HISTORY OF STOCK MARKET OF INDIA

The Stock Market of India was set up in 1875. At that time there were 22 brokers who met and
established the Bombay Stock Exchange. From that time onwards the Indian Stock market has grown
in leaps and bounds, and has become a forceful and competent stock market in the continent. It is
equal to any international market in the world. It has the same level of efficiency and organizational
ability. The market caters to the huge population of India and gives them investment opportunities. It
also provides the institutions and organizations with funds. The unpredictable nature of the Indian
stock market has made it very difficult for the common man to understand it. So prior to investing in
the stock market you have to research it properly.

When it was started the Bombay Stock Exchange had only a few hundred people taking membership
in Stock Broker Association and Native Share. In 1965 BSE was recognized permanently by the
Government of India, The BSE and National stock exchange are both the main stock exchange of
Indian stock market. Government of India gave permanent identification to the BSE. BSE along with
National Stock Exchange both are main part of Indian Share Market and are the two national stock
exchanges of India. BSE has about 5000 listings at the starting.

The stock and shares are issued to the public for investing in various companies. The revenue
generated from the stocks and shares is used for business expansion or any government projects. The
profit of the company is then shared by the public, which has invested in the company. The share
market allows for public trading of companies and has become an important source of raising fund for
the companies. The government has also formed the Securities and Exchange Board of India (SEBI)
which controls the functioning of stock exchanges, investment advisors, portfolio managers, brokers
and sub-brokers. The sensex is made on the basis of the performance of the stocks of 30 sound
financial companies.

The Indian stock market is basically divided in two parts; the first is the primary part and the
secondary part. In the primary market the shares are issued directly by the company are dealt by
share brokers appointed by the companies. In the secondary market the stocks of various companies
are listed in the stock exchange and are represented by the share brokers, the investors invest in
companies through these share brokers.

THE ATTRACTION OF INDIAN STOCK MARKET

The undeniable attraction in Indian stock market is like a lure for many people. You are not able to
deny its attraction. Even if you suffer losses, the next day you are ready with to invest again in some
other shares. It is just like the passion for gambling. You just can’t resist it. Even if you want to get up
and leave you are pulled back again with its attraction.

You are glued to TV sets with the latest stuck new and trend being televised. You watch the graph like
a hawk ready to pounce on every upward going share. At the end of the day there is joy for some
people and sorrow for the others. Those who have gained with shares are full of joy while those who
have lost wait for the next day so that they can change their losses to gain.

The thrill of investing is a thrill just like racing or gambling, you just can’t stay away from it. You
watch the trend of a particular share for a week before you try to invest in it. The life of the stock
broker is very thrilling as there are daily ups and downs. There is a huge data base, stock to be read
thoroughly, graphs to be deciphered and watching people making million and people losing millions.
There is no other excitement, which is so much full of thrill and enjoyment.
It is like a game which has to be played regardless of whether you win or lose. You have to play it and
you can’t resist it. It needs guts to play this money game, you have to keep your cool, be calm hold
on to your nerves and react very fast to gain money. All of it is done within second so no late
reaction .Once you get in the excitement of share trading, you won’t like to leave it.

COMPANIES LISTED IN INDIAN STOCK MARKET

321

RULES AND REGULATIONS

Who is a Stock Broker?
A stock broker is a person or entity, which is a member of a stock exchange. A stock broker acts as a
facilitator to carry out transactions of investors on a stock exchange. Thus if you want to buy say 100
shares of a company XYZ (which is listed on say National Stock Exchange) in the secondary securities
market, he would have to go through a stock broker registered in NSE to carry out his transactions on
National Stock exchange.

Whether stock brokers are governed by any Rules and Regulations?

Stock brokers are governed by SEBI Act, 1992, Securities Contracts (Regulation) Act, 1956, Securities
and Exchange Board of India [SEBI (Stock brokers and Sub brokers) Rules and Regulations, 1992],
Rules, Regulations and Bye laws of stock exchange of which he is a member as well as various
directives of SEBI and stock exchange issued from time to time

What are the documents to be signed with stock broker?

Before start of trading with a stock broker, you are required to furnish your details such as
name, address, proof of address, etc. and execute a broker client agreement. You are also
entitled to a document called Risk Disclosure Document, which would give you a fair idea
about the risks associated with securities market. Please go through all these documents
carefully.

What to check while registering with a stock broker?

Every stock broker is required to be a member of a stock exchange as well as registered
with SEBI. Examine the SEBI registration number and other relevant details can be found
out from the registration certificate issued by SEBI.

BSE AND NSE

The main focus of stock trading in India is on the companies that are registered with the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE). The Bombay Stock Exchange located
at Dalal Street, Mumbai, is the Asia’s oldest stock exchange. It is also a symbolic head of the stocks
trading in India and lists over 6000 companies. It has the largest number of companies and so it is the
largest stock exchange in India due to this fact. In south East Asia it is the largest stock exchange.

Another stock exchange in India the National stock exchange is also located in Mumbai and has the
largest number of equity-based and derivative-based trades and the daily turnover is the largest in
this exchange.

Many other stock exchanges are also there in India, but they are small fish compared to these two
large stock exchange. The BSE and NSE have the largest number of trading enlisted. India having
such a large population and more and more people are investing in
The demat account opened by the broker makes it possible for the investor not to actually visit the
stock exchange, All the latest updates are given in the news and is also available online. The share
certificates are now in form of virtual share certificates, these share certificates exist in actual
database and not in physically. Those who are interested in buying and selling of the shares do so with
the help of these demat accounts. They can buy and sell shares online sitting in their homes.

Many important companies have taken a plunge in this type of brokerage. It has made possible for
ordinary Indians to buy stocks and sell stocks without actually having to visit the stock exchanges.
The process offered by them is simple and transparent those who have little extra money also can
invest through this type of account

WOMEN AND INDIAN STOCK MARKET

Women are becoming popular in all fields and it is the same story in the Indian stock market as well.
Many successful investors in the stock market are women nowadays. The modern women wants to
save money for retirement and the stock market can help to achieve this saving. The stock market
needs one to be taking risks and, it won’t work if you are too conservative. You should learn to
practice asset allotment and spread out your portfolio to get maximum returns.

Many women have looked at their household products and have made profit. For instance,
when scotch bright was first introduced in the market, they searched the company that had
introduced it and invested in that company. The product was success and they gained from
it. Look properly and be aware of the latest trend and you will surely gain from it.

STOCKS GLOSSARY

Account Period Settlement:

The settlement process where the buy and sale transactions done for a particular period (week or
fortnight) are aggregated and only the net obligations are settled after the period is over. Indian
securities market had weekly account period settlement before rolling settlement.

Allotment:
A letter sent to the successful application about allotment of shares/debentures against his
application.

American Depository Receipts (ADRs):

A certificate issued in the United States in lieu of foreign security. ADRs are traded in US markets for
all intents and purposes.

American option:
A put or call option that cane be exercised any time before the expiration date.

Asset Management Company:

The company that handles day to day management and operations of a Mutual Fund.

Arbitrage
The process of benefiting out of price differential in the same scrip between two markets or because of
price difference in the scrip in the underlying market and futures or derivative
Many other stock exchanges are also there in India, but they are small fish compared to these two
large stock exchange. The BSE and NSE have the largest number of trading enlisted. India having
such a large population and more and more people are investing in

Arbitration:
Settlement of claims differences or disputes between member of a stock exchange and another
member and between a member and his clients, sub-brokers, etc., through appointed arbitrators. It is
a quasi-judicial process that is faster and an inexpensive way of resolving a dispute. The stock
exchange facilitates the process of arbitration between the members and their clients in accordance
with the bye-laws of the exchange.

Ask
The price which the seller of the security wants to sell the shares owned by him.

Auction:
An auction is a mechanism utilized by the stock exchange to fulfill its obligation to a counter party
member when a member fails to deliver agreed securities or make the payment. Through auction, the
stock exchange arranges to buy good securities and deliver them to the buying broker or arranges to
realis e the cash and pay it to the selling broker.

Definitions of stock market on the Web:

 stock exchange: an exchange where security trading is conducted by

professional stockbrokers

 A stock market / share market is a public market (a loose network of

economic transactions not a physical facility or discrete entity) for the trading
of company stock and derivatives at an agreed price; these are securities
listed on a stock exchange as well as those only traded privately.

 A place where shares, stocks and bonds are bought and sold.
 National Stock Exchange

राष्ट्रीय शेअर बाज़ार

Type Stock Exchange

Location Mumbai, India

Coordinates

Founded 1992

Owner National Stock Exchange of India Limited

Key people Mr.Ravi Narain (MD)

Currency Indian rupee

No. of listings 1,504

MarketCap US$1.35 trillion (August 2010)[1]

S&P CNX Nifty

Indexes CNX Nifty Junior
National Stock Exchange of India
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National Stock Exchange

राष्ट्रीय शेअर बाज़ार

Type Stock Exchange

Location Mumbai, India

Coordinates / 19.06028°N 72.85972°E /

Founded 1992

Owner National Stock Exchange of India Limited

Key people Mr.Ravi Narain (MD)

Currency Indian rupee

No. of listings 1,504

MarketCap US$1.35 trillion (August 2010)[1]

 S&P CNX Nifty
Indexes CNX Nifty Junior
S&P CNX 500

Website www.nse-india.com

The National Stock Exchange (NSE) (Hindi: राष्ट्रीय शेअर बाज़ार) is a stock exchange located at
Mumbai, India. It is the largest stock exchange in India in terms of daily turnover and number of
trades, for both equities and derivative trading.[2] NSE has a market capitalization of around Rs
47,01,923 crore (7 August 2009) and is expected to become the biggest stock exchange in India
in terms of market capitalization by 2009 end.[3] Though a number of other exchanges exist, NSE
and the Bombay Stock Exchange are the two most significant stock exchanges in India, and
between them are responsible for the vast majority of share transactions. The NSE's key index is
the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of
fifty major stocks weighted by market capitalisation.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies

and other financial intermediaries in India but its ownership and management operate as separate
entities.[4] There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have
taken a stake in the NSE.[5] As of 2006, the NSE VSAT terminals, 2799 in total, cover more than
1500 cities across India.[6] In October 2007, the equity market capitalization of the companies
listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South
Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in
equities.[7] It is the second fastest growing stock exchang
 Type Stock Exchange

Location Mumbai, India

Coordinates

Founded 1875

Owner Bombay Stock Exchange Limited

Key people Madhu Kannan (CEO & MD)

Currency Indian rupee

No. of listings 4,996

MarketCap US$1.39 trillion (August 2010)[1]

Volume US$980 billion (2006)

Indexes BSE Sensex

 Website www.bseindia.com

Bombay Stock Exchange

Type Stock Exchange

Location Mumbai, India

Coordinates

Founded 1875

Owner Bombay Stock Exchange Limited

Key people Madhu Kannan (CEO & MD)

Currency Indian rupee

No. of listings 4,996
 MarketCap US$1.39 trillion (August 2010)[1]

Volume US$980 billion (2006)

Indexes BSE Sensex

Website www.bseindia.com

The Bombay Stock Exchange (BSE) (Hindi or Marathi: बबई शेअर बाजार Bombay Śhare
Bāzaār) (formerly, The Stock Exchange, Bombay) is the oldest stock exchange in Asia and
largest number of listed companies in the world, with 4990 listed as of August 2010.[2][3] It is
located at Dalal Street, Mumbai, India. On Aug, 2010, the equity market capitalization of the
companies listed on the BSE was US$1.39 trillion, making it the 4th largest stock exchange in
Asia and the 11th largest in the world.[4]

With over 4,990 Indian companies listed & over 7700 scrips on the stock exchange,[5] it has a
significant trading volume. The BSE SENSEX (SENSitive indEX), also called the "BSE 30", is
a widely used market index in India and Asia. Though many other exchanges exist, BSE and the
National Stock Exchange of India account for most of the trading in shares in India.