Different Types of Share Market in India

Learn Different Types of Share Market in India

An Overview of Different Types of Share Market in India

You’ve probably heard of the stock market, but do you know all the different types of stock markets there are? There’s the primary market, the secondary market, and the over-the-counter (OTC) market. In this article, we’ll give you a brief overview of each type of stock market.

The primary market is where stocks and other securities are first sold. Companies use this market to sell their shares to the public for the first time. The secondary market is where investors buy and sell securities from each other. This market is made up of exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq. The OTC market is a decentralized market where investors can trade securities that are not listed on an exchange.

Which type of stock market is right for you? That depends on your investment goals and experience. We hope this article has helped give you a better understanding of the different types of stock markets in India.

What Is the Share Market in India?

The share market in India is a platform where people can buy and sell shares of different companies. It is a regulated market where companies can raise money by issuing shares to the public. There are two types of share markets in India- the primary market and the secondary market. The primary market is where companies issue new shares to the public. The secondary market is where people trade shares of already-issued companies.

Major Segments of Indian Share Market

There are two major segments of the Indian share market- the primary and the secondary market.

The primary market is where new shares are issued and traded. This is where the company comes to raise money by issuing shares to the public. The secondary market is where old shares are traded. This is where you come to buy and sell shares that you already own.

The two markets operate differently and have different rules. In the primary market, the company is in complete control. They decide who can buy their shares and how much they want to charge. In the secondary market, it’s a free-for-all. The price is set by the buyers and sellers themselves.

BSE and NSE – The Dual Stock Exchanges of India

There are two types of stock exchanges in India – the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE is the older of the two and was established in 1875. It’s located in Mumbai and is often referred to as the “Big Daddy” of Indian stock exchanges.

The NSE, on the other hand, was set up in 1992 and is headquartered in Mumbai. It’s younger than the BSE, but it’s quickly catching up. In fact, it’s currently the largest stock exchange in India in terms of total trades and turnover.

Both exchanges offer a similar range of services, but there are some key differences between them. The BSE is a traditional “floor-based” exchange, which means that all trading happens on the trading floor. The NSE, on the other hand, is an electronic exchange – all trading takes place through computers.

This has led to some key differences in terms of how stocks are traded. For example, at the BSE, stocks are traded by human brokers who match buy and sell orders manually. At the NSE, stocks are traded by computer algorithms that automatically match orders.

Derivatives Market in India

Let’s move on to derivatives markets, which are relatively new to the Indian scenario. Derivatives are financial instruments based on an underlying asset. They are used to transfer risk between two parties and are used as hedging instruments. In India, derivatives are cash-settled products traded in the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Common derivatives traded in India include futures and options contracts, index-based derivatives, and security-based derivatives. Futures help traders hedge against changes in the price of certain assets while options can be purchased to initiate a trade without having ownership of the underlying asset. These products can also be used for speculation and arbitrage, making them attractive investments for many traders.

The derivative market in India is highly regulated by the Securities and Exchange Board of India (SEBI). All transactions must follow specific rules regarding margin requirements, charges, expiry dates, and more. As a result, trading in this market requires a thorough understanding of how it works.

Mutual Funds Trading Platforms

You’ve heard about stocks, but what about mutual funds? Mutual funds are essentially a basket of stocks, bonds, and other securities that are professionally managed. And if you’re looking to trade mutual funds in India, then you’ll want to check out the mutual fund trading platforms out there.

These trading platforms allow investors to buy and sell shares in different types of mutual funds offered by various asset management companies. They offer a range of options including equity-oriented, debt-oriented and balanced schemes, so you can choose one that best suits your investment goals.

The trading platform also provides detailed information about each fund and its performance history so you can make an informed decision before investing. Additionally, many of these trading platforms also offer special features such as automated portfolio rebalancing and portfolio trackers to help investors manage their investments better.

IPOs – Initial Public Offerings in India

Have you ever heard of IPOs? IPOs, or Initial Public Offerings, are a type of share market in India, and it’s fairly commonplace for companies to go public with their IPO.

In an IPO, the company offers its shares at a predetermined price to the public. Anyone who wants to buy the shares can do so, with the hope that the value will increase in the future. This is one way for companies to expand their business and raise more capital.

Typically, when a company goes public through an IPO, it’ll set up a trading window for interested investors over a set period of time. Depending on demand and supply of shares, the share price could go higher than initially set. In any case, you should always research carefully before investing in any public offering!


So, that’s an overview of the different types of share market in India. As you can see, there are a few different options, each with their own benefits and drawbacks. Make sure to do your research before investing in any of these markets, and to consult with a financial advisor to get professional advice. 



A Beginner’s Guide to Investing in the Stock Market in India.


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