Biggest Stock Market Crashes in India: History, Causes & Lessons
03 July 2025 · Sachin Gadekar
From the Harshad Mehta scam to Black Monday and COVID, here’s a look at the 10 biggest falls in Nifty history and the biggest fall in Bank Nifty history.
Introduction
Introduction
The Indian stock market has witnessed remarkable highs and brutal lows. While equity markets promise wealth creation, they also carry the risk of sudden crashes wiping out billions of investor wealth overnight.
At Ultra, we help investors understand both sides of the market — its massive potential and its inherent risks. In this article, we look back at the biggest stock market crashes in India, their reasons, impact, and key takeaways for investors.
Whether you want to know the biggest fall in Bank Nifty history, see an Indian stock market crash history chart, or want insights for the next Indian stock market crash prediction, this guide will help you stay informed.
Why Do Stock Markets Crash?
Stock market crashes are triggered by:
Economic slowdowns and recessions
Corporate frauds and scams
Global financial crises
Pandemic and natural disasters
Sudden policy changes or political instability
Market bubbles bursting due to overvaluation
Crashes are a reminder that while markets reward patience, they can punish complacency.
A Look at the 10 Biggest Stock Market Crashes in India
Let’s revisit some of the biggest falls in Indian stock market history.
1. Harshad Mehta Scam – 1992
One of the most infamous crashes, the 1992 scam involved stockbroker Harshad Mehta exploiting loopholes in the banking system to pump up stock prices. When the scam was exposed, the Sensex crashed by over 55% from its peak, wiping out investor wealth and shaking trust in the system.
2. Ketan Parekh Scam – 2001
The early 2000s saw another scam, led by Ketan Parekh. He manipulated low-liquidity stocks known as K-10 stocks. When the fraud came to light, the Sensex fell sharply. The dot-com bubble burst globally added to the crisis.
3. Black Monday – 2008 Global Financial Crisis
The 2008 global meltdown was one of the worst for Indian markets. The Sensex lost over 60% from its all-time high, plunging from over 21,000 to below 9,000 due to the subprime mortgage crisis in the US.
4. 26/11 Mumbai Terror Attacks – 2008
Just months after the global crisis, the Mumbai terror attacks spooked markets again. The Sensex tanked by over 600 points on 27 November 2008.
5. China Stock Market Crash – 2015
In August 2015, a sudden crash in China’s markets triggered panic globally. The Sensex fell by over 1,600 points on 24 August 2015, one of the biggest single-day falls.
6. Demonetisation Shock – 2016
On 8 November 2016, the Indian government announced demonetisation of Rs 500 and Rs 1,000 notes. The sudden cash crunch triggered panic selling. The Sensex fell over 1,700 points in two days.
7. IL&FS Crisis – 2018
In September 2018, the debt default by IL&FS triggered a liquidity crisis in the NBFC sector. This led to massive corrections in banking and NBFC stocks, affecting the Nifty and Bank Nifty.
8. COVID-19 Market Crash – 2020
The COVID-19 pandemic led to one of the sharpest crashes in Indian market history. On 23 March 2020, the Sensex fell over 3,900 points (13%) in a single day — one of its worst falls ever. The Nifty and Bank Nifty both saw their biggest declines.
9. Adani-Hindenburg Report Shock – 2023
In January 2023, a short seller report by Hindenburg Research accused the Adani Group of fraud. The report triggered a massive sell-off in Adani Group stocks, impacting the broader market and Bank Nifty due to banking exposure.
10. Global Inflation Scare & Fed Hikes – 2022–23
Rising global inflation and aggressive US Fed rate hikes led to foreign fund outflows, dragging the Sensex and Nifty lower multiple times. Sharp intraday falls became common.
Biggest Fall in Bank Nifty History
The biggest fall in Bank Nifty history came during the COVID-19 crash in March 2020, when it fell by more than 12% in a single day due to fears of a banking crisis triggered by lockdowns.
Indian Stock Market Crash History Chart
| Year | Event | % Fall from Peak |
|---|---|---|
| 1992 | Harshad Mehta Scam | ~55% |
| 2001 | Ketan Parekh Scam & Dot-com Bust | ~40% |
| 2008 | Global Financial Crisis | ~60% |
| 2015 | China Crash | ~6% in a day |
| 2016 | Demonetisation | ~6% in 2 days |
| 2018 | IL&FS Crisis | ~10% in 3 months |
| 2020 | COVID-19 | ~40% |
| 2023 | Adani Report | ~10% in Adani stocks |
Lessons from India’s Biggest Stock Market Crashes
Do your due diligence: Avoid stocks driven by hype or manipulation.
Diversify: Don’t put all your money into one sector or stock.
Have a long-term mindset: Markets recover, but panic selling locks in losses.
Keep an emergency fund: So you’re not forced to sell investments at a loss.
Stay informed: Understand macroeconomic trends, interest rates, and global cues.
FAQs on Biggest Stock Market Crashes in India
Q1: What was the biggest fall in Bank Nifty history?
The biggest single-day fall in Bank Nifty history happened on 23 March 2020 during the COVID-19 market crash.
Q2: What are the top 3 biggest falls in Nifty history?
The Harshad Mehta scam (1992), the 2008 global financial crisis, and the COVID-19 crash (2020) are the three biggest.
Q3: How do I protect my portfolio during a stock market crash?
Diversify, avoid panic selling, maintain stop losses if trading, and stay invested for the long term.
Q4: Can I predict the next Indian stock market crash?
No one can time the market with certainty. The best defense is portfolio diversification and discipline.
Q5: Where can I track Indian stock market crash history charts?
You can check platforms like NSE India, BSE India, and credible financial news sites for charts and crash data.
Conclusion
India’s stock market has faced multiple crashes but always emerged stronger. Knowing the biggest stock market crashes in India helps you become a wiser investor.
At Ultra, we help you stay informed, build smart portfolios, and use every crisis as an opportunity. Want to diversify your investments beyond stocks? Explore our fixed-income and alternative investment options at Ultra.