project of share khan
Post on 27-Apr-2015
86 Views
Preview:
TRANSCRIPT
Session (2010-11)
INTRODUCTIONShare Khan Limited. (SSKI) is one of the leading equity research and broking houses of India. It is known for its strong belief in value-investing ideas, which form the core of its investment philosophy. The story of Share Khan Limited. (SSKI) goes back many years, when Mr.
.Morakhia family laid its foundation with a common dream to build a professional organization with strong value systems, to provide reliable & honest investment advice to investors. Share Khan Limited. (SSKI) strives to build an attitude to look for value, to look beyond the realms of stock market , a different mind-set that is not influenced by the market trends, but banks on the power of intellect. Share Khan Limited. (SSKI) currently has more than 800 outlets across India and is serving 1,00,000 educated and informed investors. It is one of the most favored brokerage houses amongst FIIs. Asia Money Brokers Poll, Hong Kong ,regards Share Khan Limited. (SSKI) as a top brokerage house in the country for its research on equities and is the fifth best in the world for the same.
The year 1998 marks the beginning of Share Khan Limited. (SSKI) operations in Lucknow a city where speculation was a synonym of Equity Transactions. In such an ignorant and callous environment, Mr. Mridul Verma Regional Manager Lucknow Branch took it on himself to bring a revolution in the mindset of people to stop treating stocks as lottery tickets but regard them as an investment option of repute.1
Session (2010-11)
OBJECTIVES: Get full knowledge and make myself full aware of the products of the company. Make myself full aware about the rule and regulations followed by the company. Get full knowledge about the competitors, who is present in the market to know that how far the competitors are different from my company and how their products are different from my company and us. Make the market full aware of the company, its products, its features, its uniqueness and jobs offered by the company. Learn the ground reality of the corporate world. Learn that how to overcome from all the objections of prospective clients.
2
Session (2010-11)
TARGETS/TASKSThe targets/tasks of training were; To find out the prospective clients and convince them to open their demat account. To motivate the people to trade in shares who have demat accounts. To create the database of those people who opened demat account with the company.
STRATEGIES:The strategies regarding completion of my target given to me during my training were as : Found the prospective customer database from different means. First of all we made cold calls to people and took an appointment from them to give the product knowledge of the company. This is a part of Direct Marketing. Database Marketing - Direct marketers mine the database to identify
prospects that would have the most interest in an offer. Tele prospecting - Generating and qualifying new leads for closure by
another sales channel.
3
Session (2010-11)
LIMITATIONS:Limitations of training were as: There were some documents needed to open demat account such as, PAN card, address proof, bank proof etc. To open a demat account and trading in shares MICR cheque was compulsory. All the signatures of account opening form were matched with the signature of the pan card. To motivate the people towards opening their demat accounts who were not interested in stock market.
4
Session (2010-11)
Share Khan Limited. (SSKI) Lucknow provides ends to ends equity solutions to all categories of its valued clients by using a combination of its numerous products and services that are: Broking on BSE/NSE (CASH & DERIVATIVES) Portfolio Management Services (PMS) On-line share Trading Timely & researched Investment and Trading Ideas Depository Services
ONLINE STOCK TRADING
On-line share trading Demat account Dematerialization Rematerialization
What is Online Stock Trading?Online Stock Trading is a recent way of buying and selling stocks. Now you can buy and sell any stock over the Internet for a low price and you dont need to call up a broker. You can buy any stock and sell any stock and it doesnt take much to get started. All you need is a brokerage
5
Session (2010-11)
account. A broker that I use is www.sharekhan.com and you can start an account with them for Rs. 750 and so they are not expensive at all. DEMAT ACCOUNT DEFINITION Demat account is a safe and convenient means of holding securities just like a bank account is for funds. Today, practically 99.9% settlement (of shares) takes place on Demat mode only. Thus, it is advisable to have a Beneficiary Owner (BO) account to trade at the exchanges. BENEFITS OF DEMAT ACCOUNT A safe and convenient way of holding securities (equity and debt instruments both). Any change in address or bank account details can be electronically intimated to all companies in which investor holds any securities, without having to inform each of them separately. No stamp duty charges. Securities can be transferred at an instruction immediately. Increased liquidity, as securities can be sold at any time during the trading hours (between 9:55 AM to 3:30 PM on all working days), and payment can be received in a very short period of time. Pledging of securities in a short period of time. Reduced paper work and transaction cost.
6
Session (2010-11)
DEMATERIALISATIONDEFINITION Dematerialization is the process of converting physical shares (share certificates) into an electronic form. Shares once converted into dematerialized form are held in a Demat account.
DEMATERIALIZATION PROCESS An investor having securities in physical form must get them dematerialized, if he intends to sell them. This requires the investor to fill a Demat Request Form (DRF), which is available with every DP, and submit the same along with the physical certificates. Every security has an ISIN (International Securities Identification Number). If there is more than one security than the equal number of DRFs has to be filled in. The whole process goes on in the following manner: THINGS INVESTORS SHOULD KNOW ABOUT ACCOUNT OPENING AND DEMATERIALISATION Providing the bank account details at the time of account opening
It is mandatory for investors Toro vide his bank account details at the time of opening a Demat account. This is done to safeguard investor's own interests. There are two major reasons for this: The interest and dividend warrants can't be en-cashed by any unauthorized person, as the bank account number is mentioned on it.
7
Session (2010-11)
It is convenient and time saving, as dividends and interests given by the companies can be directly credited to the investor's bank account
BANK ACCOUNT VS DEMAT ACCOUNT Basis Of Differentiation Form of Holdings/Deposits Used for Bank Account Funds Safekeeping of money Transfer of money (without actually handling money)
S. No.
Demat Account
1. 2.
Securities Safekeeping of shares Transfer of shares (without actually handling shares)
3.
Facilitates
4.
Where to open Requirement of PAN Number
A bank of choice
A DP of choice (can be a bank) Mandatory (effective from April 01, 2006) No interest accruals on securities held in Demat account No such requirement
5.
A DP of choice (can be a bank)
6.
Interest accrual on Interest income is subject to the holdings applicable rate of interest
7.
Minimum balance AQB* maintenance is specified requirement Either or Survivor facility for certain bank accounts Available
8.
Not available
RematerializationThe process of getting the securities in an electronic form, converted back into the physical
8
Session (2010-11)
formis known as Rematerialization. An investor can rematerialize his shares by filling in a Remat Request Form (RRF).
STOCK EXCHANGE
History of Stock ExchangesThe world's foremost marketplace New York Stock Exchange (NYSE), started its trading under a tree (now known as 68 Wall Street) over 200 years ago? Similarly, India's premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to as far as 125 years when it started as a voluntary non-profit making association. News on the stock market appears in different media every day. You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are important. Stocks of public limited companies are bought and sold at a stock exchange. But what really are stock exchanges? Known also as the stock market or bourse, a stock exchange is an organized marketplace for securities (like stocks, bonds, options) featured by the centralization of supply and demand for the transaction of orders by member brokers, for institutional and individual
9
Session (2010-11)
investors. The exchange makes buying and selling easy. For example, you don't have to actually go to a stock exchange, say, BSE - you can contact a broker, who does business with the BSE, and he or she will buy or sell your stock on your behalf. STOCK MARKET MILESTONES
1875 1956
BSE established as 'the native Share and Stock Brokers Association' BSE became the first stock exchange to be recognized under the Securities
Contract Act. 1993 2000 2000 2001 NSE recognized as a stock exchange. Commencement of Internet trading at NSE. NSE commences derivatives trading (Index futures) BSE commences derivatives trading
NATIONAL STOCK EXCHANGE (NSE)With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. Trading at NSE can be classified under two broad categories: (a) Wholesale debt market and
10
Session (2010-11)
(b) Capital market. Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.
OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)The traditional trading mechanism prevailed in the Indian stock markets gave way to many functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long settlement periods and benami transactions, which affected the small investors to a great extent. To provide improved services to investors, the country's first ring less, scrip less, electronic stock exchange - OTCEI - was created in 1992 by country's premier financial institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services.
SEBI (SECURITY EXCHANGE BOARD OF INDIA)The Government of India established the Securities and Exchange Board of India, the regulatory body of stock markets in 1988. Within a short period of time, SEBI became an autonomous body through the SEBI Act passed in 1992, with defined responsibilities that cover both development & regulation of the market while also giving the board independent powers. Comprehensive regulatory measures introduced by SEBI ensured that end investors benefited from safe and transparent dealings in securities. The basic objectives of the Board were identified as: To protect the interests of investors in securities To promote the development of Securities Market To regulate the Securities Market SEBI has contributed to the improvement of the Securities Market by introducing measures like capitalization requirements, margining and establishment of clearing corporations that reduced the risk of credit. Today, the board continues on its two-fold mission of integrating the Securities Market at the National level and also diversifying the trading products to increase the number of traders 11
Session (2010-11)
(including banks, financial institutions, insurance companies, Mutual Funds, primary dealers etc) transacting through the Exchanges. In this context the introduction of derivatives trading through Indian Stock Exchanges permitted by SEBI in 2000 AD has been a real landmark.
About SharekhanSharekhan (SSKI) ltd is 80 years old brokerage house. It is one of the leading equity research and broking houses of India and 3rd in on-line share trading.. It is known for its strong research work and providing value-investing ideas, which form the core of its investment philosophy. The story of Sharekhan (SSKI) ltd goes back 8 decades , when Morakhia family laid its foundation with a common dream to build a professional organization with strong value systems, to provide reliable & honest investment advice to investors. Sharekhan (SSKI) ltd strives to build an attitude to look for value, to look beyond the realms of stock market, a different mind-set that is not influenced by the market trends, but banks on the power of intellect.
12
Session (2010-11)
ShareKhan is one of the country's strongest names in the online trading domain today. The company runs India's largest chain of 'share shops' of 588 share shops across 213 cities in India to get a host of trading related services - our friendly customer service staff will also help you with any accounts related queries you may have ShareKhan handles revenues to the tune of Rs 800 crore to Rs 1,000 crore on a daily basis. SSKI Investor Services Pvt Ltd has been in the equities solutions business for the past eight decades. SSKI created ShareKhan in 1999, when it wanted to utilize the Internet for providing financial services through an online trading website.
SHAREKHAN SERVICES
13
Session (2010-11)
SHAREKHAN SERVICES
On-line services 14
Session (2010-11)
Dial n trade Commodities trading Derivatives trading Mutual funds Portfolio Management Services (PMS) Share shops Research Depository Services
PRODUCTS OF ON-LINE SERVICES
CLASSIC ACCOUNT SPEED TRADE
15
Session (2010-11)
Features of Classic Account that enables you to invest effortlesslyOnline trading account for investing in Equities and Derivatives via sharekhan.com Integration of: Online trading + Bank + Demat account Instant cash transfer facility against purchase & sale of shares Make IPO bookings You get Instant order and trade confirmations by e-mail Streaming Quotes Personalized Market Scan with your own customized stock ticker! Single screen interface for cash and derivatives
CORPORATE MEMBERS
16
Session (2010-11)
TARUN P. SHAH (CEO)
Education Previous company
: B.Sc.
Experience: 16 Years
: Been with SSKI Group
17
Session (2010-11)
SHANKAR VAILAYA
DIRECTOR-OPERATIONS
Education Previous company Experience
: :
Charted Accountant Been with SSKI Group : 16 years
18
Session (2010-11)
Corporate StructureSSKI Securities Pvt. Ltd. Owns 56% of Morakhia Family & Associates 100% Owns 50.5% of
SSKI INVESTOR SERVICES PVT. LTD. Retail broking arm of the group Shareholding pattern: 55.5% Morakhia family (promoters) 18.5% HSBC Private Equity India Fund Ltd 18.5% First Carlyle Ventures, Mauritius 7.5% Intel Pacific Inc.
SSKI CORPORATE FINANCE PVT. LTD. Investment Banking arm of the group
Shareholding pattern: 50.5% SSKI Securities Pvt. Ltd. 49.5 % Morakhia family
19
Session (2010-11)
ACHIEVEMENTSPIONEERS OF ON-LINE TRADING IN INDIA
Amongst the top 2 online trading websites from India Most preferred financial destination amongst online banking customers Source: Net Sense 2000, an independent study of financial services in India
Winner of Best Financial Website Award CHIP Dishnet DSL Web Awards 2001
20
Session (2010-11)
COMPETITORSICICI direct .comICICI Bank Demat Services boasts of an ever-growing customer base of over 11.5 lacs account holders. In our continuous endeavor to offer best of the class services to our customers we offer the following features: E-Instructions: You can transfer securities 24 hours a day, 7 days a week through Internet & Interactive Voice Response (IVR) at a lower cost. Now with "Speak to transfer", you can also transfer or pledge instructions through our customer care officer. Consolidation Demat Account: Dematerialize your physical shares in various holding patterns and consolidate all such scattered holdings into your primary Demat account at reduced cost.Digitally Signed Statement: Receive your account statement and bill by email. Corporate Benefit Tracking: Track your dividend, interest, bonus through your account statement. Mobile Request: Access your Demat account by sending SMS to enquire about Holdings, Transactions, Bill & ISIN details. Mobile Alerts: Receive SMS alerts for all debits/credits as well as for any request which cannot be processed. Dedicated customer care executives specially trained at our call center, to handle all your queries.Countrywide network of over 235 branches, you are never far from an ICICI Bank Demat Services outlet.
21
Session (2010-11)
KARVYKarvy, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company Karvy Consultants Limited. We started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, we have utilized our experience and superlative expertise to go from strength to strengthto better our services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of Indias premier integrated financial service enterprise.
22
Session (2010-11)
KOTAK SECURITIESKotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of around Rs.2000 crore and the AUM across the group is around 120 billion and employs over 6000 employees in its various businesses. With a presence in 216 cities in India and offices in New York, London, Dubai and Mauritius, it services a customer base of over 10,00,000.The group specializes in offering top class financial services, catering to every segment of the industry.
IndiabullsThe parent company, India Bulls Ltd owns and manages the web properties www.indiaBulls.com and www.5paisa.com. It also undertakes research, customized and off-the-shelf. Launched on 11 May 1999, www.indiaBulls.com is Indias leading and most comprehensive business and financial information website. The site provides quality information and analysis - earlier restricted to a few people - to the common man, absolutely free! The site has met with an overwhelming response and has been reviewed as the most comprehensive financial content website in India by BBC World - Money Watch, Business World, Business Line and others. The company also won the Golden Mouse Award in India Internet World 2000 for the "Best Finance" site. In May 2001, our website was included in the Top 200 Best of the Web list by Forbes Global under the Asia Investing category. We were the only website from India to be featured in any category. Since then it has been nominated twice to this list. In its last review, Forbes editors have said, "www.indiaBulls.com is a must read for the investors in South Asia..."
23
INDIA INFOLINEThe India Infoline Group comprises the holding company, India Infoline Ltd, which has 4 wholly-owned subsidiaries engaged in distinct yet complementary businesses which together offer a whole bouquet of products and services to make your money grow. As on date, the Group employs 4000 plus employees, in over 60 locations, across India. The corporate structure has evolved to comply with oddities of the regulatory framework but still beautifully help attain synergy and allow flexibility to adapt to dynamics of different businesses.
Session (2010-11)
24
Session (2010-11)
The parent company, India Infoline Ltd owns and manages the web properties www.indiainfoline.com and www.5paisa.com. It also undertakes research, customized and off-the-shelf. Launched on 11 May 1999, www.indiainfoline.com is Indias leading and most comprehensive business and financial information website. The site provides quality information and analysis - earlier restricted to a few people - to the common man, absolutely free! The site has met with an overwhelming response and has been reviewed as the most comprehensive financial content website in India by BBC World - Money Watch, Business World, Business Line and others. The company also won the Golden Mouse Award in India Internet World 2000 for the "Best Finance" site. In May 2001, our website was included in the Top 200 Best of the Web list by Forbes Global under the Asia Investing category. We were the only website from India to be featured in any category. Since then it has been nominated twice to this list. In its last review, Forbes editors have said, "www.indiainfoline.com is a must read.
SharekhanShare Khan Limited. (SSKI) is one of the leading equity research and broking houses of India. It is known for its strong belief in value-investing ideas, which form the core of its investment philosophy. The story of Share Khan Limited. (SSKI) goes back many years, when Mr. .Morakhia family laid its foundation with a common dream to build a professional organization with strong value systems, to provide reliable & honest investment advice to investors.
25
Session (2010-11)
Share Khan Limited. (SSKI) strives to build an attitude to look for value, to look beyond the realms of stock market , a different mind-set that is not influenced by the market trends, but banks on the power of intellect.
26
Session (2010-11)
CONCEPT OF STOCKStock Dividend Stock Basics- Types of Stock Different classes of Stocks Stock Basics- Conclusion & Resources Buying Stocks- Advantages & Disadvantages Debt vs. Equity Risk What is an investment? Terminologies Of Share Market How Stock Market Works Primary and Secondary Markets
27
Session (2010-11)
STOCKSTHE DEFINITION OF A STOCK OR SHARES Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.
According to INDIAN COMPANIES ACT, 1956, the shares of a company may be divided into the following categories: SHARES
EQUITY PREFERENCE
ORDINARY 1. Redeemable 2. Irredeemable 3. Cumulative 4. Non-cumulative 5. Convertible 6. Non-Convertible
EQUITY: The share holders of such shares participate in divisable profits only after the claims met of the preference shareholders i.e. they actually do not enjoy any preferential right either in respect of dividend or in respect of repayment of capital. They are entitled to receive dividend recommended by the directors declared by the company in general meetings.
Preference:They have a preferential right to be paid dividend during the lifetime of the company. They have a preferential right to the return of capital Preference shares divided into:-
1.) Redeemable & Irredeemable
28
Session (2010-11)
Redeemable: These shares are redeemed at the end of the stipulated period. These shares are redeemed either out of fresh issue of equity share or by creating capital redemption reserve fund out of profit & loss account or general reserve. Irredeemable: These shares are non refundable to the holders during the lifetime of the firm.
DIVIDENDIf you've ever owned stocks or held certain other types of investments, you might already be familiar with the concept of dividends. Even those people who have made investments that paid dividends may still be a little confused as to exactly what dividends are, however after all, just because a person has received a dividend payment doesn't mean that they fully appreciate where the payment is coming from and what its purpose is. If you have ever found yourself wondering exactly what dividends are and why they're issued, then the information below might just be what you've been looking for.
DEFINING THE DIVIDENDDividends are payments made by companies to their stockholders in order to share a portion of the profits from a particular quarter or year. The amount that any particular stockholder receives is dependent upon how many shares of stock they own and how much the total amount being divided up among the stockholders amounts to. This means that after a particularly profitable quarter a company might set aside a lump sum to be divided up amongst all of their stockholders, though each individual share might be worth only a very small amount potentially fractions of a cent, depending upon the total number of shares issued and the total amount being divided. Individuals who own large amounts of stock receive much more from the dividends than those who own only a little, but the total per-share amount is usually the same. WHEN DIVIDENDS ARE PAID
29
Session (2010-11)
How often dividends are paid can vary from one company to the next, but in general they are paid whenever the company reports a profit. Since most companies are required to report their profits or losses quarterly, this means that most of them have the potential to pay dividends up to four times each year. WHY DIVIDENDS ARE PAID Companies pay dividends as a method of sharing their profitable times with the stockholders that have faith in the company, as well as a way of luring other investors into purchasing stock in the company that is paying the dividends.
PREFERRED STOCK Preferred stock represents some degree of ownership in a company but usually doesn't come with the same voting rights. (This may vary depending on the company.) With preferred shares investors are usually guaranteed a fixed dividend forever. This is different than common stock, which has variable dividends that are never guaranteed. Another advantage is that in the event of liquidation preferred shareholders are paid off before the common shareholder (but still after debt holders). Preferred stock may also be callable, meaning that the company has the option to purchase the shares from shareholders at anytime for any reason (usually for a premium). Some people consider preferred stock to be more like debt than equity. A good way to think of these kinds of shares is to see them as being in between bonds and common shares. (If you don't understand bonds make sure also to check out our bond tutorial.)
30
Session (2010-11)
BUYING STOCKS: ADVANTAGES AND DISADVANTAGESStocks are among the best long-term investments for most Americans. The stock market offers a very stable and reliable method of building wealth long-term. This means stocks can potentially be top performers as a part of your overall financial plan.
ADVANTAGES OF INVESTING IN STOCKS:
Stocks typically outperform all other investment options over any ten-year period, making them a must for your long-term portfolio. Simply purchasing a few high quality stocks and holding them for several years have made many fortunes.
High quality stocks often "split" when the price reaches a certain level. This means that each share is divided up into one or more new shares and the price is divided along with it. For example, if one of your stocks undergoes a 2 for 1 stock split, you'll end up with 2 shares for every one that you held previously. Of course the price of each new share will now be 1/2 of what is was before, but lower
31
Session (2010-11)
priced stocks tend to grow faster than higher priced stocks giving you a better chance of increasing your equity over time. Except for a few short periods, stocks have consistently outpaced the rate of inflation since World War II. Inflation goes up and down, but stocks tend to continue to rise over time.
When you buy stocks, you take partial ownership of the company in proportion to the number of shares of each stock purchased. As an owner, you have an excellent opportunity to share in the financial success and growth of the company.
Stocks are excellent vehicles for retirement plans, especially those of younger workers who have quite a few years left to work. You should concentrate on buying stocks primarily when you're in your younger and middle working years. DISADVANTAGES OF STOCKS: Stocks are volatile. A single stock's share price can vary widely from day to day, month to month, and year to year depending on numerous factors that are beyond your control. The most effective way to invest in stocks is to "buy and hold" for the long-term and "diversify" (divide your stock holdings among several different stocks in various market sectors). The closer you get to retirement age, the more risks you assume with stocks, therefore stocks are best used in the early and middle stages of your career. Since stocks are so volatile short-term, as you begin to reach retirement age, you should start gradually moving part of your assets into other sectors.
32
Session (2010-11)
Companies can and do go out of business; at which time their stock usually become worthless. But if you select your stocks carefully you can greatly minimize this risk.
Both buying and selling stocks cost you money in the form of brokerage commissions, so the best strategy for investing in stocks is to "buy and hold" for the long-term.
DEBT Vs. EQUITYWhy does a company issue stock? Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods fit under the umbrella of "debt financing." On the other hand, issuing stock is called "equity financing." Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way. All that the shareholders get in return for their money is the hope that the shares will some day is worth more. The first sale of a stock, which is issued by the private company itself, is called the initial public offering (IPO). It is important that you understand the distinction between a company financing through debt and financing through equity. When you buy a debt investment such as a bond, you are guaranteed the return of your money (the principal) along with promised interest payments. This isn't the case with an equity investment. By becoming an owner, you assume the risk of the company not being successful. Just as a small business owner isn't guaranteed a return, neither is
33
Session (2010-11)
a shareholder. As an owner your claim on assets is lesser than that of creditors. This means that if a company goes bankrupt and liquidates, you, as a shareholder, don't get any money until the banks and bondholders have been paid out; we call this absolute priority.
RISKIt must be emphasized that there are no guarantees when it comes to individual stocks. Some companies pay out dividends, but many others do not. And there is no obligation to pay out dividends even for those firms that have traditionally given them. Without dividends an investor can make money on a stock only through its appreciation in the open market.
WHAT IS AN INVESTMENT?Investment is a term with several closely It refers to the accumulation of some kind of Assets such as equity shares or (interest, dividends or capital appreciation), operations. RETURN ON INVESTMENTS The money you earn or lose on your investment, expressed as a percentage of your original investment. related meanings in finance and economics. asset in hopes of getting a future return from it. bonds held for their financial return rather than for their use in the organizations
SHORT-TERM INVESTMENTS Short-Term Investments are generally investments with maturities of less than one year.
FUTURES & OPTIONS The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000. The futures contracts are based on the popular benchmark S&P CNX Nifty Index.
34
Session (2010-11)
The Exchange introduced trading in Index Options (also based on Nifty) on June 4, 2001. NSE also became the first exchange to launch trading in options on individual securities from July 2, 2001. Futures on individual securities were introduced on November 9, 2001. Futures and Options on individual securities are available on 118 securities stipulated by SEBI.
STOCKSA corporation is generally entitled to create as many shares as it pleases. Each share is a small piece of ownership. The more shares you own, the more of the company you own, and the more control you have over the company's operations. Companies sometimes issue different classes of shares, which have different privileges associated with them. So a corporation creates some shares, and sells them to an investor for an agreed upon price, the corporation now has money. In return, the investor has a degree of ownership in the corporation, and can exercise some control over it. The corporation can continue to issue new shares, as long as it can persuade people to buy them. If the company makes a profit, it may decide to plow the money back into the business or use some of it to pay dividends on the shares.
PUBLIC MARKETS
35
Session (2010-11)
How each stock market works is dependent on its internal organization and government regulation. The NYSE (New York Stock Exchange) is a non-profit corporation, while the NASDAQ (National Association of Securities Dealers Automated Quotation) and the TSE (Toronto Stock Exchange) are for-profit businesses, earning money by providing trading services. Most companies that go public have been around for at least a little while. Going public gives the company an opportunity for a potentially huge capital infusion, since millions of investors can now easily purchase shares. It also exposes the corporation to stricter regulatory control by government regulators.
PRIMARY & SECONDARY MARKETPRIMARY MARKET: An Issuer/Company enters the Primary markets to raise capital. They issues new securities in Exchange for cash from an investor (buyer). If the Issuer is selling securities for the first time, these are referred to as Initial Public Offers (IPOs). Summing up, Primary Market is the means by which companies float shares to the general public in an Initial Public Offering to raise capital. SECONDARY MARKETS: Once new securities have been sold in the Primary Market, an efficient mechanism must exist for their resale, if investors are to view securities as attractive opportunities. Secondary Market transactions are referred to those transactions where one investor buys shares from another investor at the prevailing market price or at whatever price both the buyer and seller agree upon. The Secondary Market or the Stock Exchanges are regulated by the regulatory that facilitates 36
Session (2010-11)
authority. In India, the Security and Exchange Board of India (SEBI) govern the Secondary and Primary Markets. For e.g. If one of the investors who had invested in the shares of company XYZ sold it to another at an agreed upon price, a Secondary Market transaction is said to have taken place. Normally investors transact in securities using an intermediary such as a broker the process.
RESEARCH METHODOLOGYDESCRIPTIVE RESEARCH: Descriptive research includes surveys and fact-finding enquires of different kinds. The major purpose of descriptive research is description of the state of affairs, as it exists at present.
SAMPLE SURVEY:
The respondents selected should be as representative of the total population as possible in order to produce a miniature cross section. The selected respondents constitute what is technically called a Sample and the selection process is called sampling Technique. The survey so conducted is known as sample survey.
COMPUTER APPLICATION:
37
Session (2010-11)
Computer can be used by just about anyone Doctor, Engineers and recently even house wives. Computers are used not only in numeric application but also in non numerical such as proving theorems, playing chess, Share trading, Preparing menu, Preparing projects and so on. Without computers we might not have achieved a number of things.
RESEARCH INSTRUMENT
QUESTIONNAIRE: Questionnaire are formal set of questions prepare to collect the required information. This is one of the most effective and popular techniques used in surveys. However, one has to be careful while drawing up questionnaire. Before deciding on the questions, it is important to understand the exact nature of the information required and who should be interviewed. The contents, phrasing and the sequence of the questionnaire should also be clear and unambiguous. The knowledge levels of the target of respondents should be kept in the mind while drawing up the questions.
MECHANICAL INSRUMENTSSampling: A sample is a subset of a unit or populations, collected as a representation of it. A sample is used to discover one or more properties of the population. Collected of sample is called SAMPLING.
38
Session (2010-11)
Proper sampling design is essential in marketing research. The sample has to be collected in such a way that is represents the populations. Sampling Units: In sampling researches, decide who will be surveyed. The portion of population that researches need to target and that represents the entire population is known as SAMPLING UNITS. The target population is should be selected in such a way that everyone in the population has that equal chances of being included in the sample.
Sample size:The sample size is an important element in research process. As the size of the sample has the direct effect of a research. It is essential for researchers to select an appropriate sample size. As the size of a sample increases, accuracy and reliability of research also increases however, the cost of research also increases. Therefore, research need to make a trade off between the accuracy and cost of research.
Sampling procedure:Sampling procedure is the way in while we selected a sample. The method for selecting samples includes stratified and unstratified sampling. Probability and non probability sampling, single stage sampling and multistage sampling and single unit sampling and clusters of unit samplings.
In my survey I have used Questionnaire as the research instrument. Sample size of the survey is 200 39
Session (2010-11)
Sources of data collectionThere are two sources on which data can be collected via primary source and secondary source. The data which are prepared from the main proposed and researcher or owner it is called primary source and the data collected from this source is called primary data. The data which is collected from the persons, private bodies, private research agencies etc are called secondary source and the data collected is from both primary and secondary type. The following are the data which have been collected from both the sources
Primary data: In the course of carrying out the project I have collected very few data from this source but they are more needed in carrying out the project work. The following data has been has been collected from this source of lucknow city.
40
Session (2010-11)
Secondary data: Most of the data in my project has been collected from the secondary source as the data is only available to them and other parties I have find the most convenient source and collected from them. The data collected from this source are the past records and it is used to analyses. The data, which have been collected from this source, are mentioned below:
DATA ANALYSIS & INTERPRETATIONSample Size: 200Division of people based on Sex
41
Session (2010-11)
9%
Male Fem ale
91%
INTERPRETATIONI took sample size 200. Among 200 people 91% are male and 9% are female.
Division of people based on OccupationNo. of people
42
Session (2010-11)
Others Housewife Professional Business Selfemployed Emloyed 0
6 10 34 88 24 3820 40 60 80 100
Series1
Occupation
INTERPRETATION Among 200 people Employed Self employed Business Professional House wife Others 38 24 88 34 10 06
Division of people based on Age Group43
Session (2010-11)
No. of people
Above 50
37
35-50
71
Series1
18-35
92
0
20
40
60
80
100
Age group
INTERPRETATIONAmong 200 people different numbers of people belonging from different age group, which is given below;
Age Group (years) 18 35 35 50Above 50
No. of people 92 7137
44
Session (2010-11)
Awareness level about Stock MarketNo. of People Age Group
No
75 Series1
Y es
125
0
50
100
150
INTERPRETATIONAmong 200 people 125 people are aware about stock market and 75 people are not aware about share market.
45
Session (2010-11)
Selection of company for investmentNo. of people60 54 50 40 33 30 20 10 0 20 23 30 40
lin e
IC
K
CompaniesINTERPRETATIONAmong 200 people different numbers of people invested in different stock broking companies. All of them are described below: Company Name No. of people
Sharekhan India Infoline Karvy ICICI direct.com Kotak Securities Other local companies
46
ot he
20 33 54 23 30 40
rl
Se cu ri t oc ie al s co m pa ni es
ek h
ar v K
Sh ar
In d
Id IC
ire ct .c
ia i
nf o
ot a
k
om
an
y
Session (2010-11)
Type of different investment in the stock market No. of peopleM utual Funds Secondary M arket bank saving Debenture Insurance IPO 0 20 19 28 36 40 60 80 25 30 62
Series1
Sources of investmentINTERPRETATIONAmong 200 people 82 people all are invested in the stock market in different means, which are as; Means of investment Mutual Fund Secondary market Bank saving Debenture Insurance IPO No. of people 62 25 30 19 28 36
47
Session (2010-11)
Selection of company for investment No. of peopleOther local companies
16
ICICI direct.com
20 70
Karvy
Series1
Indiabulls
60
Sharekhan
34 0 20 40 60 80
INTERPRETATION
Companies
Among 200 people, different numbers of people invested in different stock broking companies.
Company NameOther local companies ICICI direct.com Karvy India Bulls Sharekhan 48
No. of people16 20 70 60 34
Session (2010-11)
Market share of companies
sharekhan 20% 10% 17% 15% indiainfoline karvy ICICI direct.com Kotak Securities 12% 26% Other local companies
INTERPRETATIONThe above pie chart shows that the market share gained by the different companies in Lucknow as given below.
Company NameSharekhan India Bulls Karvy ICICI direct.com
Market Share (%)10 17 26 12
49
Session (2010-11)
Kotak Securities Other local companies
15 20
Reasons for selection of these companiesNo. of people30 25 20 15 10 5 0
ty
ce
at e
e
rS er vi
Br ok e
Pu
th
et te
G ro w
th
M ou
B
reasons of selection of companiesINTERPRETATION Among 200 people 82 people are invested in stock market. Among them 14 people due to mouth publicity, 22 people due to better service, 8 people due to growth rate, 26 people due to less brokerage and 12 people due to other reasons selected all the above companies.
50
Le
O th
ss
er R
ea so
bl ic i
ra g
R
n
Session (2010-11)
How do you know about Sharekhan (SSKI)?
25%
24%
Newspaper Hordings Electronic media
10%
Friends17%
Others24%
INTERPRETATIONMost of respondent become aware with Sharekhan Ltd. by newspaper and print media.
51
Session (2010-11)
FINDINGS khan. It was noticed that investors are very conscious about their money, they It was found that most of them believe that changes in security market Most of the people are satisfied with there mode of investment It was found that maximum numbers of investors are male in Around 45 people out of 100 investing their money are businessmen. People of age group between 18-35 preferred to invest in shares. Around 67% of people were aware of stock market. People get aware of stock market through investors, televisions etc. need more return with less risk affect the net asset value of the shares. It was found that most of the people were aware of the company share
comparison to females.
52
Session (2010-11)
mean years.
Among 100 around 41% of people invest in stock market in different People experience of investment in years in stock market is between 3-5 People mostly prefer karvy for investment The main reason behind investment in a particular Company is the past Karvy holds maximum % of shares in Lucknow city. Mostly people go through references. Most of them were satisfied with the service provided to them.
performance, dividend history, with Good Portfolio Management.
CONCLUSION
Market share of Indiabulls is greater than other company. So, it is
leading in the market. Karvy is banned by SEBI due to some reasons and it is not allowed to open
new DEMAT accounts. Sharekhan gradually increasing its market share by providing
recommendation, charging comparatively reasonable charges, it also providing 5 times exposure.
53
Session (2010-11)
charges.
The main differentiating features of all the companies are their brokerage
Some companies do not charge annual maintenance charges (AMC)
directly but they charge it in other forms as Bank charges etc. Awareness level about share market is gradually increasing in city of
Lucknow due to various advertising campaigns of different share broker companies.
Through information and complete knowledge about the concept of market may provide better response and will help to create goodwill and trust in the mind of a prospective customer.
SUGGESTIONSAfter the deep study and enumerate survey I should recommend the following suggestions to our company i.e., Sharekhan Ltd.
People should be made aware about the various facts and reasons as to why they need to switch over from Fixed Deposits and Saving to Stock Market Management, Research and Earning factors needs to be the best in the industry and efforts should be such to make it better.
54
Session (2010-11)
Company should launch various publicity campaigns such as Knops etc. to attract the prospective customers. More presentations and seminars must take place in order to make people understand what share market is all about. Last but not the least, creating awareness about the share market and providing personalize and transparent services will be the key element to stay in this business. All the customers of the Sharekhan should be allowed to make payments through franchisees because city is to big and it is not easy for every customer to reach the Head Office daily to deposit cheque in case of Offline Customers.
ANNEXUREQUESTIONNAIREWe are conducting a survey to know the customers preference towards online share trading. Information obtained from the survey will be kept confidential and will only be used for Academic purpose.
Name:..
Age:.years
55
Session (2010-11)
Address: Occupation:..
Q1. Do you plan your investment? a) Yes b) No Q2. Which are your preferred areas for investment? a) IPO. b) Saving Bank c) Secondary Market d) Insurance. e) Mutual Funds f) Debt Investment.. g) Others. Q3. How comfortable are you with equity-linked investment? a) Low b) Moderate c) High Q4. Which type of investment you prefer? a) Regular investment b) One time Q5. Do you know about share trading? a) Yes b) No Q6. Do you know about on-line trading? a) Yes b) No Q7. Do you have DEMAT account? If yes, specify name of the company. a) Sharekhan (SSKI) b) Indiabulls.. c) Karvy d) ICICI direct.com e) Other56
Session (2010-11)
Q8. Whom do you consult before making investment? a) Friends b) Professionals c) Broker d) Financial Magazines e) Others Q9. Your present investment portfolio? a) 10,000- 100,000. b) 1,00,000- 5,00,000 c) Above 5,00,000 Q10. Give Rank to important benefits of on-line trading according to your point of view? a) Money transfer b) Accessibility c) Accuracy d) Speed e) Security f) Others Q11. Negative points in on-line trading according to your point of view? a) Computer awareness. b) Cost c) Internet availability d) Security.. e) Others Q12. Are you aware about Sharekhan (SSKI)? a) No.. b) If Yes. How do you know about ShareKhan (SSKI)? a) Newspaper b) Hoardings c) Friends d) Electronic media e) Others Q13. Your Contact No..57
Session (2010-11)
THANK YOU
BIBLIOGRAPHYThere were a number of resources from which I got a lot of help while finalizing. My project report and the list of various books, magazines, journals and websites is given below:
BOOKSResearch methodology Marketing management
AUTHORS NAMEC.R.Kothari Philip Kotler
Magazines:58
Session (2010-11)
Economics Times Business Today Share Khan Value line India Today
WEB SITES:www.sharemarketbasics.com www.nasqad.com www.indobase.com www.sharekhan.com www.bseindia.com www.yeahindia.com www.nseindia.com
59
Session (2010-11)
WORD OF THANKSI take the opportunity to pay hearty regards to the management of Share khan Ltd. and my guide Mr. Santosh Kumar Shukla for providing me their kind support for completion of my project.
I am grateful to all those who directly or indirectly supported me in completion of this project whether it was moral support, financial or providing appropriate knowledge during different faces of the project. As a result I could accomplish my project successfully.
60
top related