“We had code words and mainly hand gestures to buy and sell stocks. My commission was 0.5 paise,” Mahesh Gandhi, now aged 62, reminisces about his days when he started his career at BSE.

For an institution that has been around for well over a century, and celebrated its 147 years on Thursday, Pundits had sounded the death knell in early 1990s. The National Stock Exchange (NSE) took birth in 1992 and in just three years it dislodged BSE in competition by placing snappy computer screens in the office of stock brokers across India.

The open-out-cry system was still prevalent on Bombay Stock Exchange (BSE) and the exchange fell in the race as trading screens became a great draw for younger generation traders. After the NSE cornered major market share in the cash segment and launched equity derivatives trading, BSE was pushed to the edge. The open-out-cry was a vociferous as brokers shouted on the top of their voice to buy and sell stocks.

Gandhi says he is surprised how the BSE has now transformed itself. The exchange is now ranked among the fastest venues for equity and commodity trading in the world with a trade confirmation time of just six micro-seconds.

“There has been a dramatic change in BSE as the exchange, which was dominated by private players, has seeped itself culturally into a professionally-run company,” said Deven Choksey, MD, K R Choksey Investment Managers. Deven’s father Kishan Ratilal Choksey is among the oldest surviving brokers of BSE. The father-son duo have closely witnessed ups and downs BSE.

“Product innovations, technology and professionalism have cemented BSE. It is thinking more about the cult of passive investing than revenues from pure speculation. Trading cost is down as clearing corporations of both NSE and BSE are now unified in terms of margin collection. Digitisation of settlement has been phenomenal. Most important, BSE has diversified in its product offerings,” said Choksey.

BSE runs India’s largest mutual funds distribution platform StarMF and processes over a million transactions each day. It has ensured more than ₹25,000 crore worth of flows to the MF industry this year so far and has 81 per cent market share in the transactions of MF industry. BSE has over 60 per cent market share in SME companies listed on its platform and also runs another one for listing of start-ups. Commodity derivatives, currency futures and interest rate futures are some of its other offerings.

“Dhoti clad brokers of BSE have all become suited booted and they are the same who made NSE a success story. Nostalgia keeps them attached to the BSE and even owns its shares. Hope is now firm that the exchange would grow further,” said Pradeep Udeshi, a sub-broker since 1981.

comment COMMENT NOW