The Indian share market has a rich and interesting history that demonstrates the country’s economic growth and development. For those looking to invest in shares, it is crucial to understand how India’s stock market has evolved and gained significance among the investors. From a very small beginning to becoming one of the largest stock markets in the world, India’s stock market has come a long way. Let us understand the history of the stock exchange in India, its key milestones, and how it became popular for online share trading and investments.
What is the Share Market?
Before we get into the history, it’s important to understand the basics of the Stock Market. The share market, also known as the stock market, is like a marketplace where shares of publicly listed companies are bought and sold. When someone invests in shares, he buys a small ownership stake in a company. The share market allows companies to raise capital for growth which gives investors the opportunity to invest their funds and earn returns on them. Shares experience a change of hands from the sellers to the buyers.
When was the Stock Market started in India?
India’s share market journey has a rich history of more than a century. The introduction of the stock market in India was done in the 19th century when informal stock trading first began in Mumbai, which used to be previously called Bombay.
Bombay Stock Exchange (BSE) was established in 1875. It is the oldest and 1st stock exchange in India. It started with just a handful of stockbrokers trading on the streets of Mumbai. However, as the trading activity grew, the need for a more organised market emerged, leading to the formal establishment of the BSE.
The formation of the oldest Stock Exchange in India
As India’s economy grew during the British era, the need for a structured and organised marketplace became increasingly clear. In 1875, Premchand Roychand, a prominent businessman, led the establishment of the Bombay Stock Exchange (BSE). This marked a pivotal moment in India’s financial history, laying the groundwork for the country’s formal stock trading systems.
Initially, the BSE had fewer than 350 members. However, as the potential for investment opportunities surged, the exchange expanded in both size and the way it operated.
The Evolution of the Market
Following the establishment of the BSE, India witnessed the rise of other stock exchanges. The next significant milestone was the launch of the National Stock Exchange (NSE) in 1992. The NSE revolutionised India’s trading landscape by introducing modern practices like online share trading and more streamlined clearing and settlement systems.
Today, both the BSE and NSE dominate the Indian stock market, facilitating daily trading activities for millions of investors. Together, they have significantly contributed to shaping India’s financial markets, offering a strong foundation for smooth trading operations.
Stock Market Growth and Liberalisation in the 1990s
The 1990s proved to be a decade of transformation for India. It was when we witnessed rapid globalisation, technological advancement, and significant financial reforms. The Indian government liberalised the economy in 1991. This shift welcomed foreign investment in the share market, modernised industries, and led to massive growth in sectors like IT and telecommunications.
As India became a hub for IT services, tech stocks soared. The sector’s growth, particularly through companies like Infosys and Wipro, gained attention globally, giving India a solid presence in international markets. Additionally, the establishment of the Securities and Exchange Board of India (SEBI) in 1992 played a pivotal role in regulating the market. SEBI’s efforts to protect investors from fraud and manipulation strengthened the credibility of India’s stock exchanges, fostering greater trust among investors.
In 2008, although the global financial crisis hit Indian markets, reforms post-crisis, like relaxed FDI norms, aimed to stabilise and revitalise them. The resilience shown during this time built more confidence in Indian markets as emerging powerhouses.
Online Share Trading in India
The late 1990s and early 2000s saw technology taking over and changing how share market investment was being done. Online platforms and trading softwares became available, allowing individuals to invest from the comfort of their homes.
This rise in online trading democratised the market, making it more accessible to a broader audience. Today, many investors use share trading app to buy and sell shares, track market trends, and manage their investments. With just a smartphone and internet connection, anyone can download a trading app and start investing on the BSE or NSE.
Is the Stock Exchange an organised market in India?
A common question people ask is whether India’s stock exchange is an organised market. The answer is yes. Stock exchanges like the BSE and NSE are highly organised and regulated entities. SEBI, India’s market regulator, ensures that these exchanges operate transparently, fairly, and efficiently.
The strict regulations protect investors, maintain market integrity, and curb practices like insider trading. This structured approach has helped India’s stock market evolve into one of the most dynamic and well-regulated markets in the world.
Some basic tips for investing in the Indian stock market
Detailed Research
It’s important to research the companies you plan to invest in. Look at their financial health, management team, and growth prospects. You can refer to documents like their Annual Reports, Investor presentations and other publications for an authentic source of information.
Portfolio Diversification
One must avoid putting all your money in one stock. Just like it’s risky to keep all your eggs in 1 basket, investments must be segregated too. Diversifying across sectors and industries can reduce risk.
Determine your Goals
The stock market can be volatile in the short term, but history shows that long-term investments tend to yield positive returns. However, it’s important to understand your long term and short term goals to determine the period for which you wish to invest.
Monitor the Market
There are a lot of factors which can affect stock prices. It is vital to stay updated about the market trends and news that may affect the prices. Nowadays, Share market apps make it easier to track these developments in real-time.
The role of Share Market Apps
These days a Share market app has transformed investing by providing easy, real-time access to stock markets. They offer users various tools, insights, and updates, enabling both beginners and experienced investors to make informed decisions and manage their investments effortlessly. This convenience has significantly increased the penetration of the stock market in India.
Conclusion
India’s share markets have come a long way. Which was once a very simple affair, has now turned into a highly organised financial system governed by rules and regulations. The Bombay Stock Exchange (BSE) was the first stock exchange in India. Today, the stock market plays a crucial role in India’s economy.
The evolution of online trading platforms and share market apps has made investing in shares easier than ever. By staying informed, using resources effectively, and tracking NSE Holidays 2025, you can navigate the exciting world of share market trading and potentially grow your wealth over time.Income from stock markets can prove to be a strong source of passive income. Open Demat Account today to begin your journey of investing in stock markets