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    A Project Report



    Prachi Gupta

    K.P.Engineering College


    A report submitted in the partial fulfillment of

    The requirements of

    MBA (2010-2012)

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    To maintain and cope up with the growing competition from the various online

    trading providers, Religare needs to find potential clients and also new investors

    and satisfy there needs.

    This project will accomplish to understand how the people interact with

    technology savvy products and if they are ready for doing all the tradingthrough net. The project also helps in understanding the trend of the particular

    sector (banking sector) in different market condition.

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    Efforts is work and no work is accomplished on this own. It is the

    achievement of entire human efforts and self work. I would like to acknowledge

    at those who made this work possible.

    My whole dissertation report was real exposure ofRELIGARE

    SECURITIES LTD I got the opportunity to study each and every link of this


    First of all thanks to almightily god without his mercy nothing was possible in

    my dissertation report.

    I am especially indebted to Dr. Sandeep Verma who provides me a lot of

    motivation at every movement of accomplishing this report.

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    I Prachi Gupta student ofM.B.A (Master of Business Administration) IV

    semester from K.P. Engineering College Agra, Here by I declare that the

    following report Equity and Online trading is an original piece of work no

    part of this project is either copied of partially or totally taken from some

    previous works.

    Prachi Gupta

    M.B.A IV sem


    Roll no-


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    S. No. Topic Page No.

    1. Executive Summary5

    2. Objectives...6

    3. Company Profile.7

    4. Religare Products23

    5. Investment ..33

    6. Securities 35

    7. Regulator.38

    8. Participants..41

    9. Primary Market.. 44

    10. Secondary Market...52

    11. Stock Exchange ..53

    12. Stock Trading..58

    13. Market Research Analysis...63

    14. SWOT Analysis..68

    15. Online Trading Account. 73

    16. Conclusion.......85

    17. Limitations......88

    18. References ...90

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    Executive Summary

    This project was undertaken to understand the working of Religare Securities


    The project reflects information about products and services provided by the to their customers. This also includes requirement and ways to

    acquire client acquisition has been explained and the problems faced to handle

    the clients.

    The information about their account opening charges, products, brokerage,

    research report, minimum margin requirement, exposure, etc. are shown in

    competitor analysis.

    Also I have compared the mutual funds on different parameters such as risk and

    returns, facilities, volume of investing money, good promotional schemes,

    redemption, and investing time

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    To take an overview of the Indian Stock Market and encapsulatethe various investment avenues available.

    To analyze the Indian Stock Market. How it works. What are theoptions available in the Capital Market to invest?

    What is on line trading & how it is different from other tradingof stock market? Benefits & Disadvantages of online trading.

    Also we have compared the equity and online trading ondifferent parameters such as risk and returns, facilities, volume

    of investing money, good promotional schemes, redemption,

    and investing time.

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    VisionaryLate Dr. Parvinder Singh

    Religare Securities Limited was

    promoted by Late Dr. Parvinder

    Singh with the vision to provide

    integrated financial care driven

    by the relationship of trust &confidence.

    Dr. Parvinder Singh had also thevision of creating a integrated

    health delivery system in India

    and his dream is now converting

    into realty by Fortis Hospitals

    and Labs.

    Dr. Singh also led Ranbaxy and

    made it to Indias first truly

    MNC Pharma company.

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    Indias largest pharmaceutical Company-Manufactures & markets


    Branded generic pharmaceuticals

    Active pharmaceutical ingredients.

    Amongst the top ten generic companies worldwide.

    -Started by the promoters of Ranbaxy

    -Vision : To become an integratedcaring partner forHEALTH thru

    Fortis Healthcare Limited&WEALTH

    Fortis Securities Limited .

    -A leading solutions provider in

    Screening Diagnosis Monitoring of every illness and disease in the


    -Aim to provide world class services

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    RELIGARE Securities Ltd. (RSL) is a wholly owned subsidiary of

    RELIGARE Financial Services Ltd. (RFSL), a Company promoted byDr.Parvinder Singh, Ex-CMD of Ranbaxy Laboratories Ltd.

    The primary focus of Religare Securities Ltd. is to cater to services

    in Capital Market Operations to Institutional Investors. The Company is a

    member of the National Stock Exchange (NSE) and OTCEI. The growing list of

    financial institutions with whom RSL is empanelled as approved Broker is a

    reflection of the high levels of services maintained by the Company.

    REL operates from seven domestic regional offices, 43 sub-regional offices, and

    has a presence in 498* cities and towns controlling 1,837* business locations all

    over India.

    To make a mark in the global arena, REL acquired UK-based Hichens, Harrison

    & Co. in 2008 which was subsequently re-named as Religare Hichens Harrison

    PLC ("RHH"). Hichens, Harrison & Co. was incorporated in London in the year

    1803 and is believed to be one of the oldest firms of stockbrokers in the City of


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    Pursuant to expansion of REL's business, the company has grown from largely

    an equity trading company into a diversified financial services company. With

    the addition of RHH the REL group now operates out of multiple global

    locations, other than India, (the UK, the USA, Brazil, South Africa, Dubai and


    RELIGARE was founded with the vision of providing integrated

    financial care driven by the relationship of trust. The bouquet of services offered

    by RELIGARE includes Broking (Stocks and Commodities), Depository

    Participant Service, Advisory on Mutual Fund Investments and Portfolio

    Management Services.

    RELIGARE is a pioneer in the concept of partnership to reach

    multiple locations in order to effectively service its large base of individual

    clients. Besides the reach of RELIGARE, the clients of the company greatly

    benefit by its strong research capability, which encompasses fundamentals as

    well as technical knowledge.

    Religare is a diversified financial services group of India offering a

    multitude of investment options. The diverse bouquet of financial services,

    which Religare offers, can be broadly clubbed across three key verticals -

    Retail, Institutional and Wealth spectrums. The services extend from asset

    management, Life Insurance, wealth management to equity broking, commodity

    broking, investment banking, lending services, private equity and venturecapital. Religare has also ventured into the alternative investments sphere

    through its holistic arts initiative and Film fund. With a view to expand,

    diversify and introduce offerings

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    benchmarked against global best practices, Religare operates in the life

    insurance space under 'Aegon Religare Life Insurance Company Limited and

    wealth management under the brand name 'Religare Macquarie Private Wealth'.


    RELIGARE in recent years has expanded its reach in health care and financial

    services wherein it has multiple specialty hospital and labs which provide health

    care services and multiple financial services such as secondary market equity

    services, portfolio management services, depository services etc.

    RELIGARE financial services group comprises of Religare Securities

    Limited, RELIGARE Comdex Limited and RELIGARE Finvest Limited which

    provide services in Equity, Commodity and Financial Services business &

    Religare Insurance Advisory Ltd.


    Member of National Stock Exchange of India and Bombay Stock

    Exchange of India.

    Depository Participant with National Securities Depository Limited

    (NSDL) and Central Depository Services Limited (CDSL). A SEBIapproved Portfolio Manager.

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    RSL provides platform to all segments of the investor to leverage the immense

    opportunity offered by equity investing in India either on their own or through

    managed funds in Portfolio Management.

    The ARN No. of the Religare Securities Ltd. is 33764. The ARN No. is

    required by to be available with the broker who deals on behalf of investors or

    sell the mutual funds of the different companies present in the market.

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    Religare AMC Limited

    Asset Management Business

    Portfolio Management

    Religare Finevest Limited

    Lending and Distribution business

    AEGON Religare Life Insurance Co. Ltd.

    Life Insurance Company, JV with Aegon (26%),

    Religare (44%), and Bennett & Coleman (30%)

    Religare Insurance Broking Limited

    Life Insurance Broking BusinessNon-Life Insurance Broking Business

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    Religare Macquarie Wealth Mgmt. Ltd.

    JVwith Macquarie for Wealth management Business

    Religare Arts Initiative Limited

    Business of Art

    Art Gallery

    Art Advisory

    Religare Securities Limited

    Retail Equity Broking

    Online Investment Portal

    Depository Services

    Religare Venture Capital Ltd.

    Private Equity and Investment Manager

    Vistaar Religare Capital Advisors Ltd.

    JV with Vistaar Entertainment

    Ventures for film fund

    India's first ever film fund

    Religare Finance Ltd.

    Capital Market Financing

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    Religare Capital Markets Limited

    PE and M&A Advisory

    Institutional Broking

    Investment Banking

    Religare - Milestone

    JV with Milestone Capital to manage a healthcare and education


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    The company has offices located at prime locations in Mumbai, New Delhi,

    Kolkatta and Chennai. The offices are centrally located to cater to the

    requirements of institutional and corporate clients and retails clients, and for

    ease of operations due to proximity to stock exchanges and banks . Today, we

    have a growing network of 43 sub-regional offices, and has a presence in 498*

    cities and towns controlling 1,837* business locations all over India.

    Pioneered the concept of partnership to reach multiple


    RSL.Geographical Spread

    Religare has presence in more than 100 locations across the length and breadth of the


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    Registered Office Address:-

    Delhi: D3, P3B, District Centre, Saket,

    New Delhi - 110017,


    Phone: +91-11-3912-5000

    Fax: +91-11-3912-6050

    Corporate Office Address: -

    Noida: A-3, 4, 5, Sector-125, Noida,

    Uttar Pradesh - 201 301,


    Phone: +91-0120-339-1000

    Mumbai: GYS Infinity, Paranjpe B Scheme,

    Subhash Road, Near Garware House,

    Vile Parle (E), Mumbai - 400057Phone: +91-022-6673-7100

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    Religare is led by individuals who are professionals and leaders in every sense

    of the word.

    Mr. Sunil Godhwani, CEO and Managing Director

    Sunil Godhwani joined the Board of REL in July 2006 and was appointed as CEOand Managing Director of Religare in April 2007. Has more than 21 years experience

    in business

    Also the Chairman & Managing Director of RSL since April 2002

    Mr. Anil Saxena, Group Chief Finance Officer

    Anil Saxena joined in August 2001

    With over 16 years of experience in the financial services industry has worked at

    Kotak Securities Ltd. as Vice-President

    Mr. Shachindra Nath, Group Chief Operating Officer

    Shachindra Nath joined in May 2000

    With over 15 years of experience in the financial services industry, he has worked

    at Abhipra Capital Ltd. as a Senior Consultant and Divisional In charge

    Mr. Mukesh Manglik, Head, Corporate Affairs

    More than 30 years of experience in the Corporate Sector

    Was the Head of Compliance and Company Secretary at JM Financial Assets

    Management and worked with Escorts Group and Hero Group

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    Mr. Ravi Batra, Vice President and Company Secretary

    Joined REL in January 2007. Has over 11 years of experience as

    Company Secretary

    Prior to joining Religare, worked with Varun Beverages Ltd., Himalaya

    Communications Ltd. and Precision Electronics Ltd.

    Mr. Sunil Kumar Garg, Financial Controller

    Joined REL in April 2004. Has over 15 years of experience in financial

    services industry

    Prior to joining Religare, worked with Arvind Construction Company Ltd.

    Mr. Kamlesh Dangi, Corporate HeadHuman Resources

    Has experience of more than 13 years from various organizations of

    diverse fields

    Prior to joining Religare, worked with ICICI Bank and was handling Wholesale &

    International Banking, Compensation at group level, HR systems and other similar

    portfolios. He has also spent 2 years in ICICIUK, setting up the operations for the


    Mr. Ashu Madan, National Head, Retail Equity

    Has over 17 years of industry experience in financial services

    Holds a Bachelors in Commerce from Delhi University and prior to joining,

    worked at Western India Group as the Asst. Vice-President

    Heads sales and dealing team of 3,439 employees

    Mr. Gurpreet Sidana, Head, Internet Trading

    More than 9 years of experience

    Prior to joining RSL, worked as Senior Manager of Business Development at Elite

    Stock Management Ltd.

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    Heads online trading sales team of 1,390 employees

    You can view latest Board of Directors of Religare

    Enterprises Limited:

    .No Name Designation

    1. Mr. Sunil GodhwaniCEO & Managing Director

    2. Mr. Shivinder Mohan Singh Non Executive Director

    3. Mr. Harpal Singh Non Executive Director

    4. Mr. Deepak Ramchand Sabnani Independent Director

    5. Ms. Sunita Naidoo Independent Director

    6. Mr. Padam Bahl Independent Director

    7. Mr. R. K. Shetty Alternate to Mr. J. W. Balani

    8. Mr. J. W. Balani Independent Director

    9. Capt. G. P. S. Bhalla Alternate to Mr. Deepak Sabnani

    10. Mr. Malvinder Mohan Singh Non Executive Chairman

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    CEO & MD





    HEAD M.F













































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    Mission and Vision


    To be India's first Multinational providing complete financial services solution

    across the globe.


    Providing integrated financial care driven by the relationship of trust and


    Business & Operations

    RELIGARE facilitates trading in Secondary Market in Equity Trading &

    Derivative (Future & Options) Trading through its Corporate Membership of

    the premier exchanges of the country namely National Stock Exchange (NSE),

    The Stock Exchange, Mumbai (BSE) and Over the Counter Exchange of India

    (OTCEI). Religare On-Line Terminals are installed in all the major cities of

    Northern India and its trading clients are categorized as Retail Sub-Brokers and

    Corporate, NRI's, Bankers & FI's. They provide very competitive brokerage

    rates and full transparency in operations.

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    Over a period of time Religare has recorded a healthy growth rate both in

    business volumes and profitability as it is one the major players in this line of

    business. The business thrust has been mainly in the development of business

    from Financial Institutions, Mutual Funds and Corporate.


    The operations of the company are broadly organized along the following


    Research & Analysis:

    This group is focused on doing daily stock picks and periodical scrip \ segment

    specific research. It provides the best of analysis in the industry and is valued by

    both our Institutional and Retail clientele.


    This group is focused on tracking potential business opportunities and

    converting them into business relationships. Evaluating the needs of the clients

    and tailoring products to meet their specific requirements helps the company to

    build lasting relationships.

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    A summary of our competitive advantage

    (Religare Securities Ltd).

    1. Participant on the countrys premier exchange: Religare is a member ofthe countrys premier stock exchange The National Stock Exchange of

    India (NSE).

    2. Clearing membership on Capital & Derivatives segments: It has clearingmemberships on both the Capital Market and Derivatives segment of the

    exchange. We are also authorized to trade the retail debt market.

    3. Depository Participants with NSDL & CDSL: We are depositoryparticipants with the countrys premier depository service - National

    Securities Depository Limited (NSDL), as well as with the only other

    depository with a countrywide reach - Central Depository Services Limited.

    4. Leading private sector bank as partner: Our banking partners are HDFCand ICICI BankThe foremost private sector banks in the country, that have

    the most technologically advanced infrastructure in the country, with Internet

    banking allowing access to information 24 X 7.

    5. Bloomberg Information Services: The worlds two best informationservices are Bloomberg LP andReuters. These are prohibitively expensive

    for all but mutual funds and financial institutions to own terminals of, and

    subscribe to. We however have two connections to the Bloomberg

    Information Service, the premier service; both in Delhi and Mumbai, and

    these provide us information ahead of the general public, and at par with the

    financial institutions. We have access to breaking news from across the

    globe, and across asset classes, and superior research and analysis


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    6. Prime Office Locations: We have prime office locations in the nationspolitical capital and the business capitalDelhi and Mumbai, in the heart of

    the city.

    7. Research Capabilities: We have a dedicated team of analysts in ourBombay officeThey provide fundamental analysis of stocks and markets,

    which are fundamentally strong, and provide above market returns to

    investors, but over a slightly longer time frame Typically 6 months and


    8. Technical Analysis: A daily technical newsletter is published by our in-house technical analyst, who is a recognized leading practitioner of the

    science. He has a success rate of over 73%. He tracks the progress of the

    calls on a real-time basis, and advises of any change in the profit points or

    stop loss levels.

    9. All Services under one roof: India has moved to a T+2 settlement system,where all trades and settled on a rolling basis. However this gives the clients

    no time to arrange deliveries to their broker, through a separate depository

    participant. Religare, being a trading-clearing member, as well as a

    depository participant, allows seamless transfer of securities under the same

    roof, with minimum delay, and constant monitoring.

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    Religare deals with






    P M S


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    Equity (Shares):

    We can say that a Share or Stock is a document issued by a company, which

    entitles its holder to be one of the owners of the company. A share is issued by a

    company or can be purchased from the stock market.

    Mutual Fund:

    A mutual fund is a type ofInvestment Company that gathers assets from

    investors and collectively invests those assets in stocks, bonds, or money

    market instruments. Individuals and institutions invest in a mutual fund by

    purchasing shares issued by the fund. It is through these sales of shares that a

    mutual fund raises the cash used to invest in its portfolio of stocks, bonds, and

    other securities.

    Through the collective investments of the mutual fund, each investor shares in

    the returns from the funds portfolio while benefiting from professionalinvestment management, diversification, liquidity, and other benefits and


    Derivative (F&O)-

    Derivatives (Futures & Options) are ideal instruments to protect your portfolio

    against risk. You can trade with index movements, hedge and leverage your

    portfolio by limiting risk but keeping your upside unlimited

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    The process of economic liberalization in India began in 1991.

    As part of this process, several capital market reforms were carried out by thecapital market regulator Securities and Exchange Board of India. One such

    measure was to allow trading in equities-based derivatives on stock exchanges

    in 2000. This step proved to be a shot in the arm of the capital market and

    volumes soared within three years. The success of the capital market reforms

    motivated the government and the Forward Market Commission (the

    commodities market regulator) to kick off similar reforms in the commodities

    market. Thus almost all the commodities were allowed to be traded in the

    futures market from April 2003. To make trading in commodity futures more

    transparent and successful, multi-commodity exchanges at national level were

    also conceived and these next generation exchanges were allowed to start

    futures trading in commodities on-line. Commodities exchanges have seen a

    surge in commodity futures volumes in the last few months. This rise in

    volumes has been led by bullion (gold and silver) trading. Today a whole lot of

    commodities are available for trading in futures and the list is getting bigger by

    the day. No wonder then that the commodity futures market is being viewed as

    a significant business segment by many businessmen, investors, institutions,

    brokers, banks etc.

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    FEATURES OF RELIGARE is the most comprehensive website, which allows you to invest in

    shares, mutual funds, derivatives (Future and Option) and other financial



    Religare offers you various options while trading in shares


    This is a delivery based trading system, which is generally done with the

    intention of taking delivery of shares

    MARGIN TRADING (Delivery)

    You can also do a delivery settlement trading up to 4 times the fund available

    wherein you take long buy / short sell position in stocks with the intention of

    squaring off the position within the same day settlement cycle.

    MARGIN TRADING (Intra day)

    Trough margin you can do an intra settlement trading up to 4 to 10 times your

    available funds, wherein you take long buy/ short sell position in stock with the

    intention of squaring off the position within the same day settlement cycle

    Margin PLUS will give much higher leverage in your account against your


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    BTSTBuy Today Sell Tomorrow (BTST) is a facility that allows you to sell shares

    even on 1st

    and 2nd

    day after the buy date, without waiting you have the receipt

    of shares into your Demat account.


    CALL Trade allows you to call on a local number &trade on the telephone

    through our Customer Service Executive.


    Through Religare the share can be traded on NSE as well as BSE.



    Through Religare you can now trade in index and stock futures on the NSE. In

    future trading, you take buy/sell index contracts having a longer contract period

    of up to 3 months.

    Trading in Future is simple during course of contract life; the price moves in

    favor, you make profit.

    Presently only selected stocks, which meet the criteria on liquidity and volume,

    have been enabled for future trading.

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    An option is a contract, which gives the buyer the right to buy or sell shares at a

    specific price, on or before a specific date. For this, the buyer has to pay to the

    seller some money, which is called premium. There is no obligation on the

    buyer to complete the transaction if the price is not favorable to him. To take the

    buy/ sell position on index options you have to place certain %age of order

    value as margin. With options trading, you can leverage on your trading limit by

    taking buy/sell positions much more than what you could have taken in cash


    The Buyer of a call option has the right but not obligation to purchase the

    underlying Asset at the specific strike price by paying a premium where as the

    seller of the Call has the obligation of selling the Underlying Asset at the

    specific strike price.

    By paying lesser amount of premium, you can create position under OPTIONS

    and take advantage of more trading opportunities.

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    Religare brings you the same convenience while investing in Mutual Funds as

    hassle free and less paperwork investing.

    You can now invest in any mutual fund like standard charter MF, Prudential

    ICICI MF, Alliance MF, Franklin Templeton MF, Sunderam MF, Birla sun life;

    HDFC MF, Principal MF, etc are the mutual funds available for investment.

    You can invest in mutual funds without the hassles of identity proof. You need

    on signature on the mutual fund .You also get on information of performance of

    your investment through online current NAV.


    You may invest / purchase prudential ICICI MF, JM MF, ALLIANCE MF,


    HDFC MF and STANDARD CHARTERED MF without hassles of identity



    When ever you required your money, you get it easily. For that purpose you put

    on signature on the redemption form. You get youre your money by on line or

    by physical process (cheque).

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    Systematic investment plan (SIP)

    SIP allows you to invest a certain sum of money over a period of time

    periodically. Just fill in the investment amount, the period of investment and the

    frequency of investing and submit Religare do the rest of your investment

    automatically for you.

    Systematic withdrawal program

    This allows you to withdraw certain Sum of money over a period of time


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    Investment Basics


    The money you earn is partly spent and the rest saved for meeting future

    expenses. Instead of keeping the savings idle you may like to use savings in

    order to get return on it in the future. This is called Investment.

    Why should one invest?One needs to invest to:

    earn return on your idle resources generate a specified sum of money for a specific goal in life make a provision for an uncertain future

    One of the important reasons why one needs to invest wisely is to meet the cost

    of Inflation. Inflation is the rate at which the cost of living increases.

    The cost of living is simply what it costs to buy the goods and services you needto live. Inflation causes money to lose value because it will not buy the same

    amount of a good or a service in the future as it does now or did in the past. For

    example, if there was a 6% inflation rate for the next 20 years, a Rs.100

    purchase today would cost Rs. 321 in 20 years. This is why it is important to

    consider inflation as a factor in any long-term investment strategy. Remember

    to look at an investment's 'real' rate of return, which is the return after inflation.

    The aim of investments should be to provide a return above the inflation rate to

    ensure that the investment does not decrease in value. For example, if the annual

    inflation rate is 6%, then the investment will need to earn more than 6% to

    ensure it increases in value.

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    One may invest in

    Physical assetslike real estate, gold/jewellery, commodities etc. or Financial assetssuch as fixed deposits with banks, small saving

    instruments with post offices, insurance/ provident/ pension fund etc. or

    securities market related instruments like shares, bonds, debentures etc.

    Various Short-term financial options available for


    Broadly speaking, savings bank account, money market/liquid funds and fixed

    deposits with banks may be considered as short-term financial investment


    Savings Bank Accountis often the first banking product people use, whichoffers low interest (4%-5% p.a.), making them only marginally better than fixed


    Fixed Deposits with Banksare also referred to as term deposits and

    minimum investment period for bank FDs is 30 days. Fixed Deposits with

    banks are for investors with low risk appetite, and may be considered for 6-12

    months investment period as normally interest on less than 6 months bank FDs

    is likely to be lower than money market fund returns.

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    Various Long-term financial options available for


    Post Office Savings: Post Office Monthly Income Scheme is a low risk

    saving instrument, which can be availed through any post office. It provides an

    interest rate of 8% per annum, which is paid monthly. Minimum amount, which

    can be invested, is Rs. 1,000/- and additional investment in multiples of 1,000/-.

    Maximum amount is Rs. 3, 00,000/- (if Single) or Rs. 6,00,000/- (if held

    Jointly) during a year. It has a maturity period of 6 years. A bonus of 10% is

    paid at the time of maturity. Premature withdrawal is permitted if deposit is

    more than one year old. A deduction of 5% is levied from the principal amount

    if withdrawn prematurely; the 10% bonus is also denied.

    Public Provident Fund: A long term savings instrument with a maturity of

    15 years and interest payable at 8% per annum compounded annually. A PPF

    account can be opened through a nationalized bank at anytime during the year

    and is open all through the year for depositing money. Tax benefits can be

    availed for the amount invested and interest accrued is tax-free. A withdrawal is

    permissible every year from the seventh financial year of the date of opening of

    the account and the amount of withdrawal will be limited to 50% of the balance

    at credit at the end of the 4th year immediately preceding the year in which the

    amount is withdrawn or at the end of the preceding year whichever is lower the

    amount of loan if any.

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    Company Fixed Deposits:These are short-term (six months) to medium-

    term (three to five years) borrowings by companies at a fixed rate of interest

    which is payable monthly, quarterly, semi-annually or annually. They can also

    be cumulative fixed deposits where the entire principal along with the interest is

    paid at the end of the loan period. The rate of interest varies between 6-9% per

    annum for company FDs. The interest received is after deduction of taxes


    Bonds:It is a fixed income (debt) instrument issued for a period of more than

    one year with the purpose of raising capital. The central or state government,

    corporations and similar institutions sell bonds. A bond is generally a promise

    to repay the principal along with a fixed rate of interest on a specified date,

    called the Maturity Date.

    Mutual Funds:These are funds operated by an investment company which

    raises money from the public and invests in a group of assets (shares,

    debentures etc.), in accordance with a stated set of objectives. It is a substitute

    for those who are unable to invest directly in equities or debt because of

    resource, time or knowledge constraints. Benefits include professional money

    management, buying in small amounts and diversification. Mutual fund units

    are issued and redeemed by the Fund Management Companybased on the

    fund's net asset value (NAV), which is determined at the end of each trading

    session. NAV is calculated as the value of all the shares held by the fund, minus

    expenses, divided by the number of units issued. Mutual Funds are usually long

    term investment vehicle though there some categories of mutual funds, such as

    money market mutual funds which are short term instruments.

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    The Securities Contract (Regulation) Act, 1956 [SCRA] defines Stock

    Exchange as any body of individuals, whether incorporated or not, constituted

    for the purpose of assisting, regulating or controlling the business of buying,

    selling or dealing in securities. Stock exchange could be a regional stock

    exchange whose area of operation/jurisdiction is specified at the time of itsrecognition or national exchanges, which are permitted to have nationwide

    trading since inception. NSE was incorporated as a national stock exchange.

    Equity/ShareTotal equity capital of a company is divided into equal units of small

    denominations, each called a share. For example, in a company the total equity

    capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each

    such unit of Rs 10 is called a Share. Thus, the company then is said to have 20,

    00,000 equity shares of Rs 10 each. The holders of such shares are members of

    the company and have voting rights.

    Equity Market

    In finance a share is a unit of account for various financial instruments

    including stocks, mutual funds, limited partnerships, and REIT's. In British

    English, the usage of the word share alone to refer solely to stocks is so

    common that it almost replaces the word stock itself.

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    In simple Words, a share or stock is a document issued by a company, which

    entitles its holder to be one of the owners of the company. A share is issued by a

    company or can be purchased from the stock market.

    By owning a share you can earn a portion and selling shares you get capital

    gain. So, your return is the dividend plus the capital gain. However, you also

    run a risk of making a capital loss if you have sold the share at a price below

    your buying price

    Trade in shares

    Every transaction in the stock exchange is carried out through licensed members

    called brokers.

    To trade in shares, you have to approach a broker However, since most stock

    exchange brokers deal in very high volumes, they generally do not entertain

    small investors. These brokers have a network of sub-brokers who provide them

    with orders.

    The general investors should identify a sub-broker for regular trading in shares

    and place his order for purchase and sale through the sub-broker. The

    sub/broker will transmit the order to his broker who will then execute it.

    In equity market SEBI is actively participating without them equity market

    cant control so it necessary to know about SEBI.

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    An Index shows how a specified portfolio of share prices is moving in order to

    give an indication of market trends. It is a basket of securities and the average

    price movement of the basket of securities indicates the index movement,

    whether upwards or downwards.


    A depository is like a bank wherein the deposits are securities (viz. shares,debentures, bonds, government securities, units etc.) in electronic form.


    Dematerialization is the process by which physical certificates of an investor are

    converted to an equivalent number of securities in electronic form and credited

    to the investors account with his Depository Participant(DP).

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    The definition of Securities as per the Securities Contracts Regulation Act

    (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or

    other marketable securities of similar nature in or of any incorporate company

    or body corporate, government securities, derivatives of securities, units of

    collective investment scheme, interest and rights in securities, security receipt or

    any other instruments so declared by the Central Government.

    Function of Securities Market:

    Securities Markets is a place where buyers and sellers of securities can enter

    into transactions to purchase and sell shares, bonds, debentures etc. Further, it

    performs an important role of enabling corporate, entrepreneurs to raise

    resources for their companies and business ventures through public issues.

    Transfer of resources from those having idle resources (investors) to others who

    have a need for them (corporate) is most efficiently achieved through the

    securities market. Stated formally, securities markets provide channels for

    reallocation of savings to investments and entrepreneurship. Savings are linked

    to investments by a variety of intermediaries, through a range of financial

    products, called Securities.

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    Why does Securities Market need Regulators?The absence of conditions of perfect competition in the securities market makesthe role of the Regulator extremely important. The regulator ensures that the

    market participants behave in a desired manner so that securities market

    continues to be a major source of finance for corporate and government and the

    interest of investors are protected.

    Who regulates the Securities Market?

    The responsibility for regulating the securities market is shared by Department

    of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve

    Bank of India (RBI) and Securities and Exchange Board of India (SEBI)




    The Securities and Exchange Board of India (SEBI) is the regulatory authority

    in India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992

    provides for establishment ofSEBI with statutory powers for

    Protecting the interests of investors in securities Promoting the development of the securities market and Registering and regulating the working of stock brokers, sub

    brokers etc.

    Promoting and regulating self-regulatory organizations Prohibiting fraudulent and unfair trade practices

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    SEBI has power for:

    Regulating the business in stock exchange and other securities market; Registering and regulating the working of stock brokers sub- brokers,

    share transfer agents, bankers to an issue, trustees of trust deeds, registers

    to an issue, merchant bankers, underwriters, portfolio manager,

    investment advisers and such other intermediaries who may be associated

    with securities markets in any manners;

    Registering and regulating the working of depositaries, participants,custodians of securities, foreign institutional investors, credit rating

    agencies and such other intermediaries as SEBI may by notification,

    specify in this behalf;

    Registering and regulating the working of venture capital funds andcollective investment schemes including mutual funds;

    Promoting and regulating self-regulatory organizations; Prohibiting fraudulent and unfair trade practices related to securities


    Promoting investors education and training of intermediaries securitiesmarkets;

    Prohibiting insider trading in securities; Regulating substantial acquisition of shares and take-over of companies; Calling for information from, undertaking inspection, conducting

    inquiries and audits of the stock exchanges, mutual and other persons

    associated with the securities market;

    Conducting research for the above purpose. Calling from or furnishing to any such agencies, as may be specified by

    SEBI, such information as may be considered necessary by it for theefficient discharge of its functions.

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    Participants in the Securities Market:

    The securities market essentially has three categories of participants, namely,

    the issuers of securities, investors in securities and the intermediaries, such as

    merchant bankers, brokers etc. While the corporate and government raise

    resources from the securities market to meet their obligations, it is households

    that invest their savings in the securities market.

    Is it necessary to transact through an intermediary?

    It is advisable to conduct transactions through an intermediary. For example you

    need to transact through a trading member of a stock exchange if you intend to

    buy or sell any security on stock exchanges. You need to maintain an account

    with a depository if you intend to hold securities in demat form.

    You need to deposit money with a banker to an issue if you are subscribing to

    public issues. You get guidance if you are transacting through an intermediary.

    Chose a SEBI registered intermediary, as he is accountable for its activities. The

    list of registered intermediaries is available with exchanges, industry

    associations etc.

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    A depository is an organization form to provide electronic depositoryfacilities for securities trade. Securities are then held in the electronic

    form through the medium of participants (DPs). The national Securities

    Depository Limited (NSDL) is the first Depository in India. The function

    of NSDL is regulated by the SEBI.

    The depository is not just another custodian. The depository can legallytransfer beneficial ownership. The main objective of depository is to

    reduce settlement risk by minimizing paperwork involved in trading,

    settling and transferring securities.

    To utilize the services offered by a depository, you must open an accountwith the depository through a DP. The DPs are the link between the

    shareholders, the company and NSDL.

    Depending upon the DP. There may or may not be an opening accountfees towards transaction and custody.

    Banks, financial institutions, custodians and stockbrokers can becomeDPssubject to their meeting certain requirements prescribed by NSDL and

    SEBI. NSDL publishes the list of DPs registered with them, from time to


    The DP will provide you with a passbook or statement of accountperiodically inform you on your holdings.

    You can even have a zero balance in your account. If you loose your statement of account inform the DP and obtain a


    If holdings in the statement are incorrect, approach the DP forclarification.

    If you receive an incorrect dividend amount, contact the company orregistrar.

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    Main depository participants1. NSDL2. CSDL

    1. NATIONAL SECURITIES DEPOSITORY LTD (NSDL)In order to solve the problems associated with trading securities, NSE joined

    hand with the Industrial Development Bank of India (IDBI) and the UnitTrust of India (UTI) to promote dematerizalition of securities.

    NSDL, commenced operations in November 1996 and has since established

    a national infrastructure of international standard to handle trading and

    settlement in dematerialized form and thus completely eliminated the risk to

    investors associated with fake paper.


    The Kolkata Stock Exchange Association Limited, Bank Of India HDFC Bank

    Limited CDSL is another Depository after NSDL. Its promoter are Bombay

    Stock Exchange,, Standard chartered Bank, State Bank of India Bank Of Baroda

    Union Bank Of India, Bank Of Maharastra Centurion Bank etc.

    As on 30 June 2001 CDSL has signed agreement with 3297 companies. Of

    these 3528 are available for Demat services. CDSL has 160 DPs offering

    Depository services in 78 cities across 147 locations in the country.

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    Segments of Securities Market

    The securities market has two interdependent segments: the primary (newissues) market and the secondary market. The primary market provides the

    channel for sale of new securities while the secondary market deals in securities

    previously issued.




    Role of the Primary Market

    The primary market provides the channel for sale of new securities. Primary

    market provides opportunity to issuers of securities; Government as well as

    corporate, to raise resources to meet their requirements of investment and/or

    discharge some obligation.

    They may issue the securities at face value, or at a discount/premium and thesesecurities may take a variety of forms such as equity, debt etc. They may issue

    the securities in domestic market and/or international market.

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    Face Value of a share/debenture

    The nominal or stated amount (in Rs.) assigned to a security by the issuer. For

    shares, it is the original cost of the stock shown on the certificate; for bonds, it is

    the amount paid to the holder at maturity. Also known as par value or simply

    par. For an equity share, the face value is usually a very small amount (Rs. 5,

    Rs. 10) and does not have much bearing on the price of the share, which may

    quote higher in the market, at Rs. 100 or Rs. 1000 or any other price. For a debt

    security, face value is the amount repaid to the investor when the bond matures

    (usually, Government securities and corporate bonds have a face value of Rs.

    100). The price at which the security trades depends on the fluctuations in the

    interest rates in the economy.

    Premium and Discount in a Security Market

    Securities are generally issued in denominations of 5, 10 or 100. This is known

    as the Face Value or Par Value of the security as discussed earlier. When a

    security is sold above its face value, it is said to be issued at a Premium and if it

    is sold at less than its face value, then it is said to be issued at a Discount.

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    Why do companies need to issue shares to the public?

    Most companies are usually started privately by their promoter(s). However, the

    promoters capital and the borrowings from banks and financial institutions may

    not be sufficient for setting up or running the business over a long term. So

    companies invite the public to contribute towards the equity and issue shares to

    individual investors. The way to invite share capital from the public is through aPublic Issue. Simply stated, a public issue is an offer to the public to

    subscribe to the share capital of a company. Once this is done, the company

    allots shares to the applicants as per the prescribed rules and regulations laid

    down by SEBI.

    Different kinds of issues

    Primarily, issues can be classified as a Public, Rights or Preferential issues (also

    known as private placements). While public and rights issues involve a detailed

    procedure, private placements or preferential issues are relatively simpler. The

    classification of issues is illustrated below:

    Initial Public Offering (IPO) is when an unlisted company makeseither a fresh issue of securities or an offer for sale of its existing

    securities or both for the first time to the public. This paves way for

    listing and trading of the issuers securities.

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    A follow on public offering (Further Issue)is when an alreadylisted company makes either a fresh issue of securities to the public or an

    offer for sale to the public, through an offer document.

    Rights Issueis when a listed company which proposes to issue freshsecurities to its existing shareholders as on a record date. The rights are

    normally offered in a particular ratio to the number of securities held

    prior to the issue. This route is best suited for companies who would like

    to raise capital without diluting stake of its existing shareholders.

    A Preferential issueis an issue of shares or of convertible securitiesby listed companies to a select group of persons under Section 81 of the

    Companies Act, 1956 which is neither a rights issue nor a public issue.

    This is a faster way for a company to raise equity capital. The issuer

    company has to comply with the Companies Act and the requirements

    contained in the Chapter pertaining to preferential allotment in SEBI

    guidelines which inter-alia include pricing, disclosures in notice etc.

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    Issue price

    The price at which a company's shares are offered initially in the primary

    market is called as the Issue price. When they begin to be traded, the market

    price may be above or below the issue price.

    Market Capitalization

    The market value of a quoted company, which is calculated by multiplying its

    current share price (market price) by the number of shares in issue, is called asmarket capitalization. E.g. Company A has 120 million shares in issue. The

    current market price is Rs. 100. The market capitalization of company A is Rs.

    12000 million.

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    Initial Public Offer (IPO)

    An Initial Public Offer (IPO) is the selling of securities to the public in the

    primary market. It is when an unlisted company makes either a fresh issue of

    securities or an offer for sale of its existing securities or both for the first time to

    the public. This paves way for listing and trading of the issuers securities. The

    sale of securities can be either through book building or through normal public


    Who decides the price of an issue?

    Indian primary market ushered in an era of free pricing in 1992. Following this,

    the guidelines have provided that the issuer in consultation with Merchant

    Banker shall decide the price. There is no price formula stipulated by SEBI.

    SEBI does not play any role in price fixation. The company and merchant

    banker are however required to give full disclosures of the parameters which

    they had considered while deciding the issue price. There are two types of

    issues, one where company and Lead Merchant Banker fix a price (called fixed

    price) and other, where the company and the Lead Manager (LM) stipulate a

    floor price or a price band and leave it to market forces to determine the final

    price (price discovery through book building process).

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    How does one know if shares are allotted in an IPO/offer

    for sale? What is the timeframe for getting refund if

    shares not allotted?

    As per SEBI guidelines, the Basis of Allotment should be completed with 15days from the issue close date. As soon as the basis of allotment is completed,

    within 2 working days the details of credit to demat account / allotment advice

    and dispatch of refund order needs to be completed. So an investor should know

    in about 15 days time from the closure of issue, whether shares are allotted to

    him or not.

    Does NSE provide any facility for IPO?Yes. NSEs electronic trading network spans across the country providing

    access to investors in remote areas. NSE decided to offer this infrastructure for

    conducting online IPOs through the Book Building process. NSE operates a

    fully automated screen based bidding system called NEAT IPO that enables

    trading members to enter bids directly from their offices through a sophisticated

    telecommunication network. Book Building through the NSE system offers

    several advantages:

    The NSE system offers a nation wide bidding facility in securities It provide a fair, efficient & transparent method for collecting bids using

    the latest electronic trading systems

    Costs involved in the issue are far less than those in a normal IPO The system reduces the time taken for completion of the issue process

    The IPO market timings are from 10.00 a.m. to 3.00 p.m. On the last day of the

    IPO, the session timings can be further extended on specific request by the

    Book Running Lead Manager.

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    What is Lock-in?

    Lock-in indicates a freeze on the sale of shares for a certain period of time.

    SEBI guidelines have stipulated lock-in requirements on shares of promoters

    mainly to ensure that the promoters or main persons, who are controlling the

    company, shall continue to hold some minimum percentage in the company

    after the public issue.

    SEBIs Role in an Issue

    Any company making a public issue or a listed company making a rights issue

    of value of more than Rs 50 lakes is required to file a draft offer document with

    SEBI for its observations. The company can proceed further on the issue only

    after getting observations from SEBI. The validity period ofSEBIs observation

    letter is three months only i.e. the company has to open its issue within threemonths period.

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    Secondary market refers to a market where securities are traded after being

    initially offered to the public in the primary market and/or listed on the Stock

    Exchange. Majority of the trading is done in the secondary market.

    Secondary market comprises of equity markets and the debt markets.

    Role of the Secondary Market

    For the general investor, the secondary market provides an efficient platform for

    trading of his securities. For the management of the company,

    Secondary equity markets serve as a monitoring and control conduitby

    facilitating value-enhancing control activities, enabling implementation of

    incentive-based management contracts, and aggregating information (via price

    discovery) that guides management decisions.

    Difference between the Primary Market and the

    Secondary Market

    In the primary market, securities are offered to public for subscription for the

    purpose of raising capital or fund. Secondary market is an equity trading venue

    in which already existing/pre-issued securities are traded among investors.

    Secondary market could be either auction or dealer market. While stock

    exchange is the part of an auction market, Over-the-Counter (OTC) is

    a part of the dealer market.

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    Role of a Stock Exchange in buying and selling shares

    The stock exchanges in India, under the overall supervision of the regulatory

    authority, the Securities and Exchange Board of India (SEBI), provide a trading

    platform, where buyers and sellers can meet to transact in securities. The trading

    platform provided by NSE is an electronic one and there is no need for buyers

    and sellers to meet at a physical location to trade. They can trade through the

    computerized trading screens available with the NSE trading members or the

    internet based trading facility provided by the trading members of NSE.

    Stock exchanges in India

    Currently, two stock exchanges in India, the National Stock Exchange (NSE)

    and Bombay Stock Exchange (BSE)

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    The National Stock Exchange of India Ltd. (NSE), set up in the year

    1993, is today the largest stock exchange in India and a preferred exchange for

    trading in equity, debt and derivatives instruments by investors. NSE has set up

    a sophisticated electronic trading, clearing and settlement platform and its

    infrastructure serves as a role model for the securities industry. The standards

    set by NSE in terms of market practices; products and technology have become

    industry benchmarks and are being replicated by many other market

    participants. It provides a screen-based automated trading system with a high

    degree of transparency and equal access to investors irrespective of

    geographical location.
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    The high level of information dissemination through the on-line system has

    helped in integrating retail investors across the nation. The exchange has a

    network in more than 43 sub-regional offices, and has a presence in 498* cities

    and towns controlling 1,837* business locations all over India.

    telecommunication network comprising of over 2500 VSATs. NSE has around

    850 trading members and provides trading in over 1000 equity shares and 2500

    debt securities. Besides this, NSE provides trading in various derivatives

    products such as index futures, index options, stock futures, stock options and

    interest rate futures.

    At NSE, it has always been our endeavor to continuously upgrade the skills and

    proficiency of the Indian investor. Since, financially literate investors are the

    backbone of the securities market, knowledge and awareness about the

    securities market is of the foremost concern to us, starting with the most basic

    of information being made available as the first step.

    This booklet has therefore been prepared for those of you who are keen to

    acquire some basic but key information about the stock markets as an initial

    step towards becoming a more informed investor. We hope this booklet will act

    as a means of satisfying some of your initial queries on the stock markets.

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    Bombay Stock Exchange Limited is the oldest stock exchange in Asia with arich heritage. Popularly known as "BSE", it was established as "The Native

    Share & Stock Brokers Association" in 1875. It is 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.The Exchange's pivotal

    and pre-eminent role in the development of the Indian capital market is widely

    recognized and its index, SENSEX, is tracked worldwide. Earlier an

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

    corporatised 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).
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    The BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-

    weighted index composed of 30 stocks with the base April 1979 = 100. It

    consists of the 30 largest and most actively traded stocks, representative of

    various sectors, on the Bombay Stock Exchange. These companies account for

    around one-fifth of the market capitalization of the BSE.

    The base value of the Sensex is 100 on April 1, 1979 and the base year of BSE-

    SENSEX is 1978-79.

    At irregular intervals, the Bombay Stock Exchange (BSE) authorities review

    and modify its composition to make sure it reflects current market conditions.

    The abbreviated form "Sensex" was coined by Deepak Mohoni around 1990

    while writing market analysis columns for some of the business newspapers and

    magazines. It gained popularity over the next year or two.

    The stock market has grown by over ten times from June 1990 to today. Using

    information from April 1979 onwards, the long-run rate of return on the BSE

    Sensex can be estimated to be 0.52% per week (continuously compounded) with

    a standard deviation of 3.67%. This translates to 27% per annum, which

    translates to roughly 18% per annum after compensating for inflation.

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    Screen Based Trading

    The trading on stock exchanges in India used to take place through open outcry

    without use of information technology for immediate matching or recording of

    trades. This was time consuming and inefficient. This imposed limits on trading

    volumes and efficiency. In order to provide efficiency, liquidity and

    transparency, NSE introduced a nationwide, on-line, fully automated screen

    based trading system (SBTS) where a member can punch into the computer the

    quantities of a security and the price at which he would like to transact, and the

    transaction is executed as soon as a matching sale or buy order from a counter

    party is found.


    NSE is the first exchange in the world to use satellite communication

    technology for trading. Its trading system, called National Exchange for

    Automated Trading (NEAT), is a state of-the-art client server based application.

    At the server end all trading information is stored in an in memory database to

    achieve minimum response time and maximum system availability for users. Ithas uptime record of 99.7%. For all trades entered into NEAT system, there is

    uniform response time of less than one second.

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    Place orders with the broker

    You may go to the brokers office or place an order on the phone/internet oras

    defined in theModel Agreement, which every client needs to enter into with his

    or her broker.

    How does an investor get access to internet based trading


    There are many brokers of the NSE who provide internet based trading facility

    to their clients. Internet based trading enables an investor to buy/sell securities

    through internet which can be accessed from a computer at the investors

    residence or anywhere else where the client can access the internet. Investors

    need to get in touch with an NSE broker providing this service to avail of

    internet based trading facility.

    Contract Note

    Contract Note is a confirmation of trades done on a particular day on behalf of

    the client by a trading member. It imposes a legally enforceable relationship

    between the client and the trading member with respect to purchase/sale and

    settlement of trades. It also helps to settle disputes/claims between the investor

    and the trading member. It is a prerequisite for filing a complaint or arbitrationproceeding against the trading member in case of a dispute. A valid contract

    note should be in the prescribed form, contain the details of trades, stamped

    with requisite value and duly signed by the authorized signatory. Contract notes

    are kept in duplicate, the trading member and the client should keep one copy


    After verifying the details contained therein, the client keeps one copy and

    returns the second copy to the trading member duly acknowledged by him.

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    Contract note issued by the stock broker

    A broker has to issue a contract note to clients for all transactions in the form

    specified by the stock exchange. The contract note inter-alia should have


    Name, address and SEBI Registration number of the Member broker. Name of partner/proprietor/Authorized Signatory. Dealing Office Address/Tel. No./Fax no., Code number of the member

    given by the Exchange.

    Contract number, date of issue of contract note, settlement number andtime period for settlement.

    Constituent (Client) name/Code Number. Order number and order time corresponding to the trades. Trade number and Trade time. Quantity and kind of Security bought/sold by the client. Brokerage and Purchase/Sale rate. Service tax rates, Securities Transaction Tax and any other charges levied

    by the broker.

    Appropriate stamps have to be affixed on the contract note or it ismentioned that the consolidated stamp duty is paid.

    Signature of the Stock broker/Authorized Signatory.

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    Why should one trade on a recognized stock exchange

    only for buying/selling shares?

    An investor does not get any protection if he trades outside a stock exchange.

    Trading at the exchange offers investors the best prices prevailing at the time in

    the market, lack of any counter-party risk which is assumed by the clearing

    corporation, access to investor grievance and redressed mechanism of stock

    exchanges, protection up to a prescribed limit, from the Investor Protection

    Fund etc.

    How to know if the broker or sub broker is registered?

    One can confirm it by verifying the registration certificate issued by SEBI. A

    broker's registration number begins with the letters INB and that of a sub

    broker with the letters INS.

    Precautions must one take before investing in the stock


    Here are some useful pointers to bear in mind before you invest in the markets:

    Make sure your broker is registered with SEBI and the exchanges and donot deal with unregistered intermediaries.

    Ensure that you receive contract notes for all your transactions from yourbroker within one working day of execution of the trades.

    All investments carry risk of some kind. Investors should always knowthe risk that they are taking and invest in a manner that matches their risk


    Do not be misled by market rumours, luring advertisement or hottips ofthe day.

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    Take informed decisions by studying the fundamentals of the company.Find out the business the company is into, its future prospects, quality of

    management, past track record etc Sources of knowing about a company

    are through annual reports, economic magazines, databases available with

    vendors or your financial advisor.

    Ifyoure financial advisor or broker advises you to invest in a companyyou have never heard of, be cautious. Spend some time checking out

    about the company before investing.

    Do not be attracted by announcements of fantastic results/news reports,about a company. Do your own research before investing in any stock.

    Do not be attracted to stocks based on what an internet website promotes,unless you have done adequate study of the company.

    Investing in very low priced stocks or what are known as penny stocksdoes not guarantee high returns.

    Be cautious about stocks which show a sudden spurt in price or tradingactivity.

    Any advice or tip that claims that there are huge returns expected,especially for acting quickly, may be risky and may to lead to losing

    some, most, or all of your money.

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    Research Methodology comprises defining and redefining the problem,

    formulating hypothesis or suggesting solution, collecting, organizing and

    evaluating the data, making deduction and reaching to conclusions and

    determines whether the formulated hypothesis is right and wrong.

    Research Methodology is a way to solve research in study and solving research

    problems along with logic behind them are defined through research

    methodology. Thus while talking about research methodologies we are not only

    talking of research methods but also consider the logic behind the methods.

    During my project, I collected data through various sources primary &



    To analyze the investing behavior towards commodity and equity market.

    To study the equity and commodity market

    To compare equity and commodity market, and list advantages and


    List all the implicit and explicit causes divergence towards equity market

    rather than commodity

    To recommend how company can increase its clientele base.

    To correlate amount invested with risk

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    A research design is the master plan or model for the conduct of formal

    investigation and survey. It is a specification of methods and procedures foracquiring the information needs for solving the problem. It decides the source

    of information and methods for gathering the data. A questionnaire and other

    forms are tested to use the collection of data. A sampling design is to be


    Good research design ensures that the information obtained is relevant to the

    research question and that it was collected by objectives. Since research

    design is simply the framework of plan for a study, it should be used as a

    guide in collecting and analyzing the data. It is a blueprint that is followed in

    completing the research study.

    Our approach to research is descriptive. The major objective of the descriptive

    research is to describe something usually market features or functions. It

    requires a clear specification of the who, what, when, where, why, & the way

    (the 6 Ws) of the research. Our 6 Ws are:


    Who should be considered for the research?


    What is the investment pattern of the respondent in equity or



    When should the information be obtained from the respondent?

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    Where the respondents should be contacted to obtain the required



    Why are we obtaining the information from the respondents?


    In what way we are going to obtain the information from the


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    In this research, I have used two types of data.

    Primary Source.

    Secondary Source.

    Primary source includes:-

    Discussion with branch manager

    Discussion with experts

    Discussion with investors of the firm.

    Live trading in the market

    Data collected from questionnaire.

    Secondary source includes:-

    Various books related to stock market

    Books related to Financial Management

    Web sites were used as the vital information source

    References given by Relationship Manager

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    To understand the overall working of share market, the period of

    45 days is not enough.

    Moreover, very few investor and agents have a detail knowledge of

    the study.

    The study was conducted in agra only, which restricted the scope

    of the study.

    The data provided by the investor and the agents cant be held true

    as 100% correct.

    The study was conducted to understand with respect to Risk

    involved in broking firm and investors, which is a part of the equity

    share market.

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    Market Research Analysis

    Preference of investment




    SHARES 74





    8% 2%

    Interpretation: This shows that although the mutual fund market is on rise

    yet, the most favored investment continues to be in the Share Market. So, with a

    more transparent system, investment in the Stock Market can definitely beincreased.

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    Awareness of online share trading



    Yes -- 91%

    No -- 9%

    Interpretation: With the increase in cyber education, the awareness towards

    online share trading has increased by leaps and bounds. This awareness is

    expected to increase further with the increase in internet education.

    Awareness of as a Brand



    Yes -- 63%

    No -- 37%

    Interpretation: This pie-chartshows that Religare has reasonable amount of

    Brand awareness in terms of a premier Retail Stock Broking Company. This

    brand image should be further levered by the company to increase its market

    share over its competitors.

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    Awareness of Religare Facilities



    Yes -- 20%

    No -- 80%

    Interpretation: although there is sufficiently high brand equity among the

    target audience yet, it is to be noted that the customers are not aware of the

    facilities provided by the company meaning thereby, that the company should

    concentrate more towards promotional tools and increase its focus on product

    awareness rather than brand awareness.

    DEMAT Account Market








    ICICI Direct-15%

    India Bulls-25%Others-18%

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    Interpretation: This shows that even with sufficiently high Brand Equity,

    Religare ranks only 3rd

    amongst the Demat Account providers. This is

    probably because of two main reasons.

    1. Lack of promotion and unfocussed approach towards Product awareness.2. Nontransparent marketing policies of the company.

    Hence, the company should crystallize its products and should indulge in

    aggressive marketing and promotion.

    Satisfaction Level among Customers with Current Broker



    Yes -- 92%

    No -- 8%

    Interpretation: This pie-chart accentuates the fact that Strategic Marketing,

    today, has gone beyond only meeting sales targets and generating profit

    volumes. It shows that all the competitors are striving hard not only to woo the

    customer but also to make them Brand loyal by generating customer


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    DAILY 51%WEEKLY 16%

    MONTHLY 16%



    RARELY 07%


    In spite of the huge returns that the share market promises, we see that there is

    still a dearth of active traders and investors. This is because of the non

    transparent structure of the Indian share market and the skepticism of the target

    audience that is generated by the volatility of the stock market. It requires

    efficient bureaucratic intervention on the part of the Government.

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    Percentage of Earning Invested In Share Trading



    7% 2%

    Upto 10%--71%

    Upto 25%--19%

    Upto 50%--7%

    Above 50%--3%

    Interpretation: This shows that people invest only up to 10% of their

    earnings in the stock market, again reiterating the volatile and non-transparent

    structure of the Indian stock market. Hence, effective and efficient steps should

    be undertaken to woo the customers to investment more in the lucrative stock


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    A SWOT analysis focuses on the internal and external environments,

    examining strengths and weaknesses in the internal environment and

    opportunities and threats in the external environment.



    As products of Religare is a extremely innovative product with very less cost.

    Services like online trading facility, institutional and domestic broking,

    customized research reports with almost 80% efficiency etc give Religare an

    edge over its competitors. Religare provides other support services that make

    retail investors more confident and assured with their trading. SMS alerts

    (allowing traders and investors to make the most of the available opportunities),

    Softer, intangible features like imagery, equity driving preference. Through

    efficient trading processes Investors can place their orders directly on the

    Internet, do all the information seeking and basically own the investing process.

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    Distribution Network

    We have a growing network of 150 branches and more than 300 business

    partners spread across 180 cities in India and a fully operational international

    office at London

    OUR target is to have 350 branches and 1000 business partners in 300 cities of

    India and more than 7 International offices by the end of 2006.

    Unlike a traditional broking firm, Religare group works on the philosophy of

    partnering for wealth creation.


    Companys product line is quite flexible in the sense that there is a product for

    every kind of investors. Also all the products cover all the loop holes of all the

    products offered by the other competitors like low cost, user friendly online

    trading services etc.



    Though the company has efficient products but large part of investment

    interested population does not know the company. The most basic expectation

    for a trader or investor when one begins trading is that one must get timely

    delivery of shares and proceeds from sale of shares. Also ones cash balances

    with the broker must be safe and secure. Though this confidence in the broker

    comes with time and experience, good and transparent practices also play a

    major role in imbibing confidence in traders

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    Competition from Banks

    Most of the banks due to good branding have the faith of the customers of their

    banking database. So they enjoy the liberty of huge database and customers find

    it more reliable to trade there rather than with a unknown broker. Also banks

    like HDFC Bank and ICICI Bank have the advantage of linking the trading

    accounts of their customers to saving accounts. This makes trading easier, and

    at the same time a trader withdraws exactly as much money from his account as

    is needed to complete the trade. Similarly sales proceeds are credited directly to

    saving account.


    The external environment analysis may reveal certain new opportunities for

    profit and growth.

    Ever-Increasing Market

    After the NSE brought the screen based trading system stock markets are now

    more secured which has attracted lot of retail investors and the demand is

    increasing day by day. This has resulted in improved liquidity and heavy

    volumes on transactions.Religare is one of the early entrants here. As to howmuch it will roar and how swift it can swoop on the market, the future alone can

    answer such queries.Religare has been a mega player and is known for being a

    mover of stocks. It is also known for putting big deals through and enjoys good

    networking with the FIIs. It has been dynamic enough to move with the times

    and capture the opportunities that the market throws up from time to time.

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