BASIC OF CAPITAL MARKET

Reliance Money Ltd.

BEGINNING OF INDIAN CAPITAL MARKET

The origination of the Indian securities market may be

traced back to 1875, when 22 enterprising brokers under
a Banyan tree established the “Native shares and stock
broker’s Association” which later became the “ Bombay
Stock Exchange” (BSE). Over the last 125 years, the
Indian securities market has evolved
continuously to become one of the most dynamic, modern
and efficient securities markets in Asia. Today, Indian
markets conform to international standards both in terms
of structure and in terms of operating efficiency.
 1875
Membership Certificate
 THE BEGINING

The Seed were probably first sown by the “East

India Company” in 18th Century.

Promissory Notes & Debt Instruments.

19th centuary saw Indian Enterprises flourish and

merchants and speculators of western India
trading on loan securities and shares of companies.
 THE FIRST BIG BULL

1860-61, demand for cotton increased due to civil

war in America and price was pushed up
significantly.

1865: 31 banks, 8 land reclamation companies, 20

insurance companies, 62 joint stock companies.

FIRST BIG BULL

PREMCHAND ROYCHAND
In speculative trading
 PREMCHAND ROYCHAND

 Known as the Cotton king and the Bullion king.-

Floated Bank of Bombay.

Back Bay Reclamation shares prices pushed up to

Rs.50,000.
1865: American Civil war ended, cotton prices
collapsed, companies collapsed and market
crashed. For the first time in India Broker became
a dirty word. Roychand lost all his money.
 FIRST FIVE STOCK EXCHANGES

1875: “ The Native Share and Stock broker’s

Association” formed with 318 members and
with a fee of Rs.1.
In 1928 present plot acquired and building
constructed in 1930.
1894: Second Stock Exchange at Ahmedabad.
1908 : Third, Calcutta Stock Exchange.
1937 : Madras Stock Exchange.
1947 : Delhi Stock Exchange.
 1930
 SOME BIG NAMES
1950-60:
Top speculators:
Hathibhai, favourite was TISCO,
Mahindra Mansukh in 1960s, his favourite was Standard
Mill etc. The other names to reckon with were,
Subhash Chand and Manik Chunni Lal.
1970: Nationalization of banks and industries.
and enactment of Foreign Exchange Regulation Act.
(FERA).
1979: Emergency.
RELIANCE INDUSTRIES
 1980: Retail interest in capital market boosted
through Dhirubhai Ambani’s Reliance
Industries Ltd.

 1991: Priminister Narasimha Rao and Finance

Minister, Manmohan Singh started
Privatisation,Liberalisation and Globalisation.
to unshackle the Indian Economy.
 HARSHAD MEHTA
 In a near replica of Premchand Roychand,
hundred years ago, Harshad Mehta and his
associates borrowed money from bank and
used it to push up the share prices.

 In june 1991 Sensex was 1170 and in April 1992

it was at 4467.

 The Sensex fell to 2800 in one week after the

scam broke.
 SBTS in NSE

National Stock Exchange started the screen

based trading in Capital Market (Equities)
segment in November 1994 and operations in
Derivatives segment commenced in June 2000.
This has brought about a revolution to the
Indian stock market scenario.
 KETAN PAREKH
 2001: Over the years, also, the direction of equity
investment has changed so radically as to be
unrecognizable. Old blue chips- Telco, Tisco, ITC, HLL
all- have been discarded for scrips in the ICE
(Infotech, Communications, Entertainment) sectors.
Infosys, Zee, Wipro and Satyam have become the new
touchstones of punters everywhere. The circular
trading of KP and his associates had taken the prices
of K-10 shares to dizzying heights and than came the
DOT COM bust and the crash. Shares traded at
Rs.3000/4000 now trades at Rs. 12/20 etc.
HFCL, Global Telesystem, Pentafour, DSQ etc.
 Bull Run since April, 2003.
Transparency, competitiveness and equal opportunity .
to all market participants has been the driving philosophy behind
all the development and regulatory initiatives of SEBI today. The
robust economy, ever increasing FII investment, bright economic
future have taken the market to a robust growth path.
Today Sensex is above 9000 mark and there is no relenting in the
fund flow.
There are 498 Foreign Institutional Investors with a net
investment of approximately $15bn.
There are now 34 mutual funds offering close to 380 different
types of schemes, which are as diversified and up to date as in any
other part of the world.
During the year2005, the sensex surged 42% to end at a new high
of 9398, while the Nifty jumped 36% to end at 2837.
SENSEX MOVEMENT SINCE 1998 AND THE PRESENT BULL RUN
Capital Market Introductions
 Definition of Stock & Shares

Share or Equity represents part of an

ownership of a business. So as a shareholder
you own a piece of the action that happens in
that business. Why would you want a piece of
the action? For the rewards of course. As a
shareholder you have a right over
 Bull & Bear Market
When economic indicators point to a healthy and growing
economy, companies are making money, the future looks
good, and people have more money to invest. When this
happens, stock prices on the whole generally rise, which is
called a bull market. In contrast, when the economy is
shrinking, businesses are not making as much money, and
people are losing their jobs and have less money left over
after buying
necessities, stock prices on the whole will be falling. This is
known as a bear market.
 INDEXS
WE HAVE TWO PRIME INDEXES- SENSEX FOR BSE AND
S&P CNX NIFTY FOR NSE.
NIFTY HAS 50 shares that basically represent the broader market
across sectors. The base value of NIFTY was 1000 on the start year
of Nov.3, 1995.
First compiled in 1986, SENSEX is a basket of 30 constituent stocks
representing a sample of large, liquid and representative companies.
The base year of SENSEX is 1978-79 and the base value is 100. The
Index was initially calculated based on the "Full Market
Capitalization" methodology but was shifted to the free-float
methodology with effect from September 1, 2003.
 SENSEX HISTORY

First compiled in 1986, SENSEX is a basket of 30

constituent stocks representing a sample of large,
liquid and representative companies. The base
year of SENSEX is 1978-79 and the base value is
100. The Index was initially calculated based on
the "Full Market Capitalization" methodology but
was shifted to the free-float methodology with
effect from September 1, 2003.
SENSEX Constituents
Associated Cement Company Ltd.
Bajaj Auto Ltd.
Bharat Heavy Electricals Ltd.
Bharti Tele Ventures Ltd.
Cipla Ltd.
Dr Reddy's Laboratories Ltd.
Grasim Industries Ltd.
Gujarat Ambuja Cements Ltd.
HDFC
HDFC Bank Ltd.
Hero Honda Motors Ltd
Hindustan Lever Ltd
Bank Ltd.
Infosys Technologies
Ltd.
ITC Ltd.
Larsen & Toubro Limited
Maruti Udyog Ltd.
National Thermal Power Corpn.
ONGC Ltd. Ranbaxy
Laboratories Ltd.
Reliance Energy Ltd.
Reliance Industries Ltd.
Satyam Computer Services Ltd.
State Bank of India
Tata Consultancy Services
Limited
Tata Motors Ltd.
Tata Power Co. Ltd.
Wipro Ltd. Information
S&P CNX Nifty - Constituent Lis Constituents

 Jet Airways
 ABB  Larsen & Toubro
 ACC  Mahindra & Mahindra
 Bajaj Auto  Maruti Udyog
 Bharti Tele-Ventures  MTNL L
 Bharat Heavy Electricals  NALCO
 Bharat Petroleum Corporation.
 ONGC
 Cipla
 OBC
 Dabur India
 Punjab National Bank
 Dr. Reddy's Laboratories
 Ranbaxy
 GAIL (
 Reliance Energy
 Reliance Industries Ltd.
 Glaxosmithkline Pharmaceuticals
 Steel Authority of India Ltd.
 Grasim Industries  Satyam Computer
 Gujarat Ambuja Cements  State Bank of India
 HCL Technologies  SCI
 HDFC  Sun Pharmaceutical
 HDFC Bank  Tata Chemicals
 Hero Honda Motors  Tata Motors
 Hindalco Industries  Tata Power
 Hindustan Lever  Tata Steel
 Hindustan Petroleum Corporation  Tata Tea Ltd
 ICICI Bank  Tata Consultancy Services
 Infosys Technologies  Videsh Sanchar Nigam
 Indian Petrochemicals Corporation  Wipro.
 ITC  Zee Telefilms Ltd.
S&P CNX Nifty HISTORY
S&P CNX Nifty is a well diversified 50 stock index
accounting for 23 sectors of the economy.
CNX ensures common branding of indices, to reflect
the identities of both the promoters, i.e. NSE and
CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for
NSE . The S&P prefix belongs to the US-based
Standard & Poor's Financial Information Services.

The base value of S&P CNX Nifty was set to 1000 on the
start date of November 3, 1995.
 Thank You
Deepu Ranotra Equity Advisor

Reliance Money Ltd.