Regarding stock trading in India, two leading players stand out: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). These exchanges have been significant in developing India’s stock market and have attracted millions of investors, companies, and banks. But as we think about 2025, one question comes to mind: Who will genuinely be the top player in the Indian stock market?
Let’s analyse this fierce rivalry from all angles—market share, trading volume, technology, investor trust, innovation, and future outlook—to understand which exchange leads the pack today.
BSE: The Oldest Stock Exchange in Asia
Founded in 1875, the Bombay Stock Exchange is India’s first and oldest stock exchange in Asia. With over 5,800 listed companies, BSE holds the record for the highest number of listings in the world. It is headquartered in Mumbai, and its iconic building, Phiroze Jeejeebhoy Towers, has become symbolic of Indian finance.
Strengths of BSE:
- Legacy and trust: BSE has over 149 years of history and trust.
- Broad company base: Most small- and mid-cap companies are listed here.
- S&P BSE SENSEX: Its benchmark index, SENSEX, is followed globally.
But despite its strong heritage and wide listings, BSE has lagged behind NSE in trading volume and retail investor participation for the last two decades.
NSE: The Young Challenger That Took Over
Launched in 1992, the National Stock Exchange of India was a technological revolution. NSE introduced electronic trading, bringing transparency, speed, and nationwide access to stock markets. Within a few years of its launch, NSE overtook BSE in trading volume and became the largest stock exchange in India by market turnover.
Strengths of NSE:
- High liquidity: NSE sees more daily trades than BSE.
- Technology-first approach: It pioneered screen-based trading.
- NIFTY 50 Index: NSE’s benchmark is used by mutual funds, ETFs, and derivatives markets.
Today, over 90% of all cash and derivatives trading in India happens on the NSE, making it the undisputed volume leader.
Market Share and Trading Volume: Who Dominates?
This is where NSE wears the crown.
As of 2024, NSE commands over 93% share in equity derivatives and over 80% in the equity cash segment in India. Daily trading volumes on the NSE often cross Rs. 1.5 lakh crore in the cash segment alone, while BSE’s volumes remain significantly lower.
In terms of listed companies, BSE has more, but many of those stocks are thinly traded with minimal liquidity. NSE focuses on quality over quantity, and the stocks attract more institutional and retail activity.
According to SEBI data1, most retail investors and domestic mutual funds prefer NSE over BSE for executing trades.
Technology and Infrastructure: NSE Leads the Innovation Game
NSE is the clear leader in terms of trading speed, platform reliability, and system uptime. It was the first exchange in India to offer fully automated, screen-based trading, starting a digital revolution in Indian capital markets.
While BSE later caught up with similar systems, NSE remained a step ahead with:
- Low-latency trading (important for algorithmic traders)
- Colocation facilities for high-frequency trading
- Robust cybersecurity systems
NSE has also been quick in launching investor-focused platforms, like NSE goBID, which lets users invest in government bonds easily.
BSE has improved, especially with BSE StAR MF, its mutual fund distribution platform that has grown rapidly. However, regarding overall market infrastructure, NSE still leads the pack.
Index Recognition and Popularity
While BSE’s SENSEX is the older and more iconic index, NSE’s NIFTY 50 has become the go-to benchmark for ETFs, mutual funds, futures, and options contracts.
NIFTY 50-based derivatives are far more popular than SENSEX derivatives. The NSE’s indices—like NIFTY Next 50, NIFTY Bank, and NIFTY IT—are widely tracked by financial institutions and retail investors.
The global financial community also sees NSE indices as more reflective of Indian market trends, particularly due to the higher liquidity and institutional activity they represent.
IPO Listings and Market Trust
Traditionally, most companies list on both exchanges to reach a broader investor base. However, many recent IPOs are seeing higher trading activity on the NSE, especially on the listing day.
Institutional buyers and high-net-worth individuals typically prefer NSE due to its larger order book, better execution, and broader reach. Even retail investors open demat accounts that are NSE-enabled first, as per industry data from NSDL and CDSL2.
BSE does attract smaller companies, especially from Tier-2 and Tier-3 cities, through its BSE SME platform. However, NSE’s EMERGE platform for SMEs has also started gaining momentum recently.
Investor Base and Public Engagement
Both exchanges have been working to expand India’s retail investor base. As of March 2024, India has over 13 crore demat accounts, a massive increase driven by digital brokers like Zerodha, Groww, Upstox, and others.
However, trading data shows that the NSE handles over 85% of all retail activity. Most online trading apps default to NSE because of its higher liquidity, narrower spreads, and smoother execution.
BSE has progressed through its Investor Protection Fund and social media outreach. However, it still hasn’t matched NSE’s digital engagement, especially among first-time and millennial investors.
Regulatory Compliance and Transparency
NSE and BSE operate under strict SEBI guidelines and maintain high compliance standards. However, in recent years, NSE has faced controversies such as the colocation scam. SEBI penalised NSE and its former executives for giving certain brokers unfair access to trading systems.
While damaging, this episode further strengthened NSE’s compliance and transparency frameworks.
On the other hand, BSE has had a cleaner record in public controversies but has not taken any significant steps to surpass NSE’s market dominance post-incident.
Global Rankings and Impact
In global terms, NSE ranks among the top 3 stock exchanges in the world by number of trades, as per the World Federation of Exchanges 2024 report3. BSE, while respectable, ranks lower in terms of trading volume and global influence.
Also, NSE is more actively involved in global partnerships, whether with SGX (Singapore Exchange) for GIFT City listings or launching new financial products with international relevance.
Verdict: Who will be the King of the Indian Stock Market in 2025?
When we compare all significant aspects—trading volume, technology, investor trust, global ranking, and market liquidity—NSE leads the Indian stock market.
However, BSE’s contribution cannot be ignored. It remains a trusted platform, especially for small-cap companies, and remains relevant for its iconic SENSEX index and diversified listings.
But the crown sits firmly on NSE’s head in today’s fast-paced, tech-driven market.
Key Takeaways:
- NSE dominates in volume, liquidity, and trading infrastructure
- BSE has more listings but less daily trading activity
- NSE is preferred by institutional and retail investors alike
- BSE still plays a key role in small-cap and SME space
- NSE’s future-focused approach keeps it ahead of the curve
Sources:
[1] SEBI
[2] CDSL and NSDL
[3] World Federation of Exchanges
