India @75: Memorable moments in markets
As the country celebrates its Platinum Independence anniversary, here's a throwback on the many events that that recalls the key moments that shaped Indian markets and brought it to where it is today
Team TMS New Delhi
As our country celebrates its Platinum Independence anniversary, here’s a throwback on the many events that brought financial markets to where they are today.
Even before India got independence in 1947, it had at least one stock exchange up and running in BSE in 1857.
The other prominent exchange, the NSE, was incorporated in 1992, and was recognised as a stock exchange by market regulator Sebi in 1993.
BSE, meanwhile, remains one of the world’s oldest stock exchanges and the 8th largest exchange in terms of market capitalisation.
One of the first few steps taken by the government post-independence was enactment of The Capital Issues (Control) Act that set the ball rolling for the Indian capital markets.
And as investors equated investing in stock markets with wealth creation, the pool of investors kept growing over time.
At the end of fiscal year 2021-22, the total demat account holders in India stood at 89.7 million compared to 35.9 million at the end of FY19 – up almost 150% in three years.
In all these years, veterans have innumerable stories of booms and busts spread across decades.
Within a decade of independence, India saw its first market scandal, involving Life Insurance Corporation of India and Haridas Mundhra group. The scam led to the resignation of the then finance minister.
After the markets stablised, Reliance Industries launched its initial public offer in 1977, which market mavens say, brought about the equity cult in India.
In fact, Dhirubhai Ambani had booked an entire football stadium in 1985 to hold its annual general meeting - a gala event for its 12,000 shareholders back then.
And then there was no looking back for the equity markets then.
After the big-bang ‘reformist’ Budget in 1991, FPIs and FIIs were allowed to invest in Indian equities in 1992. Today, they hold stocks worth around a fifth of India’s total market capitalisation.
The period, thereafter, saw more frequent troughs than peaks.
The Harshad Mehta scam hit the markets in April 1992, when the Sensex tanked 13%. While Mehta died in 2001, the stories of his modus operandi live on through OTT series like Scam 1992.
The crashes that followed, include the Dot-com collapse of 2000; the 2004 fall post NDA’s defeat in the national elections; and 2008’s market slump amid the Global Financial Crisis.
The GFC led to a sharp crash with the Sensex plunging 63% in 2008 to under 7,700 levels. 2008 also saw India’s financial capital under siege amid the 26/11 attacks, rattling investors.
The last market crash came in 2020, when the world was hit by the Covid-19 pandemic. The Sensex and Nifty closed at their lowest level in four years, after nosediving 33% in just 13 trading sessions.
In the commodity market, WTI crude oil futures dropped 306% on April 20, 2020, to settle at minus 37.63 dollars a barrel. The one-day plunge was the largest based on records going back to 1983.
But, between these crashes, there were periods of massive gains.
India’s Sensex touched 1,000-mark for the first time in 1990, and marched to hit the 10,000-mark in 2006.
The index, then, hit the milestone of 25,000 in 2014, and scaled mount-50K in 2021.
The lifetime high for the markets was during the same year.
Going ahead, as India looks forward to its Centenary year celebration 25 years down the line, equity investors in India are optimistic that the BSE Sensex 30 will have scaled the 100,000-mark by then.
First Published: Aug 15 2022 | 07:00 AM IST