PROJECT SYNOPSIS

“Working Of Depository System in Indian Stock Market”

With reference to

“SHARE KHAN STOCK BROKING PVT LTD”VIJAYAWADA

Project synopsis submitted to the Andhra University, Visakhapatnam in partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted BY

Ms. TEJASWINI.N

Regd No: 110278602050

PROJECT GUIDE

Mr. S.RAVI KUMAR

DEPARTMENT OF MANAGEMENT STUDIES

VESTAL ACADEMY OF I.T AND MANAGEMENT

(Approved by A.I.C.T.E, New Delhi & Affiliated to Andhra University, Visakhapatnam)

G.N.T. ROAD, VATLURU, ELURU W.G. – 534 007

2010-2012

DEPOSITORY SYSTEM

Chapter- I

INTRODUCTION

A depository system where is a place to deposit something for safekeeping as bank

in which funds or securities are deposited by other under the terms of depository agreements.

The principal function of a depository is to dematerialize securities and enable their

transactions in book-entry form. The securities are transferred by debiting the transferor’s

depository account and crediting the transferee’s depository account. The main objective is to

study the trading and settlement procedure in the exchange with particular online procedure

and manual procedure that existed before online trading. The another objective of the study

the greater benefits of the depositories. The study of dematerialization of shares procedures,

demat account, transfer of securities and trading and settlement of demat securities. The study

of services provided by NSDL. The inception of the depository system in the Indian Capital

Market has been only during the 90’s. However, when it has finally arrived it was a welcome

change for the investors who were bogged down with many a problem of scrip based trading.

The role played by the companies in encouraging its shareholders to convert their stock into

electronic form. Their attitude of being receptive to changing conditions, and to go in for

“demat” is a step in the right directions.

OBJECTIVE OF THE STUDY

To understand the basic term and process in depositary system.

Get specific knowledge about NSDL and CSDL and its investor partners.

Provide adulate and desirable information for the readers.

To find out that factors or speculations those are responsible for creating a

negative image of DS in the mind of investor.

Getting the information about the awareness of depository system.

Find out the satisfactory level of the investors regarding this system.

SCOPE OF THE STUDY

The scope of the study gives a detail description of the following activities:

Dematerialization

Rematerialisation

Electronic settlement of trade

Electronic credit of securities allotted in public, rights and bonus issue.

Pledging or hypothecation of dematerialized securities.

Freezing of demat account.

RESEARCH METHODOLOGY

Research Methodology refers to search of knowledge .one can also define research

methodology as a scientific and systematic search for required information on a specific topic.

TYPES OF RESEARCH

ANALYTICAL RESEARCH: It has to used facts or information already available and analyzes

these to make a critical evaluation of material.

SAMPLE SIZE: Considering the constraints it was decided to conduct the study based on

sample size of 50 people in specific age groups.

PRIMARY SOURCE:

I have gathered information about our project from the interaction with the customers of our

company i.e. Sharekhan. The sampling method used was basically convenience sampling

and most of the calls made were cold calls made on the generated database of recipients of

other companies.

SECONDARY SOURCE:

The secondary data, I have collected from the various websites of Sharekhan, various

journals, magazines etc.

LIMITATIONS OF STUDY

People were not willing to answer the entire questionnaire due to the less time available to them.

Some respondents might be hesitant to divulge personal and financial information which can affect the validity of all responses.

There is lack of awareness among people about investing in stock market. So the people who are aware of such things were found in specific areas for survey purposes.

Most people are comfortable with traditional system in small towns and like to trade from their respective brokers, hence not providing a true opinion of theirs.

Some of the respondents who did not do online trading were able to respond to only few questions.

The survey was done in the city and may not truly express the opinion of whole country.

Chapter-II

PROFILE OF INDUSTRY

A stock market or equity market is a public entity (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock(shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

A stock market is a market where company stock is traded between people who want to buy the stock and people who want to sell stock. Just the same as a fish market where people want to buy and sell fish or a cattle market where cows are exchanged between buyers and sellers. Stock is just a slice of a company/ organisation, if you own over 50% of the stock then you own a company. 

The size of the world stock market was estimated at about $36.6 trillion at the start of October 2008.The total world derivatives market has been estimated at about $791 trillion face or nominal value,11 times the size of the entire world economy.The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual valueA stock market is made up of several components... 

Stock Exchanges Companies Brokers Traders Index's

PROFILE OF SHAREKHAN LTD

Sharekhan is stock broking company. Share Khan comes under retail arm of SSKI (Shripal Sevantilal Kantilal Ishwarlal ) investors Services Pvt. Ltd. offers World-class facilities for buying and selling Shares on BSE and NSE, Demat Services (DP) Derivatives (F&O). SSKI group also comprises of Institutional broking and Corporate Finance. Sharekhan does not claim expertise in too many things.

Infact Sharekhan runs India's largest chain of share shops with over hundred outlets in more than 80 cities! They have 14 branches, 400 franchises also having 466 shops in 210 cities. 400 crore daily dealing allover India with almost 4000 employees and 100000 trading customers.

CURRENT POSITION VISION

To empower the investor with quality advice and superior service to help him take better investment decisions. We believe that our growth depends on client satisfaction.

MISSION

To provide the best customer service and product innovation tuned to diverse needs of clientele

Continuous up-gradation with changing technology, while maintaining human values.

Respond to progressive globalization and achieving international standard.

Chapter-III

THEORETICAL FRAMEWORK

DEPOSITORY

A depository is an organization which holds securities of investors in electronic form at the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities. In the Depository System, the securities of a shareholder are held in the electronic form  b y c o n v e r s i o n o f p h y s i c a l s e c u r i t i e s t o e l e c t r o n i c f o r m t h r o u g h a p r o c e s s c a l l e d 'dematerialization' (demat) of share certificates and facilitates transactions electronically without involving any share certificate or transfer deed. Depository system is playing a significant role in stock markets around the world and hence has become popular and prevalent in many advanced countr ies . In India the  National Securities Depository Ltd. (NSDL), promoted by Industrial Development Bank of India, Unit Trust of India, and National Stock Exchange is the first depository. A second Depository by name Central Depository Services (India) Ltd, promoted by The Stock Exchange, Mumbai and Bank of India has been regis tered recent ly and wi l l commence its operations shortly. Investors have choice of two depositories now National Securities Depository Limited (NSDL) and C e n t r a l D e p o s i t o r y S e r v i c e s ( I ) L i m i t e d ( C D S L )

Const i tuents of  Depository system:-

Depository Depository Participants (DPs) Share Registrar/Issuers Investor  Clearing Corporation/Member .

Chapter-IV

FINDING

1. Which current broker are you trading?

I found that 35% people are trading with India Bulls, 30% people are trading with Religare broker, 25% people are doing trading with Karvy and 10% people said that they are trading with Reliance Money.

2. Do you have a PAN card?

According to this survey, we find that 65% people have PAN card and only 35% people have not PAN card.

3. Do you know about DEPOSITORY services?

It was found that 30% people know about depository services, 28% people have no knowledge about it, 42% people have a little knowledge of depository services

4.  Do you know about who has control over depository services?

65% respondents said that CDSL have control over all depository services,25% people said that NSDL have control over depository system while 10% people said that both have a control on depository services.

5. How much charges do you pay for Demat account?

65% people pay less than Rs. 500 for Demat a/c,35%  people pay more than500 as Demat charges.6.  Is nomination facility available in Demat account?

It was found the nomination facility is also available in demat account.

7. Who levy charges for dematerialization of securities? Out of 10 people , 25% people said that CDSL imposed charges for dematerialization, 13% people said that NSDL and 62% people said that depository participant may levy charges for dematerialization of securities.

SUGGESTION

Regular statements of holdings should be made available at regular intervals.

The statement of holdings should be provided with the sale and purchase of the shares.

Awareness of functioning of this system should be spread to the public through advertisement.

Clear picture of the deductions made by depository participant or the charges levied on the customers should be provided in black and white.

Proper feedback should be taken into consideration. For e.g. calls should be made when the account is opened.

Sharekhan should expand its network by opening its more branches and franchise and there should be easy accessibility of services rendered by this system.

The company should launch more welfare schemes from time to time.

CONCLUSION

Sharekhan Demat Account is better than any other Demat account.

Sharekhan have good return of investment.

A good brand is always welcomed over here.

People are aware of quality so they go for ready to spend bucks of money.

At last all conclusion be concluded by that Broking is still growing industry in India.