The Stadium: Where India Trades ₹450 Lakh Crore

Before we start understanding anything about the stock market, we must look at the “Big Picture”.

India is undergoing a massive shift of storing wealth from Gold and Real Estate to Stock Market.

In this series of articles, I will capture what is happening, why it is happening and what we need to understand.

We start first by understanding the infrastructure which makes it all possible.

1. Indian Stock Exchanges : BSE and NSE

What are Stock Exchanges? Simply, they are platform / infrastructure where we can buy and sell our shares.

In India, we’ve two biggest exchanges : BSE and NSE

• BSE (Bombay Stock Exchange): Established in 1875, it is the oldest stock exchange in Asia. It has over 5,000 listed companies, making it one of the largest in the world by number of listings.

  NSE (National Stock Exchange): Launched in 1992, it was the “tech disruptor” that brought fully automated, screen-based trading to India. While it has fewer listings (~2,400 companies), it commands nearly 90% of the trading volume.

Most major companies, like Reliance or TCS, are dual-listed on both. This means the total Indian market cap is roughly the BSE figure, as it encompasses almost everything on the NSE plus several thousand smaller companies.

Feature	BSE	NSE
Established	1875	1992
Listed Companies	~5,000	~2,400
Market Cap (Jan 2026)	~$5.45 Trillion (450 Lakh Crore INR)	~$5.39 Trillion (447 Lakh Crore INR)
Benchmark Index	SENSEX (Top 30)	NIFTY 50 (Top 50)

1.1 How You Access the Exchange: The Gatekeepers (Brokers)

While the BSE and NSE provide the infrastructure, you cannot buy shares directly from them. You need a Stockbroker to act as an intermediary.

In the last decade, India has seen a “Digital Revolution” in how people trade, led by two main types of platforms:

• Discount Brokers (The Tech Disruptors): Platforms like Zerodha and Groww have democratized the market by offering low-cost, app-based trading. They are designed for the modern investor who prefers a “DIY” (Do-It-Yourself) approach with clean interfaces and zero or minimal brokerage fees for long-term investments.
• Full-Service Brokers (Traditional Banks): These are often linked to your bank accounts, such as ICICI Direct, HDFC Securities, or Kotak Securities. They provide additional services like research reports and personal relationship managers, but usually charge higher fees.

The “Demat” Link: To trade on these platforms, you need a Demat Account (like a digital locker to hold your shares in digital form) and a Trading Account (to buy and sell). Today, phone apps like Groww and Zerodha allow you to open both in minutes using just your Aadhaar and PAN card.

2. The Rules of the game

• Regulation: Both operates under the strict regulation of the Securities and Exchange Board of India (SEBI).

• Offerings: It facilitates trading in equities, derivatives (futures and options), debt instruments, mutual funds, and currencies. For now, just focus on equities (which is another name for regular stocks)

• Trading Hours: The equity market operates from 9:15 AM to 3:30 PM IST, Monday to Friday.

3. Understanding the “Scoreboard” (Benchmark Indices)

While there are thousands of companies, the “health” of the market is usually measured by two indices: the Sensex and the Nifty 50. When you hear that market is rising or crashing, it is mostly these two indices which are being talked about.

While the Sensex 30 and Nifty 50 are managed by different exchanges, they share a common goal: to represent the “best of the best” in the Indian economy. Sensex has India top 30 companies and Nifty50, as the digit 50 indicates, have India top 50 companies.

Both indices use a Free-Float Market Capitalization methodology, meaning only the shares available for public trading are considered for valuation.

Interesting Notes :

• LIC, which has overall market cap of 6.5 lakh crore is NOT in Sensex (or Nifty50). This is because of “Free Float Market Cap” rule. Govt of India owns 96% of LIC, so only 4% of stock is tradable (which comes to 0.26 Lakh Crore)
• There are several other such examples : HAL, Coal India, Adani Total Gas, DMart.

4. Why Index Inclusion is a Game Changer

In the stock market, being part of the Sensex 30 is like having a direct connection to a massive, high-pressure money pipe. Here is why it matters: When a stock enters the Sensex 30, Passive Funds (ETFs) which manage trillions of rupees are legally required to buy it. Their software is programmed to mirror the index exactly. They don’t care if the stock is “expensive” or “cheap”; if the rules say the stock is 2% of the index, the fund must use 2% of its cash to buy that stock. This creates a permanent, non-stop wave of buying pressure. The big get bigger.

• Note : You can find about passive funds here. Today, 14 Lakh Crore is managed by passive funds. This is huge and only growing.

Real-World Example (Jan 2026 Update)

We recently saw this play out with the 2025-2026 rebalancing.

• Trent Ltd and Bharat Electronics (BEL) were recently added to the Sensex 30. Because of this, passive funds were forced to buy roughly $650 million worth of their shares combined.

• Conversely, Nestlé India and IndusInd Bank were removed, leading to massive “forced” selling as those same funds had to cut them from their portfolios.

5. Next Steps

Now that we know where the market is, we need to understand what is inside it. In the next article, we will use an IPL Auction analogy to classify these 5,000+ companies by their “price tags” (Market Cap).