Indian
Stock Exchanges are one of the oldest in Asia. Its
history dates back to nearly 200 years ago. The earliest records of security
dealings in India are scanty and obscure. The East India Company was the dominant
institution in those days and business in its loan securities used to be
transacted towards the close of the eighteenth century.
By 1830's business on corporate
stocks and shares in Bank and Cotton presses took place in Bombay. Though the
trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.
The1850's witnessed a
rapid development of commercial enterprise and brokerage business attracted
many men into the field and by 1860 the number of brokers increased to 60. In
1860-61 the American Civil War broke out and cotton supply from United States
was stopped; thus, the 'Share Mania' in India begun.
The number of brokers
increased to about 200 to 250. However, at the end of the American Civil War,
in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched
Rs. 2850 could only be sold at Rs. 87).
At the end of the
American Civil War, the brokers who thrived out of Civil War in 1874 found a
place in a street (now appropriately called as Dalal Street) where they would conveniently
assemble and transact business.
In 1887, they formally established in Bombay,
the "Native Share and Stock Brokers' Association". In 1895, the Stock
Exchange acquired a premise in the same street and it was inaugurated in 1899.
Thus, the Stock Exchange at Bombay was consolidated.
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