All about the Indian Stock Market and It’s Journey

The stock markets in India began way back in 1875. The BSE (Bombay Stock Exchange) is the most established stock exchange in India.

The history of Indian stock trading begins with 318 persons taking membership in “Native Share and Stock Brokers Association” which we now know as the BSE. In the year 1965, BSE got eternal recognition from the Government of India.

The NSE (National Stock Exchange) comes next to BSE in terms of recognition. BSE and NSE symbolize themselves as synonyms of Indian stock market.

The 30 stock sensitive index (popularly known as Sensex) was first piled up in 1986. The Sensex is compiled based on the performance of the stocks of 30 financially sound companies.

In the year 1990, the BSE crossed the 1000 mark for the 1st time. It crossed 2000, 3000 and 4000 marks in 1992. The sole reason for such tremendous surge in the Indian stock market was the liberal financial policies announced by Dr. Man Mohan Singh (finance minister of India at that time)

Scam in the Indian Stock Market

The uptrend of the market was all of a sudden lost momentum with Harshad Mehta fraud. It came to public knowledge that Mr. Harshad Mehta, also known as the big bull of Indian stock market redirected immense funds from banks through deceitful means.

He played his part with 270 million shares of around 90 odd companies. A large number of small-size investors became victims of the scam and the Sensex fell more than 570 points.

To avoid such scams in future, the Government of India formed SEBI (The Securities and Exchange Board of India) in 1992. SEBI is the constitutional body that regulates and controls the functioning of stock exchanges, investment advisors, portfolio managers’ brokers, sub-brokers etc.

SEBI oblige several rigid measures to protect the interest of investors. Now with the commencement of online trading and day by day settlements the chances for a fraud is almost nil, says top authorities of SEBI.

Sensex started its journey again after as many as eight years and crossed the 5000 mark for the 1st time in the year 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005 itself.

Many FII (Foreign Institutional Investors) are investing in Indian stock markets on a very large scale. The liberal economic policies pursued by successive Governments attracted FIIs to a large scale. Sensex touched 9000 on 28 November 2005 and reached the magical figure of 10000 two and half years later on 6 February 2006.

The graph listed below will show you Sensex’s entire journey starting from level 1000 to 30000.

Factors That Affect the Stock Market

The impulsive actions of the market gave it a tag – a volatile market. The factors that influenced the market in the past were a good monsoon, election results, international events (BREXIT was the latest issue) etc. Good monsoons all the time raise the market sentiments. A good monsoon typically means improved agricultural produce and more spending capacity among rural folk. The result of a cricket match between India and Pakistan (also with the other nation) also affected the movements in Indian stock market.

Listed Companies on the Stock Exchange

India, after the United States, hosts the largest number of listed companies on the stock exchange. There are as many as 7200 companies listed in India (5,500+ companies listed in BSE and 1,696 companies listed on NSE; Just keep in mind that these numbers are flexible and can change overnight).

Once upon a time viewed with cynicism, stock market now appeals to middle-class and lower middle-class Indians also. Many Indians settled across the globe now divert their savings to stocks. This recent phenomenon is the result of opening up of online trading in India and diminished interest rates from banks. The stockbrokers based in India are opening offices in different countries mainly to cater the needs of NRIs (Non-Resident Indians).

Bombay Stock Exchange Listing

January 23, 2017, was the day when BSE (Bombay Stock Exchange) come up with IPO (15,427,197 Equity Shares of Rs 2 aggregating up to Rs 1,243.43 Cr) with an issue price of Rs. 805 – Rs. 806 per Equity Share.

And it was February 3, 2017, the day when Asia’s oldest bourse BSE listed at a robust premium to the offer price. Against the offer price of Rs 806, the BSE stock was listed at Rs 1,085 a 35% premium.

With this NSE IPO can now be expected to come soon.


Disclaimer: The contents and data presented here are just for your information & personal use only. While much effort is made to provide the information, I ( Vishal Dalwadi ) or “Fin Blab” do not guarantee the accuracy, correctness, completeness or reliability of any information or data displayed herein and shall not be held responsible.


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About me

Vishal Dalwadi

Vishal Dalwadi

Vishal is an MBA (Finance) post-graduate. He is the founder and owner of "FinBlab". His blog aims at providing information and research on Stock market and sectors including Mutual funds, IPOs, Insurance and more.

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