The Indian Stock Markets have their history marked back in 1875. The man who initiated the same was then than cotton king, Mr. Premchand Roy Chand. The first name of the Indian Stock Market was, “Native Share and Stock Brokers Association”. Post this many stock exchanges opened across the country. It was done for trading the local specialized companies in the exchange. The Ahmedabad Stock Exchange was opened in 1894 and it had the major textile companies listed on it whereas the Calcutta Stock Exchange was opened for Jute mills in 1908. The Madras Stock Exchange came into existence in 1920. This way close to 24 stock exchanges were opened in India. Among them 21 were regional and had allotted areas. Later on two other exchanges got their existence for nationwide trading naming National Stock Exchange and Over the Counter Exchange Of India.
The location of such Stock Exchanges are at Ahmedabad, Bangalore, Mumbai, Kochi, Delhi, Hyderabad, Jaipur, Kanpur, Chennai, Patna, Rajkot, Vadodara, Bhubaneshwar, Kolkata, Coimbatore, Guwahati, Indore, Ludhiana, Pune, Mengalauru, Rajkot.
These were the regional stock exchanges in India. Post the policy tightening wave by SEBI all the regional stock exchanges were closed and the only one that kept running for regional exchanges was Calcutta Stock Exchange.
Evolution
The history of Stock in India is dated back in the 18th century when the East India Company started trading in loan securities. Later on the shares of some companies of Bank and Cotton presses were traded in the 1830s in Bombay. Post this a group of 22 stockbrokers across the Bombay Town Hall started trading under a banyan tree.
Later on the First Stock Exchange of India or Asia was set up in Maharashtra as Native Share and Stock Brokers Association. However, many regional stock exchanges were opened. In the early times the trading system was down through papers. It was known as the paper trading system and the brokers used to get the quotes at the inception stage. The matches of sale and buy were made manually. This is how the markets were filled with quotes and the sound of the assembly. This scene can also be noticed in the 1992 Scam or many other early movies or series on Stock Exchange of India in the early times.
However, BSE became the first stock exchange to be granted permanent recognition under the Securities Contract Association, 1956. In the post independence era BSE was the dominator of the markets with a huge volume. However due to the continuous mishaps in the system the markets felt the need of a regulator to control the entire flow of the stock markets. This is when SEBI came into picture. It was created as a non-statutory body in 1988 and given a statutory status in 1992.
Stock Exchanges
Currently there are only 7 seven recognized stock exchanges across India :-
- Bombay Stock Exchange
- National Stock Exchange
- Calcutta Stock Exchange Limited
- Magadh Stock Exchange Limited
- India International Exchange
- NSE IFSC Limited
- Metropolitan Stock Exchange of India Limited
Currently BSE is the 8th largest stock exchange in the world with 276.713 Lakh Crore Rs capitalization followed by NSE with a 3.4 trillion dollar capitalization.
BSE
The Bombay Stock Exchange or Native Share and Stock Brokers Association is located on Dalal Street. Yes it was the oldest stock exchange started by Mr. Premchand Roy in 1875. In 1986 BSE developed the S&P BSE Sensex index. In other words the Sensex we know today has its origin in 1986. It was made to keep a measure of the overall industrial development across the Indian stock Market. In the year 2000, this index was used for opening the derivatives market and later on the future and options chain as well. The BSE shifted to automation mode of trading in 1995 and surprisingly it only took 50 days for it to make such a transition. The current system can make 8 million orders per day. The system is known as BSE On-Line Trading or BOLT.
BSE is also listed on the stock exchange as a corporate company which can be traded. The same took place in 2017. It was demutualized and corporated around 2007.
NSE
National Stock Exchange is located in Mumbai and it is the world’s largest derivatives market. It was established in 1992 and it had the first electronic mode of trading with a dematerialized system. NSE’s index is Nifty50 and it is a composition of top 50 companies from various segments. It is the only index which can be traded between Sensex and Nifty50. NSE was ranked 4th based on the cash equities by number of trades by WFE. The major purpose for establishing NSE was to bring transparency in the market as the information of stock prices were only available to a few people before. However post the establishment of NSE the same was available to anyone through any remote location.
NSE has also recently launched NSE Emerge where startups can get listed without the requirement of an IPO. It was done to raise funds for the Startups and get in direct contact with the interested group of investors.