How has the Indian stock market evolved since independence?

Imagine standing in front of a Dalal, i.e. a stockbroker in 1982, wanting to buy five shares of TATA with a few paise in hand, waiting for the broker to hand you a form to fill while other brokers shout on the calls and on the floors. Now, teleport yourself back to the online brokerage app on your phone, where you can place the order for any number of shares within a few seconds.

He Indian Stock Market It is considered one of the best performing markets in the world. NSE Today it is the second fastest growing stock exchange in the world, as well as the third largest stock exchange in the world in terms of shares. BSE It is the eleventh largest stock exchange in the world and is also considered to be the best performing stock market in the world. The importance of the exchanges has elevated the position of the Indian stock market on the world map.

This is how the stock market is evolving. Because we are celebrating Independence Day This week, I thought I would take a walk through history to see how the investment space and stock markets have evolved over the years and it is amazing to see the transformation. Come and take a walk with me!

It should be noted that this success did not come to India overnight. It was a rather gradual and challenging process that dates back to the 18th century, when the East India Company began trading in loan securities.

PS: To celebrate India’s 77th year of independence, we at Green Portfolio are offering a 20% discount on all our one-year plans. Come celebrate with us!

It has been there since the 19th century.

In the 1830s, corporate stocks began to be traded in Mumbai. In particular, shares of banks and cotton presses were traded.

In 1874, when more brokers joined the trend in central Bombay, Dalal Street was born. Today, Dalal Street has become a metonym for the entire Indian financial sector, much like Wall Street in the United States.

The small group of brokers formed ‘The Native Share & Stockbrokers Association’ in 1875, which is today known as BSE (formerly Bombay Stock Exchange).

In the late 19th and early 20th centuries, stock exchanges emerged in Ahmedabad, Calcutta (now Kolkata) and Madras.

To create a structured, transparent and regulated environment for capital raising and investment, which is essential for economic growth and industrialization, India passed the Securities Contracts Regulation Act in 1956, which formalized trading in shares.

In 1977, Dhirubhai Ambani’s company, i.e. Reliance Industries went public. This IPO sparked huge interest among retail investors and gave rise to the “stock cult.”

In 1988, the country was characterised by a lack of transparency and unreliability in its clearing and settlement systems, which made it imperative to establish a financial market regulator. Therefore, on 12 April 1988, through a resolution of the Government of India, the Securities and Exchange Board of India (SEBI) was established as a non-statutory body. However, the organisation came into being in 1992.

In 1992, the National Stock Exchange was established to increase the efficiency of the Indian stock market. It was established by the Government of India following the recommendations of the Pherwani Committee.

1994: NSE became the first Indian stock exchange to offer a modern, fully automated screen-based electronic trading system.

In 1996, the NSE launched the Nifty 50 Index. The Nifty 50 is a benchmark index of the Indian stock market that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange.

Oh by the way, there were only about 2 million demat accounts in 2000 and look at the growth since then!

Source: Green Portfolio

We have moved from manually issued paper certificates to shares that are transferred directly to our demat accounts within seconds, that too electronically and with regulation.

It has been a long journey, but now India is among the top five stock markets in the world by market capitalisation. It has been one of the best performing markets in the world. Currently, there are seven recognised stock exchanges in India, including NSE and BSE. There are also over 100 million demat accounts.

Looking ahead, we only see more growth. Investing has evolved from being exclusive to HNIs to being deeply penetrated by individual investors and we only expect it to get bigger. With the excitement and enthusiasm we have been seeing from retail investors, we can only imagine what the future will look like. Investors are not afraid of corrections and volatility now and are moving forward as we have seen this year. We hope India and Indian investors never stop growing. Happy Independence Day!

(The author is Divam Sharma, Smallcase Manager, CEO and Co-Founder of Green Portfolio. Opinions are my own)