The Stock Market of India was set up in 1875. In 1875 there were only 22 brokers who met and established the Bombay Stock Exchange. From that time onwards the Indian Stock market has grown to what it is now. It has certainly become a forceful and competent stock market in the world. 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 everyone has 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.