How to invest in the Bombay Stock Exchange (BSE) from the UK

Find the cheapest and easiest ways to invest in Asia's oldest stock exchange.

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The Bombay Stock Exchange, retaining its original name even after its home city was renamed Mumbai in 1995, boasts a rich history as the first stock exchange in Asia. Established in the 1850s by a group of five stockbrokers who used to hold meetings under a banyan tree in front of Mumbai’s Town Hall, it has grown significantly since its humble beginnings.

Today, it stands as the largest exchange in India. This guide provides insights into how UK investors can gain exposure to the thriving Bombay Stock Exchange.

What is the Bombay Stock Exchange?

Officially founded in 1875, the Bombay Stock Exchange (BSE) is the world’s 10th-largest stock exchange by market capitalisation, ahead of the National Stock Exchange of India (NSE). It has over 5,000 listed companies and a total market cap of over $2 trillion.

Top companies to invest in from the Bombay Stock Exchange

The Bombay Stock Exchange may not typically include household names that are well-known in the UK, but that doesn’t mean there aren’t any that have the potential to pack an investment punch.

There’s no such thing as the “best” company to invest in on any exchange, as it depends on your investment strategy and your appetite for risk. The 3 biggest companies on the Bombay Stock Exchange by market capitalisation as of July 2023 were:

  • Reliance Industries Ltd: A conglomerate with operations spanning oil and gas production, the manufacture of petroleum and polyester products, plastics, chemicals, synthetic textiles and fabrics.
  • HDFC Bank Ltd: One of India’s largest private sector banks.
  • Tata Consultancy Services Ltd: A global IT services, consulting and business solutions firm.

Can I invest in the Bombay Stock Exchange from the UK?

Yes, you can invest in the Bombay Stock Exchange, and there are a number of direct and indirect ways to do so. You can invest in many Indian companies through American Depository Receipts (ADRs), which represent stocks that have been purchased by an American institutional investor on the BSE, which can then be traded on US-based stock exchanges.

You can also invest directly in BSE stocks via exchange-traded funds (ETFs), which are index funds that track the performance of certain stocks or stock indices on the Bombay Stock Exchange.

Some of the largest Indian stocks may also be available to buy and sell on popular Western exchanges, including the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE). For example, the largest company on the BSE, Reliance Industries, is also listed on the LSE, which means you can buy shares in it directly using your UK trading platform or broker.

How to invest in the Bombay Stock Exchange

  1. Choose a broker or trading platform. If you want to invest in the Bombay Stock Exchange, you’ll need to pick a platform or broker that lists Indian stocks directly or via BSE-focused ETFs.
  2. Open a share trading account. Once you’ve selected the broker or platform, you’ll need to open a trading account to start investing in BSE stocks.
  3. Deposit funds. Before you start trading, you’ll need to deposit money into your investing account. Depending on your broker or platform, your funds may also need to be converted from pounds into a different currency, such as US dollars.
  4. Buy BSE stocks or invest in funds. Once your account is funded, you can buy and sell shares in BSE companies or invest in funds. You can use the platform’s search function to find the specific Indian stock or ETF you want to invest in.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

How much does it cost to invest in the Bombay Stock Exchange?

The cost of investing in the BSE depends on how you decide to invest, as well as the specific platform or broker you use. Each platform has its own fee structure, with some charging a one-off trading fee for every trade you make and others offering “fee-free” trading.

If you’re looking to invest in the Bombay Stock Exchange via an ETF or index fund, you’ll probably be charged a small percentage fee of around 0.5%.

Broker trading fees

Below is a breakdown of the basic fees you’ll pay when making a single trade using each platform or broker:

Is there a Bombay Stock Exchange ETF?

Yes – in fact, there are several ETFs that track different chunks of the exchange.

ETFs are an easy, low-cost alternative way to invest in Indian stocks on the Bombay Stock Exchange, especially if you’re looking to invest in stocks that aren’t listed on Western exchanges such as the London Stock Exchange (LSE).

Like many ETFs, the most popular Indian stock ETFs are based on the leading BSE stock indices, such as the BSE SENSEX, which tracks 30 of the largest companies on the Bombay Stock Exchange, and the BSE 500, which tracks the 500 largest companies on the BSE. You can also find ETFs that track different sectors of BSE companies, including small- and medium-sized enterprises.

Bombay Stock Exchange ETFs

Some of the largest BSE ETFs include:

  • iShares Core S&P BSE SENSEX India ETF
  • SBI – ETF SENSEX
  • HDFC Sensex ETF
  • iShares MSCI India ETF
  • WisdomTree India Earnings Fund
  • Invesco India ETF
  • iShares India 50 ETF

Why should I invest in the Bombay Stock Exchange (BSE)?

Zoe Stabler

Finder expert Zoe Stabler answers

The Bombay Stock Exchange is one of the world’s largest exchanges and lists many companies that you cannot invest in directly via the London Stock Exchange or other western exchanges. Like China – and Hong Kong in particular – India is an emerging market experiencing rapid economic growth. This may be reflected in the potential growth of Indian companies listed on the BSE.

Indian stocks may, therefore, be a good option for investors looking to diversify their portfolio internationally or get exposure to different sectors or industries. Though, bear in mind that stock markets in emerging economies tend to be more volatile. Plus, even big companies in India – and indeed the stock market itself – may operate in some ways that Westerners are less familiar with. So, plan and research carefully and be prepared for unexpected outcomes.

Which stocks are on the Bombay Stock Exchange?

Some of the largest stocks on the BSE include:

  • Reliance Industries
  • Tata Consultancy Services
  • HDFC Bank
  • Infosys
  • Hindustan Unilever
  • State Bank of India
  • Nestle India
  • Adani Green Energy

How else can I invest in Mumbai stock markets?

While the Bombay Stock Exchange may be the largest Indian stock exchange by market capitalisation and the tenth-largest in the world, it’s not the only stock exchange based in Mumbai. Hot on its heels and ranked eleventh globally is India’s National Stock Exchange (NSE).

Established in 1992, it’s much younger than the BSE and has far fewer companies listed (less than 2,000 on the NSE versus more than 5,000 on the BSE). However, the volumes traded on the NSE are much higher than the BSE. It tends to be the stock market preferred by traders rather than traditional investors.

Bottom line

The Bombay Stock Exchange, one of the world’s oldest and largest stock markets, provides an attractive avenue for UK investors seeking to invest in India. Particularly well-suited to traditional, long-term investors, the exchange has delivered robust growth over the past five years, with a remarkable 140% return – significantly outpacing both the US’s S&P 500 and the UK’s FTSE 100.

On the other hand, India’s National Stock Exchange may be a more appealing option for active traders and seasoned investors. It’s important to choose the platform that aligns with your investment strategy and experience level. International investing isn’t solely about stock performance. Currency fluctuations play a vital role. The Indian Rupee fell 20% against the dollar and 14% against the pound from 2018 to 2023, which could reduce your returns when converted back to pounds.

In terms of dividends, the Bombay Stock Exchange provides an average annual yield of 1.6% – modest when compared to the FTSE 100’s 3.9%. Some companies, such as Coal India and Oil and Natural Gas Corporation, offer larger dividends, but picking individual stocks comes with higher risks.

Funds that track a Bombay Stock Exchange index can offer a safer, more straightforward investment method. Yet, remember that investing in emerging markets like India often brings higher volatility. Any decision to invest in the Bombay Stock Exchange should carefully weigh the potential for high returns against these associated risks.

Frequently asked questions

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

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