The Bombay Stock Exchange (BSE) is the oldest stock exchange in India, with a history dating back to 1875. Located in Mumbai, it has played a crucial role in the development of India’s financial market. Over the years, BSE has witnessed many significant milestones and developments that have shaped the Indian stock market.
In 1956, the Indian government passed the Securities Contract Regulation Act, which aimed to regulate and control the stock market. This marked a turning point in the history of the Indian stock market and laid the foundation for its modern regulatory framework.
In 1964, the Unit Trust of India (UTI) launched the first mutual fund in India, signaling the beginning of a new era in the country’s financial landscape. The success of the UTI mutual fund paved the way for the rapid growth of the mutual fund industry in India.
In 1977, Reliance Industries, one of India’s largest conglomerates, made history by launching its initial public offering (IPO). This event was a milestone in the Indian capital market and highlighted the growing importance of the stock market as a source of funding for businesses.
In 1986, BSE launched the BSE Sensitive Index (Sensex), the first index in India that captured the performance of the top 30 stocks listed on the exchange. This move brought greater transparency and market benchmarking to the Indian stock market, further solidifying BSE’s position as a leading stock exchange in the country.
It was in 1992 that the Securities and Exchange Board of India (SEBI) was established, marking a significant step towards regulation and oversight of the Indian securities market. SEBI’s role in promoting investor protection and market integrity has been instrumental in shaping the Indian stock market as we know it today.
In 1994, the National Stock Exchange (NSE) was established as a competitor to BSE, introducing new technologies and trading mechanisms. This competition has been beneficial for the Indian stock market, leading to innovation and greater efficiency in trading and settlement processes.
Today, the Indian stock market is among the top five in terms of market capitalization globally. The market has evolved significantly since its inception, with the Sensex delivering an impressive 16% compounded annual growth rate (CAGR) return over the years.
The establishment of the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL) as custodians of shares for safekeeping has further strengthened the infrastructure of the Indian securities market.
With mutual fund assets under management (AUM) reaching 50 lakh crore, the Indian stock market has come a long way and continues to attract domestic and international investors.
In conclusion, the history of the Indian stock market is a story of evolution and growth. From its early beginnings in the late 19th century to its current status as a major player in the global financial market, the Indian stock market has witnessed several significant milestones and developments.
As India’s economy continues to expand, the stock market is expected to play an increasingly important role in channeling investment and driving economic growth.
Author can be reached at Irshad@bp.sharekhan.com
