BSE Schedules Demat Auction for DR-642 on June 3; Key Guidelines for Trading Members

BSE Limited has scheduled a dematerialised (demat) securities auction under settlement number DR-642/2025-26. The auction will take place on Tuesday, June 3, 2025, and is open to trading members of the exchange who wish to bid for securities.

Key Auction Timings

Offer Entry Window

• Start Time: 2:00 p.m.

• End Time: 2:45 p.m.

Auction Matching Window

• Start Time: 2:45 p.m.

• End Time: 3:00 p.m.
   

Security Pay-In Instructions

The pay-in of securities for successful bids is scheduled for Wednesday, June 4, 2025, at 8:00 a.m. All members and custodians are instructed to ensure timely delivery of securities and must comply with the depository’s cut-off timings.

Rule Change on Short Deliveries

Previously, members who had short-delivered securities were restricted from participating in the same auction. However, this restriction has now been lifted.

“Now, all trading members can offer securities even if they have short delivered them.”

Offer Entry Instructions and Compliance

Trading members are strongly advised to:

• Enter the correct security code and price while submitting offers.

“The exchange will not allow changes after submission.”

• Verify if the security is subject to any corporate actions like bonus, rights, or splits, which may impact its valuation or availability.

Additionally,

“BSE holds the right to accept or reject any offer without giving reasons.”

History of BSE

The Bombay Stock Exchange (BSE), located on Dalal Street in Mumbai, is not just India's oldest stock exchange but also the oldest in Asia, with a history spanning nearly 150 years. Its journey reflects the evolution of India's capital markets, from informal trading under banyan trees to a sophisticated, technology-driven financial hub.

1. Humble Beginnings: The Banyan Tree Era (1850s - 1875)

The roots of the BSE can be traced back to the mid-19th century, specifically the 1850s. At this time, a group of Gujarati and Parsi stockbrokers would gather informally under a banyan tree in front of Mumbai's Town Hall (and later on Dalal Street) to trade shares. These gatherings were the precursors to organized stock trading in India. The trading was rudimentary, based largely on mutual trust, and involved a small number of listed companies.

2. Formalization and Early Growth (1875 - 1947)

• Founding (July 9, 1875): The informal group of brokers formally organized themselves into "The Native Share and Stock Brokers' Association." This event on July 9, 1875, officially marked the birth of what would become the Bombay Stock Exchange. The foundation was laid during British colonial rule, with Bombay (now Mumbai) already emerging as a significant commercial center. Premchand Roychand, an eminent businessman of the time, is credited with its official founding.

• Move to Dalal Street (1930): As trading volumes expanded and the need for a permanent, regulated platform grew, the exchange moved to its own dedicated premises on Dalal Street in 1930, which remains its iconic headquarters today. Dalal Street itself became synonymous with India's financial heart.

• Early Milestones: By the early 20th century, the BSE had become a pivotal marketplace for corporate financing in British India. The period also saw the rise of prominent family-owned business houses like Tata, Birla, and Bajaj, whose companies became foundational stocks listed on the exchange.

3. Post-Independence and the Need for Reforms (1947 - 1995)

• Official Recognition (1957): After India gained independence in 1947, the BSE continued to be the primary stock exchange. It received official recognition from the Indian government under the Securities Contracts (Regulation) Act in August 1957, solidifying its legal standing.

• Slow Growth in the License Raj Era: During the initial decades of independent India, a mixed economy model with a focus on public sector enterprises and central planning meant the capital market took a backseat. Despite regulatory bottlenecks, the BSE continued to list major companies like State Bank of India and Indian Oil. However, the system largely remained manual, lacking transparency and prone to malpractices.

• Launch of SENSEX (1986): A significant step towards modernizing the market came in 1986 with the launch of the S&P BSE SENSEX (short for "Sensitive Index"). This was India's first stock market index, comprising 30 well-established and financially sound companies listed on the BSE. It quickly became the benchmark index, acting as a crucial barometer of the Indian economy and stock market trends.

• The Harshad Mehta Scam (1992): The early 1990s brought liberalization to India's economy, but also exposed severe weaknesses in the market's governance and regulation. The infamous Harshad Mehta securities scam of 1992, involving the manipulation of stock prices and exploitation of systemic loopholes, shook investor confidence. This scandal, however, served as a crucial catalyst for major reforms, leading to:

  • The establishment of the Securities and Exchange Board of India (SEBI) as a powerful regulatory authority in 1992.

  • A strong push towards electronic trading systems and greater transparency.

4. Liberalization, Digitization, and Modernization (1995 - Present)

• Competition and Digital Transformation: With the liberalization of the Indian economy, the BSE faced stiff competition from the newly launched National Stock Exchange (NSE) in 1994, which adopted a fully automated, screen-based trading system from its inception. To remain relevant, the BSE had to rapidly modernize.

• BOLT (BSE On-Line Trading) (1995): In 1995, the BSE introduced its own electronic trading platform, BOLT, shifting from traditional open-outcry trading to a more efficient and transparent screen-based system.

• Dematerialization: The introduction of dematerialization of shares made shareholding more secure and efficient by eliminating physical share certificates.

• Derivatives Trading (2000): In 2000, the BSE introduced derivatives trading (futures and options), providing investors with more sophisticated tools for risk management and speculation.

• Public Listing (2017): In a significant move, BSE became the first publicly listed Indian stock exchange in 2017, with its shares trading on the National Stock Exchange (NSE).

• Global Reach and Milestones: The BSE has continuously expanded its offerings and technological capabilities.

  • It launched India INX in 2017, India's first international exchange at GIFT City, Gujarat.

  • It joined the UN Sustainable Stock Exchange Initiative in 2012.

  • The BSE Sensex has crossed numerous milestones, from 1,000 points in 1990 to scaling 86,000 points in September 2024, reflecting the robust growth of the Indian economy.

  • As of early 2025, its market capitalization exceeded INR 400 lakh crore (over $4.5 trillion), solidifying its position as one of the world's largest stock exchanges by number of listed companies (over 5,000).

  • It also claims to be the world's fastest exchange with a median trade speed of six microseconds.

Current Status and Role

Today, the BSE operates under the strict regulatory oversight of SEBI, ensuring market integrity, transparency, and investor protection. It provides a platform for trading a wide array of financial instruments, including equities, derivatives, mutual funds, and debt instruments. Through its subsidiaries like Indian Clearing Corporation Limited (for clearing and settlement), Central Depository Services (India) Ltd (CDSL - for dematerialization), and BSE Institute Ltd (for financial education), BSE plays a crucial role in the overall functioning and development of India's capital market, serving as a vital engine for capital formation and wealth creation.