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Indian Stock Markets 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 meager 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.
The 1850’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 into 60.In 1860-61 the American Civil War broke out and cotton supply from United States of Europe 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” (which is alternatively known as ” The Stock Exchange “). 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.




A stock market (also known as a stock exchange) is intricately interwoven in the fabric of a nation’s economic life. Without a stock exchange the savings of the community, the signs of the economic progress and productive efficiency would remain underutilized. The task of mobilization and allocation of savings could be attempted in the old days by a much less specialized institution than the stock exchange. But as businesses and industry expanded and the economy assumed more complex nature, the need for permanent finance arose. Entrepreneurs needed money for long term whereas investors demanded liquidity ie. the facility to convert their investments into cash at any given time. The answer was a ready market for investments and this was how the stock exchange came into existence.
The stock exchange means anybody of individuals, whether incorporated or not, constituted for purpose of regulating or controlling the business of buying, selling or dealing in securities. The securities include
a) Shares, scrips, stocks, bonds, debentures stock or other marketable securities of a like nature in or of any incorporated company or other body corporate.
b) Government securities.
c) Rights or interests in securities.
In your neighborhood, you probably have a supermarket that sells groceries. The reason you go the supermarket is because everything you need to run your home is available under one roof. It’s far more convenient than having to make 10 stops at different stores. The Stock Exchange is a supermarket for stocks. The stock exchange is like a big room where everyone who wants to buy and sell shares can go to conduct their transactions.
The Exchange makes buying and selling easy. You do not have to actually travel to the Stock Exchange; rather, you can call a stock broker who does business with the Exchange, and he or she will go there on your behalf to buy or sell your stock. With an Exchange in place, you can buy and sell shares instantly.
The Stock Exchange has an interesting side effect. Because all the buying and selling is concentrated in one place, it allows the price of a stock to be known every second of the day. Therefore, investors can watch as a stock’s price fluctuates based on news from the company, media reports, economic news and a range of other factors. Smart buyers and sellers take all of these factors into account before making decisions.
The stock exchange has two main functions.

o The first function is to provide companies with a way of issuing shares to people who want to invest in the company. This can be illustrated by an example: Suppose a company has a mining lease over an area with some rich ore deposits. It wants to exploit these deposits, but it doesn’t have any equipment. To buy the equipment it needs money. One way to raise money is through the stock market. The company issues a prospectus, which is a sort of advertisement informing people about the prospects of the company and inviting them to invest some money in it. When the company is ‘floated’ (established) on the stock market, interested investors can become part owners of the company by buying ‘shares’. If the company operates at a profit, shareholders benefit in two ways – through the issuing of dividends in the form of cash or more shares, and through growth in the value of the shares. On the other hand, if the company does not operate at a profit (e.g., if the price of the product dips), the shareholders will probably lose money.

stock exchanges across the INDIA

At present there are 23 stock exchanges across the country, which are as follows:

1. Ahmedabad Stock Exchange Association Ltd.
2. Bangalore Stock Exchange
3. Bhubaneshwar Stock Exchange Association
4. Calcutta Stock Exchange
5. Cochin Stock Exchnage Ltd.
6. Coimbatore Stock Exchange
7. Delhi Stock Exchange Association
8. Guwahati Stock Exchange Ltd.
9. Hyberabad Stock Exchange Ltd.
10. Jaipur Stock Exchange Ltd
11. Kanara Stock Exchange Ltd
12. Ludhiana Stock Exchange Association Ltd
13. Madras Stock Exchange
14. Madhya Pradesh Stock Exchange Ltd.
15. Mangalore Stock Exchange Limited
16. Meerut Stock Exchange Ltd.
17. Mumbai Stock Exchange
18. National Stock Exchange of India
19. OTC Exchange of India
20. Pune Stock Exchange Ltd.
21. Saurashtra Kutch Stock Exchange Ltd.
22. Uttar Pradesh Stock Exchange Association Ltd.
23. Vadodara Stock Exchange Ltd.

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