RIP: Gujarati stock broker

Warning: This may sound a little parochial. If the stock market, commodity and share trading in India owes its origin to any specific community in India, then it has to be Gujarati. It’s an irony of fate that the state from where those five ‘gentlemen’ originated — who used to gather under a banyan tree in front of the Town Hall of Mumbai in c. 1850 — is the one, which is currently witnessing the demise of what they had started.

The until-recent booming stock trade in India had only grown exponentially since the end of the 18th century when some traders in Mumbai started trading in loan securities of the East India Company. Slowly the number of individuals trading in it only swelled up over a century.

It was in 1850s that the informal and under-the-tree format of this business took off and then migrated to what is today known as Dalal Street. Couple of decades later in 1875, started ‘The Native Share and Stock Brokers’ Association’, which has today evolved into the Bombay Stock Exchange. Needless to say, it was the first stock exchange of Asia.

Promoted, patronised and proliferated by Gujaratis, trading continued to give that boost to the Indian economy – despite being seen and derided by many a stiff upper lip as a form of gambling. It boosted the Indian confidence and gave a fillip to emerge as an economic superpower in the 1980s and 1990s, during the economic liberalisation.

It also gave the crores of Indian common men and women the power to dream big and become rich quickly – aka Dhirubhai Ambani. Stock trading was held as nothing short of being a magical business and the buy and sell ‘tips’ given by the lords of the stock-trading-ring were the magical spell. The gains it gave re-instilled people’s faith in capitalism as the right path for the country.

Something changed after 2007.
The lure of quick money got not just the dreamy eyed, but the swindlers and the government too! Harshad Mehta’s happened, but the business went on. But it was the government which struck the last nail in the coffin with Stock Trading Tax. The business was already ailing thanks to slowdowns and recessions, riskier but more rewarding trades in commodities, faster Internet connectivity that made it possible for a Gujarati trader to trade online in any exchange in the world, at any time of the day, without and restrictions and undue taxes. So the STT turned out to be the tipping point.

There are dozens of swanky buildings in Ahmedabad which, until recently, housed thousands of 'jobbers' — a breed of brave treasure hunters who wanted to make money in the few trading hours and become phenomenons like the 'big bull'. And replicas of such new age brokerage firm buildings aka temples of money, are found in almost every town of Gujarat.

Today most of these buildings stand witness to the glorious past. Their computer terminals are waiting for lakhs of part-time ‘jobbers’ that they used to house. The small capital that these jobbers used to bring to office every morning and a small margin that they used to take home every evening, is what build the capital on which the India Inc was founded.

So what happens next? Will the powerful and rich broker community and an eminent economist Manmohan Singh, who holds the reins of the country and the finance ministry will let it die? Will the resilient Gujaratis once again fight the greedy government to bring life back into the markets? Somebody ought to raise voice and ensure that the business-heritage of ours is not lost due to lack of vision of the politicians and greed and callousness of many a stock broker.