History Stock Market in India

History Stock Market in India

Introduction
Stock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand and supply for a particular stock)

In earlier times, buyers and sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, most of the operations are done electronically and the stock markets have become almost paperless. Now investors dont have to gather at the Exchanges, and can trade freely from their home or office over the phone or through Internet.

History of the Indian Stock Market - The Origin

One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old history.

18th Century	East India Company was the dominant institution and by end of the century, business in its loan securities gained full momentum
1830's	Business on corporate stocks and shares in Bank and Cotton presses started in Bombay. Trading list by the end of 1839 got broader
1840's	Recognition from banks and merchants to about half a dozen brokers
1850's	Rapid development of commercial enterprise saw brokerage business attracting more people into the business
1860's	The number of brokers increased to 60
1860-61	The American Civil War broke out which caused a stoppage of cotton supply from United States of America; marking the beginning of the "Share Mania" in India
1862-63	The number of brokers increased to about 200 to 250
1865	A disastrous slump began at the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87)

Pre-Independance Scenario - Establishment of Different Stock Exchanges

1874	With the rapidly developing share trading business, brokers used to gather at a street (now well known as " Dalal Street ") for the purpose of transacting business.
1875	"The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay
1880's	Development of cotton mills industry and set up of many others
1894	Establishment of "The Ahmedabad Share and Stock Brokers' Association"
1880 - 90's	Sharp increase in share prices of jute industries in 1870's was followed by a boom in tea stocks and coal
1908	"The Calcutta Stock Exchange Association" was formed
1920	Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers.
1923	When recession followed, number of brokers came down to 3 and the Exchange was closed down
1934	Establishment of the Lahore Stock Exchange
1936	Merger of the Lahoe Stock Exchange with the Punjab Stock Exchange
1937	Re-organisation and set up of the Madras Stock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India with establishment of new textile mills and plantation companies
1940	Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established
1944	Establishment of "The Hyderabad Stock Exchange Limited"
1947	"Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited"

Post Independance Scenario

The depression witnessed after the Independance led to closure of a lot of exchanges in the country. Lahore Estock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bnagalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were:

1.      Bombay 2.      Calcutta 3.      Madras 4.      Ahmedabad 5.      Delhi 6.      Hyderabad 7.      Bangalore 8.      Indore

Many more stock exchanges were established during 1980's, namely:

Cochin Stock Exchange (1980) Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982) Pune Stock Exchange Limited (1982) Ludhiana Stock Exchange Association Limited (1983) Gauhati Stock Exchange Limited (1984) Kanara Stock Exchange Limited (at Mangalore, 1985) Magadh Stock Exchange Association (at Patna, 1986) Jaipur Stock Exchange Limited (1989) Bhubaneswar Stock Exchange Association Limited (1989) Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990) Coimbatore Stock Exchange Meerut Stock Exchange

              At present, there are twenty one recognized stock exchanges in India which does not include the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).