140 years of BSE: Banyan Tree to BOLT

BSE was established in 1875 and completes its 140 years in 2105.

Sachin Mampatta of BS has a piece and some trivia on the anniversary:

The share brokers who first started conducting their business under a banyan tree in the 1840s were now looking for a roof under which to conduct their business. Twenty five brokers formed an association in 1875, each contributing Re 1, and called it The Native Share and Stock Brokers’ Association.

They settled on a trading hall in Dalal Street. However, they lacked the funds to pay the monthly rental, a princely sum of Rs 100. The man who came to their rescue was Dinshaw Maneckji Petit, also founder of the first textile mill in India. He bequeathed 25 shares in his Victoria Manufacturing Co Ltd, partly in exchange for the payment of brokerages he owed to some share brokers.

“Subsequently, those shares were sold at Rs 690 apiece. Of the Rs 17,250 thus raised, the Association repaid Maneckji Petit the Rs 2,393 he had advanced to it. The balance amount, Rs 14,857, provided the initial capital with which The Native Share and Stock Brokers’ Association started work,” notes Sameer Kochar in his book, BSE: Journey of an aspiring nation.

They later moved to their own building in January 1899, named after Petit. The exchange moved through many ups and downs through the years — the start of rival exchanges elsewhere, shutdowns due to boom-and-bust cycles and struggles with regulation to limit speculation.

BSE enjoyed a status as the pre-eminent force in the share market right up to the 1990s. Many familiar things associated with the BSE were introduced during this time, including the iconic Phiroze Jeejeebhoy Towers in which the exchange is now housed, and the 30-stock Sensex, barometer of the Indian stock market.

Hmm.. Nice history bit. Who could have imagined that it will be equity markets which will hold much of India’s story.  Take equity markets out of the game and I don’t think India will be as hyped and as hopeful a place.

Anniversaries like these should be about scholars introspecting on the role of equity markets in Indian financial markets. How they evolved historically and the role BSE played in the journey. With lack of detailed historical account from different perspectives, we just treat them as as a general event. Why doesn’t India have adequate number of financial historians? These are such important stories to learn and relearn key lessons from past..