From Harshad Mehta to Covid-19 to 2025: India's worst stock market crashes ever

From the Harshad Mehta scam to Covid-19 and now April 2025, here's a look at the biggest single-day crashes in Indian stock market history and how long recoveries took

Stock market crash, Monday, April 7, 2025: Benchmark Indian equity indices BSE Sensex and NSE Nifty50 crashed on Monday, April 7 and recorded one of their worst falls in the last four years. The fall is a part of a global market crash that saw Japan’s Nikkei 225 index drop 8 per cent to hit the lower circuit filter.

 

Back home, the Sensex crashed 3,939.68 points, or 5.22 per cent, to the intraday low of 71,425.01. The Nifty50, on the other hand, plunged 1,160.8 points, or 5.06 per cent, to an intraday low of 21,743.65 during Thursday's intra-day trade. Notably, all 30 constituent stocks of Sensex fell in the range of up to 12 per cent.

 

The Indian equity market crash on Thursday, April 7 came on the back of US President Donald Trump's tariff hikes and the backlash from China that imposed 34 per cent tariffs on US imports.

 

That said, this isn't the first time that the Indian markets have crashed this bad in a single session. 

 

Here are some of the biggest crashes in the history of Indian equity markets along with the time markets took in recovery:

 

1. Covid-19 Crash (2020)

The outbreak of the global pandemic Covid-19 in 2020 caused one of the most feared stock market crashes in recent history. In the month of March 2020, the Sensex plunged from 41,000 hit a low of around 25,981 as global markets reacted to the economic shutdowns and uncertainties. However, recovery came quickly with the help of the injection of liquidity as well as lowering interest rates.

 

By November 2020, the Sensex had climbed back to around 41,000, marking an 8-month recovery and a 58 per cent gain from the crash low. The rally continued, and by September 2021, the Sensex scaled past 60,000, representing over a 130 per cent gain from the March 2020 low. This recovery was fueled by vaccine optimism, Foreign Institutional Investor (FII) inflows, and a surge in retail investor participation.

 

The northward march continued, which helped the Sensex to scale its all-time peak of 85,978.25 in September 2024. 

Crash Event	Bottom Level	Recovery Time	Recovery to Pre-crash Level	Total Gain from Bottom
COVID-19 Crash, 2020	25,981	8 months	By Nov 2020	58% (to pre-crash)
Financial Crisis, 2008	8,000	2 years	From 8,000 to 21,000	162%
Ketan Parekh Crash, 2001	2,594	3 years	By mid-2004	62%
Harshad Mehta Scam, 1992	2,529	4 years	By 1996	82%

 

2. Global financial crisis (2008)

The Global Financial Crisis (GFC) of 2008 caused a massive stock market crash in India, with the Sensex plummeting to approximately 8,000 levels from 21,000 levels by March 2009. This was weighed down by widespread global economic turmoil, with the collapse of major financial institutions and a sharp contraction in economic activity.  

 

The Indian market, however, began its recovery shortly after, supported by global stimulus measures and interest rate cuts. By November 2010, the Sensex had regained the 21,000 mark, a two-year recovery that represented a 162 per cent gain from the low of 8,000. The factors driving this recovery included global quantitative easing (QE), the revival of FII inflows, and a general economic rebound worldwide.

 

3. Ketan Parekh crash / Dot-com Bubble (2001)

The Ketan Parekh scam, combined with the burst of the dot-com bubble, caused a severe crash in 2001, with the Sensex falling to 2,594 levels from 4,200 levels in September. The market’s recovery was slow but steady, with real momentum starting to build in 2003. By mid-2004, the Sensex had climbed back to around 4,200, reflecting a 62 per cent gain from the crash low.

 

This recovery was driven by strong GDP growth in India, a booming IT sector, and growing global interest in India’s economic potential.

 

4. Harshad Mehta scam crash (1992)

The markets witnessed one of the worst falls in 1992 owing to the infamous Harshad Mehta scam. The scam led to a fall, with the Sensex dropping from 4,467 to around 2,529 by May 1993.

 

The market, however, gradually began to recover, taking almost four years to return to previous highs. By 1996, the Sensex crossed the 4,600 mark again, representing an 82 per cent gain from the bottom. This recovery, in markets,  was supported by a series of economic reforms and liberalisation policies, increased investor awareness, and the introduction of stronger institutional safeguards, which helped rebuild investor confidence and stabilise the markets.