Long back in the year 1957, a few visionaries got together with the idea of initiating trading in Government Securities. These young entrepreneurs incorporated a firm in the name of “The Bangalore Stock Exchange Association Private Ltd” (BgSE) which was duly registered with ROC on May 28, 1957. This marked the beginning of functioning of BgSE which started in a humble rented room behind Chamber of Commerce building on K.G. Road.
BgSE was started with an initial Capital of Rupees one lakh divided into 400 shares of Rs.250/- each. But little did its founders realize that down the lane, it would provide food and shelter to thousands of people in Karnataka.
The First subscribers and Directors of the Company were Dharmaprakasha L.S. Venkoji Rao, Mr. S.M. Ramakrishna Rao, Mr. M S Sambamurthy Jahgirdar, Mr. V Srinivasan, Mr. S. Ramanathan, Mr. R. Jagannathan, Mr. T. G. H. Rao and Mr. P.N. Eshawaraiah. Witnesses for this glorious moment were Mr. L K Srinivasa Murthy and Mr. A. Nanjunda Iyer.
Before granting recognition to this Exchange, the Government of India insisted that the Exchange should also have a list of its own Companies for Trading in addition to the Trading Members. At that crucial moment, Dharmaprakasha L.S. Venkaji Rao, helped in enlisting quite a number of Companies on this Exchange including a few Plantation Companies and other Companies like Mysore Paper, Mysore Sugar, Mysore ITL on which he also happened to be a Director. With this the Association (BgSE) got recognition from the Ministry of Finance as an Exchange on March 17, 1963 for an initial period of five years. Its name was changed to “The Bangalore Stock Exchange Limited” and it subsequently got permanent recognition in 1983.
Till the year 1976, the BgSE had membership of 17 members which was subsequently increased to 42 following a bonus issue. Number of Members later increased to 84 after a right issue. With the permission of Ministry of Finance, BgSE issued further 40 membership cards to public and professionals at a floor price of Rs 2 Lakhs. Thereafter 14 more cards were issued to Authorized Assistants (AAs) in the year 1990, taking the total number to 140. Another set of cards were issued subsequently in two phases to individuals and corporate members at a floor price of Rs. 15 lakhs and Rs. 25 lakhs respectively. Major portion of funds raised out of the increase of membership was later utilized for purchase of land and building at Infantry Road and J C Road, Bangalore.
The Exchange conducted itself in a very fair and disciplined manner. Its reputation soon reached the corporate circles and BgSE attracted listing of more companies. Some of the companies which got listed in those days were Canara Bank, Canara Land Investment Ltd, Canara Banking Corporation Ltd, Canara Industrial & Banking Syndicate Ltd, Bhadra Coffee Estate Ltd, Balanoor Tea & Rubber Co Ltd, Devan Tea & Production Ltd, Bangalore Printing & Publishing Ltd, General Investment Trust Ltd, Maharastra Apex Corporation Ltd, Mysore Industries and Testing Laboratory Ltd, Mysore Lamp Works, Mysore Tobacco Ltd, Remco, Mysore Coffee Estate, Western India Investments UB Ltd, Mandya Paper Mills, Mysore Chemicals & Fertilizers Ltd, MRF Limited, Mysore Sugars Ltd, United Breweries and Bharat Electronics Limited.
Mr. M L Gopal Shetty was elected as the first President of BgSE. He served two tenures of two years each as President. During his first tenure, BgSE was granted recognition by the Ministry of Finance as an Exchange in 1963. Mr. Gopal Shetty invited the then Honorable Chief Minister of Karnataka, Mr. S. Nijalingappa, to inaugurate the Exchange.
Dharmaprakasha L S. Venkoji Rao became the next President of the Exchange. He was instrumental in enlisting quite a number of Companies on the Exchange including a few Plantation Companies and other Companies on which he also happened to be a Director. His efforts helped BgSE in getting recognition as an Exchange.
Mr. P.S. Narayana Rao, convened a Meeting of the Standing Committee of Presidents of Stock Exchanges in Mach 1967. The Meeting was attended by the Presidents of all the Eight Stock Exchanges which were recognized by the Ministry of Finance at that time and also by the Officials from the Ministry of Finance. This meeting invited wide media coverage to the Exchange.
In 1963, BgSE got initial recognition for five years. During the tenure of Mr. M. Nanjappaiah Jahagirdhar, BgSE got renewal of recognition for a further period of five years from the Central Government.
During the tenure of Mr. V. Srinivasan, BgSE grew in business and reputation.
Mr. H C Nagabhusan got the first Year Book of the Exchange compiled. It was presented to the then President of India, Shri V V Giri. During his Presidentship, BgSE completed 10 years of service to Investors. To mark the occasion, a function was held at Chamber of Commerce grounds which was inaugurated by Mr. N. Raghunatha Reddy, the then Minister of State, Government of India and on this occasion BgSE released the Directory of companies compiled by the Exchange.
Mr. Alan J. Chaves held the office of President of the Exchange for two terms and worked for the development of the Exchange.
Mr. K V Shankar held the post of President for a period of six years. During his period many industry visits were conducted for the benefit of the members which became a practice during the tenure of the succeeding Presidents. The visit of the Chairman of Birla Group of Industries, Mr. G D Birla, was one of the notable events. As the Operations of the Exchange scaled up, BgSE office was shifted from Indian Bank building, K G Road, to the Unity Building.
During Mr. M.N. Venkat Subban’s tenure, the Exchange completed 20 years of existence. BgSE applied to the Government for a permanent recognition. Keeping in view the fast growth of Exchange and the services rendered to the Capital Market by the members, the government was pleased to grant permanent recognition to the Exchange. Mr. Venkat Subban organised an impressive function inviting Sri Janardhan Pujari, Union Minister of State, Finance, as the Chief Guest. Sri M.R. Maiya, Executive Director of Bombay Stock Exchange, also graced the occasion.
During Mr. Murthy’s tenure the Stock Exchange inducted new professional Members. He also played a pivotal role in introducing a clearing system and auction of short sales for smooth settlement of trades. He organized All India Presidents’ Conference, jointly with All India Financial Institutions Association. A laudable achievement during his time was the setting up of the Customer Protection Fund.
Mr. Prabhakar was instrumental in further increase in the number of professional members by admitting new members and establishment of professional organization set up to manage the Stock Exchange. He constituted a Committee of senior members to conduct Investors’ conferences at various District Head quarters of Karnataka. He hosted a Seminar on “Challenges of the Emerging Markets” which was presided over by the then Deputy Governor of RBI, and was also addressed by eminent people like Mr Pherwani of UTI, Mr N D Prabhu of Canara Bank, Mr Vallab Bansali and Mr Nimesh Kampani. He also had the privilege of organising Silver Jubilee Celebrations of the Exchange, in December 1987, which was inaugurated by the then Finance Minister Mr. N D Tiwari.
Mr. Krishnamurthy S Lokkur was on the Governing Board of BgSE for more than 12 years. Mr. Krishnamurthy was nominated to various Committees of SEBI during the initial days of SEBI. He was also member of the High Power Committee of Stock Exchanges. He was instrumental in setting up of Clearing House jointly with Canara Bank, which was inaugurated by the then Chairman of Canara Bank, Mr. N D Prabhu. Another landmark achieved during his period was the extension in jurisdiction of the Exchange under Section 13 of SCR Act to other parts of the State. He further increased the Membership of the Exchange by inducting Professionals, Corporates, and Individuals as Members. He attended the Conference conducted by World Federation of Stock Exchanges (FIBV) which was hosted by Amsterdam Stock Exchange and enlisted BgSE as Correspondence Member of FIBV. He hosted an Investors’ Conference wherein the then SEBI Chairman, Dr. S A Dave, interacted directly with the investors. He later became Secretary of Federation of Indian Stock Exchanges.
In order to cope with the increased scale of operations and provide better infrastructure to the members and investors, Mr. Jagadeesh Kumar, shifted office of BgSE from Unity Building to UNI Building. Mr. Jagadeesh Kumar is extremely good in public relations and was successful in inviting Mr. G V Ramakrishna, Chairman & Mr C B Bhave, Executive Director of SEBI to visit the Stock Exchange. During his tenure, Infantry Road Property was purchased by BgSE in an auction conducted by Income Tax Department. In this venture, he was ably supported by the then Vice President, Mr. S C Patel, Mr. Krishnamurthy S. Lokkur one of the Directors on the Board and the then Secretary, Mr. Raghavendra Rao.
During this period, SEBI issued new guidelines on the Governance of the Stock Exchanges mainly impacting constitution of the Governing Board and election of the office bearers of the Exchange. Pursuant to the new guidelines, the President of BgSE was no longer elected directly by the members of the Stock Exchange, but among the Directors on the Governing Body. In compliance to the new SEBI guidelines, BgSE took steps to appoint the Executive Director who was sole in charge of the Exchange’s administration.
Mr. K R L Raju was the first President elected amongst the Members of the Governing Board. During his tenure, BgSE witnessed further induction of Members. The selection of new members was done in a record time, through a thoroughly professional process of written tests by IIM-B, followed by an interview by the Governing Board. It brought accolades to the Exchange from the Capital Market observers. In the process, Mr. Raju filled the coffers of the Exchange by collecting infrastructure fund from the new Members and BgSE started looking for purchase of a constructed building to house its office. Mr. K.R.L Raju constituted a Building Committee comprising Mr. F. Mahavir Kumar, R. Jagadesh Kumar, Mr. K. Ishwara Bhat, Mr. L.S. Prabhakar and Mr. L.S. Krishnamurthy.
The present building on J.C Road, from where the Exchange is operating now, was purchased during Mr. F. Mahavir Kumar’s tenure from the Thapar group. Within six months of the acquisition of the building, trading operations were automated in a record time, making BgSE the first Exchange in South India and the fourth in the country to have screen based trading system. This resulted in huge increase in the volumes and the Exchange climbed to the 8th position from the 16th position. The management, staff and the members exhibited excellent team work and cooperation to take the Exchange to new heights.
Mr. Ishwar Bhat was the Member of Computerization Committee which selected and purchased the software, hardware and decided rules for computerized trading. He was also the member of the Building Committee which finalized the purchase of Stock Exchange Building. He played a significant role in the formation and incorporation of the subsidiary company, i.e. BgSE Financials Limited.
Mr. U B Maiya, was actively involved in setting up of Coffee Futures Exchange. During his tenure various Bangalore based companies held IPO related meetings in the Exchange premises. He initiated opening of service centers and additional Trading floors in other centres of Karnataka. The Exchange played a key role in promotion of the Interconnected Stock Exchange at Navi Mumbai.
Mr. Pankaj Shah became the President of the Exchange in 1998. During his tenure, there was complete transition of the business model of the Exchange. He along with other Regional Stock Exchanges (RSEs) conceptualized the Subsidiary model through which the RSEs could provide facilities to their Members and Investors to trade on NSE and BSE. This model was approved by SEBI on November 8, 1999. BgSE Financials Ltd (BFSL) was incorporated as the Subsidiary of BgSE and it obtained Membership of NSE in May 2000 and BSE in October 2000 in the Capital Market Segment. Members of BgSE got registered with SEBI as the Sub Brokers of BFSL and started trading in “CM” segment of NSE and BSE.
Mr. Pankaj J. Shah was also a Director and Chairman of the Inter connected Stock Exchange Limited, Navi Mumbai. He was also on the advisory panel on Intermediary Members Committee of SEBI.
During his term as the President, the Exchange has witnessed many new business initiatives and tremendous growth. He was also the Chairman on the Board of the Subsidiary Company. During his tenure, BFSL became one of the largest DP of NSDL in Karnataka. He was also instrumental for registering BFSL in the NSE-Derivative segment and in providing opportunity to the Members and Investors of BgSE to trade in “F&O” segment of NSE.