10 Interesting Facts about the Indian Share Market

India has been the hub for trading from the early 17th century.

From the first batch of European traders who arrived in Southern India by sea to the last group of Englishmen who ran the East India Company remained bedazzled by all that this mysterious land had to offer in the name of trade.

From trading spices and raw materials to trading stocks, the Indian idea of “market” has undergone immense changes over the past two centuries.

The organization which brought in the concept of trading in stocks and shares within India is the East India Company.

The new age stock market can be divided into three exchanges in India –

  • Bombay Stock Exchange
  • Calcutta Stock Exchange
  • National Stock Exchange

The Bombay Stock Exchange is considered to be the oldest stock exchange in Asia.

Established in the year 1875, the origin of the Bombay Stock Exchange can be traced back to the year 1855, when four Gujaratis and one Parsi stockbroker would gather under the banyan trees in front of Mumbai’s Town Hall.

The location of these meetings changed many times as the number of brokers constantly increased.

The group eventually moved to Dalal Street in the year 1874 and in 1875, they became an official organization known as “The Native Share & Association”.

In due course of time, this organization grew in size and popularity, eventually establishing itself as the Bombay Stock Exchange in the year 1875.

Right after this, the Calcutta Stock Exchange was founded in the year 1908.

What began as a meeting held under a neem tree in the light of bourse activities in Calcutta circa 1830 became the foundation of one of the oldest stock exchanges in Asia.  The earliest record of dealings in securities in India is the British East India Company’s loan securities.

In 1908, the Calcutta Stock Exchange was incorporated and it consisted of 150 members.

The Calcutta Stock Exchange Ltd was granted permanent recognition by the Government of India in April 14, 1980.

The present building of the Calcutta Stock Exchange at the Lyons Range (Calcutta) was constructed in the year 1928.

Reference Source: https://en.wikipedia.org/wiki/Calcutta_Stock_Exchange

The National Stock Exchange is the leading stock exchange in India today.

Situated in the city of Mumbai (erstwhile Bombay) the National Stock Exchange (NSE) was established in the year 1992 and is also the first demutualized electronic exchange in India.

The main reason behind the establishment of NSE was to bring in transparency within the.

Instead of trading membership being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced and met minimum financial requirements was given the opportunity to trade.

NSE ensured that anyone who was qualified was given the opportunity to trade

In this regard, NSE proved to be miles ahead of its times when it separated ownership and management within the stock exchange.

Through the course of the post, we will look at the few interesting facts that make the Indian Stock Market unique and different from other stock markets around the world.

Comparatively speaking, the Indian Stock Market has gained popularity over the recent years and many foreign nationals have also set their eyes on the growth of the Indian stock market.

Some of the interesting facts about the Indian Stock Market are:-

  • There are 17 stock exchanges throughout India! Apart from the three major stock exchanges in the country, there are stock exchanges in Hyderabad, Chennai, Nagpur, Delhi, Uttar Pradesh Indore, etc.
  • The SENSEX reached an all-time high of 29681.77 Index points in January of 2015 and a recorded an all-time low of 113.28 Index points in December of 1979.
  • Nifty witnessed the record market capitalization of 98, 45,639 crores in January, 2015.
  • India became one of top 10 markets in the world by market capitalization in the year 2014. India’s market capitalization is approximately $1.6 trillion and this puts the country ahead of Switzerland & Australia markets, if based on market capitalization.
  • It was only in the year 1947 (Post Independence) that the stock exchange in Delhi was established.
  • There was shutdown of various stock exchanges in India due to the socio-political unrest which took place after the war of Independence in 1947. It was only in the year 1956 that most of the stock exchanges in India got recognized under the Securities Contracts Regulations Act.
  • Foreign Institutional Investors (FIIs) are the strongest driving forces in Indian stock markets. Among Domestic Institutional Investors (DIIs) and LIC hold a very important position in the market.
  • The Bombay Stock Exchange (BSE) is one of the world’s top exchanges in terms of its enlisted members. There are more than 5,000 companies enlisted under the Bombay Stock Exchange.
BSE is one of the world’s top stock exchange with more than 5000 companies enlisted
  • Stock markets (S&P500 & Dow Jones Industrial Average) contracts can be traded in the National Stock Exchange (NSE) in India. The derivatives contracts were introduced in the year 2011 and it was for the first time thatthese companies were enlisted on any exchange outside U.S.A.

Reference source – http://traderschowk.com/2015/01/16/10-interesting-facts-about-indian-stock-market/

In spite of India being counted as one of the still developing countries, it has one of the leading stock exchanges in the world.

National Stock Exchange India ranks 8thin terms of the largest Market Capitalization. It has a market capital of INR 101,002,177.2.

NSE was the largest exchange by number of trades in equity shares in the years 2012 and 2011 as well.

Nevertheless, in spite of India having a population of 1.2 billion citizens, only 20 million are demat account holders, out of which even fewer a number indulge in active trading.

Due to the scarce number of Indians being involved in active trading, Indian stock market has not been able to reach the same level of popularity and acceptance such as the NYSE (New York Stock Exchange).

There are several interesting facts which govern the origin and evolution of the Indian Stock Market.

Though the post enlists 10 of the most unique ones, there are several other interesting facts as well.

If you wish to share with any more unique facts about the Indian stock market or stock markets from other countries, please feel free to share the information with us!