Decades Following Independence

1960s 

This decade was overcast by severe droughts during 1965 to 1967 and spectator of two wars and needless to say that the wars and drought did affect the Indian Stock Markets negatively. Also the bans and restricted trading dwarfed the growth of Private Sector thus impacting the markets in an adverse manner.

1970s

This decade was more turbulent than the last two, as there was a war and emergency and nuclear test and the reactions that followed. And as if it was not enough, and to make the matters worse the Government of India asked the foreign companies to liquidate their equities and thus Indianised most of the industries. Then they introduced the Foreign Exchange Regulation Act (FERA) in the year 1973 as a last nail in the coffin of foreign equity. It took almost 15 years for foreign equity to re-enter our markets.

1980s

It was in the middle of 1980s that the Indian Stock Market experienced a positive turnaround which encouraged retail investment too. Companies that were most benefited were Reliance Industries and Bombay Dyeing. The Reliance Group came up with a lucrative IPO which was a huge hit and thus generated further interest in Indian Capital Markets. Also the convertible debentures offered by Tata Engineering, Reliance Textiles etc propagated the popularity of markets. 

It was then, that the government under late Prime-Minister Rajiv Gandhi, partially liberalized the Indian Economy giving the required boost.

But at the same time, our economy was crippled from ever increasing foreign debt along with poor performances of Public Sector. To make the matters worse Balance of Payment situation was totally unconstrained.

Indian Equity Market Post Independence

While Indian subcontinent was cheering its independence in the year 1947, stock market suffered depression owing to partition. Lahore stock exchange was shut down and then merged with the Delhi Stock Exchange. The impact of world economy which was struggling post World War II, was also visible on Indian Stock Market too.

The coming decades paved the way to a more structured markets and reforms that created the present day Stock Exchanges operating in India. 

1950s 

In the year 1947, the Capital Issues (Control) Act was enacted, which controlled securities that were introduced during World War II. The Act was governed by the office of Controller of Capital Issues (CCI) which came under Ministry of Finance.
Securities Contract (Regulation) Act was introduced in 1956 and all eight recognized stock exchanges came into its purview. Those 8 stock exchanges were - Bombay, Delhi, Calcutta, Madras, Ahmedabad, Hyderabad, Manglore and Indore. All the members, contracts in securities came under this Act. Also restrictions on issuing securities was enforced.

Both of these Acts were abolished in the year 1992 as a part of the liberalization and economic reforms in India. Securities and Exchange Board of India (SEBI) emerged as the absolute regulator of Stock Exchanges and members and all the activities carried on by and in the exchanges.

There were as many as 500 brokers at the time of independence registered with Bombay Stock Exchange. The number remain more-or-less same as the government policies which were Socialist and the strict regulations on the capital markets did not render positive for the stock market. Therefore the decade after the independence did not witness any major changes in the market and brokering was considered no serious occupation but gambling. Stock Market too was majorly dependent on speculations and hunches or brokers and were also manipulated a lot. Companies like Bombay Dyeing, Birla, Scindia, TELCO etc were investors/brokers favorites in those times.

Read more about the following decades !

Launching of Indian Share Market

Brokering trade took almost 10 years to revive itself, since the market crash in 1865 after American Civil War. It was after they realized that they should do the business in an organized manner in order to protect their own interests and earn respect in public as well. Therefore they set up the Stock Exchange in the year 1875. So the first stock exchange of India was born and it was named - "The Native Share and Stockbroker Association". It was intended to be a voluntary and non-profit institution. The association started with 318 members. And it was Premchand Roychand who formed the rules and regulations of the association.

Prior to the inauguration of Broker's Hall in 1899, the rules and regulations of Stock Exchange were re-framed in 1887 under a charter along with objectives, which is still in practice. The objective was to protect the interest of investors and members, to establish regulation and practice of honest and justified transactions, and to promote country's industrial development by means of efficient resource mobilization through investment in corporate securities.

In 1920's, the exchange was shifted to a new location, near the Town Hall. The location of present Bombay Stock Exchange came into being in 1930. The other two exchanges came into existence during this time, one was Ahmedabad and the other one was Calcutta (now Kolkata). The contribution that cotton textile industry made to formation of Bombay Stock Exchange was similar to what Jute, Tea and Coal industry conferred to Calcutta Stock Exchange.

The Madras (now Chennai) Stock Exchange was ephemeral, as it opened in 1920 and went out of business in 1923. Although in 1930's southern India did observe a accelerated growth of industries with the establishment of contemporary textile industries coupled with other companies. Thus the Madras Stock Exchange came back into existence in the year 1937.

In the midst of 30's Lahore (then in India) also established its own Stock Exchange in the year 1934, which subsequently merged with Punjab Stock Exchange.

During the beginning II World War, the Indian equity market uphold a growth for a terse period, which lasted too soon owing to the confining control and regulations imposed by government. It was only after 1943, when India grew into an inventory and supply abode, the equity market saw a surge in its stock prices. This turnaround led to the formation of new exchanges on Uttar Pradesh and Nagpur in the year 1940 and Hyderabad in 1944.

And finally in 1947, Delhi Stock Exchange came into existence with the merger of Share Exchanges Limited and Delhi Stock and Share Brokers' Association Limited.

Know more about what happened to Share Market after Independence