An iconic landmark that arguably gave Mumbai the title of the commercial capital of India, it is hard to believe that Asia’s oldest bourse - the Bombay Stock Exchange started its operation under a banyan tree in the historic, Fort area of Mumbai.
It all started in 1855, when an informal group of 12 stock brokers gathered under this banyan tree, and decided to start trading among themselves.
It was a great idea by all accounts, because within five years, by 1860, this ‘informal’ exchange was flourishing and had 60 brokers, five times the original number!
In fact, the first share market boom, ‘Share Mania’ as it was called, began with the American Civil War when the cotton supply from the US to Europe stopped, inflating the demand for Bombay cotton. The boom brought in riches overnight for the brokers and their numbers soared to 250!
Through the 1860’s and 70’s, while trading flourished informally, a need was felt to create a larger platform. And by 1875, under the guidance of one of the most prominent cotton traders of the time, Sir Premchand Roychand, 25 brokers formed an association, called the ‘Native Share and Stock Brokers’ Association’ with a contribution of Re. 1 from each. Soon the association went looking for an office, but Rs 100 as rent was just too much to dish out!
The man who came to the rescue of the fledgling exchange was textile magnate, Sir Dinshaw Maneckji Petit, the founder of the first textile mill in India. He bequeathed 25 shares in his Victoria Manufacturing Co Ltd, in exchange for the payment of brokerages he owed to some share brokers. Subsequently, those shares were sold at Rs 690 apiece. Of the Rs 17,250 thus raised, the Association repaid Maneckji Petit the Rs 2,393 he had advanced to it. The balance amount, Rs 14,857, provided the initial capital with which The Native Share and Stock Brokers’ Association started work.
It was only in 1928, over eight decades after its inception, that the plot of land on which the BSE building now stands was acquired. In 1957, the BSE became the first stock exchange to be recognised by the Indian Government under the Securities Contracts Regulation Act.
Several stock broking firms in Mumbai still bear the name of the first few traders who started under the famous banyan tree. These include D.S. Prabhudas & Company - now known as DSP, Jamnadas Morarjee - now known as JM, Champaklal Devidas- now called Cifco Finance and Brijmohan Laxminarayan.
( With inputs from BSE: Journey of an Aspiring Nation by Sameer Kocchar)