Little would a stranger looking at the subtle Phiroze Jeejeebhoy tower in the old part of Bombay know that the building houses about US$2.87 trillion in public wealth! The Bombay Stock exchange is one of the most reputed and renowned stock exchanges in the world and the oldest stock exchange in Asia. It has delivered sizeable returns to the investors in its products and has directly, or indirectly, employed hundreds of thousands of people over the years.
The Story:
In the 1850s British India, five stockbrokers decided to conduct daily sale meetings under a banyan tree in front of the Bombay town hall. Over the years many people were attracted by the profitability of the business and started joining the stockbrokers' group. Due to its increasing size, the group had to constantly keep shifting venues.
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| Stockbrokers in downtown Bombay, c.a. 1865 |
Finally, in 1874, the group relocated to the place presently known as Dalal (Hindi for broker) street in South Bombay. A year later, the group formed an official organization called 'the Native Share and Stockbrokers association', thus laying the foundation stone for the Bombay Stock Exchange. The association included prominent business figures such as Premchand Roychand, a Jain cotton tycoon who was also the director of the Bank of Bombay.
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| Premchand Roychand (1831-1906) |
The group acquired a building on the street to conduct its operations, although the present site which houses the exchange was bought much later in 1928. For the next half a century, the exchange grew quite slowly but steadily owing to the lack of access and increasing poverty levels under the British administration. A decade after India's independence, on August 31st, 1957 the BSE was recognized by the Government under the Securities Contracts Regulation Act, which regulates the exchange of securities in India and prevents any wrong-doing. In 1986, the BSE formally developed the BSE Sensex, an overall performance index. If one had invested Rs. 1,00,000 in the Sensex in 1986, today he/she would have about Rs. 90,00,000!
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| BSE Today |
Very good update. May add more details of certain trades / key highlights of exchange in that era. The old and new photographs are quite nice to visualise the change over period of time.
ReplyDeleteHey , Thank you so much! Although this blog is focused mainly on the formation, I'll surely do a follow up sometime about other developments.
DeleteVery good update. May add more details of certain trades / key highlights of exchange in that era. The old and new photographs are quite nice to visualise the change over period of time.
ReplyDeleteAn Enticing Blog ! Wanted to know more
ReplyDelete