--- title: "Running Behind Lakshmi: A 200-year saga of Indian bulls and bears" type: "News" locale: "en" url: "https://longbridge.com/en/news/279469718.md" description: "The book \"Running Behind Lakshmi\" by Adil Rustomjee chronicles the history of India's stock market, tracing its evolution from informal trading in the 19th century to modern electronic exchanges. It highlights significant events, including the speculative boom of the 1860s driven by the American Civil War, the establishment of the Native Share & Stock Brokers’ Association in 1875, and the IPO of Tata Iron and Steel Company in 1907. The book also discusses the badla trading mechanism and the development of the Sensex in 1986, providing insights into the market's institutional growth and challenges over time." datetime: "2026-03-17T09:04:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/279469718.md) - [en](https://longbridge.com/en/news/279469718.md) - [zh-HK](https://longbridge.com/zh-HK/news/279469718.md) --- # Running Behind Lakshmi: A 200-year saga of Indian bulls and bears by Adil Rustomjee Published by Hachette India Stock trading in India began long before a formal stock exchange came into being. Newspapers such as the Bengal Hurkaru and Chronicle were publishing bid-offer prices for shares in the early 19th century. That long, uneven evolution is the subject of Adil Rustomjee’s substantial and deeply researched book, an 862-page account that traces the history of Indian markets from their informal beginnings under a banyan tree in Bombay to the modern era of electronic trading. The book vividly reconstructs the first great speculative episode in India. The bull run of the 1860s was set off by the American Civil War, which disrupted cotton supplies from the American South to English mills and sharply increased the demand for Indian cotton. The resulting profits unleashed a feverish boom in Bombay. Shares of newly floated banks, financial associations, and land reclamation companies soared. In scale and speculative intensity, the episode rivalled Britain’s South Sea bubble and the Dutch tulip mania. In an environment devoid of regulatory checks, banks and financial associations amplified the frenzy by lending against inflated share prices. Market activity peaked between July 1864 and April 1865. The collapse, when it came, was equally dramatic. Speculators, carried away by the euphoria, failed to reckon with the obvious reality that the American Civil War would eventually end, and with it the higher demand for Indian cotton. Robert E Lee surrendered on April 9, 1865. When the news reached Bombay on May 1, it sparked off a brutal crash. Banks and business houses came under severe strain. Many collapsed. Mr Rustomjee, who studied international relations at Johns Hopkins and business at Yale, is well placed to tell this story. He was drawn to the subject after chancing upon the BSE (Bombay Stock Exchange) archives and realising that a vast, underutilised treasure trove of Indian market history lay waiting to be organised into a definitive narrative. What emerges is not merely a chronology of trading practices, but a fuller institutional history of how a market evolves, resists reforms, adapts under pressure, and slowly acquires legitimacy. The Native Share & Stock Brokers’ Association was formed in Bombay on July 9, 1875. It represented a decisive step towards establishing a formal exchange. A turning point came with the initial public offering (IPO) of Tata Iron and Steel Company . When the Tatas sought capital in 1907, London bankers refused to back what they regarded as a doubtful native enterprise. The Tatas managed to raise about ₹2.3 crore in India. It marked an important stage in the growth of large-scale share issuance by limited-liability joint-stock companies in India. The stock markets, however, remained marginal for most of the 20th century. Under colonial rule, and for two generations after Independence, slow economic growth and limited public participation kept the market at the periphery of economic life. Serious institutional development came only in the final decade of the 20th century, after which activity rose sharply. Among the book’s most valuable contributions is its detailed treatment of badla, the uniquely Indian trading mechanism that the author describes as an “unmargined naked forward”. Positions could be initiated without capital, margin or ownership of the underlying stock, making badla, a highly leveraged wager. With no initial capital committed, gains could be enormous. So, too, could losses. A trader could square up, take delivery or carry a trade forward into the next settlement period by paying an interest cost known as the badla rate. It was the most dominant form of trading for much of Indian market history. The later sections extend the story into the modern institutional era. No formal stock index existed for the first century of the market’s existence until the Sensex was created in 1986, with 1978-79 as the base year. The role of the Controller of Capital Issues, which distorted IPO pricing by keeping them close to face value; the creation of the Unit Trust of India in 1963 and the launch of Unit Scheme 1964, which faced recurrent problems due to its promise of guaranteed returns on an equity-backed product; and the FERA (Foreign Exchange Regulation Act, 1973)-driven dilution of multinational shareholdings in 1978, which led to a bonanza for Indian investors who received shares of blue chips at very low prices — all are recounted. Dhirubhai Ambani’s role in bringing ordinary Indians into the equity market and the deep dive into the establishment of the National Stock Exchange make for compelling reading. At a time when household savings are shifting from bank deposits to mutual funds and equities, the book offers an essential historical perspective. It explains how India moved, in start-and-stop fashion, from a speculative, opaque marketplace to a cleaner system that gives ordinary Indians a shot at creating long-term wealth. Anyone keen to understand this evolution, and the institutional struggles that made it possible, should make the effort to read this weighty tome. ### Related Stocks - [SAUD.UK](https://longbridge.com/en/quote/SAUD.UK.md) ## Related News & Research - [Weekly Recap: 500kt JV with Krakatau Steel and Q1 FY27 rev, FY25 rail cut](https://longbridge.com/en/news/294624023.md) - [Odisha seeks nod to divert forest land for Tata Steel iron ore block](https://longbridge.com/en/news/280911931.md) - [SAIL an attractive risk-reward play, says ICICI Direct; sets ₹200 target](https://longbridge.com/en/news/278643096.md) - [SAIL Q4 PAT seen up 19.5% YoY to Rs. 80.8 cr: ICICI Securities](https://longbridge.com/en/news/283604658.md) - [CIL to invest ₹3,300 crore in 8 coking coal washeries to cut imports](https://longbridge.com/en/news/280796121.md)