When a business or organization needs capital for a huge start-up or expansion of business it may want to raise the required funds from public. However, before approaching public, a company has to fulfill the regulatory requirements laid by Securities Exchange Board of India (SEBI) which is the regulatory authority existing to protect the interests of investors and govern the activities of Stock Market. On approval from SEBI, once a Company goes public (raises fund from Public in the Primary Market) it will become Publicly Listed Company until which it will be considered as Private. When a company becomes publicly listed company it means its shares are listed on a recognized stock exchange.
An investor cannot give back the shares and claim their money from a company after the issue of share certificates through IPO process, however, the investor can sell his share to another person to liquefy his investment. Stock Exchange / Stock Market / Share Market is the centralized place for such buyers and sellers to meet. Since this is the place where the second sales of Company’s shares takes place, it is also referred as ‘Secondary Market’.
Bombay Stock Exchange (BSE) the oldest, Asia’s first stock exchange established in 1875 located in Mumbai and National Stock Exchange (NSE) – India’s leading stock exchange established in 1992 located in Mumbai are the two big stock markets existing in India. All the listed companies in India are listed in either of these exchanges. There are around 5000 companies listed in BSE. NSE relatively being a new exchange when compared to BSE, has a lesser number of companies which is around 2000. However NSE’s volume of shares and value of turnover is much bigger than BSE.