Chapter II

History & Evolution of Stock Exchanges in India

2.1 Introduction: Before we study the historic volatile days of the ten years, let us first know what are :

a) Stock Markets,
b) Stock exchanges.

a) Stock Markets: Stock Market is a market where the trading of company stock, both listed securities and unlisted takes place. It is different from stock exchange because it includes all the national stock exchanges of the country.
For example, we use the term, "the stock market was up today" or "the stock market bubble."
b) Stock Exchanges: Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts.
Stock exchanges also facilitates for the issue and redemption of securities and other financial instruments including the payment of income and dividends.
The record keeping is central but trade is linked to such physical place because modern markets are computerized. The trade on an exchange is only by members and stock broker do have a seat on the exchange.
2.2 History of Indian Stock Market: Indian stock market marks to be one of the oldest stock market in Asia. It dates back to the close of 18th century when the
East India Company used to transact loan securities. In the 1830s, trading on corporate stocks and shares in Bank and Cotton presses took place in Bombay.

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Though the trading was broad but the brokers were hardly half dozen during 1840 and 1850.

An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan tree still stands in the Horniman Circle Park,
Mumbai. In 1860, the