A Peek Into History: 

Evolution of Indian Stock Markets

I came across some interesting articles on the evolution of the Indian stock markets. I complied the various interesting statistics and events. The compilation is mostly from old newspaper articles (sources provided as far as possible).

What is interesting to note is that in the recent years, the government seems to believe that the Indian stock markets are "safe" (As a disclaimer, we personally hold the view that speculation can never be safe). This seems to be the thinking after the introduction of dematerialisation of shares and "compulsory rolling settlement". The predominant concern during the period 1060-2002 seems to have been to bring about better compliance and make the system "safe".

On July 6, 1981, the Government of India announced that they they were introducing new norms for the stock exchanges.  These guidelines were aimed at checking irregularities in the functioning of the stock exchanges. They included:

• Tightening the present system of check on benami share transfers
• Computerise the operation of the stock exchanges
• Authorities should move quickly to impound the increase in share prices to curb speculation. 
• Fix a minimum scale of brokerage in order to further curb speculation.
• Prohibit the directors and senior officials of a company from handling the share books of a company once these books are closed. 
• The company management should pass on the information of issue of bonus shares immediately to the stock exchanges. 

The Government thought that they could broad base the equity markets by reducing the face value of shares from the existing Rs.100 per share to Rs.10 per share by 1983. Most of the companies were stated to be opposed to that measure and they were reported to be pressurising the government on that count.

It is pertinent to note that nowhere is there any mention to undertake measures to improve price discovery as well as to increase settle investor grievances.

Source: The Financial Express, 8 July 1981