

100

2005-06

124.0736794

93

131.8595

79

2006-07

99.0123606

74

128.6279

77

2007-08

98.2684640

74

159.8696

96

2008-09

93.5381865

70

168.0442

101

2009-10

103.7593190

78

204.6183

123

2010-11

147.8492253

111

212.0801

128

2011-12

223.6606434

168

303.7522

183

2012-13

155.0718960

116

345.2200

208

2013-14

197.0101701

148

454.5500

274

MEAN

137.57

227.47

SD

44.31

106.87

CV%

32.21

46.98

Source: Computed from (1) annual reports of NSEIL, Mumbai (Annual reports
purchasedeonlineefromehttp://www.businessbeacon.com/kommon/bin/sr.php?
kall=wcos&tab=6010&cocode=155676&ttype=entire_text, maintained byCentre for
Monitoring Indian Economy (CMIE) accessed on Jan. 15, 2015) (2) annual reports of

45

BSE

Limited,

Mumbai

downloaded

from

http://www.bseindia.com/qresann/resultarch.apson Jan. 7, 2015.

INTERPRETATION
This table indicates that NSE has more Mean Total Expenditure than BSE. This is due to
higher amounts of expenditure in NSE and comparatively lower amount of expenditure in
BSE. Standard deviation is comparatively higher in NSE which shows higher deviations over
the period of time. NSE also consists comparatively greater co-efficient of variance of total
expenditure, which shows higher intensity of fluctuations and comparatively higher
consistency of total expenditure in BSE.
TOTAL EXPENDITURE

INTERPRETATION

46

This chart indicates that the beginning pattern of fluctuations is same that is decreasing and
later on it tends to increase. But for last two years this pattern is opposite that is decrease then
increase in BSE and increase in NSE. In the year 2011-12 BSE recorded highest total
expenditure out of the ten years while NSE recorded highest total expenditure in the year
2013-14.
Hypothesis Testing
H0: 1= 2
There is no significant difference between mean scores of Total Expenditure of Bombay
Stock Exchange and National Stock Exchange over the period of time.
H1: 1 > 2
The mean score of Total Expenditure of Bombay Stock Exchange is higher than the mean
score of Total Expenditure of National Stock Exchange over the period of time.

S.E.

SAMPL

MEAN(X

STANDARD
DEVIATION(SD)

SIZE(n)

POOLED

df

STANDARD
DEVIATION

LEVEL

ttable

t-

OF

calcualated

Sig.

value
(ttv)

0.05

1.734

0.01

2.552

(tcal)

BSE

10

137.57

44.31

NSE

10

227.47

106.87

82.23

18

2.23

INTERPRETATION

47

This table indicates that calculated value of t is 2.33, which is more than the
alpha/critical/table value of t at 5% level of significance tcal > ttv(18, 0.05) but less than 1%
level of significance tcal < ttv(18, 0.01).Which means that at 5% level of significance H0 is
in the rejection region and cannot be accepted. Hence, 1 > 2. The mean score of Total
Expenditure of Bombay Stock Exchange is higher than the mean score of Total Expenditure
of National Stock Exchange over the period of time. At 1% level of significance H0 is in the
acceptance region and it can be accepted. Hence there is no significant difference between
mean scores of Total Expenditure of Bombay Stock Exchange and National Stock
Exchange.1= 2. In short at 5% level of significance H0 is not accepted but at 1% level of
significance H0 is accepted.

PROFIT BEFORE TAX (PBT)

(Rs. in crores)
YEAR

BSE
AMOUN
T

NSE
TREND

AMOUNT

TREND

PERCENTAGE (Rs.)

PERCENTAGE

(Rs.)
2004-05

52.72

100

104.7245

100.00

2005-06

28.14

53

43.5068

41.54

2006-07

20.75

39

48.2725

46.09

2007-08

51.23

97

135.8336

129.71

2008-09

59.59

113

202.3571

193.23

2009-10

111.22

211

267.7372

255.66

2010-11

100.16

190

476.4137

454.92

2011-12

200.05

379

734.7881

701.64

48

2012-13

266.02

505

678.4400

647.83

2013-14

288.20

547

811.4900

774.88

MEAN

117.81

SD
CV%

350.36
98.68

83.76

298.97
85.33

Source: Computed from (1) annual reports of NSEIL, Mumbai (Annual reports
purchasedeonlineefromehttp://www.businessbeacon.com/kommon/bin/sr.php?
kall=wcos&tab=6010&cocode=155676&ttype=entire_text, maintained by Centre for
Monitoring Indian Economy (CMIE) accessed on Jan. 15, 2011) (2) annual reports of
BSE

Limited,

Mumbai

downloaded

from

http://www.bseindia.com/qresann/resultarch.aps accessed on Jan. 7, 2011.

INTERPRETATION
This table indicates that NSE earns double than BSE over the period of time because the
mean of Profit before Tax of NSE almost double than that of BSE. Standard deviation and coefficient of variance of Profit before Tax of NSE is also comparatively higher than BSE
which means higher deviation and higher intensity of fluctuations are present in NSE.
Standard deviation is used to calculate the risk and in NSE higher risk is involved in the
earnings before tax than BSE. Hence it can be concluded that there is lower risk, more
stability and consistency are involved in BSE. That can be a reason of survival of BSE more
than one century.

PROFIT BEFORE TAX INDICES

49

INTRTPRETATION
This chart indicates the indices of growth of Profit before Tax of NSE is comparatively
higher. Comparing 2003-04 to 2013- 14 NSE registered growth in profit before tax more
than seven times while BSE registered growth more than five times.

Hypothesis Testing
H0: 1= 2
50

There is no significant difference between mean scores of Profit Before Tax of Bombay Stock
Exchange and National Stock Exchange over the period of time.
H1: 1 > 2
The mean score of Profit Before Tax of Bombay Stock Exchange is higher than the mean
score of Profit Before Tax of National Stock Exchange over the period of time.
t-test

(PROFIT BEFORE TAX)

S.E.

SAMPLE
SIZE(n)

MEAN(X

STANDARD

POOLED

DEVIATION(SD)

STANDARD

df

10

117.81

98.68

NSE

10

350.36

298.97

324.66

LEVE

calculate

DEVIATION

BSE

t-

OF sig.

0.99

vaue
(ttv)

(tcal)

ttable

0.05

1.73
4

0.01

2.55
2

INTERPRETATION
This table indicates that calculated value of t is 0.99, which is less than the alpha/critical/table
value of t at 5% level of significance tcal > ttv(18, 0.05) and 1% level of significance tcal
<ttv(18, 0.01).Which means that at 5% and 1% level of significance H0 is in the acceptance
region and it is accepted. Hence, there is no significant difference between mean scores of
Profit Before Tax of Bombay Stock Exchange and National Stock Exchange 1= 2.
PROFIT AFTER TAX (Rs.in crores)

51

YEAR

BSE
AMOUNT(Rs.
)

NSE
TREND
PERCENTAGE

AMOUNT(Rs.
)

TREND
PERCENTAGE

2004-05

52.7190354

100

67.8245

100

2005-06

26.0542056

49

34.4290

51

2006-07

189.5825933

360

33.7763

50

2007-08

235.8150669

447

94.5122

139

2008-09

59.5888507

113

155.0123

229

2009-10

59.3337442

113

191.4173

282

2010-11

90.8414912

172

354.8744

523

2011-12

178.9883069

340

521.2552

769

2012-13

212.1795166

402

515.5500

760

2013-14

212.9433792

404

613.7700

905

MEAN

131.80

258.24

SD

80.97

223.55

CV%

61.43

86.57

Source:Computed from (1) annual reports of NSEIL, Mumbai (Annual reports

purchasedeonlineefromehttp://www.businessbeacon.com/kommon/bin/sr.php?
kall=wcos&tab=6010&cocode=155676&ttype=entire_text, maintained by Centre for
Monitoring Indian Economy (CMIE) accessed on Jan. 15, 2011) (2) annual reports of
BSE Limited, Mumbai downloaded from http://www.bseindia.com/qresann/resultarch.
aps accessed on Jan. 7, 2011.
52

INTERPRETATION
This table indicates that NSE earns almost double than BSE over the period of time because
the mean of Profit after Tax of NSE almost double than that of BSE. Standard deviation and
co-efficient of variance of Profit before Tax of NSE is also comparatively higher than BSE
which means higher deviation and higher intensity of fluctuations are present in NSE.
Standard deviation is used to calculate the risk and in NSE higher risk is involved in the
earnings before tax than BSE. Hence it can be concluded that there is lower risk, more
stability and consistency are involved in BSE. That can be a reason of survival of BSE more
than one century.

53

PROFIT BEFORE TAX INDICES

INTERPRETATION
This chart indicates the indices of growth of Profit after Tax of NSE is comparatively higher.
The highest Profit after Tax is recorded in the year 2013-14 by NSE and in 200506 by BSE.
Hypothesis Testing
H0: 1= 2
There is no significant difference between mean scores of Profit After Tax of Bombay Stock
Exchange and National Stock Exchange over the period of time.
H1: 1 > 2

54

The mean score of Profit After Tax of Bombay Stock Exchange is higher than the mean score
of Profit After Tax of National Stock Exchange over the period of time.

t-test

(PROFIT AFTER TAX)

S.E.

SAMPL

MEAN(X

SIZE(n)

STANDARD

t-table

DEVIATION

POOLED

(SD)

STANDARD

df

calculate

10

131.80

80.97

10

258.24

223.55

177.22

LEVEL value(ttv
)
OF sig.

DEVIATION

NS

t-

(tcal)

1
8

1.595

0.05

1.734

0.01

2.552

BSE

INTERPRETATION
This table indicates that calculated value of t is 1.595, which is less than the
alpha/critical/table value of t at 5% as well as 1% level of significance. tcal < ttv(18, 0.05)
and tcal < ttv(18, 0.01). Which means tcal is in the acceptance region hence H0 is accepted at
5% as well as 1% level of significance. On this base it can be concluded that: 1= 2. There
is no significant difference between mean scores of Profit After Tax of Bombay Stock
Exchange and National Stock Exchange.

55

LIMITATIONS OF THE STUDY

The data has been collected for NSE and BSE for 10 years 2004-2005 to 2013-2014
only.

Among all the investors there are few investors who do not have the knowledge of the
value stocks and the growth stocks. They invest their money looking at the good
future prospects of the companies and the current scenario of the companies.

The data collected is at the end of the financial year, which means study does not
include the whole financial years data or the data between the two financial years.

56

CONCLUSION
It can be concluded that the financial position of BSE and NSE from 2004-04 to 2013-14 is
quite satisfactory. In most of the cases the trends are more stable in BSE than NSE. In BSE
and NSE both most of the items of balance sheet and profit and loss account show favourable
trends. If any negative sign was there it was soon recovered. There are fluctuations in the
amounts of Net Current Assets and from Total Income, Profit after Tax but most of them are
favourable in BSE and NSE both. Most important thing to be noticed is that in not a single
year of study BSE or NSE registered any loss in terms of Profit before Tax of Profit after Tax.

57

REFERENCES
BSE Limited Annual Reports | Campbell, J.Y., A.W. Lo, and A.C. Makinlay, The
Econometrics of Financial
Markets, Princeton University Press, Princeton, NJ, 1997. | Kothari C.R., Research
Methodology, New Age Publications
| Levine, R. and S. Zervos, Stock Market Economic Development and LongRun
Growth, World Bank Economic Review,
1996, 10, pp.323339. | Madhumaty R., Rangnathan M., Investment Analysis and
Portfolio Management, Pearson Education
| NSE India Limited Annual Reports | Pandian, Punithavathy, Security Analysis and
Portfolio Management, Vikas Publishing House
Pvt. Ltd., | Patwari D. C. and Bhargava A., Options and Futures An Indian
Perspective, Mumbai: Jaico Publishing
House. | Pasupathy K. Advani, Volatility is Here to Stay and One Must Learn to Live
with it, Dalal Street Investment Journal , February
Srivastava, R. Derivatives and risk management, New Delhi: Oxford University press. |
Securities Market
In IndiaA Review | Varma, J. R. (2010) Derivatives and Risk Management, (4th Ed.),
New Delhi: Tata McGraw-Hill. |
| www.bseindia.com
www.nseindia.com | www.business becon.com | www.cmie.com |

58