The Bombay Stock Exchange Began in 1875 With Rs 1 From Each Broker, Has Been Recognised Under the 1956 Securities Contracts Act Since 31 August 1957, and Now Has 5,452 Listed Companies and the 30-Share Sensex

The Bombay Stock Exchange, now BSE Limited, dates itself to 9 July 1875, when a group of Bombay brokers resolved to form the Native Share and Stock Brokers’ Association. The exchange’s prospectus, filed with the Securities and Exchange Board of India (SEBI) in January 2017, gives that date and says that on 31 August 1957 it became the first exchange in India to be granted permanent recognition under the Securities Contracts (Regulation) Act, 1956. SEBI’s monthly bulletin records 5,452 companies listed on BSE at the end of 2024-25 (active and suspended companies counted together), with a market value of Rs 4,12,87,647 crore, or about Rs 413 lakh crore.

This article follows the exchange through its dated milestones and the statute that governs it. Where sources disagree on a date or a count, each version is given with its source.

Brokers under a banyan tree

Accounts of the start vary. Business Standard’s 2025 history places the informal beginnings in the 1850s, with a group of 20 to 22 brokers trading under a banyan tree. Its 2015 history says the 1840s. Live History India gives 1855 and a group of 12. All three place the brokers under a banyan tree in the Fort area of Bombay before they had a building.

Business Standard adds that roughly half a dozen brokers were recognised by banks and merchants between 1840 and 1850 and met at Cotton Green. By 1860 there were 60, meeting between the old fort walls and the Mercantile Bank, and the number rose to 200 to 250 during the share mania of the early 1860s. The American Civil War had cut cotton supplies to Britain, Indian cotton filled the gap, and the money went into new companies. The mania ended in 1865 when the war did, and several of Bombay’s richest merchants lost their fortunes.

One rupee each, and a hall on Dalal Street

After the bust, a little more than two dozen brokers formed an association in 1875 and put in Re 1 each, according to Business Standard. Its 2015 account, which draws on Sameer Kochhar’s book on BSE, says there were 25 members. They chose a trading hall on Dalal Street but could not find the Rs 100 monthly rent.

Dinshaw Maneckji Petit, a textile mill founder, gave the association 25 shares of his Victoria Manufacturing Company, partly in settlement of brokerage he owed some members. The shares sold at Rs 690 each, raising Rs 17,250. The association repaid Rs 2,393 that Petit had advanced and kept Rs 14,857 as starting capital.

The prospectus states the purpose in its own words. The resolution of 9 July 1875 was to form an association for “protecting the character, status and interest of Native share and stock brokers” and for providing a hall for the members. The association was formally constituted by an indenture, a signed deed, dated 3 December 1887. Business Standard records that it moved into its own building on Dalal Street in January 1899, and BSE’s timeline lists a clearing house started by the Bank of India on 2 February 1921.

Rules before independence

A committee headed by Sir Wilfrid Atlay, a former chairman of the London Stock Exchange, reported on the Bombay exchange in 1924. Business Standard summarises its findings as laxity in the association’s working: some rules were not printed or published, and neither the public nor brokers could tell which were in force. The committee also listed the corners of the early 1920s, such as those declared in Fazulbhoy Mill shares in February 1921 and Currimbhoy Mill shares in July 1921.

The Bombay Securities Contracts Control Act was enacted on 29 October 1925, according to the 2015 Business Standard timeline. K R P Shroff was president of the exchange from 1923 to 1966, and Business Standard says he was involved in early legislation, including the Securities Contracts (Regulation) Rules of 1957.

What the 1956 Act requires, and the 1957 recognition

The Securities Contracts (Regulation) Act, 1956 is Act 42 of 1956 and is dated 4 September 1956. A footnote in SEBI’s consolidated copy says it came into force on 20 February 1957, under a Gazette notification of 16 February 1957. Section 3 lets any stock exchange apply to the Central Government for recognition, with its bye-laws and its rules on the governing body, office-bearers and membership. Under section 4, the government may grant recognition if it is satisfied that the rules meet prescribed conditions “to ensure fair dealing and to protect investors”, and that recognition is in the interest of the trade and the public. The conditions can include government representation on the exchange, up to three persons.

Section 19 bars anyone from organising or joining a stock exchange other than a recognised one without the Central Government’s permission, in areas the government notifies. Section 5 allows recognition to be withdrawn after a hearing. SEBI’s consolidated copy notes that since 13 September 1994 SEBI exercises the government’s powers under these sections as well.

BSE dates its recognition to 31 August 1957. Its prospectus says it was the first exchange in India to be granted permanent recognition. The Act’s text, as far as sections 3 to 5 go, speaks only of recognition, so “permanent” is BSE’s own description. SEBI’s list of recognised stock exchanges shows BSE’s recognition as permanent, as read on 28 October 2026.

The tower, the index and the 1992 reforms

Phiroze Jeejeebhoy chaired the exchange from 1966 to 1980. Business Standard says construction of the tower that still houses BSE began in 1973 and took seven years, and that it was named after him after his death in 1980. The Free Press Journal’s agency copy dates the building to 1970, so press accounts of the tower differ. The prospectus gives the registered office as P. J. Towers, Dalal Street.

BSE’s timeline records the launch of the Sensex on 2 January 1986 as the country’s first equity index, with 1978-79 as the base year and a base value of 100. Outlook Money gives 1 January 1986. The index follows 30 large companies and has been weighted by free-float market capitalisation (shares actually available to the public) since 1 September 2003, the Free Press Journal reports. BSE’s timeline records the first closes above 1,000 on 25 July 1990, above 2,000 on 15 January 1992 and above 4,000 on 30 March 1992.

On 2 January 2026 BSE marked 40 years of the Sensex. It said the index has grown at 13.4 per cent a year since inception, close to the nearly 13 per cent annual growth of India’s nominal GDP over the same period (see India’s GDP rank in numbers), and that it covers nearly 40 per cent of the country’s market capitalisation.

The regulator changed in 1992. SEBI began in 1988 as a non-statutory body and, in its own account, the SEBI Act came into force on 30 January 1992. BSE’s timeline lists the repeal of the Capital Issues (Control) Act on 29 May 1992 and the setting up of the Securities Appellate Tribunal the same year. These came one year after the 1991 reforms.

A bomb, a rival and screens

BSE’s tower was one of the targets in the serial blasts of 1993, Business Standard recounts. Its then chief executive, M R Mayya, was walking down to the car park, and the explosion had torn through the building by the time he reached it. The newspaper puts the death toll from the blast at the exchange and the others across the city at 257. The case and its verdicts are covered in Mumbai bombings and the courts.

The National Stock Exchange (NSE) was incorporated in November 1992 and recognised as a stock exchange in April 1993, according to its 1999 market review. Its wholesale debt market went live in June 1994 and equity trading began on 3 November 1994. NSE says that by October 1995 it had become the largest exchange in India by volume traded.

BSE’s timeline records its BOLT on-line trading system as introduced on 14 March 1995. Business Today’s milestone list says it expanded across the country in 1997, and Business Standard’s 2015 narrative also gives 1997 for BOLT.

A company since 2005, listed since 2017

The 2004 amendment to the 1956 Act added sections 4A and 4B, which required recognised exchanges to corporatise and demutualise. Demutualisation, as the Act defines it, separates the ownership and management of an exchange from the trading rights of its members. SEBI approved BSE’s scheme by an order dated 20 May 2005. The company was incorporated as Bombay Stock Exchange Limited on 8 August 2005, and every member received 10,000 shares of Re 1 for each membership card.

The scheme required at least 51 per cent of the company to be held by the public other than trading-right holders. SEBI gave a 12-month extension on 11 May 2006, a share purchase agreement followed on 13 April 2007, and SEBI approved the sale on 4 May 2007. The prospectus also records that Singapore Exchange and Deutsche Börse each agreed in 2007 to acquire 5 per cent. The name became BSE Limited on 8 July 2011.

BSE’s initial public offering in January 2017 was an offer for sale of up to 15,427,197 shares of Rs 2 each by existing shareholders, so the exchange itself received none of the proceeds. The shares were to list on NSE, which had given in-principle approval on 7 October 2016, and BSE’s timeline records the listing on 3 February 2017. The prospectus counted 9,542 shareholders in January 2017.

BSE and NSE in 2024-25

SEBI’s bulletin gives 5,452 companies listed on BSE in 2024-25, against 2,720 on NSE. BSE’s listed companies were worth Rs 4,12,87,647 crore at the end of the year. PTI’s year-end report gives the same figure and a gain of Rs 25,90,546.73 crore over the year.

Trading volume is where the two differ. Cash-market turnover in 2024-25 was Rs 19,33,907 crore on BSE and Rs 2,81,27,848 crore on NSE, SEBI’s table shows. The Free Press Journal, citing a 2023 BSE statement, gives over 4,100 listed companies, while SEBI’s table counts both active and suspended companies.

Business Standard’s timeline for BSE’s 150th year records that the company itself crossed Rs 1 trillion (Rs 1 lakh crore) in market value on 14 May 2025.