Stock Market & its Watershed Moment with India

  •   Wed, Mar 04 2026
  •   By David Pinto Prabhu

March 4, 2026

Many would be surprised to know that the Bombay Stock Exchange had commenced its operations way back in 1830 and turned official in 1875. A bunch of baniyas’ sat under the banyan tree at South Bombay near the Elphinstone circle and would trade in stocks. The only difference between India & the US being the tree, the traders in the US sat under a buttonwood tree on Wall Street in 1792.

On the global front, it is safe to assume that the first stock exchange was set up in Holland. And this was formulated because of an Indian angle. Ever since the sea route to India was discovered, all the major European powers fought to get a pie in the lucrative spice trade. In the melee, the discoverer of the route, Portugal, suddenly saw its naval might collapse with the defeat of the Spanish Armada. The Dutch, traditionally being seafarers, also referred to as Vikings long ago, benefitted in this chaos. They took a step ahead and allowed trading of the newly set up Dutch East India Company (DEIC) in 1602. No guesses here, the underlying trade of DEIC being the rich spices from India. The British & the French, just borrowed the nomenclature to set up its own India bound companies.

The Dutch have to be credited for sowing the seeds of capitalism. They invented the concept of stock exchanges, established the first Multinational Company (MNC) and also the first Mutual Fund. All this was done to finance the spice trade with the East. The Dutch came up with a unique idea of diversifying the risky sea trade. They said, why don’t we divide the ownership of the ships into shares and thus the risk is not on one, but on a bunch now. The shares were issued in the form of pieces of paper, called aandelen, for which the holder would receive a share in the profits from the voyage of the ship. We now fondly refer to them as dividends. On the flip side, if the ship sunk, the shareholder had to write off his holdings to the extent of the aandelen he possessed. The value of such aandelens were published in the coffee houses of Amsterdam.  Aandelen was later rebranded as a share certificate.

Aaandelen, then remained in the lockers for safekeeping in lieu of the share of profits. Then on one fine day, two Dutch gentlemen, Mr. Van der Spuy, who needed to encash his aandelens to fund his house and Mr. Christiaan Weiland, who wanted to invest for his daughter’s marriage, met at the Amsterdam coffee house and did the unbelievable. Mr. Weiland purchased the aandelens of Mr. Van der Spuy for cash and changed the ownership of the aandelen to himself. The former wanting to encash his holdings and the latter eyeing the future cash profits from the aandelen. And thus, was born the Amsterdam Stock Exchange and the first trade in shares.

Today the total value of the global stock exchange is around 127 trillion USD where the US dominates with a share of 60%, followed by China at 11%, Japan at 7%, and India now at 5%. The greatest wealth creating tool was based on funding a trade that blossomed on the Indian coast. Yet, India remains an emerging market and regrettably the oldest one. It was India who bestowed prosperity to the Europeans. The British were able to fund their coffers to finance their Industrial revolution thanks to the loot they carried away from India. The loot to be 65 trillion USD in terms of today’s value.

Here we stand today, proud of our civilization, proud of our soil, eager to reclaim what was ours long ago. Yes, we had a share of 25% in the global GDP under the Mughals and 40% when the Cholas ruled South India.

Today, India boasts of an Rs 80 lac crore of assets under management (AUM) under Mutual Funds, around 150 million demat accounts with 4.2 trillion USD of market capitalization. And yet, India’s MF industry is roughly 25% of the Banking industry whereas in the US it is at 161%, China at 48%. The percentage of Indian population investing in MFs is just 8%, whereas in the US it is at 46%, China at 45%. So, those who think that Indian equity markets have plateaued, be rest assured India’s Amrith Kaal has just started now. What we are witnessing is just the beginning. Invest wisely & sit tightly. Do not time the market, instead spend more time in the market.

 

 

 
By David Pinto Prabhu
David Pinto Prabhu, Partner at Fisdom Private Wealth, is on a mission to simplify the clutter surrounding the dynamic nature of investments. He has over 20 years of experience in the field of investments. After starting his career with ING Investment Management (2004), he moved to J P Morgan Asset Management (2008), and was heading South India for its institutional business. He holds a PGDM degree from St Joseph’s College of Business Administration, Bengaluru, and a B Com degree from St Aloysius College, Mangaluru, where he is currently based. David can be contacted on LinkedIn: linkedin.com/in/david-pinto-29037a33 and Email: davidcasmir@gmail.com.
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