religare security prashant

8/4/2019 Religare Security Prashant

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A

PROJECT REPORT

On

Religare.in

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A RANBAXY Group Company

Submitted for the partial fulfillment towards the award of the

degree in

MASTER OF BUSINESS ADMINISTRATION

Submitted to:- Submitted by :-Madurai Kamraj University Prashant Kumar

Faculty MBA Department Roll No.-A8C7510072

MBA IInd Year

MADURAI KAMRAJ UNIVERSITY

Madurai

PREFACE

To compete and outscore the growing competition from the various online trading

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

range of financial services. The company in sync with its mission objective of

providing complete financial services to its clients by upholding the relationship of

trust and confidence.

The Broad objective of the project is to equip the trainees with all the knowledge,


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skills, qualities & confidence necessary to face any circumstances that might arise

during the course of the business while providing service to the clients.

The objective of the project was to understand peoples perception towards

technology savvy products & services, equities trading & their readiness for doing

stock trading through net. The project also helps in understanding the trend of the

particular sector (banking sector) in different market condition.

All these live experiences & learning helped me to learn to cope up with different

types of people and their diversified need satisfaction level.

ACKNOWLEDGEMENT

It has been a great pleasure and wonderful learning experience to work as a Trainee

in RELIGARE SECURITIES LTD. which is Indias well known and starkly

established Financial Services Company. I as a trainee got to learn a lot as I had an

opportunity to work with people who are extremely talented, co-operative& masters

of their own field..

I would like to express my sincere gratitude & thanks to Ms. Indu Mathur,


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Associate HR Manager Mr. NISHANT GHOSH , Branch Manager, Religare

Securities Ltd, ASHOK Vihar New Delhi for giving an opportunity to elongate my

knowledge and providing me a pragmatic experience.

The project would not have seen the light of the day without the unparalleled

support & able guidance of Mr. VINEET SOLANKI, Relationship Manager

Religare Securities Ltd. ASHOK Vihar, New Delhi who has been my project

guide. I would like to convey my sincere thanks to Mr. Vineet Solanki who has

been a source of inspiration & a great teacher. It would not be fair if I dont thanks

Mr. Amit Dhami, Mr.Nesar Ahmad & Mr.Ajit (all Relationship Managers,

Religare)for their valuable guidance, useful inputs, love & support throughout the

training period.

Last but not the least I would like to thanks each and every member of the Religare

Securities for their full support which made this experience a pleasurable one.


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Contents

S. No. Topic

1. Executive Summary

2. Objectives

3. Company Profile

4. Religare Products

5. Investment

6. Securities

7. Regulator

8. Participants

9. Primary Market

10. Secondary Market11. Stock Exchange

12. Stock Trading

13. Market Research Analysis

14. SWOT Analysis

15. Online Trading Account16. Conclusion

17. Limitations

18. References


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Executive Summary

This project aimed at understanding the core business & basic operations of

Religare Securities Ltd. Promoting the business of the company through

acquisition of new clients & by explaining the products & services of the company

was one of the primary objectives. In the process I learnt a no. of effective marketing

techniques, enhanced my convincing power. Further I also carried out a

comprehensive analysis of the major competitors of Religare securities in the

financial services market & the threats posed by them.

The project also provides information about the products and services provided by

Religare to their customers. This also includes the requirements and ways to acquire

new clients and the problems faced to handle the clients.

The information about theaccount 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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Objectives

To take an overview of the Indian Stock Market and encapsulate the

various investment avenues available.

To analyze the Indian Stock Market. How it works. What are the

options available in the Capital Market to invest?

To understand online trading & analyze how it is different from

other trading of stock market? Also to gauge the pros & cons of

online trading.

To compare equity and online trading on different parameters such

as risk and returns, facilities, volume of investing money, good

promotional schemes, redemption, and investing time.


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19 Nehru Place , New Delhi

110019

Telephone- 011- 30815100 /66552200

Fax [email protected]

Website: www.religare.in
mailto:%E2%80%[email protected]:%E2%80%[email protected]://www.religare.in/http://www.religare.in/http://www.religare.in/mailto:%E2%80%[email protected]


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INTRODUCTION

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GROUP PROFILE010009000003350200000200a80100000000a801000026060f004

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Indias largest pharmaceutical Company

-Manufactures & markets

Generics

Branded generic pharmaceuticalsActive pharmaceutical ingredients.

Amongst the top ten generic companies worldwide.

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-Started by the promoters ofRanbaxy

-Vision: To become an integrated Caring partner for

HEALTH through Fortis Healthcare Limited &WEALTH through Fortis Securities Limited.

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-A leading solutions provider in

Screening

Diagnosis

Monitoring of every illness and disease in thecommunity.

-Aim to provide world class services


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Religare is driven by ethical and dynamic process for wealth creation. Based on

this, the company started its endeavor in the financial market.

Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through

Religare Securities Limited, Religare Finevest Limited, Religare Commodities

Limited and Religare Insurance Advisory Services Limited provides integrated

financial solutions to its corporate, retail and wealth management clients. Today, we

provide various financial services which include Investment Banking, Corporate

Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance

and Mutual Funds. Plus, theres a lot more to come your way.

Religare is proud of being a truly professional financial service provider managed by

a highly skilled team, who have proven track record in their respective domains.

Religare operations are managed by more than 1500 highly skilled professionals

who subscribe to Religare philosophy and are spread across its country wide

branches.

Today, it have a growing network of 1550 branches and more than 300 business

partners spread across 460 cities in India and a fully operational international office

at London.

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

partnering for wealth creation. We not only execute trades for our clients but also

provide them critical and timely investment advice. The growing list of financial

institutions with which Religare is empanelled as an approved broker is a reflection

of the high level service standard maintained by the company.


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Religare Securities Ltd. (RSL)

I feel immensely privileged in introducing Religare Securities Limited, a

company managed and controlled by Ranbaxy promoters and presently among the

leading brokerage house of India.

The primary focus of RSL 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 isempanelled, as approved Broker is a reflection of the high levels of services

maintained by the Company. As on date the Company is empanelled with Alliance

Capital AMC, UTI, IDBI, IFCI, SBI, BOI-MF, Punjab National Bank, PNB-MF,

Oriental Insurance, GIC, UTI-Offshore, ICICI Can bank MF, Punjab & Sind Bank,

Pioneer ITI, SUN F&C, IDBI Principal, Prudential ICICI, ING Baring and J M

Mutual Fund.

Religare in recent past has been constantly innovating in terms of the product

and services, which it offers, and in this respect it has started a premium NRI,

FIs, HNIs and Corporate Servicing group. This group specifically caters to the

growing investment needs of these premium client categories by taking all

their portfolio investment decisions depending upon their risk / returnparameter.

Religare has a very credible team in its Research & Analysis division, which

not only caters to the need of our Institutional clientele but also gives their


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valuable input to Investment Dealers.

Religare is also giving in house depository services to its clientele and it is

among one the leading depository services provide among country. Presently

it manages more than Rs. 3000 Crores worth of shares under its electronic

custody.

Religare among capital market investment fraternity is the most vibrant place

in terms of information and performance and every day it is consolidating its

efforts to provide more customized services to its clients.

It is in the process of developing relationship with like minded corporate and

individual who can value Religare philosophy of financial care and in this respect I

request for a personal meeting with you on convenient date.

The primary focus of RSL 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 which RSL is

empanelled, as approved Broker is a reflection of the high levels of services

maintained by the Company.

As on date the Company is empanelled with UTI, IDBI, IFCI, SBI, BOI-MF, Punjab

National Bank, PNB-MF, Oriental Insurance, GIC, UTI-Offshore, ICICI Can bankMF, Punjab & Sind Bank, Pioneer ITI, SUN F&C, IDBI Principal, Prudential ICICI,

ING Baring and J M Mutual Fund.


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Background of Religare Securities Ltd

Religare Securities Limited, a Ranbaxy Promoter Group Company, was

founded by late Dr. Parvinder Singh (CMD Ranbaxy Laboratories

Limited), with the vision of providing integrated financial care driven by

the relationship of trust & confidence. To realize its vision the Religaregroup provides various financial services which include broking (stocks

& commodities), depository participant services, portfolio management

services, advisory on mutual fund investments and many more. Working

on the philosophy of being Financial Care Partner, Religare unlike

other traditional broking firms not only executes the trades for the clients

but also provides them critical and timely investment advice. The growing

list of financial institutions with which Religare is empanelled as an

approved broker is a reflection of the high levels of service standard

maintained by the company. Religare is a truly professional financial

service provider managed by a team of highly skilled professionals who

have proven track record in their respective domains. Religare has the

widest reach through its Regional, Zonal and Branch Offices spread

across the length & breadth of the country.


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Now a days Religare is driven by ethical and dynamic process for wealth

creation. Based on this, the company started its endeavor in the financial market.

- An ISO 9001 : 2000 company

- Member of National Stock Exchange (NSE) since November 1994, first

deposit based

- Member of BSE.

- Depository Participant with

- National Securities Depository Limited (NSDL) since July 2000 -

- Central Depository Services (India) Limited (CDS) since February 2003

- SEBI Approved Portfolio Manager

- Working on the Philosophy of being Financial Care Partner

- Among the leading service provider in Capital Market

In a span of less than five years of its retail operations, FSL recorded a healthy

growth rate both in business volumes and profitability.

Religare is among the very few stock market intermediaries to having very

sound based capital and healthy net worth..

Religare aims to have its footprint all across the country by the end of year so

that it may add value to the investing community in the country.


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Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through

Religare Securities Limited, Religare Finevest Limited, Religare Commodities

Limited and Religare Insurance Advisory Services Limited provides integrated

financial solutions to its corporate, retail and wealth management clients. Today, it

provide various financial services which include Investment Banking, Corporate

Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance

and Mutual Funds. Plus, theres a lot more to come your way.

Presence

Religare is present in more than 1550 branches all over India and the target is to

cross 1800 branches very soon. Its branches are fully equipped with high bandwidth

internet lines and high end computers i.e. the latest IT tools. There are efficient

branch managers and dealers to give you tips of highest quality and accuracy with

support from our analysts. Its branches would make you feel like doing business in

Dalal Street however, in a more sophisticated manner. You get to work with more

traders and learn more and also trade more.


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Infrastructure

OfficesThe 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, it have a growing network of

1550 branches and more than 400 business partners spread across 460 cities in India

and a fully operational international office at London.


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Management

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

the word.

Board of Directors

Malvinder Mohan Singh( Chairman / Chairperson)

Sunil Godwani (MD and CEO)

Shivinder Mohan Singh ( Non Executive Director )

Padam Bahel ( Independent Director )

Harpal Singh ( Non Executive Director)

Deepak Ramchand Sabnani ( Independent Director)

J W Balani ( Independent Director )

R K Shetty ( Alternative Director )


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G P S Bhalla ( Alternative Director )

Sunita Naidu ( Independent Director )

Mission and Vision


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Mission-

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

across the globe.

Vision-

Providing integrated financial care driven by the relationship of trust and

confidence.

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.

Business:

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


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business thrust has been mainly in the development of business from Financial

Institutions, Mutual Funds and Corporate.

Operations:

The operations of the company are broadly organized along the following functions.

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.

Marketing:

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.

A summary of our competitive advantage

(Religare Securities Ltd).

1. Participant on the countrys premier exchange: Religare is a member of the

countrys premier stock exchange The National Stock Exchange of India

(NSE).

2. Clearing membership on Capital & Derivatives segments: It has clearing

memberships on both the Capital Market and Derivatives segment of the


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

3. Depository Participants with NSDL & CDSL: We are depository participants

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 HDFC and

ICICI Bank The 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 information services

are Bloomberg LPandReuters. 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 capabilities.

6. Prime Office Locations: We have prime office locations in the nations political

capital and the business capital Delhi and Mumbai, in the heart of the city.

7. Research Capabilities: We have a dedicated team of analysts in our Bombay

office They 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 above.


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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.

Religare deals with

(Products)

EQUTIES..

MUTUAL FUND


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DERIVATIVES (F & O)

COMODITIES

P M S

WELTH MANAGEMENT

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


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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 professional investment

management, diversification, liquidity, and other benefits and services.

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

CommodityThe process of economic liberalization in India began in 1991.As part of this process, several capital market reforms were carried out by the capital

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


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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.

FEATURES OF RELIGARE

Religare.in is the most comprehensive website, which allows you to invest in

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

products.

1. TRADING IN SHARES

Religare offers you various options while trading in shares

CASH TRADING

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 an delivery settlement trading up to 2 times the fund available


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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 limits.

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

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

our Customer Service Executive.

TRADING ON BSE/NSE:

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

2. TRADE IN DERIVATIVES

FUTURE

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


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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.

OPTION

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 segment.

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 Callhas 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


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take advantage of more trading opportunities.

3. INVESTING IN MUTUAL FUND

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.

PURCHASE

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

FRANKLINE TEMPLETON MF, SUNDARAM MF, BIRLA SUN LIFE MF,

HDFC MF and STANDARD CHARTERED MF without hassles of identity proof.


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REDEMPTION

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).

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

periodically.


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Investment Basics

InvestmentThe 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 need to

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


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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.

VARIOUS OPTIONS AVAILABLE FOR INVESTMENT

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

investment.

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

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

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

deposits.

Fixed Deposits with Banksare also referred to as term deposits and minimum


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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.

Various Long-term financial options available for investment.

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


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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.

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.


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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.

STOCK EXCHANGE

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 its recognition 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 forvarious 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


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the word stock itself.

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 memberscalled 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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Index

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.

Depository

A depository is like a bank wherein the deposits are securities (viz. shares,

debentures, bonds, government securities, units etc.) in electronic form.

Dematerialization

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).

SECURITIES


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Securities: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.

REGULATOR

Why does Securities Market need Regulators?The absence of conditions of perfect competition in the securities market makes the


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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)

.

SECURITY 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, subbrokers etc.

Promoting and regulating self-regulatory organizations

Prohibiting fraudulent and unfair trade practices

SEBI has power for: Regulating the business in stock exchange and other securities market;

Registering and regulating the working of stock brokers subbrokers, share

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

issue, merchant bankers, underwriters, portfolio manager, investment advisers


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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 and collective

investment schemes including mutual funds;

Promoting and regulating self-regulatory organizations;

Prohibiting fraudulent and unfair trade practices related to securities markets;

Promoting investors education and training of intermediaries securities

markets;

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 the efficient

discharge of its functions.

PARTICIPANTS

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


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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.

DEPOSITORY PARTICIPATION

A depository is an organization form to provide electronic depository facilities

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 legally


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transfer 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 account with

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 account fees

towards transaction and custody.

Banks, financial institutions, custodians and stockbrokers can becomeDPs

subject to their meeting certain requirements prescribed by NSDL and SEBI.

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

The DP will provide you with a passbook or statement of account periodically

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 duplicate.

If holdings in the statement are incorrect, approach the DP for clarification.

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

Main depository participants

1. NSDL

2. CSDL

1. NATIONAL SECURITIES DEPOSITORY LTD (NSDL)

In order to solve the problems associated with trading securities, NSE joinedhand with the Industrial Development Bank of India (IDBI) and the Unit Trust 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


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in dematerialized form and thus completely eliminated the risk to investors

associated with fake paper.

a. CENTRAL DEPOSITOEY SERVICESLTD (CSDL)

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.

Segments of Securities Market

The securities market has two interdependent segments: the primary (new issues)

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.

1. PRIMARY MARKET

2. SECONDARY MARKET


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1. PRIMARY MARKET

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 these

securities may take a variety of forms such as equity, debt etc. They may issue the

securities in domestic market and/or international market.

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


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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.

ISSUE OF SHARES

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 a Public

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


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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 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.

A follow on public offering (Further Issue)is when an already listed

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 fresh

securities 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


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capital without diluting stake of its existing shareholders.

A Preferential issueis an issue of shares or of convertible securities by

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 as

market 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.

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 issue.

Who decides the price of an issue?


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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).

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 15 days

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


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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.

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


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observations from SEBI. The validity period of SEBIs observation letter is three

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

SECONDARY MARKET

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.


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Difference between the Primary Market and the Secondary

Market

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

STOCK EXCHANGE

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


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

Bombay Stock Exchange (BSE)

1.NATIONAL STOCK EXCHANGE (NSE)

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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


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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.

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 350 cities and its trading members are connected to the central

servers of the exchange in Mumbai through a sophisticated 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


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satisfying some of your initial queries on the stock markets.

2.BOMBAY STOCK EXCHANGE (BSE)

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 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


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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).

The BSE Sensex orBombay 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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STOCK TRADING

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.

NEAT

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. It has 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 or as

defined in the Model Agreement, which every client needs to enter into with his or

her broker.

How does an investor get access to internet based trading

facility?

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 arbitration proceeding 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 each.

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 following:

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 and time

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 is mentioned

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

markets

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 do not

deal with unregistered intermediaries.

Ensure that you receive contract notes for all your transactions from your

broker within one working day of execution of the trades.

All investments carry risk of some kind. Investors should always know the

risk that they are taking and invest in a manner that matches their risk

tolerance.

Do not be misled by market rumours, luring advertisement or hot tips of the


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day.

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.

If youre financial advisor or broker advises you to invest in a company you

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, abouta 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 stocks does

not guarantee high returns.

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

activity.

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.

Market Research Analysis

Preference of investment


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75%

16%

7% 2%

Only shares --75 %

Mutual Funds --16%

Bonds --7%

Derivatives --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 be increased.

Awareness of online share trading

91%

9%

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 Religare.in as a Brand


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63%

37%

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.

Awareness of Religare Facilities

20%

80%

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


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20%

15%

25%

18%

Religare-20%

Sharekhan-15%

ICICI Direct-25%

India Bulls-22%Others-28%

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. Non transparent marketing policies of the company.

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

marketing and promotion.


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Satisfaction Level among Customers with Current Broker

92%

8%

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 satisfaction.

Frequency of Trading

9%

25%

55%

11%

Daily-9%

Weekly-27%

Monthly-53%

Yearly-11%

Interpretation: In spite of the huge returns that the share market promises, we

see that there is still a dearth of active trade and investors. This is because of non

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


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

bureaucratic intervention on the part of the Government.

Percentage of Earning Invested In Share Trading

75%

16%

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 market.

Rating of Share Trading Companies

15%

20%

30%

5%

10%

Religare-15%

Sharekhan-20%

ICICI Direct-30%

India Bulls-25%

Others-10%

Interpretation: The survey indicated that people ranked Religare at the 3rdposition as an online stock broking company. Even after relatively low brokerages

and better services being provided in competitors, Religare is not at top spot because

of ineffective marketing and promotion strategies. Hence, the company should

indulge in to aggressive marketing and promotional methods and should approach

this problem in a more structured format.


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SWOT ANALYSIS

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.

STRENGTHS

Services

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 opportu

religare security prashant

Documents