• The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India.
   
• Bombay Stock Exchange was established in 1875. There are around 3,500 Indian companies listed with the stock exchange, and has a significant trading volume. As of July 2005, the market capitalization of the BSE was about Rs. 20 trillion. The BSE SENSEX (SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume. Along with the NSE, the companies listed on the BSE have a combined market capitalization.
   
• The National Stock Exchange of India (NSE), is one of the largest and most advanced stock markets in India. The NSE is the world's third largest stock exchange in terms of transactions. It is located in Mumbai, the financial capital of India. The NSE VSAT terminals, 2799 in total cover 320 cities in India.

The Role of the Stock Exchange

• Raising capital for businesses: The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public.
   
• Mobilizing savings for investment: When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in a stronger economic growth and higher productivity levels.
   
• Facilitate company growth: Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways to company growing by acquisition or fusion.
   
• Corporate governance: By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations by public stock exchanges and the government
   
• Barometer of the economy: At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.

Importance of stock exchanges

• A lot has been written about the relevance and importance of stock exchanges in the economy.
   
• One of the key advantages is that stock exchanges are an efficient medium for raising resources and channeling savings from the public by way of issue of equity / debt capital by joint stock companies listed on the stock exchanges.
   
• The second main benefit is the wide dispersal of information and the need to disclose adequate information — not only the quarterly or year-end financial results, but also major events that have an impact on the working of the company.