analysis of indian stock market and comparison of corporate stock brokers final

PREFACE

Indian stock exchanges host the most number of listed companies after United States.

About 2500 companies are listed in the Bombay Stock Exchange and the National Stock

Exchange. Apart from foreign institutional investors, Indian stock market has some 30

million domestic investors.

The working of stock markets has started in India as early as 1875, when 318 persons

coming together to Native Share and Stock Brokers Association, with Re.1 for membership

free.

Closest to BSE is National Stock Exchange, also located at Bombay. Nifty is the market

index of NSE. Indian stock market has seen many ups and downs, but now is flying high,

crossing every previous record and zoom to even further heights. BSE-Sensex crossed the

four-figure mark of 1000 in 1990 and had a smooth bull ride till 1992, when the big-full of

Indian stock market, Harshad Mehta became a villain in the infamous Harshad Mehta scam

broke out. The sensex lost 570 points in no time and some eight to 12 million investors were

pushed to bankruptcy.

After that incidence, came the Securities and Exchanges Board of India. With the

enforcement of several regulations and strict guidelines, the confidence of investors was

somewhat regained. With the present technology and practices, it is next to impossible to

commit a fraud in Indian Stock market. So claims the SEBI.

Under the watchful eyes of SEBI, Indian Stock markets once again gained

momentum. The sensex crossed reached and crossed 6000 mark in 2000 and crossed the 7000

and 8000 marks in 2005. Foreign Institutional Investors are pumping in money into the

market.

The FIIs are confident of a sustainable momentum. The momentum in the stock

market can be associated with the growth in the fields of export, IT, ITES,

telecommunication, education, energy sector, agriculture etc. The reformist policies being

pursued by the government is also a factor for this growth.

Due to large scale outsourcing by American and European countries, a large number

of jobs also went to India, resulting in more affluent youth who are only happy to spend out

their money. This helped in the growth of telecommunication, FMCG and manufacturing

sectors. The steady growth of GDP is also a critical factor in the upward movement of Indian

stock market.

Analysis of Indian Stock Market and Comparison of Corporate Stock Brokers

2 Dr. Gaur Hari Singhania Institute of Management and Research

Apart from FIIs, the non-resident Indians also invest hugely in he stock market. Diminishing

returns from bank deposits and the facilities of online trading made them turn to stock

markets and with the current bull-run many have made a good fortune from stock markets.

The stockbrokers also chip in on and open offices in foreign countries, aimed at him NRIs

there.

The initial public offers by Tata Consultancy Services, Maruti Udyog Limited, ONGC

etc. were big events in Indian stock market. Not only did they put a great show, but also took

the stock market to newer heights. TCS is a big weight in the stock market from the day it

was listed. Traditional heavy weights are Reliance, Tata, and Bharati etc. Now new entrants

like Biocon are also play significant roles in the market.

Growth directed at sky is visible everywhere. The biggest growth opportunity lies in

the stock market itself. The population of India is well above one billion. The number of

investors is just above 40 million. That is just 4% of the total population. The measures for a

10% growth are sought.



INDUSTRY STUDY

BOMBAY STOCK EXCHANGE

Bombay Stock Exchange is the oldest stock exchange in Asia What is now popularly known

as the BSE was established as "The Native Share & Stock Brokers' Association" in 1875.

Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector by

providing it with an efficient capital raising platform.

Today, BSE is the world's number 1 exchange in the world in terms of the number of listed

companies (over 4900). It is the world's 5th most active in terms of number of transactions

handled through its electronic trading system. And it is in the top ten of global exchanges in

terms of the market capitalization of its listed companies (as of December 31, 2009). The

companies listed on BSE command a total market capitalization of USD Trillion 1.28 as of

Feb, 2010.

BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000

certifications. It is also the first Exchange in the country and second in the world to receive

Information Security Management System Standard BS 7799-2-2002 certification for its BSE

On-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISO

version of BS 7799 for Information Security.

The BSE Index, SENSEX, is India's first and most popular Stock Market benchmark index.

Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures and

options on the index are also traded at BSE.

With its tradition of serving the community, BSE has been undertaking Corporate Social

Responsibility (CSR) initiatives with a focus on Education, Health and Environment. BSE

has been awarded by the World Council of Corporate Governance the Golden Peacock

Global CSR Award for its initiatives in Corporate Social Responsibility (CSR).

Vision

"Emerge as the premier Indian stock exchange by establishing global benchmarks"

Base Year- 1978-79

Base Index Value- 100

Date of launch- 1/1/1986

Method of calculation- Launched on full market capitalization method and effective

September 01, 2003, calculation method shifted to free-float market capitalization



NATIONAL STOCK EXCHANGE

The National Stock Exchange of India Limited has genesis in the report of the High Powered

Study Group on Establishment of New Stock Exchanges. It recommended promotion of a

National Stock Exchange by financial institutions (FIs) to provide access to investors from all

across the country on an equal footing. Based on the recommendations, NSE was promoted

by leading Financial Institutions at the behest of the Government of India and was

incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the

country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956

in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment

in June 1994. The Capital Market (Equities) segment commenced operations in November

1994 and operations in Derivatives segment commenced in June 2000.

The following years witnessed rapid development of Indian capital market with introduction

of internet trading, Exchange traded funds (ETF), stock derivatives and the first volatility

index - IndiaVIX in April 2008, by NSE.

August 2008 saw introduction of Currency derivatives in India with the launch of Currency

Futures in USD INR by NSE. Interest Rate Futures was introduced for the first time in India

by NSE on 31st August 2009, exactly after one year of the launch of Currency Futures.

With this, now both the retail and institutional investors can participate in equities, equity

derivatives, currency and interest rate derivatives, giving them wide range of products to take

care of their evolving needs.



ORGANIZATION STRUCTURE

Introduction

Anagram Capital Ltd. (Anagram) is amongst the leading retail broking houses in India. It is

engaged in offering comprehensive personal finance solutions since 1994. The company is a

part of the of the Rs 20 bn Lalbhai Group. The group companies in the capital and

commodities market area include Anagram Capital Ltd and Anagram Comtrade Ltd.

Anagram offers a wide range of services for the discerning equity investor, in addition to

online account access and real time trading, Insurance Services, Wealth Management

Services, Mutual Fund and Advisory Services

The firm has its roots in Western India especially Gujarat where it is the biggest player. But it has

expanded considerably.

Anagram is positioned amongst the top retail broking houses in the country. An achievement

indeed for a company that's been providing comprehensive personal finance solutions since

1994. Anagram Capital Ltd. (Anagram), promoted by Edelweiss Group. Anagram Stock

broking Ltd. and Anagram Comtrade Ltd. are the other group companies in the capital market

area.

Anagram is a member of all leading stock and commodities exchange in India -National

Stock Exchange (NSE), Bombay Stock Exchange (BSE), National Commodities Exchange of

India Ltd. (NCDEX) and multi Commodities Exchange Market of India (MCX) and a

depository participant with NSDL. Our current offerings include trading in cash and

derivative segment through our branches and sub-brokers high-speed anywhere trading

through the net, Online Depository Services, Commodities trading, PMS, Currency Future

Trading, Distribution of Mutual Funds, IPO’s and other financial products.

DIVISIONS

We have a nationwide presence with 135 plus branches, 1300 plus Sub Brokers & Business

Associates, 3000 plus terminals and a professionalized team of 1200 plus employees spread

across 200 plus cities. Our well - qualified staff will always be ready to fulfil your Stock

Broking needs or solve your queries over the telephone, or at the branches themselves.



HIERARCHY



PRODUCT OFFERINGS

Anagram has divided its product and service offering under three broad client

interface categories:-

“Retail Spectrum”, “Wealth Spectrum” and “Institutional Spectrum” as per following

details:-

Retail Spectrum Wealth Spectrum Institutional Spectrum

↓ ↓ ↓

Caters to a large number

of retail clients by offering

all products under one

roof through our branch

network & online mode

� Equity &

Commodity

Trading

� Personal Financial

Services

� Distribution of

mutual funds

� Distribution of

Insurance

� Distribution of

savings products

� Personal Credit

� Personal loan

services

� Loans against

shares

� Online Investment

To provide customized

wealth advisory services to

high net worth individuals

� Wealth Advisory

Services

� Portfolio

Management

Services

� International

Equity

� Priority Client

Equity Services

� Arts Initiative

To forge and build strong

relationships with

corporate and institutional

clients

� Institutional Equity

Broking

� Investment

Banking

� Merchant Banking

� Transaction

Advisory Services

HDFC Securities Ltd Brics



Karvy Consultants Ltd Centrum

Prabhudas Lilladher Centuryfinvest

Sharekhan Chona Financial Services (P) Ltd.

AnandRathi CIL Securities Ltd

JM Financial Ltd Competent Finman Pvt Ltd

Kotak Securities Ltd Composite Investments Private Ltd

Motilal Oswal Securities Ltd Consortium Securities Pvt Ltd

Ambit Holdings

Crimson Financial Services Ltd/ Crimson

Commodity Ltd

Indiabulls Crosseas Capital Services

Moneypore Crown Group

Parag Parikh Financial Advisory Services Ltd Dalmia Securities Pvt Ltd

RBS Broking India Dani Shares & Stocks Pvt Ltd

5Paisa.com Dawnay Day AV Securities Pvt Ltd

Edelweiss Dynamic

Enam Securities Pvt Ltd Elite Stock Management Ltd (ESML)

HSBC InvestDirect (India) Limited (HIL) Eureka Stock & Share Broking Services Ltd

Kisan Ratilal Choksey Shares & Securities Pvt Ltd Farsight Group

Mathew Easow Financial Services Fortune Financial Services (India) Ltd

DJS Stock and Shares Ltd Globe Group

Hybrid Financial Services Ltd Gogia International Securities Ltd (GISL)

India Cements Capital Ltd Goldmine Stocks Pvt Ltd

Mefcom Securities Ltd GRD Securities Ltd

Modern Shares & Stock Brokers Ltd Gupta Equities Pvt Ltd

Munoth Capital Market Ltd H. Nyalchand Financial Services Ltd

Munoth Financial Services Ltd (MFSL) Hem Group

Pioneer Investcorp Ltd (PINC) ICDS Securities Ltd

Ratnabali Capital Markets Ltd ICICI Securities

16anna.com IDBI Capital Market Services Ltd

A.G. Shares & Securities Ltd IDFC-SSKI Group

Abhipra India Infoline

Adroit Financial Services Pvt Ltd Indira Group

Ajay Natavarlal Securities Pvt. Ltd. Innovate Securities Pvt. Ltd.

Alankit Invest India

Almondz Capital Markets Pvt Ltd InvestMentor Securities Ltd.

Amit Nalin Securities Pvt Ltd (ANSec) ITI Financial Services Limited

Angel Broking Ltd Jaypee Capital Services Ltd.

Anugrah Stock & Broking Pvt Ltd Jhaveri Securities Pvt. Ltd.

Anush Shares and Securities Pvt Ltd JRG Securities Ltd

Apeejay Securities Private Limited JV Capital Services (P) Ltd

Apollo Sindhoori Capital Investments Ltd Kassa Finvest Pvt Ltd

Arcadia Share & Stock Brokers Pvt Ltd Kaynet Finance Ltd.



Above mentioned is the list of corporate stock brokers that are the competitors of

Anagram Capital Ltd.

Asit C. Mehta Investment Intermediates Ltd Keynote India

Khajanchi & Gandhi Stock Broking

ASL Capital Holdings Private Ltd Khambatta Securities Ltd

Astha Credit & Securities (P) Ltd Khandwala Group

Best Bull Stock Trading Private Ltd Kunvarji Commodity Brokers Pvt. Ltd.

Bharat Bhushan & Company Labdhi Finance Corporation

Microsec Macquarie Securities (India) Pvt Ltd

Modex International Securities Ltd Magnum.co.in

Monarch Projects and Finmarkets Ltd Mansukh Securities & Finance Ltd

Moongipa Investments Ltd. Marck Securities Pvt. Ltd.

MSB Group Marfatia Stock Broking Pvt. Ltd.

Narayan Securities Pvt. Ltd. Master Trust Ltd

Navia Markets Ltd MG Group of Companies

NDA Securities Limited RR Investors Capital Services Pvt. Ltd

Networth Stock Broking Ltd Sajag Securities Pvt Ltd

Pace Financial Services SATCO Securities & Financial Services Ltd

Padmakshi Financial Services Pvt. Ltd Shah Investors Home Ltd (SIHL)

Parsoli Corporation Limited Shardul Securities Ltd

Pee Aar Securities Limited Share Mart

PKJ Share Brokers Ltd. Shree Naman Developers Limited

Prayas Securities Pvt. Ltd. Shreepati Holdings & Finance Pvt. Ltd

PSJ Securities Pvt. Ltd. Shreyas Stocks Pvt Ltd

R. Wadiwala Securities Pvt. Ltd. Shri Parasram Holdings Pvt Ltd

R.K. Global Shares & Securities Ltd SKP Securities Ltd

Rajvi Stock Broking Ltd SMC Investment Solutions & Services

Reflection Investments Star Finvest Pvt. Ltd

Reliable Stocks & Shares (India) Ltd Sugal & Damani Share & Stock Brokers

Reliance Money Sumedha Fiscal Services Ltd (SFSL)

Religare Enterprises Ltd Sushil Finance

Bonanza Portfolio Ltd Swastika Investmart Ltd

Wellworth Share and Stock Broking Ltd The Kasat Securities Pvt Ltd.

Yoha Securities Ltd Transparent Shares & Securities Pvt Ltd

Agroy Finance & Investment Ltd Twin Earth Securities Pvt Ltd (TESPL)

Amrapali Capital and Finance Services Ltd Unicon Investment Solutions

Aryan Share and Stockbrokers Ltd Ventura Securities Ltd



OTHER INFORMATION ABOUT ANAGRAM

Edelweiss to acquire Anagram Capital:

Edelweiss has entered into an agreement to acquire Anagram Capital for Rs. 164 crore in an

all-cash transaction. With a nation-wide network of more than 137 branches and over 1,300

sub-brokers, Anagram has one of the widest geographical reach among retail broking firms.

The company has more than 1.80 lakh clients and estimated total revenue of Rs. 100 crore for

the nine months ended December 31, 2009. The company’s average daily equity trading

volume is about Rs. 800 crore. Edelweiss plans to operate Anagram as a 100 per cent

subsidiary with clear focus on continuity and building on the current business and people

with investments in research, products, training and technology.

“This acquisition is in synch with Edelweiss’ plan to expand the retail broking business. The

acquisition of Anagram, with its reach and large, high quality and diversified client base, will

give impetus to Edelweiss’ retail broking and distribution businesses.

What makes this transaction exciting is the minimal overlap between the broking operations

of both companies. We are also impressed with Anagram’s professional management team

and the consistent focus on client service and risk management. I welcome all employees,

Anagram’s clients and partners to the Edelweiss family,” said Rashesh Shah, Chairman,

Edelweiss Group, said.

With a view to focussing on its core business of textiles, Gujarat-based Lalbhai group on

Wednesday exited its domestic broking business by selling its firm, Anagram Capital, to

Edelweiss Capital.

“The Lalbhai group’s core business is textiles and it is a global leader in denim. It is also

diversifying into other businesses and since finance does not form a core business for the

group, it was decided to sell-off the business,” Anagram Capital’s CEO, Mayank Shah, told

PTI here. In the late-1990s, ICICI had acquired Anagram Finance, another Lalbhai group

company.



REGISTERATION DETAILS

Anagram Stockbroking Limited

BSE Cash SEBI Regn. No.: INB011257152, BSE F&O SEBI Regn. No.: INF010808537

PMS Regn. No.: INP000002031, NSDL DP SEBI Regn. No.: IN-DP-NSDL-180-2000,

Mutual Fund: ARN 3068

Anagram Capital Limited

NSE Cash SEBI Regn. No.: INB230597630, NSE F&O SEBI Regn. No.: INF230597630

NSE Currency Derivative SEBI Regn. No: INE230597630

Anagram Comtrade Limited

MCX-10425; NCDEX-00205; NMCE- CL0126, National Spot Exchange Limited – 11270

Registered Office

Anagram House, H. L. Commerce College - Stadium Road Near Commerce Six Circle,

Navrangpura, Ahmedabad 380 009

LIST OF STOCK EXCHANGES IN INDIA

OTC Exchange of India

Madras Stock Exchange Ltd.

The Uttar Pradesh Stock Exchange Association Ltd. Cochin Stock Exchange Ltd.

Jaipur Stock Exchange Ltd. Bangalore Stock Exchange Ltd.

National Stock Exchange of India Ltd. Gauhati Stock Exchange Ltd.

The Ludhiana Stock Exchange Ltd. The Calcutta Stock Exchange Association Ltd

Bhubaneshwar Stock Exchange Ltd. The Delhi Stock Exchange Ltd.

Vadodara Stock Exchange Ltd. Madhya Pradesh Stock Exchange Ltd.

Bombay Stock Exchange Ltd. Magadh Stock Exchange

Ahmedabad Stock Exchange Ltd. Pune Stock Exchange Ltd.

Mangalore Stock Exchange MCX Stock Exchange Ltd

Hyderabad Stock Exchange

Saurashtra Kutch Stock Exchange (SKSE)

Coimbatore Stock Exchange



INTRODUCTION

Analysis of Indian Stock Market

In general, the financial market divided into two parts, Money market and capital market.

Securities market is an important, organized capital market where transaction of capital is

facilitated by means of direct financing using securities as a commodity. Securities market

can be divided into a primary market and secondary market.

PRIMARY MARKET

The primary market is an intermittent and discrete market where the initially listed shares are

traded first time, changing hands from the listed company to the investors. It refers to the

process through which the companies, the issuers of stocks, acquire capital by offering their

stocks to investors who supply the capital. In other words primary market is that part of the

capital markets that deals with the issuance of new securities. Companies, governments or

public sector institutions can obtain funding through the sale of a new stock or bond issue.

This is typically done through a syndicate of securities dealers. The process of selling new

issues to investors is called underwriting. In the case of a new stock issue, this sale is called

an initial public offering (IPO). Dealers earn a commission that is built into the price of the

security offering, though it can be found in the prospectus.

SECONDARY MARKET

The secondary market is an on-going market, which is equipped and organized with a place,

facilities and other resources required for trading securities after their initial offering. It refers

to a specific place where securities transaction among many and unspecified persons is

carried out through intermediation of the securities firms, i.e., a licensed broker, and the

exchanges, a specialized trading organization, in accordance with the rules and regulations

established by the exchanges.

A bit about history of stock exchange they say it was under a tree that it all started in

1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National

Stock Exchange (NSE) started operations in 1994.

NSE was floated by major banks and financial institutions. It came as a result of Harshad

Mehta scam of 1992. Contrary to popular belief the scam was more of a banking scam than a

stock market scam. The old methods of trading in BSE were people assembling on what as

called a ring in the BSE building. They had a unique sign language to communicate apart

from all the shouting. Investors weren't allowed access and the system was opaque and

misused by brokers. The shares were in physical form and prone to duplication and fraud.



NSE was the first to introduce electronic screen based trading. BSE was forced to follow suit.

The present day trading platform is transparent and gives investors prices on a real time basis.

With the introduction of depository and mandatory dematerialization of shares chances of

fraud reduced further. The trading screen gives you top 5 buy and sell quotes on every scrip.

A typical trading day starts at 10 ending at 3.30. Monday to Friday. BSE has 30 stocks which

make up the Sensex .NSE has 50 stocks in its index called Nifty. FII s Banks, financial

institutions mutual funds are biggest players in the market. Then there are the retail investors

and speculators. The last ones are the ones who follow the market morning to evening;

Market can be very addictive like blogging though stakes are higher in the former.



ORIGIN OF INDIAN STOCK MARKET

The origin of the stock market in India goes back to the end of the eighteenth century when

long-term negotiable securities were first issued. However, for all practical purposes, the real

beginning occurred in the middle of the nineteenth century after the enactment of the

companies Act in 1850, which introduced the features of limited liability and generated

investor interest in corporate securities.

An important early event in the development of the stock market in India was the formation

of the native share and stock brokers 'Association at Bombay in 1875, the precursor of the

present day Bombay Stock Exchange. This was followed by the formation of

associations/exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). In

addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to

recede into oblivion during depressing times subsequently.

Stock exchanges are intricacy inter-woven in the fabric of a nation's economic life. Without a

stock exchange, the saving of the community- the sinews of economic progress and

productive efficiency- would remain underutilized. The task of mobilization and allocation of

savings could be attempted in the old days by a much less specialized institution than the

stock exchanges. But as business and industry expanded and the economy assumed more

complex nature, the need for 'permanent finance' arose. Entrepreneurs needed money for long

term whereas investors demanded liquidity – the facility to convert their investment into cash

at any given time. The answer was a ready market for investments and this was how the stock

exchange came into being.

Stock exchange means anybody of individuals, whether incorporated or not, constituted for

the purpose of regulating or controlling the business of buying, selling or dealing in

securities. These securities include:

(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like

nature in or of any incorporated company or other body corporate;

(ii) Government securities; and

(iii) Rights or interest in securities.

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are

the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges.

However, the BSE and NSE have established themselves as the two leading exchanges and

account for about 80 per cent of the equity volume traded in India. The NSE and BSE are

equal in size in terms of daily traded volume. The average daily turnover at the exchanges has

increased from Rs 851 crore in 1997-98 to Rs 1,284 crore in 1998-99 and further to Rs 2,273

crore in 1999-2000 (April - August 1999). NSE has around 1500 shares listed with a total

market capitalization of around Rs 9, 21,500 crore.



The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9, 68,000

crore. Most key stocks are traded on both the exchanges and hence the investor could buy

them on either exchange. Both exchanges have a different settlement cycle, which allows

investors to shift their positions on the bourses. The primary index of BSE is BSE Sensex

comprising 30 stocks. NSE has the S&P NSE 50 Index (Nifty) which consists of fifty stocks.

The BSE Sensex is the older and more widely followed index.

Both these indices are calculated on the basis of market capitalization and contain the heavily

traded shares from key sectors. The markets are closed on Saturdays and Sundays. Both the

exchanges have switched over from the open outcry trading system to a fully automated

computerized mode of trading known as BOLT (BSE on Line Trading) and NEAT (National

Exchange Automated Trading) System.

It facilitates more efficient processing, automatic order matching, faster execution of trades

and transparency; the scrip's traded on the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F'

and 'Z' groups. The 'A' group shares represent those, which are in the carry forward

system (Badla). The 'F' group represents the debt market (fixed income securities) segment.

The 'Z' group scrip's are the blacklisted companies. The 'C' group covers the odd lot securities

in 'A', 'B1' & 'B2' groups and Rights renunciations. The key regulator governing Stock

Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other

participants in Indian secondary and primary market is the Securities and Exchange Board of

India (SEBI) Ltd.



BACKGROUND OF STOCK EXCHANGE IN INDIA

The emergence of stock market can be traced back to 1830. In Bombay, business passed in

the shares of banks like the commercial bank, the chartered mercantile bank, the chartered

bank, the oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta,

Englishman reported the quotations of 4%, 5%, and 6% loans of East India Company as well

as the shares of the bank of Bengal in 1836. This list was a further broadened in 1839 when

the Calcutta newspaper printed the quotations of banks like union bank and Agra bank. It also

quoted the prices of business ventures like the Bengal bonded warehouse, the Docking

Company and the storm tug company.

Between 1840 and 1850, only half a dozen brokers existed for the limited business. But

during the share mania of 1860-65, the number of brokers increased considerably. By 1860,

the number of brokers was about 60 and during the exciting period of the American Civil

war, their number increased to about 200 to 250. The end of American Civil war brought

disillusionment and many failures and the brokers decreased in number and prosperity. It was

in those troublesome times between 1868 and 1875 that brokers organized an informal

association and finally as recited in the Indenture constituting the “Articles of Association of

the Exchange”. On or about 9th

day of July,1875, a few native brokers doing brokerage

business in shares and stocks resolved upon forming in Bombay an association for protecting

the character, status and interest of native share and stock brokers and providing a hall or

building for the use of the members of such association.

As a meeting held in the broker’ Hall on the 5th

day of February, 1887, it was resolved to

execute a formal deal of association and to constitute the first managing committee and to

appoint the first trustees. Accordingly, the Articles of Association of the Exchange and the

Stock Exchange was formally established in Bombay on 3rd

day of December, 1887. The

Association is now known as “The Stock Exchange”.

The entrance fee for new member was Re.1 and there were 318 members on the list, when the

exchange was constituted. The numbers of members increased to 333 in 1896, 362 in

1916and 478 in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896,

Rs.2500 in 1916 and Rs. 48,000 in 1920. At present there are 23 recognized stock exchanges

with about 6000 stock brokers. Organization structure of stock exchange varies.14 stock

exchanges are organized as public limited companies, 6 as companies limited by guarantee

and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have

been permanent recognition. Others have to seek recognition on annual basis.



These exchange do not work of its own, rather, these are run by some persons and with the

help of some persons and institution. All these are down as functionaries on stock exchange.

These are

1. Stockbrokers

2. Sub-broker

3. Market makers

4. Portfolio consultants etc.

1.) Stockbrokers

Stock brokers are the members of stock exchanges. These are the persons

who buy, sell or deal in securities. A certificate of registration from SEBI is mandatory to act

as a broker. SEBI can impose certain conditions while granting the certificate of registrations.

It is obligatory for the person to abide by the rules, regulations and the buy-law. Stock

brokers are commission broker, floor broker, arbitrageur etc.

2.) Sub-broker

A sub-broker acts as agent of stock broker. He is not a member of a stock

exchange. He assists the investors in buying, selling or dealing in securities through

stockbroker. The broker and sub-broker should enter into an agreement in which obligations

of both should be specified. Sub-broker must be registered SEBI for a dealing in securities.

For getting registered with SEBI, he must fulfil certain rules and regulation.

3.) Market Makers

Market maker is a designated specialist in the specified securities. They

make both bid and offer at the same time. A market maker has to abide by bye-laws, rules

regulations of the concerned stock exchange. He is exempt from the margin requirements. As

per the listing requirements, a company where the paid-up capital is Rs. 3 crore but not more

than Rs. 5 crore and having a commercial operation for less than 2 years should appoint a

market maker at the time of issue of securities.

4.) Portfolio consultants

A combination of securities such as stocks, bonds and money

market instruments is collectively called as portfolio. Whereas the portfolio consultants are

the persons, firms or companies who advise, direct or undertake the management or

administration of securities or funds on behalf of their clients.



ABOUT NSE AND BSE

Formation

The National Stock Exchange of India was promoted by leading financial institutions at the

behest of the Government of India, and was incorporated in November 1992 as a tax-paying

company. In April 1993, it was recognized as a stock exchange under the Securities Contracts

(Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM)

segment in June 1994. The Capital Market (Equities) segment of the NSE commenced

operations in November 1994, while operations in the Derivatives segment commenced in

June 2000.

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage.

Popularly known as "BSE", it was established as "The Native

Share&Stock Brokers Association" in 1875.

It was the first stock exchange in the country to obtain permanent recognition in 1956 from

the Government of India under the Securities Contracts (Regulation) Act, 1956. Earlier an

Association of Persons (AOP), the Exchange is now a demutualised and corporatized entity

incorporated under the provisions of the Companies Act, 1956, pursuant to the

BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and

Exchange Board of India (SEBI).Bombay Stock Exchange Limited received its Certificate of

Incorporation on 8th August, 2005 and Certificate of Commencement of Business on 12th

August, 2005. The Exchange has succeeded the business and operations of BSE ongoing

concern basis and its recognition as an Exchange has been continued by SEBI.

Members

While the BSE has over 874 members-brokers across the country, NSE has more than 1000

members. In NSE, a prospective trading member is admitted to any of the following

combinations of market segments: Wholesale Debt Market segment, Capital Market (CM)

and the Futures and Options segments, CM Segment and the WDM segment, or CM

Segment, the WDM and the F and O segment. There is no such thing at BSE and members

join as any of the following: Trading Members, Trading cum Clearing Members, Professional

clearing member, Limited trading member and Self Clearing member.

For NSE: In order to be admitted as a trading member, the individual trading member/at least

two partners of the applicant firm/at least two directors of the applicant corporate must be

graduates and must possess at least two years' experience in securities markets. The applicant

for trading membership/any of its partners/shareholders/directors must not have been

declared defaulters on any stock exchange, must not be debarred by SEBI for being

associated with capital market as intermediaries and must not be engaged in any fund-based

activity. The trades executed on the Exchange may be cleared and settled by a clearing

member.



The initial joining fee for a member at BSE is Rs. 90 Lakhs while that for an NSE member is

between 100 to 300 Lakh depending on the kind of membership one chooses.

In addition to annual fees, NSE members are required to pay transaction charges on trades

undertaken by them. They pay transaction charge at the rate of Rs. 3.5 for every Rs. 1 lakh of

turnover in the CM segment. The transaction charges payable to the exchange by the trading

member for the trades executed by him on the F&O segment are fixed at the rate of Rs. 2 per

lakh of turnover (0.002%) subject to a minimum of Rs. 1, 00,000 per year. At BSE, these fees

differ according to the various types of members.

For BSE, the requirements to becoming a member are:

1. Authorised By NSC As A Brokerage House

2. Authorisation Of BSE

3. Negotiation From NSC

4. Trained Staff At BSE(Brokers, Traders, Accountants)

5. Data On Member Registration

6. Company By-Laws

7. Membership Fee

8. Financial Statements

9. Company Mission Statements

10. Handbook On Internal Operations & Control

11. Personal Information File For Management And Specialized Staff

12. Contribution To The Guarantee Fund

13. Payment For The Licensed Access To Use The Operating System

Listing

Listing means formal admission of a security to the trading platform of the Exchange. In

BSE, the securities may be of any public limited company, Central or State Government,

quasi governmental and other financial institutions/corporations, municipalities, etc. The

objectives of listing are mainly to provide liquidity to securities; mobilize savings for

economic development; protect interest of investors by ensuring full disclosures. The

Exchange has a separate Listing Department to grant approval for listing of securities of

companies in accordance with the provisions of the Securities Contracts (Regulation) Act,

1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines

issued by SEBI and Rules, Bye-laws and Regulations of the Exchange. A company intending

to have its securities listed on the Exchange has to comply with the listing requirements

prescribed by the Exchange.



At NSE, the following criteria’s are to be fulfilled when one applies to be listed:

Approval of Memorandum and Articles of Association

Approval of draft prospectus

Submission of Application

Listing conditions and requirements

Once a company fulfils these criteria’s then they have to submit the following to the board:

1. A brief note on the promoters and management.

2. Company profile.

3. Copies of the Annual Report for last 3 years.

4. Copies of the Draft Offer Document.

5. Memorandum & Articles of Association.

The listing fees depend on the companies paid up capital at both NSE and BSE. While the

initial listing fee at NSE is Rs.7500, it is Rs.20, 000 at BSE. The annual listing fees for a

company with a paid up capital up to Rs. 5 Crores is Rs. 10,000 at BSE while it is Rs. 8,400

at NSE. For a company with paid up capital between 5 to 10 crores, BSE charges Rs. 15,000

while NSE charges Rs. 10,000.

Indices

The main Index of BSE is SENSEX while that of NSE is CNX Nifty. The other indices at

BSE are: BSE 500, BSE 100, BSE 200, BSE PSU, BSE MIDCAP, BSE SMLCAP, BSE

BANKEX, BSE Teck, BSE Auto, BSE Pharma, BSE Fast Moving Consumer Goods

(FMCG), BSE Consumer Durables (SYMBOL: Cons Dura), BSE Metal.

NSE also set up as index services firm known as India Index Services & Products Limited

(IISL) and has launched several stock indices, including: S&P CNX Nifty, CNX Nifty

Junior, CNX 100 (= S&P CNX Nifty + CNX Nifty Junior), S&P CNX 500 (= CNX 100 +

400 major players across 72 industries), CNX Midcap (introduced on 18 July 2005 replacing

CNX Midcap 200).



CALCULATION OF SENSEX

SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this

methodology, the level of index at any point of time reflects the total market value of 30

component stocks relative to a base period. (The market capitalization of a company is

determined by multiplying the price of its stock by the number of shares issued by the

company). An index of a set of combined variables (such as price and number of shares) is

commonly referred as a 'Composite Index' by statisticians. A single indexed number is used

to represent the results of this calculation in order to make the value easier to work with and

track over time. It is much easier to graph a chart based on indexed values than one based on

actual values.

The base period of SENSEX is 1978-79. The actual total market value of the stocks in the

Index during the base period has been set equal to an indexed value of 100. This is often

indicated by the notation 1978-79=100. The formula used to calculate the Index is fairly

straightforward. However, the calculation of the adjustments to the Index (commonly called

Index maintenance) is more complex.

The calculation of SENSEX involves dividing the total market capitalization of 30 companies

in the Index by a number called the Index Divisor. The Divisor is the only link to the original

base period value of the SENSEX. It keeps the Index comparable over time and is the

adjustment point for all Index maintenance adjustments. During market hours, prices of the

index scrips, at which latest trades are executed, are used by the trading system to calculate

SENSEX every 15 seconds and disseminated in real time.

CLOSURE OF SENSEX

The closing SENSEX is computed taking the weighted average of all the trades on SENSEX

constituents in the last 15 minutes of trading session. If a SENSEX constituent has not traded

in the last 15 minutes, the last traded price is taken for computation of the Index closure. If a

SENSEX constituent has not traded at all in a day, then its last day's closing price is taken for

computation of Index closure. The use of Index Closure Algorithm prevents any intentional

manipulation of the closing index value.



MAINTAINENCE OF SENSEX

One of the important aspects of maintaining continuity with the past is to update the base year

average. The base year value adjustment ensures that additional issue of capital and other

corporate announcements like bonus etc. do not destroy the value of the index. The beauty of

maintenance lies in the fact that adjustments for corporate actions in the Index should not per

se affect the index values.

The Index Cell of the Exchange does the day-to-day maintenance of the index within the

broad index policy framework set by the Index Committee. The Index Cell takes special care

to ensure that SENSEX and all the other BSE indices maintain their benchmark properties by

striking a delicate balance between high turnover in Index scrips and its representative

character. The Index Committee of the Exchange has experts from different field of finance

related to the capital markets. They include Academicians, Fund-managers from leading

Mutual Funds, Finance - Journalists, Market Participants, Independent Governing Board

members, and Exchange administration.

ADJUSTMENTS TO SENSEX

The arithmetic calculation involved in calculating SENSEX is simple, but problem arises

when one of the component stocks pays a bonus or issues rights shares. If no adjustments

were made, a discontinuity would arise between the current value of the index and its

previous value. The Index Cell of the Exchange periodically adjusts the base value to take

care of such corporate announcements.

Adjustments for Rights Issues:

When a company, included in the compilation of the index, issues right shares, the market

capitalisation of that company is increased by the number of additional shares issued based

on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to

the Base Market Capitalisation

Adjustments for Bonus Issue:

When a company, included in the compilation of the index, issues bonus shares, the market

capitalisation of that company does not undergo any change. Therefore, there is no change in

the Base Market Capitalisation, only the 'number of shares' in the formula is updated.

Other Issues: Base Market Capitalisation Adjustment is required when new shares are issued

by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way

of buy-back of shares, corporate restructuring etc.

Base Market Capitalisation Adjustment: The formula for adjusting the Base Market

Capitalisation is as follows:



New Base Market Capitalisation = Old Base Market Capitalisation X (New Market

Capitalisation/Old Market Capitalisation)

To illustrate, suppose a company issues right shares which increases the market capitalisation

of the shares of that company by say, Rs.100 crores. The existing Base Market Capitalisation

(Old Base Market Capitalisation), say, is Rs.2450 crores and the aggregate market

capitalisation of all the shares included in the index before the right issue is made is, say

Rs.4781 crores. The "New Base Market Capitalisation " will then be: Rs.2501.24 crores =

2450 X (4781+100)/4781

This figure of 2501.24 will be used as the Base Market Capitalisation for calculating the

index number from then onwards till the next base change becomes necessary.

SENSEX UPDATION

During market hours, prices of the index scrips, at which trades are executed, are

automatically used by the trading computer to calculate the SENSEX every 15 seconds and

continuously updated on all trading workstations connected to the BSE trading computer in

real time.



BEING A MEMBER IN SENSEX

The general guidelines for selection of constituents in SENSEX are as follows:

Listed History: The scrip should have a listing history of at least 3 months at BSE. Exception

may be considered if full market capitalisation of a newly listed company ranks among top 10

in the list of BSE universe. In case, a company is listed on account of merger/ demerger/

amalgamation, minimum listing history would not be required.

Trading Frequency: The scrip should have been traded on each and every trading day in the

last three months. Exceptions can be made for extreme reasons like scrip suspension etc.

Final Rank: The scrip should figure in the top 100 companies listed by final rank. The final

rank is arrived at by assigning 75% weightage to the rank on the basis of three-month average

full market capitalisation and 25% weightage to the liquidity rank based on three-month

average daily turnover & three-month average impact cost.

Market Capitalization Weightage: The weightage of each scrip in SENSEX based on three-

month average free-float market capitalisation should be at least 0.5% of the Index.

Industry Representation: Scrip selection would generally take into account a balanced

representation of the listed companies in the universe of BSE.

Track Record: In the opinion of the Committee, the company should have an acceptable track

record.



COMPANIES LISTED IN NIFTY

as on Friday, July 09th, 2010

ABB ltd. ACC ltd.

Ambuja cements BHEL

Axis bank ltd. Bharat petroleum corporation ltd.

Bharti Airtel ltd. Cairn India ltd.

Cipla ltd. DLF ltd.

GAIL HCL tech ltd.

HDFC bank ltd. Hero Honda motors ltd.

Hindalco Industries ltd. Hindustan Unilever ltd.

HDFC finance corporation ltd. ITC ltd.

ICICI Bank ltd. Idea cellular ltd.

Infosys Technologies ltd. Infrastructure Development Finance Co.

ltd.

Jaiprakash associates ltd. Jindal Steel and Power ltd.

Kotak Mahindra bank ltd. Larsen and Tubro ltd.

Mahindra and Mahindra ltd. Maruti Suzuki India ltd.

NTPC ltd. ONGC

Power grid corporation of India ltd. PNB

Ranbaxy Laboratories ltd. Reliance Capital ltd.

Reliance Infrastructure ltd. Reliance Communications ltd.

Reliance Industries ltd. Reliance Power ltd.

Siemens ltd. SBI

SAIL Sterlite Industries ltd.

Sun Pharmaceuticals Industries ltd. Suzlon Energy ltd.

TCS Tata Motors ltd.

Tata Power co. ltd. Tata Steel ltd

Unitech ltd. Wipro ltd.



COMPANIES LISTED IN SENSEX

As on Friday, 09

th July at 4:02 pm

HDFC

DLF

ONGC

Reliance Infra

Sterlite India

Mahindra and Mahindra

Tata Motors Reliance Communications

Wipro

Tata Power

Tata Steel

Reliance

NTPC

Jaiprakash Associates

Maruti Suzuki

Jindal Steel

SBI

Larsen

ICICI Bank

Infosys

Bharti Airtel

TCS

HDFC Bank

Hindalco

BHEL

Hero Honda

Cipla

ACC

HUL

ITC



DIFFERENCE BETWEEN NSE AND BSE

BSE NSE

Market capitalization of listed

companies

Rs. 4,670,227 crore Rs. 3,367,350 crore.

Number of members 951 (Oct 2007) 1,009 as on March 2007

Number of listed companies 4,867 OCT(2007) 1,288 (March 2007)

Geographical spread Presence in 417 cities Presence in 1,486 cities

Website www.bseindia.com www.nse-india.com

Main Index BSE Sensex S & P CNX Nifty

Owner Bombay Stock Exchange National Stock Exchange of

India Limited

Key people Rajnikant Patel (CEO) R.H.Patil (Founder, MD)

Claim to fame Oldest stock exchange in

Asia.

Third largest stock exchange

in the world in terms of

volumes.

What is it? Indian Stock exchange Indian Stock exchange

Location Mumbai Mumbai

Established in 1875 1993

Name Bombay Stock Exchange National Stock Exchange

Index value ( 2009) 17,326.01

Number of trader workstations 15,151(Oct 2007)

Index value (As on 11th December

2007)

6,097

Top trading companies in volumes

in main index (Till March 2007)

Reliance Industries Limited,

Infosys Technologies

Limited, Satyam Computer

Services.

Top companies in terms of market

capitalization in each index (Till

March 2007

Reliance Industries Limited,

Oil and Natural Gas

Corporation, Bharti Airtel

Limited



MARKET BASICS

Electronic trading

Electronic trading eliminates the need for physical trading floors. Brokers can trade from

their offices, using fully automated screen-based processes. Their workstations are connected

to a Stock Exchange's central computer via satellite using Very Small Aperture

Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and

are matched electronically.

Exchanges in India

The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the

country's two leading Exchanges. There are 20 other regional Exchanges, connected via the

Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via

their VSAT systems.

Index

An Index is a comprehensive measure of market trends, intended for investors who are

concerned with general stock market price movements. An Index comprises stocks that have

large liquidity and market capitalization. Each stock is given a weight age in the Index

equivalent to its market capitalization. At the NSE, the capitalization of NIFTY (fifty selected

stocks) is taken as a base capitalization, with the value set at 1000. Similarly, BSE Sensitive

Index or Sensex comprises 30 selected stocks. The Index value compares the day's market

capitalization vis-à-vis base capitalization and indicates how prices in general have moved

over a period of time.

Execute an order

Select a broker of your choice and enter into a broker-client agreement and fill in the client

registration form. Place your order with your broker preferably in writing. Get a trade

confirmation slip on the day the trade is executed and ask for the contract note at the end of

the trade date.

Need a broker

As per SEBI (Securities and Exchange Board of India.) regulations, only registered members

can operate in the stock market. One can trade by executing a deal only through a registered

broker of a recognized Stock Exchange or through a SEBI-registered sub-broker.



Contract note

A contract note describes the rate, date, time at which the trade was transacted and the

brokerage rate. A contract note issued in the prescribed format establishes a legally

enforceable relationship between the client and the member in respect of trades stated in the

contract note. These are made in duplicate and the member and the client both keep a copy

each. A client should receive the contract note within 24 hours of the executed trade.

Split

A Split is book entry wherein the face value of the share is altered to create a greater number

of shares outstanding without calling for fresh capital or altering the share capital account.

For example, if a company announces a two-way split, it means that a share of the face value

of Rs 10 is split into two shares of face value of Rs 5 each and a person holding one share

now holds `two shares.

Buy Back

As the name suggests, it is a process by which a company can buy back its shares from

shareholders. A company may buy back its shares in various ways: from existing

shareholders on a proportionate basis; through a tender offer from open market; through a

book-building process; from the Stock Exchange; or from odd lot holders. A company cannot

buy back through negotiated deals on or off the Stock Exchange, through spot transactions or

through any private arrangement.

Settlement cycle

The accounting period for the securities traded on the Exchange. On the NSE, the cycle

begins on Wednesday and ends on the following Tuesday, and on the BSE the cycle

commences on Monday and ends on Friday. At the end of this period, the obligations of each

broker are calculated and the brokers settle their respective obligations as per the rules, bye-

laws and regulations of the Clearing Corporation. If a transaction is entered on the first day of

the settlement, the same will be settled on the eighth working day excluding the day of

transaction. However, if the same is done on the last day of the settlement, it will be settled

on the fourth working day excluding the day of transaction.

Rolling settlement

The rolling settlement ensures that each day's trade is settled by keeping a fixed gap of a

specified number of working days between a trade and its settlement. At present, this gap is

five working days after the trading day. The waiting period is uniform for all trades. In a

Rolling Settlement, all trades outstanding at end of the day have to be settled, which means

that the buyer has to make payments for securities purchased and seller has to deliver the



securities sold. In India, we have adopted the T+5 settlement cycle, which means that a

transaction entered into on Day 1 has to be settled on the Day 1 + 5 working days, when

funds pay in or securities pay out takes place.

Advantages of Rolling Settlements

As mentioned earlier, this is the system practiced in developed countries. Pay outs are quicker

than in weekly settlements, and investors will benefit from increased liquidity. The other

benefit of the modified system is that it keeps cash and forward markets separate. In the

current system, the trader has five days to square off his transaction which leads to a high

level of speculation as people even without funds tend to "play" the market. During volatile

markets, especially in a bearish market, this often leads to a payment problem which has

dogged the Indian stock exchanges for a long time. It provides for a higher degree of safety,

and once mechanisms such as futures and stock-lending become popular, it would result in

quality speculation and genuine investor interest.

Short selling

Short selling is a legitimate trading strategy. It is a sale of a security that the seller does not

own, or any sale that is completed by the delivery of a security borrowed by the seller. Short

sellers take the risk that they will be able to buy the stock at a more favorable price than the

price at which they "sold short."

The selling of a security that the seller does not own, or any sale that is completed by the

delivery of a security borrowed by the seller, Short sellers assume that they will be able to

buy the stock at a lower amount than the price at which they sold short.

Auction

An auction is conducted for those securities that members fail to deliver/short deliver during

pay-in. Three factors primarily give rise to an auction: short deliveries, un-rectified bad

deliveries, and un-rectified company objections

Separate market for auctions

The buy/sell auction for a capital market security is managed through the auction market. As

opposed to the normal market where trade matching is an on-going process, the trade

matching process for auction starts after the auction period is over. If the shares are not

bought at the auction i.e. if the shares are not offered for sale, the Exchange squares up the

transaction as per SEBI guidelines. The transaction is squared up at the highest price from the

relevant trading period till the auction day or at 20 per cent above the last available Closing

price whichever is higher. The pay-in and pay-out of funds for auction square up is held

along with the pay-out for the relevant auction.



Bad Delivery

SEBI has formulated uniform guidelines for good and bad delivery of documents. Bad

delivery may pertain to a transfer deed being torn, mutilated, overwritten, defaced, or if there

are spelling mistakes in the name of the company or the transfer. Bad delivery exists only

when shares are transferred physically. In "Demat" bad delivery does not exist.

Dematerialization

Dematerialization in short called as 'demat' is the process by which an investor can get

physical certificates converted into electronic form maintained in an account with the

Depository Participant. The investors can dematerialize only those share certificates that are

already registered in their name and belong to the list of securities admitted for

dematerialization at the depositories.

Depository

The organization responsible to maintain investor's securities in the electronic form is called

the depository. In other words, a depository can therefore be conceived of as a "Bank" for

securities. In India there are two such organizations viz. NSDL and CDSL. The depository

concept is similar to the Banking system with the exception that banks handle funds whereas

a depository handles securities of the investors. An investor wishing to utilize the services

offered by a depository has to open an account with the depository through Depository

Participant.

Depository Participant

The market intermediary through whom the depository services can be availed by the

investors is called a Depository Participant (DP). As per SEBI regulations, DP could be

organizations involved in the business of providing financial services like banks, brokers,

custodians and financial institutions. This system of using the existing distribution channel

(mainly constituting DPs) helps the depository to reach a wide cross section of investors

spread across a large geographical area at a minimum cost. The admission of the DPs

involves a detailed evaluation by the depository of their capability to meet with the strict

service standards and a further evaluation and approval from SEBI. Realizing the potential,

all the custodians in India and a number of banks, financial institutions and major brokers

have already joined as DPs to provide services in a number of cities.



SENSEX AND NIFTY READINGS



COMPARISON OF CORPORATE BROKERS

Criteria Offers provided

Types of account 2

A/c opening fees(Trading + Demat) 500/- + 250/-

Brokerage Intraday 0.05% - 0.10%

Delivery 0.25% - 0.50%

AMC None

Lead time 1 week

Margin Intraday 3 times

Delivery 12 times

Interest rate None

Sauda expiry T+5

Software Power indiabulls(750/-)


Types of account 2

A/c opening fees(Trading + Demat) 555+300

Brokerage Intraday 0.05%

Delivery 0.5%

AMC 300/-

Lead time 1 week


Delivery 12 times

Interest rate 18%

Sauda expiry T+5

Software ODIN




Types of account 2

A/c opening fees(Trading + Demat) 500/- +40/-

Brokerage Intraday 1 paisa

Delivery 10 paisa

AMC 300/-

Lead time 4-5 days


Delivery 10 times

Interest rate 18%

Sauda expiry Never

Software ODIN


Types of account 2

A/c opening fees(Trading + Demat) 2520/-

Brokerage Intraday 3 paisa

Delivery 30 paisa

AMC 2000

Lead time 7-8 days


Delivery 10 times

Interest rate 18%

Sauda expiry T+3

Software GOTX




Types of account 2


Brokerage Intraday 0.01% to 0.03%.

Delivery 0.10% to 0.30%.

AMC 400/-

Lead time 1 week


Delivery 10 times

Interest rate 18%

Sauda expiry T+4

Software FLIP


Types of account 2


Brokerage Intraday 0.01% to 0.03%.

Delivery 0.10% to 0.30%.

AMC 350/-

Lead time 1 week


Delivery 10 times

Interest rate 18%

Sauda expiry T+5

Software ODIN



STATEMENT OF PROBLEM

To select a corporate broker that is rated highest on customer satisfaction level.

OBJECTIVE

1. To conduct a study on awareness level of people about stock brokers in Kanpur city.

2. To study the market share of Anagram Capital Ltd in the Kanpur city.

3. What factors should Anagram Capital Limited consider to become a market leader?

4. To find out the problems faced by clients while trading with Anagram Capital Ltd.

5. To identify the drawbacks in the current system of trading and suggesting improvements in

the same.

6. To get practically exposed to the trading market.

METHODOLOGY

• Research applied – Exploratory research.

• Size of sample - 20 investors of Anagram Capital Ltd. and 50 investors of other corporate

brokers.

• Population- Complete Kanpur City.

• Tool-Questionnaires, In-depth interview, Telephonic interview.

• Sampling Technique-Non probability sampling technique (judgemental sampling).



SOURCES OF DATA COLLECTION

1. Primary Data - Primary data is collected through questionnaire filling which was done by

investors of Anagram Capital Ltd. and other stock broking firms.

2. Secondary Data - Secondary data is collected from journals, textbook, website. These data

are located quickly and are also inexpensive.

Survey Method: - Survey refers to the method of securing information concerning

phenomena under study from all or selected number of respondents of the concerned area. In

a survey the investigator examines those phenomena which exist in the universe independent

of his action.

The data collected for the project is from 20 clients of Anagram Capital Ltd. and 50 other

investors of other corporate stock broking firm.

We visited different stock broking offices to collect the data for the company for their

comparison and also met some existing clients of the company, who filled the questionnaires

later.



ANALYSIS RESULTS AND FINDINGS

Comment: - On an average IIFL is rated highest on brokerage while on the other hand Angel

Stock Broking Limited is the company that charges the least brokerage on both intraday and

delivery transactions.

Comment: - Karvy Securities charges the maximum account opening fees and the Annual

Maintenience Charges while Angel Stock broking is on the other extreme.



ANALYSIS RESULTS AND FINDINGS(CLIENTS)

1) Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years

2) What is your favourite instrument of saving?

(a) Insurance (b) Stock market (c) Mutual funds (d) Others (specify) _________



3) What is the basic purpose of your investment?

(a) Liquidity (b) Returns (c) Capital appreciation

(d) Tax benefits (e) Risk covering (f) Others

4) Who you are?

(a) Trader (b) Investor



5) Your source of information of Anagram Capital Limited is.

(a) Newspaper (b) Internet (c) Television

(d) Friends/ Relatives (e) Existing clients of ACL



6) How would you rate the following elements of Anagram Capital Limited? (Please tick

for each statement)

Excellent Very good Good Fair Poor

Overall satisfaction

Charges levied

Knowledge of employees you deal with

Online services offered

Ability to resolve problems

Quality of advice

Performance of investments

Level of significance= 25%



Ho1= charges levied is not dependent on the overall satisfaction level of the people.

Ha1= charges levied is dependent on the overall satisfaction level of the people.

Comment- the significant value is less than the tabulated value i.e. 1.213 hence the null

hypothesis is accepted which concludes that charges levied is not dependent on overall

satisfaction.



Ho1= online services offered is not dependent on the overall satisfaction level of the people.

Ha1= online services offered is dependent on the overall satisfaction level of the people.


hypothesis is accepted which concludes that online services is not dependent on overall

satisfaction.



Ho1= ability to resolve problems is not dependent on the overall satisfaction level of the

people.

Ha1= ability to resolve problems is dependent on the overall satisfaction level of the people.


hypothesis is accepted which concludes that ability to resolve problems is not dependent on

overall satisfaction.



Ho1= quality of advice is not dependent on the overall satisfaction level of the people.

Ha1= quality of advice is dependent on the overall satisfaction level of the people.


hypothesis is accepted which concludes that quality of advice is not dependent on overall

satisfaction.



Ho1= performance of investments is not dependent on the overall satisfaction level of the

people.

Ha1performance of investments is dependent on the overall satisfaction level of the people.


hypothesis is accepted which concludes that performance of investments is not dependent on

overall satisfaction.



ANALYSIS RESULTS AND FINDINGS (NON CLIENTS)

1) Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years

2) Who you are? (a) Trader (b) Investor



3) What is your preferred medium of receiving research report and tips from your

dealer?

a) SMS facility b) Instant messaging c) E-mail d) Others (specify) ________

Comment: - SMS is the most preferred medium of receiving research report



4) In which company you have d-mat and trading account?

a) Karvy Securities b) India Infoline Security Private Limited

c) Indiabulls Securities Limited d) Angel stock broking limited e) Others

Comment:- Angel Stock broking limited is rated highest which signifies that Angel Stock

Broking Ltd. is the most popular company and Indiabulls is the least popular out of the ones

selected for research.



5) Are you satisfied with you present broking firm?

a)Yes b) No

Comment: - The chart signifies that Angel Stock Broking is the company whose clients are

most satisfied with the services of the company and other column signifies that some other

company(s) is rated as the least preferred companies of the respective clients.



6) What is the reason for your satisfaction?

a) Services b) Brokerage c) Operating expenses d) Others

Comment: - the chart signifies that brokerage is the most convenient factor on which the

respondents are satisfied. The brokerage chart (mentioned above) also displays that Angel

Stock Broking has the least brokerage charged from its clients



7) Write the name of the brand which comes immediately with respect to following

punch lines?

(a) It’s all about money honey ___________________________________________

(b) Service truly personalised ____________________________________________

(c) Bringing industry, finance and people together ____________________________

(d) One name for successful investing ______________________________________

(e) Trading just got faster _______________________________________________



ASUMPTIONS

• Only age and income level of people are taken as parameter to construct a paired

sample t testing, and qualification and gender are being ignored because it does not fit

in to the investment criteria.

• The filling up of the questionnaires by the respondents is least affected by the time in

which they fill the questionnaire.

• The sample of 70 respondents represent the whole Kanpur city

• As the sample size taken is quite small so the error rate taken is quite large.

FINDINGS

• According to the survey most of the clients of “Anagram Capital Ltd” say that the

research data provided is sufficient for them to take intelligent trading decisions.

• Anagram Capital Limited takes much in to account the budget of their clients and

then takes any investment decisions.

• People pay more emphasis on brokerage than service provided by brokerage houses.

• Angel stock broking Ltd. came out to be a leading company on the following points

� Brokerage

� Fees charged

� Maximum customers

� Customer satisfaction

� Awareness

SUGGESTIONS TO ANAGRAM CAPITAL LIMITED

� Improvement in the time delay of account opening is required.

� There should be a specific number of clients under each relationship manger, so that

each client can be attended properly and can be imparted desired time.

� Some promotional activities are required for the awareness of the customer, seminars

should be held for providing information to prospective and present customers.

� People at young age should be encouraged to invest in stock market.

� The company officials should maintain healthy relationship with their clients.



LIMITATIONS

� Size of the research may not be substantial.

� There was lack of time on the part of respondents.

� There may be biasness in information by market participant.

� Due to limitation of time a sample size of only 50 respondents were chosen.

� The sample for research was chosen only from a limited area.

� Some of the respondents may be biased in giving responses.

� Complete data was not available due to company privacy and secrecy.

CONCLUSION

On the basis of the study it is found that Angel Stock Broking Ltd is better services provider

than the other stockbrokers because of their timely research and personalized advice on what

stocks to buy and sell.

Apart from this Anagram Capital Ltd. is also an upcoming challenging competitor to Angel.

Though Anagram has not flourished as a leading company, but still has a long way to go and

can acquire a place in the lead in the forthcoming years. As it has not been many years when

Anagram has opened its branch office in Kanpur so still the awareness is quite low, so

Anagram should focus on more and more promotional activities to gain high customer

response. The company should also organize seminars and similar activities to enhance the

knowledge of prospective and existing customers, so that they feel more comfortable while

investing in the stock market.



APPENDIX

QUESTIONNAIRE FOR CLIENT OF ANAGRAM CAPITAL LIMITED

Dear Respondent,

This information revealed by you will be used for institutional work only. This will be

a part of my Summer Training Project. No information will be disclosed to any outside party.

Please spare sometime to fill in this questionnaire.

Q1. What is your favourite instrument of saving?

(a) Insurance (b) Stock market (c) Mutual funds (d) Others (specify) _________

Q2. What is the basic purpose of your investment?

(a) Liquidity (b) Returns (c) Capital appreciation

(d) Tax benefits (e) Risk covering (f) Others

Q3. Who you are?

(a)Trader (b) Investor

Q4. If you are an investor then what is your portfolio size?

(a) 0-5 Lac (b) 5-10 Lac (c) 10-20 Lac (d) More than 20 Lac

Personal information

Name: -

Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years

Contact No. : -

Address: -

Gender: - (a) Male (b) Female

Marital status: - (a) Married (b) Unmarried

Education: - (a) Under Graduate (b) Graduate (c) Post Graduate (d) Other

Household income: - (a) Rs.100000 or less (b) Rs.100000 to Rs. 200000

(c) Rs. 200000 to Rs. 300000 (d) Above Rs.300000



Q5. What is the time horizon of your investment?

(a) 1-30 days (b) 1-6 months (c) more than 6 months (d) depends upon the profit

Q6. Your source of information of Anagram Capital Limited is.

(a) Newspaper (b) Internet (c) Television

(d) Friends/ Relatives (e) Existing clients of ACL

Q7.How would you rate the following elements of Anagram Capital Limited? (Please

tick)

Excellent Very good Good Fair Poor

Overall satisfaction

Charges levied

Knowledge of employees you deal with

Online services offered

Ability to resolve problems

Quality of advice

Performance of investments

Q9. Based on your experience with ACL, use a tick to indicate how you feel about the

online services (software provided and back office support) of ACL?

A B C D E F G

(a) Ease of access __ __ __ __ __ __ __ Unease of access

(b) Friendly __ __ __ __ __ __ __ Unfriendly

(c) Fast __ __ __ __ __ __ __ Slow

(d) Accurate __ __ __ __ __ __ __ Inaccurate

(e) Simple __ __ __ __ __ __ __ Complex

Feedback (if any)

___________________________________________________________________________

___________________________________________________________________________



QUESTIONNAIRE FOR NON CLIENTS

Dear Respondent,

This information revealed by you will be used for institutional work only. This will be

a part of my Summer Training Project. No information will be disclosed to any outside party.

Please spare sometime to fill in this questionnaire.

Q1. Do you have a pan card?

(a)Yes (b) No

Q2. Who you are?

(a) Trader (b) Investor

Q3. If you are an investor then what is your portfolio size?

a) 0-5 Lac b) 5-10 Lac c) 10-20 Lac d) More than 20 Lac

Q4. What is the time horizon of your investment?

a) 1-30 days b) 1-6 months c) more than 6 months d) depends upon the profit

Personal information

Name: -

Age: - (a) 20-30years (b) 31-40years (c) 40-50years (d) Above 50years

Contact No. : -

Address: -

Gender: - (a) Male (b) Female

Marital status: - (a) Married (b) Unmarried

Education: - (a) Under Graduate (b) Graduate (c) Post Graduate (d) Other

Household income: - (a) Rs.100000 or less (b) Rs.100000 to Rs. 200000

(c) Rs. 200000 to Rs. 300000 (d) Above Rs.300000

Occupation: - (a) Business (b) Service (c) Professional (d) Others



Q5. What is your preferred medium of receiving research report and tips from your

dealer?

a) SMS facility b) Instant messaging c) E-mail d) Others (specify) ________

Q6. In which company you have d-mat and trading account?

a) Karvy Securities b) India Infoline Security Private Limited

c) Indiabulls Securities Limited d) Angel stock broking limited

e) Others

Q7. Are you satisfied with you present broking firm? a)Yes b) No

Q8. State the reason for your satisfaction?

a) Services b) Brokerage c) Operating expenses d) Others

Q9. Write the name of the brand which comes immediately with respect to following

punch lines?

(a) It’s all about money honey ___________________________________________

(b) Service truly personalised ____________________________________________

(c) Bringing industry, finance and people together ____________________________

(d) One name for successful investing ______________________________________

(e) Trading just got faster _______________________________________________

Feedback (if any)

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________



ABBREVIATIONS USED

BSE Bombay Stock Exchange

CSDL Central Securities Depository Limited

CARE Credit Analysis & Research Limited

CRISIL Credit Rating Information Services of India Limited

F&O Futures and Options

FPO Follow up Public Offering

IISL India Index Services & Products Ltd.

ICRA Investment Information and Credit Rating Agency of India

NCDEX National Commodity and Derivatives Exchange Ltd.

NSCCL National Securities Clearing Corporation Limited

CDSL Central Depositories Services Ltd.

DRF Demat Request Form

DCA Department of Company Affairs

DEA Department of Company Affairs

DP Depository Participant

EPS Earnings Per Share

FI Financial Institution

FII Foreign Institutional Investors

FMC Forward Markets Commission

IPO Initial Public Offer

ISIN International Securities Identification Number

NEAT National Exchange for Automated Trading

NSDL National Securities Depository Limited

NSE National Stock Exchange

NAV Net Asset Value

NYSE New York Stock Exchange

NCFM NSE’ Certification in Financial Markets

OTC Over The Counter

RRF Remat Request Form

RBI Reserve Bank of India

SBTS Screen Based Trading System

T+2 Second day from the trading day

SEBI Securities and Exchange Board of India



SAT Securities Appellate Tribunal

SCRA Securities Contract (Regulation) Act

SCRR Securities Contract (Regulation) Rules

S&P

ICSE

CTCL

VSAT’s

IBT

Standard & Poor

Inter-Connected Stock Exchange

Computer to Computer Link

Very Small Aperture Terminus

Internet-based Trading



BIBLIOGRAPHY

G C. Beri – Marketing Research

TATA Mc Graw-Hill Publishing Company Ltd.

C.R.Kothari – Research Methodology

New Age International Ltd.

M.D. Rashikh Irfan -- Stock exchanges in India

WEBLIOGRAPHY

http://www.anagram.co.in

http://www.moneycontrol.com

http://www.capitaline.com

http://www.icicidirect.com

http://www.hdfcsecurity.com

http://www.karvy.com

http://www.bseindia.com

http://www.nseindia.com

http://www.nseindia.com/content/indices/ind_niftylist.csv

http://www.tradersedgeindia.com/bse_sensex.htm

http://www.indiahowto.com/what-is-sensex-nifty.html

http://shabbir.in/nifty-listed-companies/

http://www.moneycontrol.com/sensex/bse/sensex-live

analysis of indian stock market and comparison of corporate stock brokers final

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