BSE began under a banyan tree with five traders. Now it runs Dalal Street

India Today

2 days ago

The Bombay Stock Exchange (BSE), one of the world's oldest and Asia's first stock exchanges, quietly turned 150 this year. A towering presence on Dalal Street today, BSE began not in marble halls or digital terminals, but under the thick shade of a banyan tree.This tree in the 1850s became the meeting place for four Gujaratis and one Parsi broker who would meet daily under it near Bombay's Town Hall.advertisementThere were no buildings, terminals, or indices at that time, just men trading shares with chalk and their voices.
Over time, more joined, and by 1875, this informal circle of brokers gave itself a name: The Native Share & Stock Brokers' Association. It was the foundation of what the world would come to know as BSE.Financial historian Sucheta Dalal once wrote, 'India's earliest brokers weren't just stock traders, they were storytellers of risk.'That storytelling spirit -- of taking calculated risks and building from nothing, has defined the BSE's rise from colonial Bombay to modern Mumbai.HOW DALAL STREET GAINED THE TRUSTDecades before the Dow Jones Index in America was born, Bombay had a buzzing trade in cotton, jute, and railways, fuelled by imperial commerce and speculation. Business people used to come to Bombay for trade from across the country.When the British industrial capital flowed through Indian ports, native brokers found their own pace.The early 1900s saw BSE move to its iconic home on Dalal Street, and by the time the world faced the Great Depression of 1929, the markets were already deeply linked to global events.The crash sent textile, shipping, and plantation stocks spiralling. The colonial state, as historian Dwijendra Tripathi notes, "remained distant, letting the native market fend for itself."
Premchand Roychand, often regarded as India's original share king, was also famously known as the
World War II brought fresh shocks, blackouts, rationing, and Japanese threat over Bombay disrupted trade, but also sparked speculation in steel and textiles supporting the war effort.In 1942, the Quit India Movement shut down the exchange temporarily, as nationalist protests spilled into the city's financial lanes.THE NEW STARTAfter 1947, India's newly adopted economic model leaned heavily on various sectors for growth. At that time, BSE became the main channel to raise capital.In 1957, it was formally recognised under the Securities Contracts (Regulation) Act, but the culture remained insular -- dominated by old broker families and manual operations.advertisementThat would change with the economic reforms of 1991. The arrival of liberalisation opened the gates for foreign investment, and exposed flaws in the system.In 1992, Harshad Mehta's securities scam shook the country.A single broker manipulating the banking system had sent stock prices soaring. When the fraud unravelled, so did investor trust.Veteran market observer Gita Piramal notes in her book Business Maharajas, 'The Harshad Mehta scandal was not just a scam, it was a mirror. It showed how unprepared the system was for modern finance.'Post-2000, BSE began reinventing itself. It demutualised in 2007, separating ownership from operations.International players like Deutsche Brse and Singapore Exchange took stakes. BSE diversified into derivatives, mutual funds, debt markets, and even platforms for startups and SMEs.In 2017, the BSE made history by listing itself on its own exchange. The IPO was oversubscribed 51 times.Today, BSE operates from the 29-storey Phiroze Jeejeebhoy Towers, but its reach extends far beyond Mumbai.With platforms like BSE StAR MF and India INX in GIFT City, the exchange now connects investors across India and abroad.advertisementIn the words of Charles Dow, founder of the Dow Jones Index, 'The market is never wrong, only opinions are.'If the Indian market has a voice, BSE has been its longest echo. From banyan roots to blockchain rails, BSE's 150-year journey isn't just financial history, it's a reflection of how India thinks, invests, and evolves.- Ends