150 years of BSE: From banyan tree to Dalal Street, how stock exchange grew by leaps and bounds

The Bombay Stock Exchange (BSE) has been around for 150 years.

The BSE, the fourth largest stock exchange in the world, was founded on July 9, 1875, near Town Hall in South Bombay.

It is the first stock market to be set up in Asia.

But this came two decades after traders had already been gathering under a banyan tree near Town Hall.

But what do we know about the history of the BSE?

Let’s take a look:

According to News18, stock brokers in 1855 began meeting under the banyan tree to buy and sell cotton.

As per CNBC, nearly two dozen traders would meet under the tree.

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They then shifted to Meadows Street – known as called Esplanade Road at the time – as well as to other locations due to their growing numbers.

Then, on July 9, 1875, the Native Share & Stock Broker’s Association was formed – three years before Japan would establish its own Tokyo Stock Exchange.

Among the founders was Premchand Roychand – known as the ‘Cotton King’ of Bombay.

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Roychand, who also founded the Bank of Bombay, was among the few cotton traders that actually spoke English in Bombay.

Roychand, who came from a family of diamond merchants in Surat, played a massive role in the stock market’s rules and regulations.

He gained fame during the US civil war when there was huge demand for Indian cotton.

By 1865, the unorganised stock market was witnessing a massive boom.

Bombay back then had 31 banks, 62 joint stock companies, 20 insurance companies and 16 cotton pressing companies.

Though the stock prices went through the roof, the good times wouldn’t last.

When the war ended in 1865, stock prices cratered.

Ten years later, what we today recognise as the BSE was formed.

According to Mumbai Mirror, the association originally had 318 members.

The entry fee was the sum of Re 1.

The location for the exchange was purchased in 1895, while the Native Brokers Hall was inaugurated by James Mclean in 1899.

Landmarks aplenty

In 1921, Bank of India began Clearing House.

Land for the BSE at its current location of Dalal Street was bought in 1928, while the building was constructed in 1930, as per Mumbai Mirror.

In 1957, the BSE granted permanent recognition under Securities Contracts (Regulation) Act (SCRA).

The PJ Towers, named after BSE chairman Phiroze Jamshedji Jeejeebhoy, was built in the 1970s.

Jeejeebhoy ran the BSE from 1966 to 1980.

In 1986, the S&P BSE SENSEX, India’s  first equity index was officially launched at a base of 1,000.

In 1987, the Investor’s Protection Fund (IPF) was introduced.

In 1990, the S&P BSE SENSEX closed above 1,000.

By January 1992, S&P BSE SENSEX closed above the 2,000 mark for the first time.

Just a few months later in March 1992, it crossed 4,000 for the first time.

In 2017, the BSE became the first listed stock exchange in India.

Today, three decades on, the BSE Sensex is at a record high 80,355.

As per Moneycontrol, the market went from 70,000 to 80,000 in a mere 138 trading sessions.

That’s its fastest ever 10,000-point rise.

The market capitalisation of benchmark Sensex increased from Rs 136.89 lakh crore on December 11, 2023 when it hit the 70,000-mark to Rs 158 lakh crore on July 3 – a gain of Rs 21.2 lakh crore.

Last week, the total market capitalisation of BSE-listed companies was at a record high of Rs 450 lakh crore.

On Thursday, when Sensex hit its intraday lifetime peak of 80,392.64 in early trade, BSE-listed firms achieved a market capitalisation of Rs 4,47,30,452.99 crore ($5.36 trillion).

The same day also saw the benchmark at 80,049.67.

With inputs from agencies