“HISTORY OF BSE & NSE : A complete Guide to INDIAN STOP EVALUATION.

 A Full 3000+ Words History of BSE & NSE.

Introduction

The stock markets in India form the basis of its financial system, which facilitates the formation of capital, wealth creation and economic growth. The two most powerful organisations that determine the financial landscape of India are Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The BSE is the oldest stock exchange in Asia, established in 1875 and has been through the transformation of India as a colony to an independent industrial country. In 1992, the NSE was established and transformed the trading through electronic platforms, introducing transparency, efficiency and increased investor involvement.

Stock exchanges enable businesses to raise funds and investors to buy and sell securities, which is a major contributor to economic growth. These exchanges have over the years drawn investment in India and enhanced the financial credibility of the country.

This blog is a detailed A-Z guide on BSE and NSE, which includes:

* Complete history, Founders, milestones and key events.  
* technical innovations and indices development.  
* Market comparisons  
* Impact on the economy  
* Future outlook  

1. History of Bombay Stock Exchange (BSE).  

1.1 Foundation and Early Days (1875–1950s)  

Founder: Premchand Roychand, one of the most prominent businessmen in Mumbai.  

First Trading: Under a banyan tree; this was later formalized as the Native Share and Stock Brokers Association.  

The first systematic stock exchange in India.  

Challenges in Early Trading:  

- Brokers are few and informal.  

- Paper settlements and regular conflicts.  

- Low literacy of investors.  

- absence of regulatory framework.  

Growth Indicators:  

Approximately 50 brokers were formally associated by 1900.  

Trading was increased by industrial growth in Mumbai, textiles, shipping, banking.  

Listed companies increased gradually.  

Early Companies Listed:  

- Tata Group  

- Godrej & Boyce  

- Bombay Dyeing  

1.2 Post-Independence Era (1950s–1980s)  

India was oriented towards industrialisation and the BSE was a place to raise capital.  

1956: Permanent recognition under the Securities Contracts (Regulation) Act.  
Tata, Reliance, Godrej.  

Open outcry continued to prevail, but formal clearing and settlement systems were established.  

Regulatory Developments:  

- Broker associations to regulate trade.  

- Compulsory company reporting.  

- 2 (or 3) settlement cycles (T+2 / T+3) were introduced.  

Market Growth Metrics:  

The number of listed companies grew to more than 1,000, as compared to a few hundred.  

The level of trading increased steadily, which indicated an increase in the economy.  

The introduction of SENSEX and the Key Milestones (1986-2000s) were introduced.  

1986: SENSEX was launched, which tracks 30 leading companies.  

Giving a standard of market performance.  

1990s: The idea of demutualisation was to decouple ownership and trading rights.  

1995: Online trading was introduced, which increased the number of investors.  

Capitalization and involvement in the market soared.  

Historical Highlights:  

- 1987: The BSE was hit by a global crash in the stock market.  

- 1991: Foreign investment was enhanced by economic liberalization.  

- 1995: The use of technology resulted in quicker settlements.  

The 1.4 Technological Advancements (2000s2010s)  

Complete floor trading to electronic trading.  

Introduction of derivatives- options and futures.  

2016: India INX, the first international exchange in India, is launched at GIFT City.  

Partners with NYSE and Nasdaq made it easier to transfer technology and list internationally.  

Impact on Investors:  

- More efficiency and transparency.  

- Less errors and settlement risks.  

- Allowed retail investor participation throughout the country.  

1.5 BSE Today  

Over 5,000 companies are listed.  

Trades equities, derivatives, debt, ETFs and mutual funds.  

Participates actively in investor education, risk management and financial literacy.  

International fame: 6th in the world in terms of market capitalization.  

2. History of National Stock Exchange (NSE).  

2.1 Foundation and Objectives (1992–1994)  

The NSE was formed to modernize the Indian stock trading.  

Goals Transparency, efficiency, national access.  

Founder/Key Initiators: one of the SEBI initiatives is Dr. R.H. Patil.  

Significance: First completely electronic stock exchange in India.  

Empowered national involvement of both retail and institutional investors.  

2.2 First Operations and Development (1994-2000)  

1994: Trading session was first held.  

Nifty 50 was introduced as the index.  

Derivatives market was launched to hedge and manage risks.  

Mechanized clearing minimized the risk of default.  

Key Achievements:  

- More efficiency and liquidity.  

- Lowered transaction costs  

- Expanded investor involvement on a national level.  

2.3 Technological Innovations (2000s-2010)  

Launch of SME platform, corporate bonds platform and currency derivatives.  

Operations were also enhanced by the use of advanced clearing and settlement systems.  

NSE was a prototype to other emerging markets across the world.  

2.4 NSE Today  

Biggest trading volume in India.  

Offers equities, derivatives, currency, bonds and commodities.  

All electronic and very transparent.  

Known to be technologically efficient.  

3. BSE vs NSE: Comparison in Detail.  

Feature |                    BSE |                          NSE  

Founded |                 1875 |                        1992  

Trading System |     Floor |              Electronic Fully electronic.  

Major Index |          SENSEX |                Nifty 50  

Listed Companies |  5,000+ |                     1,600+  

Market Cap Rank-   6th in the world     2nd in the world  

Technology |     Progressive digitization | All electronic since its beginning.  

International Trading | INX international trading, NSE IX international exchange.  

4. Major Milestones & Timeline  

- 1875: BSE was established in a banyan tree.  
- 1956: BSE is given permanent status.  
- 1986: SENSEX launched  
- 1992: NSE established  
- 1994: NSE trading begins  
- 1995: BSE online trading was launched.  
- 2000: NSE derivatives launched  
- 2016: India INX launched  
- 2017: BSE IPO listing  

5. Impact on Indian Economy  

Easy capital raising of companies.  

Gave millions of investors wealth.  

Enhanced levels of disclosures.  

Drew foreign investments and enhanced the global presence of India.  

Investor Examples:  

- IPO and mutual fund retail investors.  

- Companies issuing billions of dollars of equity and debt.  

6. Technological Transformations  

Movement of manual trading on the floor to electronic trading.  

Live stock prices, web trading and mobile applications.  

Automated clearing and settlement.  

Further blockchain and AI integration.  

7. Future Outlook  

Digital asset and blockchain expansion.  

Growth in ETFs, derivatives and overseas listing.  

Increased retail involvement and increased financial literacy.  

India is a country that seeks to be a financial hub in the world.  

8. Conclusion  

The BSE is the heritage and the past; the NSE is the electronic trading and efficiency of the present. They all create a strong, open, and dynamic financial ecosystem that contributes to the growth of the economy, builds investor trust, and gains international acknowledgment.