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Securities And Exchange Board of India Securities and Exchange Board of India

MARCH 2004 VOL. 2 NUMBER 3

SECURITIES AND EXCHANGE BOARD OF INDIA

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PAGE

SPEECH

Indian Corporates’ Governance - Let it be rated high 5

ARTICLES

� Broking Industry - 10 Years Hence 8

� Corporate Governance: A brief account of the major developments 13

� IPO Analysis: Shareholding Pattern in the Immediate Post Listing Phase 32

DISCUSSION PAPERS/COMMITTEE REPORTS

� Report of the Internal Group on SEBI (Substantial Acquisition of Shares and Takeovers)Regulations, 1997 39

� Secondary Market Advisory Committee (SMAC) 40

PRESS RELEASES

� Secondary Market Advisory Committee (SMAC) 41

� Investor Grievances 41

CIRCULARS

� Issuance of Electronic Contract Notes 42

� Certification of agents/distributors and employees - Mutual Funds 42

� Monthly Revised Cumulative Reports - Mutual Funds 43

� Recognition of credit ratings given by reputed foreign credit rating agencies 43

� Guidelines for Participation by Mutual Funds in Derivatives Trading 44

� Transfer-cum-demat scheme 44

� SEBI (Mutual Funds) (Amendment) Regulations, 2004 44

� Issuance of Offshore Derivative Instruments by Registered Foreign InstitutionalInvestors (FII) 45

� Minimum contract size for Exchange traded derivative contracts 45

� Issuance of Electronic Contract Notes - Debt Market 46

� Implementation of uniform security specific actions 46

��




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4

LEGAL ROUND UP

� Notification 47

� Orders passed by Chairman and Whole Time Members, SEBI 58

INTERNATIONAL SECURITIES MARKET DEVELOPMENTS 61

Table on Daily Return and Volatility: Select World Stock Indices 66

ANNEXURES AND STATISTICAL TABLES 67

ABSTRACTS OF RESEARCH ARTICLE 111

PUBLICATION 113

GUIDELINES TO AUTHORS 115

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��

It is indeed my pleasure to be here this morningat this FICCI - ICRA organised workshop onCorporate Governance Rating Model, to ex-

change views and thoughts on the subject of Cor-porate Governance.

“The Good and the Crook”

In his introductory remarks, Mr. Vellayan, re-called (pleasantly!) that, years back, I happened tobe a director on the Board of EID Parry. Mr.Balaram, in his speech, mentioned that in thematter of regulatory prescriptions, one has todifferentiate between the “good” and the “crook”.Even at the risk of my observation being misinter-preted as the current regulator’s certification, Ican say, from the erstwhile development banknominee’s perspective and without the aid of anycorporate governance rating model, that EID parrywas indeed a good example of good corporategovernance! Having said this, let me also cite myexperience with a Board of another corporatewhich would eminently fit into the second cat-egory of Balaram’s description! This is a true story:A decade back, I happened to be a nominee repre-senting IDBI on the Board of this particular Delhi-based company. I got a day’s notice for a Boardmeeting of the company; the meeting was to beheld in Bombay; the venue was a five star hotel andthe scheduled time was 1.45 p.m.!’ The meetingwas to be followed by lunch. The Board was com-pact and homely! Besides me as a nominee direc-tor, the Board consisted of a CMD and two direc-tors, i.e. a husband, a wife and a daughter, allbelonging to the promoter family! In attendancewas, of course, an amenable Company Secretary.The main agenda for the Board Meeting related toapproval of audited annual accounts. On thegrounds of confidentiality, the papers were not

circulated in advance! Theywere placed on the table. Theopening remarks of the Chair-man was that the restaurantwhere the lunch had beenarranged would be closed by 2p.m.! The message was clear; itunequivocally mandated the maximum durationof the meeting i.e. 15 minutes! I quickly flippedthrough the papers. A fine print under “Notes tothe Accounts” could not escape a trained eye of abanker. According to the note, the accrued liabilityon account of interest payable on the outstandingterm loans had not been provided for in theaccount! The interest amount ran into a few croreof rupees. The accounts had been audited and theauditors had obviously soothed their pricking con-science by qualifying their “true and fair” certifica-tion, “subjecting” it to the said Note to theAccounts. To the annoyance of the rest of Board,I insisted on the accounts being redrawn. Theverbal battle between the three family membersand the lone outsider lasted for more than an hour!Eventually, the battle was won by the loner!! Thiswas symptomatic of the governance standards ofthat corporate. What ultimately befell the corpo-rate and its promoters is another dismal story. Theworld is, after all a mix of good, bad and ugly - ofunequal proportions. Laws and Regulations can-not be framed so as to apply only to bad and ugly.They have to be common for all. Speed limit andtraffic rules, for instance, cannot be different forgood drivers and rogue drivers. It is the readycompliance with the letter and spirit of the Regu-lations that must distinguish the good from therest. In any case, legality should be the minimumstandard of action to follow.

�� T.M. NAGARAJAN

*Abridged version of the address of Shri T.M. Nagarajan, Whole Time Member, SEBI at FICCI - organised Workshop on January 24, 2004,at Chennai.



6

‘Welfare of the King’

The last decade has been resonant with the deaf-ening noise of debate on corporate governance theworld over. From Cadbury to Higgs, from CalPERSto SOX and, at home, from Omkar to Kumar andfrom Naresh Chandra to Narayana Murthy com-mittees and groups, reports and recommenda-tions, codes and principles, regulations and legisla-tions have emerged on the subject. After a series ofreported corporate scandals like Enron’s eclipse,Worldcom’s wilt, Tyco’s fiasco, Grasso’s goldenparachute and Parmalat’s perfidy, the thrust ofdiscussion now must be more on nuances of thecorporate governance code rather than on its veryneed. Relevance of ethics in business, in fact, is nolonger questioned. Corporate governance code isnot dubbed outright as unnecessary nor is it merelytolerated as a “necessary evil”. Today, good corpo-rate governance is being viewed as an imperative,a prescriptive for long term success or even healthysurvival of corporates.

The LPG (liberalisation, privatisation andglobalisation) has fired the competitive spirit amongthe corporates. It has been realised that efficiencyand cost effectiveness can alone keep the throatfrom being cut. In their own enlightened self inter-est, the corporates need, not only to perform in theshort run but also to conform to global standardsof efficiency and ethics and act fairly in the inter-ests of all the stake holders. Mark Twain said: “Inthe welfare of the subject, lies the welfare of theKing.” If the stake holders are the subjects, thecorporate is the king!

Nobler Endeavour

Growth aspirations of the corporates and highinterest rate regime led to disinter- mediation andthe corporates increasingly accessed capital mar-ket for their funding needs. However, the situationdid not last for long. Unsustainable pricing of IPOs,vanishing acts of companies and I.T. meltdown - allrobbed the market of its buoyancy. Two succes-sive scams and wide spread industrial sicknessskimmed the investors’ confidence, rendering thesecondary market subdued and driving the pri-mary into slumber, for the last few years.

As you are aware, several measures have beentaken in the last 2 to 3 years to enhance the efficacyof the market, in terms of modernisation of thetrading platform, dematerialisation of scrips, short-ening of settlement cycle, robust risk containmentmeasures, segregated segments of cash and de-rivative market, with multi products etc. The dis-closure norms and accounting standards standraised to international level. On an on going basisthe behaviour of the market and its participants isconstantly watched with an eagle’s eye and appro-priate regulatory action is promptly clamped downto protect the integrity of the market and theinterests of the investors. These may enliven thesecondary market, but it may not suffice for en-thusing the investors to flock to the primary mar-ket. The corporates too should play their part interms of sustained performance and perceptiblygood standards of governance.

Corporate Governance standards, on the one hand,get reflected in market conditions and, on theother, they help the corporates access the marketfor raising resources in a cost effective manner. Asthe investor’s protection is a matter of paramountimportance for the Regulator, charged with thestatutory responsibility in this behalf, SEBI has tobe concerned with corporate governance, sur-mounting any jurisdictional impediment. Whilethe Company Law takes care of the basic require-ment of the form of corporate governance struc-ture, SEBI is concerned with the dynamic sub-stance of corporate governance practice. Kautilyasays in Arthasastra: “To be good is noble; to tell thepeople how to be good is nobler.” SEBI is engagedin such a nobler endeavour!

Listlessness

The corporate governance guidelines are evolvingin tune with market dynamics. As part of SEBI’scontinual search for improvement, NarayanaMurthy Committee was asked to evaluate theadequacy of the existing practices. Based on itsrecommendations, Clause 49 of the listing agree-ment was comprehensively revised in the last Au-gust. It caused some listlessness among thecorporates, leading to spate of representations.Open, transparent, and consultative process had



7


been adopted while evolving the said Clause 49.The Narayana Murthy Committee consisted of 23members from various fields and interests. It wentby highly professional and democratic method.The suggested recommendations were given toeach member for rating them on a scale of 1 to 10in terms of fairness, importance, ease of imple-mentation, verification and enforcement etc., andthose rated above 7 were arranged in a descendingorder and the first 20 were finally recommended.These were posted on the website for 21 days forpublic comments. Thereafter, in the light of thecomments received, the recommendations wereadopted by SEBI, and sent to Stock Exchanges, forincorporation in the listing agreement. It was there-fore surprising that issues were still raised in thematter.

Among others, three issues disturbed thecorporates more: Definition of independent direc-tors, Nine-year term for such directors and Whistleblowing policy. While materiality factor could havebeen taken as implied, comments have been madethat the existing definition of independent directorcan be stretched to an extreme extent to mean thatan user of a consumer product may be disquali-fied to be an independent director of the con-cerned manufacturing company! Similarly, it hasbeen apprehended that the clause relating to nineyear term prescribed for independent directorwould disconnect the promoters from the Boardsof their own companies. While the apprehension isunderstandable, it cannot be gainsaid that too longan association could, more likely than not, breedmutual dependence. As regards whistle blowingpolicy, despite its likely frivolity - nuisance whichcan be tackled through appropriate internal guide-lines, the policy itself cannot be abhorred as un-warranted. It is a known fact that, but for a whistleblown by Mr Watkins, the Enron’s cancer wouldnot have been detected. Taking a cue from Enron’sepisode, many multinationals, like Johnson &Johnson, GEC, Bayer, Xerox have drawn up theirown internal whistle blowing system. Neverthe-less, not being impervious to implementation -issues, SEBI engaged the same Narayana Murthy

committee to evaluate the concerns or commentsexpressed by the corporates and the suggestionsreceived from various quarters. Based on suchevaluation, the recommendations have been re-visited and refined by the committee. These haveagain been posted and are still on the website. I dohope, many corporate eyeballs will hit the site thistime.

Rating

The third plank in the corporate governance ismarket discipline. Herein comes the relevance ofcorporate governance rating by a credit ratingagency. Both CRISIL and ICRA have developedrating models. Mr. Ghosh has just made a detailedpresentation on the methodology of ICRA’s owncorporate governance rating model. Both Mr.Ghosh and Ms. Anitha George, referred toMcKinsey’s survey finding causal relationship be-tween governance standards and sustained profit-ability. A point was raised as to whether corporategovernance rating would be mandatory. No; it isnot compulsory nor is it the regulatory intention(as of now!) to make it mandatory. In course oftime, corporates, well rated on corporate gover-nance standards, would reap the benefit of accessto cheaper funds, reputational gains andstakeholder’s loyalty. Over time, it might result inhigher market valuation too. Thus, economic con-siderations or compulsions would render corpo-rate governance rating worthwhile.

Conclusion

Fortunately, India has been spared of any majorcorporate debacles of the kind the world wit-nessed recently. Today, strong macro economicfundamentals, good growth rate, low inflation, lowinterest rate, burgeoning forex reserves, encour-aging corporate performance, global recognitionof India’s potential and upgradation of country’srating, surging secondary market and rising confi-dence level of investors all these augur well for thecountry and the Capital Market. As acomplementarity, let the Indian Corporate gover-nance standards also be rated high!

SPEECH



8

If I extrapolate the current trend for a few yearsfrom now, I visualize three major changes inthe broking industry. They are:

a. the number of entities providing broking ser-vices would at best be 100,

b. there will be no stand alone provider of brokingservice, and

c. broking will have sharp client focus.

The number of entities providing broking serviceswould at best be 100.

Let us look at statistics relating to brokers on cashequity segments of exchanges. There are about9,000 registered stock brokers in the market. Thenumber has remained almost constant over last 8years. It has rather started declining since 2001.This is despite manifold increase in the volume oftrades. Take the case of NSE. The number ofbrokers on NSE reduced from 1013 at the end ofMarch 1997 to 887 at the end of March 2003. Thenumber of trades executed on NSE, however,increased from 26 million during 1996-97 to 240million during 2002-03. This means that thoughthe number of brokers reduced by 13% over 1997-2003, the number of trades executed by themincreased by 823%. A broker of NSE on averagehandled 25,000 trades in 1996-97 while it handled2,70,000 trades during 2002-03 - the average ca-pacity of a broker increased ten times over 7 years.Further, the number of brokers on active ex-changes is about 1500, the number of active bro-kers on active stock exchanges is about 500, top100 brokers account for 62% of turnover, the shareof top 100 brokers in total turnover of NSE in-creased from 44% in 1997-98 to 62% in 2003-04.These figures indicate increasing concentration ofbusiness among few brokers and big brokers arebecoming bigger and bigger while small are be-

��coming smaller and smallerand disappearing from themarket.

Two developments contrib-uted to this trend. They are:broking entities got corpora-tised and the technology be-came available and affordablefor corporate brokers.

Let us first look at corporatisation of brokingentities. Till 1985, only individuals were allowed tobecome brokers. Rule (8) (4) of the SCRR, then invogue, prohibited a company to become a brokerof a stock exchange. This framework envisagedbroking as a profession dependent on individualskills and emphasized on individual attributes. Itpermitted only individuals to become brokers andexplicitly prohibited companies to become bro-kers. It restricted liability of brokers by prohibitingthem from associating with any organisation car-rying on forward trading. It did not allow an indi-vidual to become broker on more than one ex-change. It did not allow a broker to carry on non-securities business except as a broker not involv-ing any financial liability. Nor did it allow him toadvertise for business purpose or issue circularsor other business communications to persons otherthan his clients. All these indicate that broking wasconsidered a profession, not a business.

The thinking changed and the need for betterbroking service was felt. By a notification in June,1986 Government removed prohibition on compa-nies to become brokers. It initially permitted sec-tion 322 companies to become brokers of the stockexchanges subject to the certain conditions. Theconditions were also liberalized later on. The pro-hibition on becoming a broker of more than oneexchange was withdrawn in November 1988. De-

�� ! ��" �� M. S. SAHOO*

*Mr. M.S.Sahoo, Chief General Manager, SEBI. The views expressed are of the author only and not of SEBI. Email ID : [email protected].


9


spite these initiatives, the corporate brokership didnot take off. The legal changes were effected inNovember 1992 to open up the brokership of stockexchanges to corporates with limited liability. Inorder to encourage existing brokers to corporatisethemselves, which was considered desirable fordevelopment of the securities market, the IncomeTax Act, 1961 was amended in 1997 to exemptcapital gains tax on corporatisation of brokingentity. The SEBI Regulations, 1992 were amendedin January 1998 to provide for fee continuity ben-efit on conversion. In response, many brokeragefirms reorganised themselves into corporate enti-ties. At the end of March 2003, about 40% brokerswere corporate bodies.

Thus a conscious effort has been made to convertbroking from a professional activity to a businessactivity and brokerage entity from proprietorshipform to corporate form. The changes in law toallow corporate entities to take up broking activity,the brokers to operate on multiple exchanges,brokers to issue advertisements in a limited way,incentives to corporatise broking entity etc. indi-cate efforts in this direction. There is a complete U-turn in the sense that companies, which wereexplicitly prohibited from becoming brokers, arenow encouraged to become brokers. This trendwould continue, now that the regulators, ex-changes, brokers and investors have tasted thefruits of corporatisation in terms of quality ofservice and compliance, and the day is not far offwhen individuals will be prohibited from becom-ing brokers. And the existing individual brokersmay be forced to corporatise or quit and corporatesmay be induced to become brokers. These corpo-rate brokers can hire professionals to provideprofessional broking services. The corporate wouldbe required to satisfy the requirements ofbrokership such as financial soundness and infra-structure while their employees would be requiredto have/acquire skills to provide broking services.Thus ten years from now, the market would haveonly corporate brokers, who would employ quali-fied professionals to render broking services.

The other contributing factor is technology, whichprovided scalable solutions to automate the secu-

rities transactions. In course of time the technol-ogy became affordable. The exchanges providedelectronic trading platform. Brokers embracedtechnology not only because it was necessary toaccess electronic trading system of the Exchange,but also because it made business sense - im-proved the efficiency of their operations, providedhuge economies of scale, and made compliancefunction much easier.

The corporatisation enabled brokers to investheavily in technology. This allowed them to under-take additional business at negligible or zero mar-ginal cost. If a broker puts in additional 1000orders on the NEAT trading system today, it reallydoes not add to his cost. On the other hand, the costof setting up systems and ensuring compliancewith ever increasing rules and regulations of SEBIand Exchanges became too heavy for small bro-kers to break even. This is because of the nature ofbusiness of broking and the technology, whichprovide substantial economies of scale after athreshold level of investments. This trend wouldcontinue - big brokers will continue to invest intechnology and human resources and grow big-ger, while small brokers would fail to do so andconsequently fail to provide quality service toclients and to meet ever increasing compliancerequirements and gradually withdraw from themarket. This is exactly parallel to the business ofstock exchanges, where big exchanges have be-come bigger and small exchanges have becomesmaller. As one or two stock exchanges can nowcater to the needs of the entire market, a fewbrokers, with financial muscle and available tech-nology, can also cater to the needs of the wholemarket. A bank with 13,000 branches can offertrading terminals in all its branches and if a fewbanks do so, clearly there is no space for 10,000brokers in the market.

This would precipitate further if smaller exchangesdisappear; then about 8000 brokers will also disap-pear overnight.

Thus 10 years from now, I do not see more than100 brokers in the broking industry. I would not besurprised if there are only 100 intermediaries inthe securities market providing different kinds of

BROKING INDUSTRY - 10 YEARS HENCE



10

intermediation services. Of the 100 brokers envis-aged, the majority would be trading memberswhile there would a few clearing members. Theseclearing and trading members would operateacross the segments, and across the exchangesand even across markets.

There will be no stand alone provider of brokingservice.

Currently brokers enjoy a sort of monopoly. Thetrading platform of an Exchange is accessible tobrokers only. While granting this protection, i.e.reserving an exclusive area of trade for brokers,the law prohibits them from taking up any otherfund based activity. They can not do broking innon-securities; nor can they do non-broking busi-ness. Many brokers consider this restriction asunreasonable, particularly in the liberalised envi-ronment. It was okay when a broker was an indi-vidual professional. It does not gel well when abroker is a corporate business entity. How can yousay that a corporate entity can do only one kind ofbusiness? Can one prescribe that a corporate, en-gaged in cement production, can not producecement? Many brokers, therefore, demand free-dom of business and trade guaranteed in theconstitution; they would like to undertake anykind of business - broking in non-securities, andeven non-broking activities in securities market orelsewhere. They would like to act as banker, aninsurance agent, trade in commodities futures,and even engage in manufacture of steel. Some ofthem are thinking to enforce their freedom oftrade and business through a court intervention.The authorities are not oblivious of such demand.They are gradually diluting the restriction. Theyhave diluted this restriction in case of corporatebrokers, and specified agencies such as IDBI,NABARD etc. They have recently permitted bro-kers to undertake broking in commodities, thoughin a truncated manner. They have allowed brokersto do some kind of fund based activity incidental tobroking such as margin trading and stock lending.Banks, even though engaged in fund based activi-ties, have been allowed to undertake broking. Theclearing members in the derivative segments havefreedom to take up any activity. This trend would

continue and soon brokers would have absolutefreedom to undertake any other business or activ-ity.

When they would have such freedom or the re-striction is withdrawn, they would also lose theassociated privilege. As brokers demand freedomto undertake any other activity, other economicagents similarly demand freedom to undertakebroking activity. A merchant banker, a commodi-ties broker or a NBFC would like to do broking.Every economic agent demands absolute free-dom of business and trade. In course of time, statemust fulfil this demand and if not fulfilled, it will beenforced by Courts. This means that existing bro-kers would face competition not from poor brokercousins, but from financial power houses. Theentities having huge financial muscle power andcarrying on various activities in financial marketwould offer broking services. In such circum-stances, many of the existing brokers will go out ofbusiness unless they join or create a big financialpower house. Ten years from hence, there wouldbe about 100 such financial power houses who willbe providing various financial services, includingintermediation services in securities market andbroking. And each such power house would be aone stop shop for all financial products/services. Itwill have license to act as a banker, a commoditiesbroker, a portfolio manager and a securities bro-ker simultaneously. There would be no stand aloneprovider of broking service.

Broking will have sharp client focus.

The demutualization of exchanges is imminentand inevitable. This will segregate the trading rightsfrom ownership and management. Both authori-ties and brokers realize that the business worksbetter if trading rights and ownership rights are indifferent hands. Authorities want demutualizationto avoid conflict of interest. The brokers, withstrong motivation for business, feel that their in-terests are better protected by non-interested pro-fessional management. They like to concentrateon business rather owning and managing ex-changes.

As a result of demutualization, the exchangeswould lose the status of self regulatory organiza-



11


tion. Associations like ANMI/BSE Brokers’ Forumwould be SROs and will be recognized/registeredby the regulator as such. They would not only bean industry association to promote the interest ofits brokers as it is today, they would also regulatethe conduct of its brokers in public interest. Theywould have strict entry and eligibility criteria andonly after one satisfies their requirements; it wouldbe registered as broker by Exchange or SEBI.However, there will be a few such SROs, whowould compete among themselves as Exchangesdo today. As a result, public interest would getprecedence over the interest of the brokers. Inpublic interest, the SROs would make huge invest-ments to upgrade the quality of broking service.

With demutualization, the exchanges would nothave incentive to restrict the number of brokers.Brokership would be available on tap. One wouldno more buy brokership card at a hefty price frommarket. There would be free entry and free exit tobroking industry and any body and every bodycomplying with the requirements of broking willbe registered as broker. This would introduceperfect competition, which would force brokers toconcentrate on business, not on exchange man-agement. The competition would come not onlyfrom existing brokers and financial power housesbut also from clients who would have direct accessto trading platform. The competition would de-mand higher transparency and good corporategovernance and ensure utmost care of the clients.Every detail of the broker would be available in themarket. The regulator/Exchange or SRO wouldmaintain databases where the details of everybroker, including its management, associated en-tities, financial soundness, track records of ser-vice, punishments, etc. would be available and aclient would use these details for choosing itsbroker. Even the brokers and SROs would seekrating and such rating would also be available onthe web. I understand that the rating agencieshave already developed models to rate variousmarket intermediaries, including brokers. The rat-ing and branding would play a crucial role inattracting clients. These would require continuousnourishment which would force the brokers andSROs to be more client oriented. This would force

them to innovate consistently to render betterservices to clients at lower charges.

Another factor which will increase client focus istechnology. It has completely changed the archi-tecture of securities transactions. It has made thetrading platform accessible to clients through theinternet and mobile devices. It would continue toplay a much bigger role in the days to come inexecution of trades and monitoring of positions inthe market. It would enable exchanges to directlymap the ultimate clients having a distinct identifi-cation number, which can be linked to their bankand the depository accounts. The clients wouldexecute their trades themselves and systems wouldbe potent enough to check the availability of fundsin their bank accounts or securities in their deposi-tory accounts before execution of orders. Indeed,the system would lock in funds in the bank ac-count and the securities in the DP account beforeexecuting an order. A reverse transaction wouldunlock the said funds or securities and make roomfor further trading by the clients. As execution andmonitoring of trades would be taken care of bytechnology, it would be a paradigm shift in themarket microstructure and clients would not needto go through a broker. If this happens, there willbe pressure on authorities to allow clients to ac-cess trading platform directly, and law will bechanged accordingly. Thus the broker will havecompetition from fellow brokers as well as clients.

This does not mean that the brokers will have nobusiness. There is no requirement of using anintermediary to buy NSC from post office or a lifeinsurance policy. But most such transactions arefacilitated by intermediaries. The clients in securi-ties market have access to trading platform throughthe Internet. But the volume of trades executedthrough the Internet is still insignificant. It is be-cause clients value the assistance of a betterequipped person and like to transact through him.If transactions are so simple like buying over thecounter medicine, clients can do trades directly.But if it is buying prescription medicines, clientswould need the assistance of a qualified person.Even all clients would not be equipped to under-take simplest of simple transactions. What would,




12

therefore, happen is that the some clients wouldundertake plain vanilla transactions directly. Theymay not mind to transact through a broker if thebroker charges a very nominal amount for itsservices. The fact that the marginal cost of under-taking a transaction is close to zero, and the nomi-nal broking charges can attract the clients to bro-ker for plain vanilla transactions would keep thebroking charges to minimum. Some other clientswould need assistance of a broker even for simpletransactions. Most clients would need assistancefor transactions in sophisticated instruments.

Innovations are very fast in financial market. Newerand newer products with complicated featuresare coming up every day. Thus there would be twoniche segments in the market. One is market fortraditional products where the clients can tradedirectly. In the other market, where new sophisti-cated products are traded, the clients would needto use brokers. The volumes in the second nichemarket would be much higher as we see deriva-tives volumes are now higher than the volumes incash markets. In order to service in the secondniche market, the brokers will redefine their com-petencies and skills set. They will reposition them-selves as consultants or advisors to the clients astheir role on the execution of the trades wouldcome down drastically.

Thus I visualize a scenario where there would be atbest 100 financial service providers who wouldalso provide broking service with sharp client fo-cus.

The above structure will throw up a few issues.

It emerges from above that 9,900 brokers woulddisappear in next 10 years. But this may not hap-pen automatically and may not be painless. Manyexchanges have zero volumes for more than 5years now, but no exchange has closed down sofar. It is because of market rigidities and the painsassociated with any closure. Similarly, there wouldbe 100 entities providing broking services, while9,900 registered brokers will remain on recordwithout any business. What to do with these 9,900brokers? Not only the infrastructure and resourcesof these 9,900 brokers would be a national waste,

they would also create risk for the system. An idlemind is devil’s workshop - they would continue tobe supervised by SEBI even if they do not have anybusiness. The authorities and the brokers needwork towards painless closure of broking unitsthrough a process of consolidation. The brokersand the authorities should jointly work out a strat-egy to replace the ill-equipped under utilized in-dustry of 10,000 brokers by a strong professionalwell capitalized industry of about 100 brokers. Thebrokers need the support and assistance of theauthorities to convert themselves to financial con-glomerates, which can compete even at globallevel. There are two main hurdles to consolidationwhich need to be removed. One, while the brokingentities consolidate, there would be transfer ofassets and liabilities and various transactions be-tween/among existing/emerging broking entities.Such transactions would attract taxes, includingcapital gains tax. The fear of payment of such taxeswould discourage the brokers to come together.The kind of exemption available on consolidationof industrial units could be extended to consolida-tion of broking entities. Second, SEBI should alsofacilitate consolidation by providing fee continuitybenefit to the emerging entity, if the erstwhileconsolidating entities have paid full fees. This wouldbe analogous to the incentives granted by Govern-ment and SEBI for corporatisation of brokingentities in 1997-98. The brokers should come for-ward to merge/amalgamate with one another inthe interest of their growth and survival.

The other issue is monitoring and compliance. Ifan entity provides services in the jurisdictions ofthree different regulators, and also provides threekinds of services in each jurisdiction, there wouldbe regulatory overlaps and gaps. This would in-duce activity based regulation - each regulatorshall monitor his area of activity. Three differentactivities of an entity would be regulated by threedifferent regulators. In addition, a common agencyfloated by all the regulators shall monitor theactivities of each financial power house whichprovides different kinds of services, includingbroking. The authorities need to prepare for thiskind of environment.



13


“Strong corporate governance is indispensable toresilient and vibrant capital markets and is animportant instrument of investor protection. It isthe blood that fills the veins of transparent corpo-rate disclosure and high-quality accounting prac-tices. It is the muscle that moves a viable andaccessible financial reporting structure. Withoutfinancial reporting premised on sound and honestnumbers, capital markets will collapse upon them-selves. It is a truism that the adequacy and thequality of corporate governance shape the growthand the future of any economy.”3

Shri G.N.Bajpai, Chairman, Securities and Ex-change Board of India

For almost over two decades there has been aconsiderable debate on finding better ways of con-ducting the affairs of the corporate. With eco-nomic liberalization, privatization and globalization(LPG), the role of individual investor/institutionalinvestor in the overall economic development ofcountry has assumed overwhelming importanceas the number of shareholders, both individualand institutional investors become voluminous.The gap between owners and management has gotwidened. Managers are appointed by the owners tomanage the company and provide maximum pos-sible return to the shareholders and adhering tothe other principles of governance in the society. Inthis review article an earnest and sincere attempthas been made to identify developments in thefield of corporate governance in various countriesand some of the more important recommenda-tions/provisions of corporate governance recom-mendations have been enumerated.

��

While scanning various fea-tures of the report it is found tothe surprise that very few hand-ful countries, the corporategovernance code has been per-mitted by the Securities Com-mission/Finance Services/Commission/Board.The few countries include India, Pakistan, Turkey& Malaysia. The USA & UK have been distinction ofhaving appointed maximum of 14 Committees/Provisions/Acts with respect to corporate gover-nance. Yet another important finding is that inmost cases corporate governance has been permit-ted/advocated by the Industry/Association and/orstock exchanges Several inter governmental agen-cies such as Common Wealth Association for Cor-porate Governance, OECD, CEPS/EBRD etc., havealso taken initiatives in securing better corporategovernance.

The review also identifies various significant con-tribution of the codes, reports and provisions. Fromthe review it is found that the Treadway Commis-sion which submitted its report in 1987 was one ofthe earliest committees to look into issues regard-ing corporate governance. Recorded and availableevidence indicates that New York Stock Exchangetook initiative before Treadway. However, its scopeappears restricted to audit committee.

Time and again debates on corporate governanceoccupy the centre stage of the financial marketscenario. The structures of corporate governanceare built and rebuilt on a very frequent basis asseepages occur through in the form of crises andscandals. There has been unstinted and concerted

�� #�$�� %��%�� &�'� � (�& ��

DEEPTHI LS2

1. The author thanks Shri T.M.Nagarajan, the Whole Time Member, SEBI for providing idea and encouragement and Dr. M.T. Raju,Economic Advisor, SEBI for valuable suggestions and guidance.

2. Ms. Deepthi LS, Research Officer, SEBI The views expressed are of the author only and not of SEBI. Email ID: [email protected] article was prepared to provide information on the overall development of corporate governance codes and committees.

3. From a key note address by Shri G.N. Bajpai, Chairman, SEBI on the conference on corporate governance on December 3, 2002.



14

endeavour to erect a stable structure of corporategovernance ever since the shenanigans in the formof scandals erupted. This is important and desir-able for the development of a value based andaccountable corporate culture.

Corporate governance is indispensable for econo-mies primarily since good corporate governanceprovides the basic and sound milieu for the settingup of well functioning financial institutions foreconomic growth. It is also an important prerequi-site for attracting foreign investment. Also it playsa major role in the allocation of capital in anefficient manner and promotes financial develop-ment and henceforth economic growth.

“Governance is the process whereby elements insociety wield power and authority, and influenceand enact policies and decisions concerning publiclife and economic and social development.”- Governance Working Group, International Insti-tute of Administrative Sciences.

“The key to practicing really good governance isnot in the processes but in the human aspect,cultural, and value beliefs of people running com-panies. What distinguishes exemplary boards isthat they are robust, honest in their dealings, ableto curb personal greed in conflicts, and create andfoster a culture of open dissent, yet within a cli-mate of trust and candor.” (Cheah Foo Seong,Council Member, the Malaysian Association of theInstitute of Chartered Secretaries and Adminis-trators, The Star (Malaysia), February 3, 2004).

The term “corporate governance” is a relativelynew one both in the public and academic debates,although the issues it addresses have been aroundfor much longer, at least since Berle and Means intheir work “The Modern Corporation and PrivateProperty” (1932) and the even earlier Smith (1776)and Marshall (1920)4.

Corporate governance involves a set of relation-ships between a company’s management, its board,its shareholders and other stakeholders. Corpo-

rate governance also provides the structurethrough which the objectives of the company areset, and the means of attaining those objectivesand monitoring performance are determined. (Re-vised OECD principles).

The essence of all these definitions denotes thefollowing:

1. The relevance of governance and in particu-lar, good governance.

2. The key element in good governance is valuesand ethical beliefs of people running the com-panies.

3. Corporate governance in the form of relation-ship between the management, board, share-holders and stakeholders is crucial in achiev-ing the objectives of the company.

An analysis of the history of corporate governanceliterature, practices and provisions would be en-lightening to understand the evolution and devel-opment of the concept and culture. Is not theincreased clout on corporate governance an ap-pendage of the impact of ethics on the businesspractices, values and beliefs?

The existence of ethical codes does not ensure allout success, but they have the capacity to put abreak on failures. It can prevent the individualsfrom landing the corporation into an ethical mo-rass and from putting down their own ethics whenthey act on behalf of the firm. This is particularlyimportant at a global level because cultural differ-ences in beliefs and values do lead to cross-culturaldifferences in behavior”. (Parker, 1998)

The Path to Corporate Sustainability

Ultimately, corporate governance is a conglom-eration of the values held by the multifariousplayers in the society - individuals, corporates andbusiness professionals, public institutions and thesociety as a whole. The existence and implementa-tion of sound procedures to disincent those whoviolate the norms would create a sense of fear and

4. Corporate Governance: An Introduction, Corporate Governance, edited by Kevin Keasey, Steve Thompson and Mike Wright, 4 volumeset, Edward Elgar, 1999.

CORPORATE GOVERNANCE : A BRIEF ACCOUNT


15


would induce proper adherence to the principlesof corporate governance.

The emphasis now has to be shifted from corpo-rate governance to corporate sustainability. Cor-porate sustainability is an all encompassing term.

“The GVC (the corporate governance and valuecreation rating) approach stems from the beliefthat good governance, over and beyond its processaspects, is fundamentally a sustainability issue -good governance should result in the creation andfair distribution of tangible benefits.”5

But it has to be interpreted from the view point ofinvestors. Sustainability as such is a very old con-notation which means a kind of development whichwould improve the present generation withoutcompromising the interests of the future.

Corporate sustainability is a method for creatinglong term shareholder value by embracing oppor-tunities and managing risks. This means ensuringthat companies have to make decisions that pro-

tect the economic health over the long term andshare market performance over a short period.This implies putting investment perspectives farahead of the short term goals. Corporatesustainability invokes an overview of companiesfrom the social, environmental and economic angleof governance. Sustainability is the balancing ofthe risk and opportunities in the form of externali-ties and efficiencies respectively.

Investment risks may arise where corporate ac-tivities adversely impact society or the physicalenvironment. As stakeholders and communitiesrecognize these potential (externality) impacts andadvocate for their reallocation back to source;community, regulatory and litigation risks canarise.6 Opportunities for efficiency gains can beachieved via reduced resource consumption and/or a variety of productivity innovations.7

The following diagram represents potential link-ages between corporate sustainability activity andshareholder value.

5. Shri G.N. Bajpai, Chairman, SEBI. “India: at the cutting edge of corporate governance” Speech delivered on November 4, 2003.6. OECD report, Experience from regional corporate governance round tables.7. OECD report, Experience from regional corporate governance round tables.

Corporate sustainability - the ‘added value’ drivers




16

Corporate governance codes- emphasis and vari-ous featuresThere has been consistent and persistent effortson the part of inter governmental organisations,exchanges and the regulatory authorities to framecode of corporate governance. The pioneeringeffort in this direction can be traced to the OECD,the first major inter governmental body to codifya set of principles. But USA and the UK hadtravelled far ahead in this direction largely as aresult of the efforts of stock exchanges. Of specialreference is that of New York Stock Exchange(NYSE) which had strongly supported the idea ofaudit committees since 1970s. In fact in August1940, one of its Subcommittees recommended,“Where applicable the selection of the (indepen-dent) auditors by a special committee composedof directors who are not officers of the companyseem acceptable.” In January 1977, the NYSE for-mally adopted an Audit Committee Policy State-ment, which required establishment of audit com-mittees by its listed companies. The London StockExchange implemented the recommendations ofthe Cadbury Committee when it put into force therequirement that listed UK companies should es-tablish audit committees comprising of non-ex-ecutive directors.

The governance principles developed by Cadburycommittee addressed four key issues: (1) the struc-ture, organisation and membership of companies’boards of directors (2) the accountability of boardsto shareholders (who own companies) and otherstakeholders (3) the transparency of governancestandards and processes and (4) the quality ofcompanies’ communications about these and otherissues

The Sarbanes -Oxley Act was a landmark steptowards achieving better corporate governance inthe wake of corporate scandals. The provisions ofthe Sarbanes-Oxley Act sought to establish anindependent public accounting over sight board,executive certification of financial statements,expand rules governing conflicts of interest andincrease civil and criminal penalties. The new bodycreated, the public company accounting oversightboard was designed to supervise public account-

ing firms and the related activities like approval ofaudit reports, the testing and reporting of internalcontrol systems, etc. The objective of the act was toimprove corporate responsibility, increase publicdisclosure, improve the quality and transparencyof financial reporting and auditing, and strengthenpenalties for securities law and other violations.Further the act expands financial reporting re-quirements and accountabilities, the authority andresponsibility of audit committees and revokescertain actions by public companies. The act en-hances protection for corporate whistle blowersand establishes various requirements like CEO/CFO certification of all SEC periodic filings thatinclude financial statements an internal controlreport to be filed with the annual report, along withthe CEO/CFO certification of annual and quar-terly reports.

One direct impact of this act would be the in-creased scrutiny of CEOs and CFOs as a conse-quence of all these requirements. It bans out-rightly external auditors from providing non auditservices such as bookkeeping, financial informa-tion systems design, appraisal or valuation ser-vices, internal audit outsourcing services, anymanagement function or human resources ser-vice, and investment advisor, broker, or legal ser-vices.

The noteworthy change that the SOX ushered inwas the alteration of the meaning of corporategovernance from a time old concept. In fact itempowers the SEC to take the bull by the horns bystrengthening the oversight of the SEC; makingaudit committees, not management, the primaryemployers of public accountants; strictly curtail-ing the activities of external auditors in order toincrease independence; and enforcing manage-ment reporting and disclosures with real penalties.It is the demarcation of this sphere of authoritythat requires priority attention.

Another much discussed report on corporate gov-ernance recently is the King report on corporategovernance in South Africa. The significance ofthe report was that it broadened the scope andimplication of good governance. This was achievedby advocating a comprehensive and well knit ap-



17


proach towards the interests of stakeholders in anall inclusive framework comprising social, eco-nomic and environmental aspects. Encouragementto activism by shareholders, business and finan-cial press and increased emphasis on disclosurebased regulation were major features of the re-port. Another feature of the report was that ithighlighted the constraints on management ofconforming to the corporate governance stan-dards. Such corporate boards then should adopt abalancing approach as they have to balance theselimitations with performance for the financial suc-cess and sustainability.

In Asia too, there has been a spate of efforts forcorporate governance reform. It would be enlight-ening at this juncture to point out that Kyrgyzstanwas the first country to adopt a compulsory codeof best practice in the realm of corporate gover-nance. This was with the aid and under the guid-ance of the Asian Development Bank. (Source:international conference on corporate governancein Vietnam: Asian Development Bank)

Corporate Governance committees

A plethora of corporate governance codes, a flurryof committees to review those, swarms of litera-ture and research papers - this has been the sce-nario of corporate governance at present. Thisemphasis -whether undue or not - is necessitatedby travails of time. What is in fact germane to thedebate is how much of all these recommendationsare imbibed into the corporate culture and aretaken up as a clarion call to reform the underlyingmalfeasance.

However, there are some revealing benefits thatengender from a careful modelling of corporategovernance.

Corporate governance requires firms to be morerisk aware and to develop more effective solutionsto problems. The establishment of a good riskmonitoring process is easier if senior managementperceive corporate governance as a useful andongoing management information tool. It has tobe viewed as an essential part of the decisionsupport process rather than as an overly bureau-cratic, periodic process. Often it is put forth in a

manner interspersed with complex interruptionsfrom auditors and ambiguous guidelines on thepart of regulators. Actually it has to be embeddedin the corporate culture.

Evolution of corporate governance in India

The effort to devise a corporate governance codein India was not prompted by any serious macroeconomic collapse or crisis. It came in varioussmall steps over a period of time.

The genesis of a formal codification of the corpo-rate governance principles in India can be tracedto the CII code on desirable corporate governanceframed in April 1998. The code mainly dealt withboard composition, non executive directors, auditcommittees, disclosures especially those of nonfinancial nature. It had stressed that there was noneed for preferring a two tier board as a singleboard is sufficient for the maximization of longterm shareholder value if it performs well. Furtherit had stipulated that board meeting should be heldfor a minimum 6 times a year at an interval of 2months. One important feature of the code is thatit had emphasized the Cadbury committee reportrecommendation “The most appealing feature ofCadbury committee report is the compliance cer-tificate that has to accompany the annual reportsof all companies listed in the LSE.”

Department of Company Affairs

The Department of Company Affairs has beentaking steps regularly to nurture the culture ofcorporate governance. With this end in view DCAhad made necessary changes in the CompaniesAct, 1956 and the attendant rules. Some of theprominent provisions injected over time include -the provisions relating to ‘nomination facility forshareholders and deposit-holders’; ‘buy-back ofsecurities’, ‘relaxation in norms relating to inter-corporate loans and investments’, ‘setting up ofInvestor Education and Protection Fund’, ‘allow-ing sweat equity’ and ‘Compliance of accountingstandards in preparation of annual accounts’ -introduced through Companies (Amendment) Act,1999 to provide initiatives and safeguards for im-proved investor protection and better corporate




18

governance. The Companies Act, 1956 has againbeen amended vide Companies (Amendment) Act,2000 providing for Postal Ballot, Audit Committee,Directors Responsibility Statement, DebentureTrustees, Secretarial Compliance Certificate, Re-duction of Time for Payment Dividend (includinginterim dividend), ten fold increase of fines andOption for Election of a Director by Small Share-holders etc. Latest steps initiated by DCA to im-prove the corporate governance include the Com-pany Law Settlement Scheme and Fast TrackScheme launched in 2000.

Initiatives by SEBI

No account on corporate governance in Indiawould be complete without narrating the initia-tives of the regulator in accelerating and system-atizing the framework of corporate governanceand moulding it as a tool with threefold objectives- wealth creation, wealth sharing and wealth man-agement.

The initial step was the Kumaramangalam Birlacommittee report which was submitted in 1999.The report had framed a sound corporate gover-nance code in the lines of international best andstandard practices. This was implemented by in-ducting clause 49 in the listing agreement. Butwith a spate of changes rocking the world andIndian financial scenario, it was necessary to relookvarious provisions so as to finetune it. The out-come was the Narayana Murthy committee reporton corporate governance which was submitted onFebruary 8, 2003. The report had outlined therecommendations as mandatory and non manda-tory

With the aim to bring corporate governance to thefulcrum of assessment of corporate performance,governance ratings tools were designed by CRISIL,one of the foremost credit rating agency of thecountry. The assessment variables include trans-parency and disclosure, board composition, share-holder protection etc. The corporates should bemanaged in such a way that they create wealth forthe stakeholders. The level of corporate gover-nance which sets the relationship between thecompany and the stakeholders add to or reduce

future wealth creation by them. Also it should bein accordance with the concept of wealth sharingi.e. wealth created should be distributed amongstall the stakeholders in tandem with their contribu-tion. The wealth generated over a long period oftime should be managed well so as to optimize therate of return over a long period of time.

Certain issues and perspectives

Dichotomy of controlling and minority share-holders: One major issue that has been dominat-ing the discussions on corporate governance is thedichotomy between the controlling and minorityshareholders. Many countries have been devisinginstruments and mechanisms to prevent the abuseof minority shareholder rights and to empowerthem.

The legal frame work is incessantly important inerecting a sound and stable structure of corporategovernance. This being the situation there hasbeen various instruments to evolve a legal frame-work. In many countries there has been a greaterusage of private actions, for example, such asderivative action and class action law suits. Theinstrument of derivative action is proposed re-cently in Hong Kong. A derivative action refers tocivil proceedings brought by a minority of com-pany members (shareholders) seeking a remedyfor the company in respect of a wrong done to it.Any damages awarded by the Court would go to thecompany, instead of to the members initiating thederivative action. In Hong Kong there has been aproposal and ongoing consultations to empowerSFC to initiate a derivative action.

The principle of derivative action suits is an alter-native to the individual suit. In the case of a deriva-tive suit, a certain section of shareholders caninitiate action against board members or othercompanies on behalf of the company. But theusage of derivative suits is not as rampant as itshould be. For example, shareholders have notfiled derivative suits in Bulgaria and Romaniaeven though the legal framework allows for them.

The instrument of class action law suits is preva-lent in China and Chinese Taipei. But their adop-tion is subjected to controversy as these kinds of



19


suits are subject to lots of abuse and lead bigcompanies face green mail.

In some discussions there has been a proposal tohave certain board members chosen by minorityshareholders. This is beyond the requirement ofindependent board members. Cumulative votingis one strategy to bring this idea into practice. Butthen the argument against the idea is that will it notagain regenerate class of directors serving certaingroups?

Another issue in many developing and emergingmarket economies has been tunneling. Tunnelingis a situation when insiders take a company’s assetsfor themselves, as if the assets are disappearingdown an underground tunnel.8

This happens at the cost of other shareholders anddeteriorates investor confidence and capital mar-ket development. This finally leads to lower valu-ations, less equity finance, and ultimately slowergrowing and less stable economies. But whethersuch kinds of situations prevail in India or not hasto be looked into.

Another relevant area is the improvement of theeffectiveness of the board meetings. There shouldbe provisions for the representation of minimumfraction of share capital, implementation of man-dates decided on in the board meetings, confer-ment of rights to shareholder to approach courtsto revoke the results of the meeting if legal require-ments are not met.

In some countries there are certain kinds of rightslike appraisal rights and dissenter’s rights. Throughthe appraisal rights the shareholders are given theopportunity to confirm if the terms of a transac-tion are good for a company or biased. In somecases, an independent appraisal is automaticallyrequired, in others shareholders may have to go tocourt, or petition regulators, to initiate one. Inmany countries, access to appraisal rights hasbeen broadened over the last few years. Howeveractually ensuring a fair and accurate appraisalremains a challenge. Often the company chooseswho will conduct the appraisal, and in practice, this

may compromise its independence and objectiv-ity.

In Korea, there prevails another class of rightscalled dissent rights to shareholders. Dissenters’rights are put into force when some shareholdersvote against certain major transactions approvedby the general meeting. The transactions includemergers and sales of the company.

Whistle blower policy

Employees are usually the first ones to knowabout transactions and practices that violate thelegal rights of shareholders and other stakehold-ers. “Whistleblowers” who reveal these abusiveactivities can be a critical source of informationand are in many cases essential in bringing theappropriate civil and criminal action. The potentialfor employees to act as whistleblowers can be animportant deterrent to abusive behaviour.

Measures to boost the whistleblower policy wouldbe action to protect whistleblowers, shielding themfrom liability, penalising employers who retaliate,facilitating the internal flow of information throughmechanisms like anonymous reporting by em-ployees and creating an internal “ombudsman” tofollow up on employee allegations of unethicalbehaviour.

Conclusion

The process of change and adaptation will con-tinue increasing the diversity and complexity. Theaim ultimately should be to promote a culture ofcompliance and promote the ethos. In spite of therepetitions in terms of various codes, committeesand principles, the significance will never fade. Asstated by World Bank “Corporate governance isconcerned with holding the balance between eco-nomic and social goals and between individual andcommunal goals. The governance framework isthere to encourage the efficient use of resourcesand equally to require accountability for the stew-ardship of those resources. The aim is to align asnearly as possible the interests of individuals, cor-porations and society.”

8. OECD report, Experience from regional corporate governance round tables.


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Country Year Code Authority InstrumentsSection A: A Chronicle of Corporate Governance Codes/Principles/Regulations

Country Year Code Authority Instruments

Australia 1995 Bosch Report

July 1995 AIMA Guide & Statement of Recom-mended Practice

Corporate Governance - Volume one :In Principle, Volume two: In Practice

July 1999 Corporate Governance : A Guide forInvestment Managers and Corporations

2002 Horwath 2002 Corporate GovernanceReport

December 2002 Corporate Governance : A Guide forFund managers and Corporations

March 2003 Principles of Good Corporate Gover-nance and Best Practice Recommenda-tions

Austria September 2002 Austrian Code of Corporate Governance

Australian Institute of Company Direc-tors, Australian Society of Certified Prac-ticing Accountants, Business Council ofAustralia, Law Council of Australia, TheInstitute of Chartered Accountants in Aus-tralia, The Securities Institute of Australia

Investment & Financial Services Associa-tion

The Audit Office of New South Wales,Australia Performance Audit Report, Pub-lic Sector Corporate Governance


Research conducted by Professors JimPsaros and Michael Seamer, University ofNewcastle Business school


ASX Corporate Governance Council

Composition and structure ofboards and board committees,separation of roles of chairman andCEO; independent non executivedirectors to comprise the majorityof the board; chairperson to be anindependent non executive direc-tor

Majority of the board to consist ofindependent directors

A board with majority of indepen-dent directors, independent chair-person, meet at least 6 times annu-ally. Audit and remuneration com-mittee to have independent mem-bers

Comply or explain principle re-quired by ASX listing rules; bal-ance of authority in the board; dis-closure of division of responsibil-ity ; separation chair-CEO; estab-lish board committees with major-ity of ; independent directors; eth-ics oversight; transparent compen-sation tied to corporate and indi-vidual performance; protectwhistle-blowers

One share one vote principle; es-tablish board committees; trans-parent compensation; disclosure ofconflicts of interest; minority share-holder representation.


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Belgium January 1998 Corporate Governance - Recommenda-tions

December 1998 The Cardon Report

18 November, 1999 Guidelines on Corporate GovernanceReporting

January 2000 Director’s Charter

January 2004 English version not available

Brazil May 8, 1999, Code of Best Practice of Corporaterevised April Governance9, 2001

Canada December 1994 Toronto Report

June 1999 Five years to the Day

November 2001 Saucier Report

March 26, 2002 Proposed New Disclosure Requirementand Amended Guidelines

Common- November 1999 Principles of Best Practice for thewealth Commonwealth

Cyprus 26 September, 2002 Corporate Governance Code

November 2003 Addendum of the Corporate GovernanceCode

Czech republic February 2001 Revised Corporate Governance Code

Federation of Belgian enterprises.

Belgian Corporate Governance Commis-sion

Directors Foundation

English version not available

Toronto Stock Exchange and Institute ofCorporate Directors

Joint Committee on Corporate Governance

Toronto Stock Exchange

Commonwealth Association For Corpo-rate Governance

Cyprus Stock Exchange

Cyprus Stock Exchange

Czech Securities Commission

Board to comprise of a number ofnon executive directors; indepen-dence of committees

Board to comprise of independentand non executive directors; trans-parent compensation tied to corpo-rate performance

Board to comprise only of outsidedirectors; establish audit commit-tee with only of outside directors

Independent board leader as a list-ing requirement; disclosure of gov-ernance practices; shareholder ap-proval of options plans

Equal treatment and protection ofshareholders ; active role of institu-tional investors; committees withmajority of independent directors;25% independent directors in thesupervisory board; disclosure ofconflict of interest.


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Denmark February 2000 Guidelines on Good Management of aListed Company

December 6, 2001 The Norby Committee’s Report on Cor-porate Governance in Denmark

December 2003 Report on Corporate Governance inDenmark

France July 1995 Vienot I Report

July 1999 Vienot II Report

Adopted on June 9, Recommendations on Corporate1998 and amended Governancein 2001

23 September, 2002 English version not available

October 2003 The Corporate Governance of ListedCorporations

Germany April 1, 1998 English version not available

March 5, 1998

June 1998 DSW Guidelines

June 2000 German Code of Corporate Governance

January 2000 Corporate Governance Rules For(updated July 2000 German Quoted Companies

4 non executive directors in theboard; remuneration committee;transparent compensation tied tocorporate performance

Full decision power to sharehold-ers in case of a takeover bid; quar-terly reports; management pay pro-portional to corporate results;board to comprise entirely of nonexecutive directors

Board to comprise ½ of indepen-dent directors; independence ofexternal auditors; audit and com-pensation committees to compriseentirely of non executive directorsand with 2/3 independent direc-tors; concern for balance sheet vola-tility from the adoption of IAS ac-counting standards.

Improve shareholders’ participa-tion; information and voting atAGM ; establish board committeeswith ½ majority of independent di-rectors

Compensation tied to corporateperformance; establish supervisoryboard committees; facilitate share-holder voting.

Danish Shareholders Association

Copenhagen Stock Exchange

Copenhagen Stock Exchange Committeeon Corporate Governance

CNPF & AFEP

MEDEF (French Business Confederation)& AFEP

AFG-ASFFI Commission on CorporateGovernance

MEDEF & AFEP-AGREF

Based on Consolidation of the 1995, 1999,& 2002 AFEP and MEDEF’s Reports.


German Ministry of Justice

German Panel on Corporate Governance


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July 10, 2001 Baums Commission Report

February 26, 2002 Cromme Code

May 21, 2003 Amendments to the Cromme Code

Greece October 1999 Principles on Corporate Governance inGreece: Recommendations for its Com-petitive Transformation

July 24, 2001 Principles of Corporate Governance

Hong Kong February 1999 Code of Best Practice: HKEX ListingRequirements

March 2001 Corporate Governance Disclosure inAnnual Reports

June 2001 Model Code For Securities TransactionsBy Directors Of Listed Companies:Basic Principles

Indonesia March 2000 Code for Good Corporate Governance

March 2001 Code for Good Corporate Governance

Ireland March 1999 Corporate Governance, Share Optionand Other Incentive Schemes

Italy February 1998 English version not available

October 1999 Report & Code of Conduct

Revised July 2002 Corporate Governance Code

Japan September 1997 Urgent Recommendations ConcerningCorporate Governance

October 1997 Corporate Governance Principles: AJapanese View

Improve shareholder participation,information and voting at AGM;separation between chair and CEO;majority made of non executivedirectors; non specified number ofindependent directors; establishinternal audit committee made ofat least 3 non executive directors.

Establish remuneration commit-tees; limits to share option schemes;compensation tied to corporateperformance

German Corporate Governance Kodex

Government Commission German Corpo-rate Governance Code

Committee on Corporate Governance (Un-der the Coordination of The Capital Mar-ket Commission)

Federation of Greek Industries

Hong Kong Stock Exchange

Hong Kong Society of Accountants

Hong Kong Stock Exchange

The National Committee on CorporateGovernance

The National Committee on CorporateGovernance

Irish Association of Investment Managers

Law reform based on Draghi proposals

Committee for the Corporate Governanceof Listed Companies

Committee for the Corporate Governanceof Listed Companies

Japan Federation of EconomicOrganisations

Corporate Governance Forum


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June 1998 Report of the Pension Fund CorporateGovernance Research Committee

October 26, 2001 Revised Corporate GovernancePrinciples

Kenya Principles for Corporate Governance inKenya

Sample Code of Best Practice forCorporate Governance

Korea September 1999 Code of Best Practice for CorporateGovernance

Lithuania February 11, 2004 The Corporate Governance Code forthe Companies Listed on the NationalStock Exchange Of Lithuania

Malaysia March 2000 Malaysian Code on Corporate Gover-nance

Macedonia July 2003 White Paper on Corporate Governancein South Eastern Europe

Malta October 1, 2001 Principles of Good Corporate Gover-nance

Mexico July 1999

The June 27, 1997 Peter’s Report and RecommendationsNetherlands

Compensation tied to corporateperformance; separation of CEO-chair; majority of the board madeof outside directors; establish com-mittees chaired in and majoritymade of outside directors, inde-pendent directors for the audit com-mittee.

Voluntary, improve shareholders’participation ; at least ¼ outsidedirectors; audit committees chairedand made of 2/3 outside directors;disclosure of all information forshareholders’ decision making andcumulative voting to improve theminority shareholders’ representa-tion.

At least 20% outside directors onthe board; audit committee chairedby an outside director; improveshareholders’ participation, infor-mation and voting.

Voluntary ; supervisory board;report conflicts of interest to thechairman; individuals to hold lim-ited number of directorships;remuneration unrelated to the

Pension Fund Association

Japan Corporate Governance Forum

Private Sector Initiative for CorporateGovernance

Private Sector Corporate GovernanceTrust

Committee on Corporate Governance

National Stock Exchange of Lithuania

Securities Commission, Malaysia

Macedonia Corporate Governance andCompany Law Project

Malta Stock Exchange

Mexican Stock Exchange, The MexicanBanker’s Association, The Mexican Insti-tute of Finance Executives and The Mexi-can Institute of Public Accountants

Committee on Corporate Governance


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November 2000 Government Governance; CorporateGovernance in The Public Sector, Whyand How?

August 2001 SCGOP Handbook on Corporate Gover-nance

July 1, 2003 Draft Corporate Governance Code

December 9, 2003 The Dutch Corporate Governance Code

OECD May 1999 OECD Principles of Corporate Gover-nance

January 2004 Draft Revised Text: OECD Principles ofCorporate Governance

Pakistan March 4, 2002 Stock Exchange Code of Corporate Gov-ernance

March 2002 Code of Corporate Governance (Revised)

Pan-European June 1995 Corporate Governance in Europe

September 1997 Sound Business Standards and Corpo-rate Practices: A Set of Guidelines

February 2000 Corporate Governance Guidelines

May 2000 EASD Principles and Recommendations

Peru November 2001 English version not available

July 2002 English version not available

The Netherlands Ministry of Finance Gov-ernment Audit Policy Directorate

The Foundation for Corporate GovernanceResearch for Pension Funds

Corporate Governance Committee

Corporate Governance Committee

OECD

OECD

The SEC of Pakistan

The SEC of Pakistan

Report of a CEPS Working Party

European Bank for Reconstruction andDevelopment

European Shareholders Association

European Association of Securities Deal-ers Corporate Governance Committee



company’s results; committees nei-ther encouraged nor discouraged.

Improve institutional shareholders’participation, information and vot-ing; restrictions to issuance of mul-tiple voting of shares and to antitakeover defenses; supervisory di-rectors’ remuneration not tied tothe company’s results.

Whistle blower protection. Limiton directorships held. Approval ofthe remuneration policy by the in-dividual shareholders; control ofconflict of interest; definition ofindependence.


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Poland June 2002 The Corporate Governance Code forPolish Listed Companies

July 4, 2002 Best Practices in Public Companies in2002

Portugal November 1999 Recommendations on CorporateGovernance

Romania June 24, 2000 Corporate Governance Initiative forEconomic Democracy in Romania:Corporate Governance Code

Corporate Governance Code inRomania

Russia April 4, 2002 The Russian Code of CorporateConduct

Singapore March 21, 2001 Code of Corporate Governance

Slovakia September 2002 Corporate Governance Code

South Africa November 24, 1994 King I Report

March 2002 King II Report

Spain October 1996 English version not available

February 1998 English version not available

January 8, 2003 The Aldama Report

The Polish Corporate Governance Forum

The Best Practices Committee at Corpo-rate Governance Forum

International Centre For EntrepreneurialStudies, University of Bucharest

Russian Institute of Directors

The Co-Ordination Council for CorporateGovernance

Corporate Governance Committee, Coun-cil on Corporate Disclosure and Gover-nance

Bratislava Stock Exchange

The Institute of Directors of SouthernAfrica

The Institute of Directors of SouthernAfrica



Comply or explain principle; restric-tions of anti-takeover defences; atleast two independent supervisorydirectors.

Protection of minority sharehold-ers; improved transparency; at least½ independent supervisory direc-tors.

Disclosure to the public; institu-tional investors disclosure of vot-ing practices; restrictions to antitakeover defences; at least one in-dependent director.

Suggestion to government and par-liament to enact legislation to havelisted enterprises adopt the complyor explain principle, detailed defi-nition of conflicts of interests ofdirectors; adoption of the corpo-rate governance code.


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Sweden 26th October, 2001 Corporate Governance Policy

February 2003 The NBK Rules

Switzerland July 1, 2002 Corporate Governance Directive

July 25, 2002 Corporate Governance: Swiss Code ofBest Practice

Turkey July 1, 2003 Corporate Governance Principles

UK December 1, 1992 Cadbury Report

July 17, 1995 Greenbury Report

January 1998 Hampel Report

September 1999 Turnbull Report

October 1999 The KPMG Review of Internal Control:A Practical Guide

December 1999 Hermes Statement on InternationalVoting Principles

May 2000 The Combined Code

January 2001 Code of Good Practice

The Swedish Shareholders’ Association

The Swedish Industry and CommerceStock Exchange Committee

SWX Swiss Exchange

Swiss Business Federation

The Capital Markets Board

Committee set up by Financial ReportingCouncil, The London Stock Exchange (LSE)and The Accountancy Profession

Study Group on Director’s Remunerationset up by the CBI

The London Stock Exchange LSE, Confed-eration of British Industry, The Institute ofDirectors, The Consultative Committee ofAccountancy Bodies, The National Asso-ciation of Pension Funds and The Associa-tion of British Insurers

Institute of Chartered Accountants inEngland and Wales

KPMG Audit Committee Institute

Hermes Pension Management Limited

Derived by the Committee on CorporateGovernance from its Final Report andfrom the Cadbury and Greenbury Reports

Association of Unit Trusts and InvestmentFunds

Decision on the company’s capital(share buyback, reselling) shouldnot be delegated to the board; theboard should comprise of only nonexecutives; separation of chair andCEO; establish nomination, auditand remuneration committeesmade of a majority of non execu-tive directors; stock option plansconditioned on transparency andquantitative limits.


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June 7, 2002 Review of the Role and Effectiveness ofNon Executive Directors

October 21, 2002 The Hermes Principles

October 21, 2002 The Responsibilities of InstitutionalShareholders and Agents - Statement ofPrinciples

January 20, 2003 Review of the Role and Effectiveness ofNon Executive Directors

The Smith Report

July 23, 2003 The Combined Code on Corporate Gov-ernance

USA October 1987 Treadway Commission report

September 1994 Jenkins report

September 1997 Statement on Corporate Governance

March 2000 TIAA-CREF Policy Statement on Corpo-rate Governance

November 1996, Report of the NACD Blue Ribbonreissued 2001 Commission

1994, revised 2002 Principles of Corporate Governance

January 23, 2002 Sarbanes Oxley Act

Department of Trade and Industry

Hermes Pension Management Limited

Institutional Shareholders Committee

Department of Trade and Industry

Financial Reporting Council

Financial Reporting Council

American Institute of Certified Public Ac-countants, American Accounting Associa-tion, the Institute of Internal Auditors, theInstitute of Management Accountants,

American Institute of Certified Public Ac-countants (AICPA)

The Business Round Table

Teacher’s Insurance and Annuity Associa-tion- College Retirement Equities Fund

National Association of CorporateDirectors

American Law Institute

Securities and Exchange Commission

Improve quality and accountabil-ity of independent directors; ½ in-dependent non executive directorswithin the board; nomination com-mittee made of majority of inde-pendent directors; remunerationcommittee entirely of independentdirectors; senior independent di-rector to facilitate dialogue withinvestors.

Establishment of audit committeesregardless of the size of the compa-nies; competent and independentdirectors should chair the commit-tee. Performance evaluation of thecompanies against a charter.

The public company accountingoversight board, ensuring auditorindependence, corporate responsi-


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March 1998, Core Policies, General Principles,revised March 25, Positions and Explanatory Notes2002

May 2002 Principles of Corporate Governance

August 1, 2002 Corporate Governance Rule Proposals

January 9, 2003 Commission on Public Trust andPrivate Enterprise

August 2003 Restoring Trust - The Breeden Report

November 4, 2003 Final NYSE Corporate GovernanceRules

Council of Institutional Investors

The Business Round Table

New York Stock Exchange (NYSE) Boardof Directors

The Conference Board

The US District Court for the SouthernDistrict of New York

New York Stock Exchange (NYSE)

bility, enhanced financial disclo-sures, white collar crime penaltyenhancements.

Directors’ monitoring role of man-agement on behalf of the stock-holders; establish a code of con-duct; establish committees; a sub-stantial number of independentdirectors within the board.

Better balance between board andCEO functions; independent direc-tors; transparent compensation tiedto company’s performance.

Listing standard; costing of stockoptions; increased board indepen-dence; stronger nomination, com-pensation and audit committees.

C:\BULLET24\MARCH\SB-MAR-3 Tan-14 Mk Mg 15-3-2004\Mg 17-3-2004\O.P> 17-3-2004 30


30

Section B: Corporate Governance Codes in India

Corporate Governance Code Year Authority

Desirable corporate governance: a code April1998 Confederation of IndianIndustry

The Kumaramangalam Birla Committee 1999 Securities and ExchangeReport on corporate Governance Board of India

Report of the Task force on Corporate November 20, 2000 Department of CompanyExcellence through Governance Affairs

Report of the Advisory Group on Corpo- March 24, 2001 Reserve Bank of Indiarate Governance: Standing Committee onInternational Financial Standards andCodes

Report of the Consultative Group of Direc- April, 2002. Reserve Bank of Indiators of Banks/Financial Institutions:Ganguly Committee Report

Report of the Committee (Naresh Chandra) December 23, 2002. Ministry of Finance &on Corporate Audit and Governance Company Affairs

Report of the SEBI Committee (N.R. February 8, 2003 Securities and ExchangeNarayana Murthy) on Corporate Board of IndiaGovernance

Report of the committee on regulation of July 8, 2003 Ministry of Finance &private companies and partnership Naresh Company AffairsChandra committee-II

Section C: Speeches and Articles by Chairman,SEBI and Whole Time Member, SEBI on Corpo-rate Governance

(1) A key note address by Shri G.N. Bajpai onCorporate Governance and Development onDecember 3, 2002 at New Delhi.

(2) Address by Chairman at Lex Mundi and Glo-bal Corporate Governance Forum of theWorld Bank on November 4, 2003

(3) Corporate Governance and Development :Why It Matters - Chairman ‘s speech at GlobalCorporate Governance forum’s meeting inNovember 2003

(4) “Indian Corporates’ Governance- Let it berated high” - Speech by Shri T.M. Nagarajan,WTM, SEBI on January 24, 2004 at Chennai.

Section D: The firsts in corporate governance recommendations

Feature Code

Composition of audit committee as solely of The Treadway (1987), MacDonald Commissionindependent directors (1988), Cadbury (1992), Toronto Stock Exchange,

New York Stock Exchange

The composition of audit committee as Bosch (1990, 1993, 1995), Ernst & Young (1992),majority of independent directors. KPMG (1995), AARF (1997), Investment and

Financial Services Association (1999), National



31


Association of Security Dealers and the BlueRibbon Committee (2000)

Review of board performance Cadbury committee report

Composition of the board - proportion of Cadbury committee reportexecutive and non executive directors, boardcomposition when chairman is non executiveor other wise

Separation of roles of the chairman and the Cadbury committee reportCEO

Non executive directors and their indepen- Cadbury committee reportdence

Equitable treatment of shareholders rights OECD Principlesincluding foreign and minority shareholders

Timely and accurate disclosures on all OECD Principlesmaterial matters

Feature Code




32

��

�� SHANTANU BHAUMIK & ANUBHUTI SAHAY*

The analysis attempts to identify trends, if any, inthe shareholding behaviour of the investors in theimmediate post-listing phase of a few select IPOs.The result indicates three distinct trends. First, theNIBs offload heavily, sometimes up to 88% after theissue is listed. Consequently, their shareholding, inmost cases, is less than that of the other twocategories. Secondly, oversubscription seems to bea common phenomenon for all the issues understudy. Lastly, the QIBs demand the highest numberof shares, get the highest number of shares andhold their allocation for maximum number ofdays.

Introduction

Until 1999, the Indian companies went publicthrough the fixed price route only. Fixed priceoffer route implies that prices of initial publicofferings are fixed before applications are invitedfrom the potential investors. As prices are prefixed, investors through their applications indicatethe quantity they would like to get at the said price.

However, in 1999, another option in the form ofbook building procedure was made available tothe issuers. This particular method, which assessesthe market before fixing up the prices of an initialpublic offering, essentially involves three distinctsteps. First, an appointed underwriter sets an ini-tial price range and organises road shows to pub-licize the imminent offering. These road showshelp to raise interest as well as to reduce informa-tion asymmetry among the various categories ofinvestors. In the second stage, the investors submittheir non-binding price and quantity orders. Thesebids provide the issuer with valuable informationabout the market demand of the concerned secu-

rity as well as the prospects ofthe firm. These indications ofinterest are called a book andthe process of polling potentialinvestors is called book build-ing. In the last stage, the un-derwriter fixes up a price on the basis of receivedbids and allocates shares on a discretionary basis.

Thus, the advantage of the latter procedure overthe former lies in the process of price discovery.However, the other side of the same coin is thatallocation of shares is a sole discretion of themerchant bankers. This creates uncertaintyamongst the investors who feel that few powerfulinvestors may be favoured against the rest.

In order to ensure that all investors have more orless a level playing field in case of allocation, theSecurities and Exchange Board of India (SEBI),identified three categories of investors: (a) Retailinvestors (b) Qualified Institutional investors (c)Non Institutional Investors or High Net-worth In-dividuals who do not fall in the category of eitherretail nor QIBs. The latest Disclosure and Protec-tion Guidelines (DIP 2003) lay down the allocationrule amongst these three categories (Appendix).These rules aim to develop a healthy investor basein the primary market. However recently it wasfelt that several investors subscribe to the issue inorder to exit soon after listing. One of the possiblereasons could be the speculative motive of a sec-tion of the investors. This motive most probably isfuelled by excessive funding by banks, unneces-sary hype, assurance of no margin to the QIBcategory (as against 100% margin for retail andNIBs), aggressive advertising regarding over sub-scription etc.

*Mr. Shantanu Bhaumik, Ex-manager& Anubhuti Sahay, Trainee Officer, SEBI. Views expressed are of authors only and not necessarilyof the SEBI.


33


In view of the above, this paper tries to identifysome common trends, if there are any, on thefollowing issues, by analyzing few of the initialpublic offerings as indicated in Table 1. Analysishave been done for the first sixty days after listingto examine

� The level of demand by various categories ofinvestors for an issue.

� Details of allotment amongst the three cat-egories of investors.

� Post listing shareholding pattern of the threecategories of investors.

Table 1 : Issues Analysed

II. Methodology

Data from merchant bankers and depositoriesnamely NSDL and CDSL has been used to analysethe abovementioned issues. Though, the final fig-ure for level of demand and final allocation madeto investors is arrived on by simple aggregation ofthe information provided, the approach to identifythe post listing trend is relatively more sophisti-cated. For this, transaction details of top fifty retailinvestors, top fifty Non institutional investors andtop twenty QIBs is observed for the first sixty days1.

Net Holding (buy less sales) of each of the three-sample investor category is aggregated at the endof each day. The net holding, for instance, obtainedat the end of the first day is deducted from theinitial allocation for a sample category. The figurehence obtained indicates the amount sold/pur-chased for day one as well as the number of sharesstill held in the kitty of that investor group at theend of day. For the successive days, same exercise

1. Only in case of Maruti Udyog Ltd, analysis has been done for top ten QIBs

IPO ANALYSIS : SHAREHOLDING PATTERN

Name of the issue Analysed

From To

Bharti Televentures Ltd 18 Feburary, 02 14 April, 02

I-Flex Solutions Ltd. 27 June, 02 26 August, 02

Divi’s Laboratory Ltd. 12 March, 03 11 May, 03

Maruti Udyog Ltd 9 July, 2003 1 September, 03

Indraprastha Gas Ltd 26 December, 03 25February, 04

allocation details of the various investor catego-ries while section two analyses the holding patternof sample investor categories.(a) Bid and allocation detailsOur analysis shows that, in general, the highestnumber of shares was demanded by the QIBs.They also got the highest percentage share inallocation of most of the issues.This is reflected in Figure 1. Except for Divi’s andIndraprastha Gas Ltd. in the other three issues,QIBs demanded more than sixty per cent. Thepercentage allocated to them was again the high-est-above sixty per cent-in all cases except forMaruti where the retail investors got the highestpercentage share of 45% in contrast to 40% allo-cated to the QIBs.Also noticed was the fact that the there was over-subscription in all cases. When the subscriptionratio, defined as shares demanded by shares allo-cated, is greater than one then it indicates over-

is carried out but instead of the initial allocationfigure, the final holding on the previous day istaken into consideration each time. The figurethus obtained on the last day of the study gives thenumber of shares held after two months of listingas well as the number of shares sold/purchasedduring the whole period. In order to plot thepattern of holding, normalization of the final fig-ure for each day is done.

III. Results

The trends observed from the analysis is dividedin two sections. The first section gives bid and



34 IPO ANALYSIS : SHAREHOLDING PATTERN

Percentage of Total shares demanded

2% 10%

88%Retail Investors Non Institutional Investors QIBs

P e rce nta ge of to ta l sha re s a llo tte d

4% 16%

80%

Retail Inv es to rs Non Ins titutiona l Inv es tors QIBs

Figure 1: Bid and Allocation DetailsBharti Televentures Ltd.

subscription as the total amount demanded isgreater than what is offered. The over subscrip-tion level ranged from double the amount allo-cated (for Bharti Televentures Ltd.) twenty eighttimes of the allocated number of shares. (ReferTable 2). Category wise the maximum level ofoversubscription was noticed for the non Institu-tional investors for Indraprastha Gas Ltd. whodemanded seventy times more than what wasallocated to them. Full subscription took placeonly for the retail investors in case of BhartiTeleventure. Though in none of the issues underconsideration allocation was done in equal propor-tion to the quantity demanded, in few cases allapplications for allocation were accepted. This isevident when number of shares bids received iscompared with the number of successful allottees.The scrips of Maruti and I-flex Solutions Ltd. onlysaw some unsuccessful applications.

(b) The Holding patternThis particular analysis is done for the set of topfifty retail investors, top fifty NIBs and top twentyQIBs. A look at Figure 2 reflects that the non-institutional investors offloaded maximum num-ber of shares immediately after getting allocationand listing. The pattern olds for all the IPOs underconsideration except for Indraprastha Gas Ltd.

In most cases it is observed that on the very firstday after listing there is sharp decline in the num-ber of shares held which implies that shares weresold heavily on the very first day. Thereafter the

decline continues till the end of the period understudy but at a gradual pace.

Another noticeable fact was that the holding ofthis particular section of the investors namely, theNIBs, always remained below the level of holdingof other two categories. This indicates that NIBsinvested in most of the issues with a short termview and thus sold immediately after allocation. Itis not that other categories did not sell shares. Theysold but in a gradual fashion. The analysis showsthat QIBs are long-term investors as they main-tained their initial level of holding till the end. Thisis very much obvious from the patterns observedfor the four scrips namely Maruti, Bharti, Divi’sand I-Flex.

Indraprastha Gas Ltd., however, deviates from theobserved common trend. The QIBs have offloadedthe maximum number of shares instead of theNIBs. The holding of the former, in fact, at the endof the study turned out to be lower than that of theNIBs. There can be number of possible reasons forthis variation. One can be the share percentage oftop fifty NIBs in the total allocation to this categoryas a whole was at only twenty five per cent for thisparticular issue. In other three issues, there sharehas been greater than sixty per cent. Even in caseof Maruti where there share percentage was littleless, it still amounted to approximately forty percent. Thus, any offloading of shares by the major-ity was not captured in the plot.

Beside this technical reason, yet another reasonseems to account for a higher offloading by the

Retail Investors Non Institutional Investors QIBs Retail Investors Non Institutional Investors QIBs

Percentage of Total shares demanded Percentage of total shares allotted


35



Percentage of Total Shares Allocated

3%

33%

64%

Retail investors NIBs QIBs

Percentage of Total Shares Demanded

7%

62%

30%

Retail investors NIBs QIBs

Percentage of Total Share Allocated

45%

15%

40%

Retail Investors NIBs QIBS


64%

13%%5% 23%

Retail Investors NIBs QIBS

Maruti Udyog Ltd.


13%

51%

36%

R etail Investors Non Institutional Investors QIB s

Pe rce ntage of Total Share s Allotte d

25%

15%60%

R etai l Inves tors Non Ins titutional Inves t ors QIB s

Divi’s Laboratory Ltd.


24%

16%60%

Retail Investors Non Institutional Investors QIBs

Percentage of Total Shares Allotted

25%

15%60%

R etail Investors Non Ins titutional Inves tors QIB s

I-Flex Solutions Ltd.

Indraprastha Gas Ltd.



Retail Investors NIBs QIBs










Retail Investors NIBs QIBs Retail Investors NIBs QIBs



36

QIBs. A look at the closing number of shares heldby the chosen set of 20 QIBs reveal that 14 of themhad zero shares on the last day. This implies thatonly thirty per cent held some shares at the end theperiod under consideration. This is unlike previouscases where at least sixty-five per cent of the QIBshad some holding at the end of the period. Herethey held only twenty four per cent of the totalshares allotted as seventy six per cent was offloadedduring the period.Table 3 also supports the earlier findings on share-holding pattern. The NIBs sold the highest percent-age of shares in the immediate post-listing period.Even in case of Indraprastha Gas Ltd., they sold ahuge percentage of seventy-five though it was lessby one per cent of the QIBs offloading.Figure 2: The Holding Pattern*

Holding Pattern of Investors-Indraprastha Gas Ltd

0

200

400

600

800

1000

1200

260DEC 1-Jan-04 7-Jan-04 13-Jan-

04

19-Jan-

04

25-Jan-

04

31-Jan-

04

6-Feb-04 12-F eb-

04

18-F eb-

04

24-Feb-

04Date

Nu

mb

er o

f S

har

es

R E T AIL NIB S QIB S

Holding Pattern of Investors: Divi's Laboratory

0200400600800

100012001400

1600

Date O

f Allo

tmen

t

15-M

ar-0

3

19-M

ar-0

3

23-M

ar-0

3

27-M

ar-0

3

31-M

ar-0

3

4-Apr-

03

8-Apr-

03

12-A

pr-0

3

16-A

pr-0

3

20-A

pr-0

3

24-A

pr-0

3

28-A

pr-0

3

2-May

-03

6-May

-03

10-M

ay-0

3

Num

ber

Of S

hare

s


Hold ing Patter ns of Inve s tors - M aruti Udyog Ltd .

0200400600800

10001200

Date o

f allo

tment

13-Ju l-0

3

18-Ju l-0

3

23-Ju l-0

3

28-Ju l-0

3

2-Aug-0

3

7-Aug-0

3

12-Aug -0

3

17-Aug -0

3

22-Aug -0

3

27-Aug -0

3

1-Sep-0

3

No

. of

sh

are

s

Retail A llottees Non-Institutional A llottees QIB A llottes

Holding Pattern of Investors: Bharti Televentures

0 200 400 600 800

1000 1200

Dat

e of

18-F

eb-

22-F

eb-

26-F

eb-

2-M

ar-0

2 6-

Mar

-02

10-M

ar-

14-M

ar-

18-M

ar-

22-M

ar-

26-M

ar-

30-M

ar-

3-A

pr-0

2 7-

Apr

-02

11-A

pr-

15-A

pr-

Nu

mb

er o

f S

har

es


Allottees


*Holding pattern is for the top 50 retail investors, top 50 NIBs and top 20 QIBs. Pattern shown for 1000shares allotted to each category. Data provided by the depositories.

Holding Patte rn of Inve stors : i-Flex

0

200

400

600

800

1000

1200

Date

of a

llotm

ent

30-J

un-0 2

4-Ju

l-02

8-Ju

l-02

12-J

u l-02

16-J

u l-02

20-J

u l-02

24-J

u l-02

28-J

u l-02

1-Aug

-02

5-Aug

-02

9-Aug

-02

13-A

ug-02

17-A

ug-02

21-Aug -0

2

25-A

ug-02

Date Of Allotm e nt

Nu

mb

er O

f S

ha

res


IV. ConclusionTo conclude we can summarise the above find-ings as following:

� The QIBs, in general, demand the highestpercentage in an issue and get the highestpercentage of allocation.

� Oversubscription seems to be a common phe-nomenon for all issues analysed.

� The NIBs seem to invest with a short-termview as they start offloading shares immedi-ately listing. This trend of selling shares con-tinues till the end of the period under study.Their shareholding as a consequence is al-ways less than the other two categories. TheQIBs are investors with long-term interestview in any issue. However, this result isconditional upon the sample of investors takeninto consideration.


37


Table 2: Bid and allocation Details

Category of investors No. of No. of No. of No. of Subscriptionbids successful shares shares Ratio

allottees bid for allocated

Bharati Televentures Ltd.

Retail Investors 23100 23100 7978700 7978700 1

NIBs 1124 1124 38848000 29462400 1.3

QIBs 122 122 336099400 147895600 2.2

I Flex Solutions

Retail Investors 13427 9763 2626330 990500 2.6

NIBs 201 119 1763841 594100 2.9

QIBs 75 66 6401350 2377100 2.6

Divi’s Laboratory Ltd.


NIBs 381 380 23109873 480727 48.07

QIBs 64 64 16116300 1922734 8.3

Maruti Udyog Ltd.


NIBs 4064 3336 176313800 11920200 14.79

QIBs 376 294 500622100 31786900 15.75

Indraprastha Gas Limited


NIBs 6897 6897 715182000 10165600 70.3

QIBs 151 151 348816990 19850000 17.5

Table 3 : Percentage Sold During the Period of Study (percentage calculated for 50 top retailinvestors,top 50 NIBs and top 20 QIBs)

Name of the Issue Category of Allocated Closing PercentageInvestors No. of number of sold within

shares shares two months

I Flex Solutions Retail 23000 15571 32

NIBs 527330 323215 39

QIBs 1832842 1822208 1




38

Bharti Televentures Retail 50000 48680 3NIBs 17654500 12752895 28QIBS 94365181 96295299 2

Divi’s Laboratory Ltd. Retail 7500 6745 10NIBs 310250 68729 78QIBs 1231884 910760 26

Indraprastha Gas Ltd. Retail 5200 4600 11NIBs 2587300 642587 75QIBs 10442400 2487600 76

Maruti Udyog Ltd. Retail 20000 6850 65NIBs 4428000 723000 83QIBs 10401500 8618173 17

Name of the Issue Category of Allocated Closing PercentageInvestors No. of number of sold within

shares shares two months

APPENDIX I

Allocation rules

An issuer company proposing to issue capitalthrough book building can issue securities to thepublic through the following manner:

(I) 100% book building:

In case, an issuer company makes an issue of 100%of the net offer to public through 100% bookbuilding process -

� not less than 25% of the net offer to the publicshall be available for allocation to retail indi-vidual investors ;

� not less than 25% of the net offer to the publicshall be available for allocation to non institu-tional investors i.e. investors other than retailindividual investors and Qualified InstitutionalBuyers;

� not more than 50% of the net offer to thepublic shall be available for allocation to Quali-fied Institutional Buyers.

Provided that, 50% of the issue size shall bemandatorily allotted to the Qualified InstitutionalBuyers, in case the issuer company is making apublic issue under Clauses 2.2.2 and 2.3.2.

(II) 75% Book building

In case an issuer company makes an issue of 75%of the net offer to public through book buildingprocess and 25% at the price determined throughbook building the following allocation rules needto be satisfied.

� In the book built portion, offers are made tothe QIBs and the non Qualified InstitutionalBuyers only. It is provided that not less than25% of the net offer to the public, shall beavailable for allocation to non Qualified Insti-tutional Buyers and not more than 50% of thenet offer to the public shall be available forallocation to Qualified Institutional Buyers.

� the balance 25% of the net offer to the public,offered at a price determined through bookbuilding, shall be available only to retail indi-vidual investors who have either not partici-pated or have not received any allocation, inthe book built portion.

Provided that, 50% of the issue size shall bemandatorily allotted to the Qualified InstitutionalBuyers, in case the issuer company is making apublic issue under Clauses 2.2.2 and 2.3.2of theguidelines.


(Table 3 continued)


39


��

�� !"�� #�$��%��&��'�())*

An internal group was formed to closely lookinto the provisions of the SEBI (SubstantialAcquisition of Shares And Takeovers) Regu-

lations, 1997 and suggest measures which maytake care of the interest of the investors. TheGroup deliberated and finalized their recommen-dations. The recommendations of the Group inthis regard are placed as following :

1. Offer Price

(i) The threshold limit for acquisition throughoff market transactions shall be limited to 5%of shares or voting rights and any acquisitionbeyond this through off market transactionswould trigger the open offer obligation.

(ii) An acquirer who holds more than 5% but lessthan 15% shares or voting rights shall acquireadditional shares or voting rights, only throughstock market mechanism and otherwise, theacquisition would trigger the open offer obli-gation.

(iii) However, acquisition through preferential al-lotment pursuant to a special resolution passedu/s 81(1A) of the Companies Act, 1956 wouldbe exempted. This would be subject to thecondition that the shareholders pass a sepa-rate special resolution to the effect that theprospective acquirer would not be requiredto make an open offer in terms of the provi-sions of the Regulations, pursuant to the saidacquisition. In the event of such a resolutionbeing defeated, the acquirer shall be requiredto comply with the open offer obligationsunder the Regulations, if he acquires the sharesbeyond the threshold limit of 5%. This wouldbe in addition to other categories of exemp-tion already provided under Regulation 3.

(iv) The existing provisions ofReg.10 shall be modifiedsuitably.

2. Reduction in time for completion of open offer

The group observed that at present open offerformalities ideally take 120 days to complete fromthe date of public announcement. The group rec-ommends that the current time cycle of the offermay be reduced from 120 days to 90 days.

3. Restriction of Sale during the offer period

The group recommends that the Regulations maybe amended by incorporating a specific provisionunder “General obligations of the Acquirer” to puta restriction on the sale of shares by the acquirerduring the offer period.

4. Independent advice by the board of TargetCompany

The Group recommends that the Regulations maybe amended suitably by incorporating a clausethat obliges the board of the target company tocomment on the general affairs of the target com-pany and future plans, if any, by way of a notice/comments letter to the shareholders of the targetcompany.

The group also recommends that the Target com-pany may be obligated to provide such informa-tion as may be sought by the acquirer for thepurpose of making adequate disclosures in theletter of offer as specified in the standard formatby the Board.

5. Time frame for completion of acquisition throughthe MOU which triggers the code

The group observed that the Regulations do notprovide for any time limit for completion of acqui-



40

sition of shares under the MOU which triggers anopen offer. The issue whether the time frame forcompletion of such acquisition of shares throughMOU should be specified in the Regulations wasdebated by the group.

It was decided that since it is a contractual obliga-tion of acquirer and seller, SEBI may not intervenein the issue. It is for the concerned parties to decidewhen they wish to exercise their right regardingacquisition of shares.

6. Participation of Merchant Banker in the OpenOffer and disclosure of the same to all the share-holders.

The group observed that the regulations are notexplicit on the said issue and recommends that theregulations may be suitably amended under theheading obligations of Merchant Banker therebyproviding for the following:

(i) Merchant Banker should not be allowed todeal in the scrip of Target Company duringthe period commencing from date of appoint-ment of MB as manager to the issue till the 15days from the closure of the offer.

(ii) Shareholding of Merchant Banker in the tar-get Company, if any, shall be disclosed in thepublic announcement as well as in the letterof offer.

�� !��+��$��%��,�� +�,&As ambiguous information on the shareholdingpattern affects price discovery in the secondarymarket, and vitiates research and policies, SEBIobserved an apparent need to revisit the presentdisclosure of shareholding that was being done asper the format provided in Clause 35 of the ListingAgreement. It is believed that these new disclo-sures would be beneficial to the regulators, stockexchanges analysts etc.

The SMAC has deliberated on the present disclo-sure requirements in terms of the aforesaid clause,and has arrived at a new format, which is now putup for public comments.

One of the key changes in this new disclosureformat is replacement of the term “ Promoters” isreplaced by the Controlling Interest. This was donebecause it was realized that the key issue was notwho initially promoted the company but who con-trolled it as of date.

For details please see the website www.sebi.gov.in



41


The Secondary Market Advisory Committee(SMAC) has been set up by SEBI as a standing committee to advise on matters relating

to secondary market. The committee has deliber-ated on the various disclosure requirements relat-ing to the shareholding pattern of companies andhas arrived at a revised format for the disclosureof shareholding pattern under clause 35 of thelisting agreement. This revised format, preparedon the basis of the recommendations of thecommittee is placed on the SEBI websitewww.sebi.gov.in for public comments. The com-ments on this report may please be forwarded toMs. Aparna Thyagarajan, Manager, SEBI or maybe e-mailed to [email protected] on or beforeFebruary 27, 2004.

Ref : PR No.32/2004, dated February 05, 2004

��%��%��!�During the month of February 2004, SEBI hasreceived 2595 grievances against listed compa-nies. In the same period 1803 grievances werereported redressed. These redressed grievancesinclude grievances brought forward from the pre-vious periods.

Type Grievances GrievancesReceived Redressed

I 202 208

II 479 355

III 952 504

IV 525 308

V 437 428

TOTAL 2595 1803

Type I : Non-receipt of re-fund orders/allot-ment letters etc.

Type II : Non-receipt ofdividend.

Type III : Non-receipt ofshare certificates/bonus shares.

Type IV : Non-receipt of debenture certificates/interest on debentures/redemptionamount of debentures/interest on de-layed payment of interest on deben-tures/redemption amount of deben-tures.

Type V : Non-receipt of right forms/interest ondelayed receipt of refund order.

Ref : PR No. 42/2004, dated February 20, 2004 andPR No. 53 dated March 09, 2004

For details please see website www.sebi.gov.in

��

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42

This is in continuation of the SEBI CircularNo. SMDRP/POLICY/Cir-15/00, dated De-cember 15, 2000 and clarification issued

vide letter dated SEBI/SMD/SE/15/2003/29/04,dated April 29, 2003 on the issue of an electroniccontract note whereby SEBI had permitted theissue of electronic contract notes with digital sig-nature obtained from a valid Certifying Authorityprovided under the Information Technology Act,2000 (IT Act). The exchanges were directed tomake the necessary amendments to the bye-laws,rules and regulations for the implementation ofthe same.

It has been brought to the notice of SEBI that theformat of the electronic contract note prescribedby the exchanges were not in conformity with theformat of the physical contract note particularlywith respect to the pre-printed terms and condi-tions. Hence members issuing electronic contractnotes were also issuing physical contract noteswhich amounted to duplication and unnecessaryreconciliation between the physical and electroniccontract notes.

In order to streamline the issuance of electroniccontract notes as a legal document like the physi-cal contract note, the exchanges are advised toimplement the following:

1. The exchanges would prescribe a standardformat for the electronic contract note in itsbye-laws, rules and regulations.

2. The exchange bye-laws, rules and regulationsfor issuance of electronic contract note shallbe amended to include all the standard pre-printed terms and conditions in the physicalcontract note. The electronic contract notewould mention the relevant bye-laws/rules/regulations of the exchange subject to whichthe said contract note is being issued.

3. The exchange shall also modify/amend otherrelevant bye-laws, rules and regulations with

respect to signing of theelectronic contract notewith a digital signature soas to make the modifiedformat of the electroniccontract note a valid legaldocument like the physi-cal contract note.

4. The mechanism of record keeping of elec-tronic contract notes in a soft non-tamperableform shall be prescribed by the exchange incompliance with the provisions of the IT Act,2000.

Hence the exchanges are advised to :

1. Make necessary amendments to the relevantbye-laws, rules and regulations of the ex-change for the implementation of the abovedecision immediately.

2. Bring the provisions of this circular to thenotice of members of the Exchange and alsodisseminate the same on your website, if any.

3. Communicate to SEBI, the status of the imple-mentation of the provisions of this circular insection II, item No. 13 of the Monthly Develop-ment Report for the month of February 2004.

This circular is being issued in exercise of powersconferred under section 11(1) of the Securitiesand Exchange Board of India Act, 1992, read withsection 10 of the Securities Contracts (Regulation)Act, 1956 to protect the interests of investors insecurities and to promote the development of, andto regulate the securities market.

Ref : DNPD/Cir-9/04, dated February 3, 2004

��,��!��-�� SEBI Circular No. MFD/CIR No. 10/310/01 datedSeptember 25, 2001, had inter alia mentioned

��

��!��!��!�,��!�.��


43


that, the existing and new employees of mutualfunds particularly those involved in sales andmarketing, shall be encouraged to pass the certi-fication process by December 2002.

Also with reference to SEBI Circular No. MFD/CIR/20/23230/2002, dated November 28, 2002and specifically to the paragraph under the head-ing “Exemption for Senior Citizens”, it has nowbeen decided to modify the criteria for exemptionof the persons who were engaged in distribution ofunits of mutual funds as on 30/9/2003 as under :

1. All agents/distributors who were above theage of 50 and had experience of at least 5years as on 30/9/03, would not be required topass the certification test.

2. Moreover, as a one-time measure, the per-sons who have already been exempted fromthe certification test as per the earlier criteria(i.e., above 60 years of age and having experi-ence of at least 2 years) shall continue to beexempted from the certification requirement.

However, all exempted persons (as per 1 and 2above) shall attend a refresher course on mutualfunds which would be offered by AMFI, by Sep-tember 30, 2004 and a certificate to that effectendorsed by a mutual fund should be submitted toAMFI. Out of the persons engaged by the AMCs forselling and distribution of units as on September30, 2003, the AMCs shall inform all such personswho would qualify for exemption under the afore-said criteria.

Ref : SEBI/IMD/CIR No. 254/04, dated February 4,2004

��%��+��,��%��+,�&SEBI circular MF/CIR/07/404/2000 dated July31, 2000 prescribes the format for Monthly Cumu-lative Report.

The format of the Monthly Cumulative Reportafter revision incorporate the disclosure of aver-age asset under management, data on total num-ber of investors in the schemes and the data onFund of Funds scheme. The monthly cumulative

report (MCR) shall be submitted to SEBI in therevised format, commencing with the report forthe month of March’ 04.

The above clarifications are being issued in accor-dance with the Regulation 77 of the SEBI (MutualFunds) Regulations, 1996.

Ref : SEBI/IMD/CIR No.3/2564/2004, dated Feb-ruary 5, 2004

�/��!��!��%�� !��!��This circular is being issued in exercise of powersconferred by section 11(1) of the Securities andExchange Board of India Act, 1992, read withsection 10 of the Securities Contracts(regulation)Act, 1956, to protect the interests of investors insecurities and to promote the development of, andto regulate the securities market.

Clause 4(V)(A)(b) of SEBI Circular No. IES/DC/CIR-4/99 dated July 28, 1999, stipulates that:

“Not more than 5% of the trade guarantee fund or1% of the total liquid assets deposited with theclearing house whichever is lower shall be exposedto any single bank which is not rated P1 (or P1+) orequivalent by a RBI recognised credit rating agencyand not more than 50% of the trade guarantee fundor 10% of the total liquid assets deposited with theclearing house whichever is lower shall be exposedto all such banks put together.”

It has now been decided to accept bank guaran-tees of banks having credit rating from reputedforeign credit rating agencies also, towards theliquid assets of a member. Hence, Clause 4(V)(A)(b)of the said circular is being modified to read asfollows:

“Not more than 5% of the trade guarantee fund or1% of the total liquid assets deposited with theclearing house, whichever is lower, shall be ex-posed to any single bank which is not rated P1 (orP1+) or equivalent, by a RBI recognised creditrating agency or by a reputed foreign credit ratingagency, and not more than 50% of the trade guar-

CIRCULARS



44

antee fund or 10% of the total liquid assets depos-ited with the clearing house, whichever is lower,shall be exposed to all such banks put together.”

Ref : SEBI/DNPD/DC/Cir-19/2004/02/06, datedFebruary 6, 2004

/��!�� +��0��1��%��%�#��With reference to SEBI Circular No. MFD/CIR/011/061/2000 dated February 1, 2000 whereguidelines were issued for mutual funds to partici-pate in derivative trading for the purpose of hedg-ing and portfolio balancing and Circular No. MFD/CIR/21/25467/2002 dated December 31, 2002where certain types of transactions were explainedwith illustrative examples which may be consid-ered as hedging and portfolio balancing. Associa-tion of Mutual Funds in India (AMFI) has made arepresentation for some more clarifications forhedging and portfolio balancing.

Thus, Clarifications are being issued in accor-dance with the provisions of Regulation 77 of theSEBI (Mutual Funds) Regulations, 1996. The guide-lines for participation by Mutual Fund in deriva-tives trading have been issued on

1. Derivatives Positions and Limits.

2. Positions Involving Multiple Derivatives.

3. Disclosure and Accounting Norms.

Ref : SEBI/IMD/CIR No. 4/2627/2004, dated Feb-ruary 6, 2004

/��#��2!��2��!��SEBI had introduced compulsory dematerializedtrading in select shares for all investors with effectfrom January, 1999. During this phase, the compa-nies/transfer agents were under tremendous pres-sure on account of the large number of physicalshares being received by them for transfer and/ordemat. Moreover, transfer and demat were twoseparate processes and the investors were requiredto submit the transferred shares to the share trans-fer agent, through their DPs, for dematerialization.

This entire process involved anywhere from 1-3months and the investors could not sell the sharesduring this period.

Accordingly, the transfer-cum-demat scheme wasintroduced by the depositories to counter the prob-lems faced by the investors in the transition phaseof moving from physical to demat trading mode.However, as on date, it is felt that the facility oftransfer-cum-demat is no longer relevant as largenumber of stocks have already been dematerial-ized and almost 100% trading takes place in dematand can be withdrawn without causing any undueinconvenience and/or delays to the investors. Ithas accordingly been decided to withdraw thetransfer-cum-demat scheme.

The depositories are accordingly advised to ;

1. Make necessary amendments to the relevantbye-laws, rules and regulations for the imple-mentation of the above decision immediately.

2. Bring the provisions of this circular to thenotice of the DPs of the Depository and also todisseminate the same on the website.

3. Communicate to SEBI the status of the imple-mentation.

Ref : SEBI/MRD/Cir - 10/2004, dated February 10,2004

/�� +��0��&��'�3445This circular enclosed the SEBI (Mutual Funds)(Amendment) Regulations, 2004, published in theofficial gazette on January 15, 2004. The amend-ments made in the Securities and Exchange Boardof India (Mutual Funds) Regulation, 1996, are asfollows :

i. in fourth schedule, in the existing instruction2, the following shall be inserted, at the end,namely:-

“Nomination can also be in favour of theCentral Government, State Government, alocal authority, any person designated by vir-tue of his office or a religious or charitabletrust.”



45


ii. In the existing instruction 3 the following shallbe inserted after the word ‘trust’ and beforethe word ‘society’,-

“other than a religious or charitable trust”

Ref : SEBI/IMD/CIR No. 5/265/2004, dated Febru-ary 16, 2004

/��!��1��%��%�� 0��%��0��&With reference to Circular No. IMD/CUST/02/2004, dated January 26, 2004 regarding the cap-tioned subject it is clarified that the followingwould be deemed to be regulated entities for thepurpose of Regulation 15 A of the Regulations

1. Any entity incorporated in a jurisdiction thatrequires filing of constitutional and/or otherdocuments with a registrar of companies orcomparable regulatory agency or body underthe applicable companies legislation in thatjurisdiction;

2. Any entity that is regulated, authorised orsupervised by a central bank, such as theBank of England provided that the entitymust not only be authorised but also be regu-lated by the aforesaid regulatory body;

3. Any entity that is regulated, authorised orsupervised by a securities or futures commis-sion, or territory such as the Financial Ser-vices Authority (UK).

4. Any entity that is a member of securities orfutures exchanges such as the New YorkStock Exchange (USA) or other similar self-regulatory securities or futures authority orcommission within any country, state or ter-ritory provided that the aforesaid mentionedorganizations which are in the nature of selfregulatory organizations are ultimately ac-countable to the respective securities/finan-cial market regulators.

5. Any individual or entity (such as fund, trust,collective investment scheme, investment

company or limited partnership) whose in-vestment advisory function is managed by anentity satisfying the criteria of (a), (b), (c) or (d)above.

Ref : Circular No. IMD/CUST/13/2004, dated Feb-ruary 19, 2004

�6��+��!��!��7��8!��%��%�!��!�This circular is being issued in exercise of powersconferred by section 11(1) of the Securities andExchange Board of India Act, 1992, read withsection 10 of the Securities Contracts(regulation)Act, 1956, to protect the interests of investors insecurities and to promote the development of, andto regulate the securities market.

This is in reference to SEBI stipulation on mini-mum contract size of derivative contracts speci-fied in various circulars issued to SEBI approvedDerivative Exchange/Segment and their ClearingHouse/Corporation (hereinafter collectively re-ferred to as Exchange).

However, it has been noticed that in the recentpast, with the increase in prices of few underlyingstock, the contract size/value of most derivativecontracts have far exceeded the stipulated valueof Rs. 2 Lakhs. While due to a fall in the price ofsome underlying stock; the contract size/valuehas fallen below Rs. 2 Lakhs. It has, therefore, beendecided that the lot size/multiplier shall be re-duced for contracts with value exceeding Rs. 2Lakhs. It has also been decided that the lot size/multiplier shall be increased for contracts withvalue less than Rs. 2 Lakhs.

To facilitate the aforesaid measures, the stipula-tion that the lot size/multiplier should be in themultiple of 100 stands revoked.

Before implementing the aforesaid measures theExchange shall give a notice of at least two weeksto the market. Further, for the purpose of revisingthe contract size, the contract size/value shall bedetermined on the basis of the closing prices of theunderlying on the day prior to the beginning of the

CIRCULARS



46

notice period. However, both NSE and BSE shallendeavour to specify the same lot size/multiplieron common underlying.

Ref : SEBI/DNPD/Cir-20/2004/02/23, dated Feb-ruary 23, 2004

6��!��!��!�,��!�.��2�1� ��+��$��This is in continuation of SEBI Circular No.DNPD/Cir-9/04 dated February 3, 2004 specifying themodel format on the captioned subject for theequity market. The model has been specified inthis circular and based on it, the exchanges areadvised to prescribe a standard format for issu-ance of the electronic contract note in its bye-laws,rules and regulations. The other requirements asmentioned in the same circular dated 03/02/04are applicable for debt market as well and accord-ingly, required to be complied with.

The Stock Exchanges are directed to;

1. Make necessary amendments to the relevantbye-laws, rules and regulations for the imple-mentation of the above decision immediately.

2. Bring the provisions of this circular to thenotice of the member brokers/clearing mem-bers of the Exchange and also to disseminatethe same on the website.

3. Communicate to SEBI, the status of the imple-mentation of the provisions of this circular insection II, item No. 13 of the Monthly Develop-ment Report for the month of March 2004.

Ref : SEBI/MRD/SE/Cir-11/2004, dated February25, 2004

6��!��!��!��!��BSE/NSE have been jointly deciding on the secu-rity specific surveillance measures including trans-ferring of scrips from rolling settlement to tradefor trade segment and vice versa, imposition ofmargins, suspension of trading, etc. It is observedthat such security specific actions are not imple-mented uniformly across the stock exchanges incases where such securities are also listed andtraded on those stock exchanges which are essen-tial for the safety and integrity of the market. It has,therefore, been decided that all stock exchangesshall implement the security specific decisionstaken by BSE/NSE such as transferring of scripsfrom rolling settlement to trade for trade segmentand vice versa.

In the event of any stock exchange not able toimplement the above decisions, trading in suchscrip in the normal rolling settlement shall not beavailable.

The Stock Exchanges (other than BSE and NSE)are advised to communicate to SEBI, the status ofthe implementation of the provisions of this circu-lar in section II, item No. 13 of the Monthly Devel-opment Report for the month of March 2004.

Ref : SEBI/MRD/SE/Cir- 12/2004, dated February26, 2004

For details please see www.sebi.gov.in



47


��

.�#�0�,�#��.

�� 2��&��'�3445

THE GAZETTE OF INDIAEXTRAORDINARY

PART - III - SECTION 4PUBLISHED BY AUTHORITY

SECURITIES AND EXCHANGE BOARD OF INDIANOTIFICATION

Mumbai, the 19th day of February, 2004

SECURITIES AND EXCHANGE BOARD OF INDIA(SELF REGULATORY ORGANIZATIONS)

REGULATIONS, 2004

F. No. SEBI/LAD/DOP/3348/2004. In exercise ofthe powers conferred by section 30 read withclause (d) of sub-section (2) of section 11 of theSecurities and Exchange Board of India Act, 1992(15 of 1992), the Board hereby makes the followingRegulations, namely:—

CHAPTER - I

PRELIMINARY

Short title and commencement

1. (1) These Regulations may be called the Securi-ties and Exchange Board of India (Self RegulatoryOrganizations) Regulations, 2004.

(2) These Regulations shall come into force onsuch date as may be specified by the Board:

Provided that different dates may be specified fordifferent provisions of these regulations and anyreference in any such provision to the commence-ment of these regulations shall be construed as areference to the commencement of that provision.

Definitions

2. (1) In these regulations, unless the context oth-erwise requires,—

(a) “Act” means the Securities and ExchangeBoard of India Act, 1992 (15 of 1992);

(b) “Board” means the Secu-rities and ExchangeBoard of India establishedunder section 3 of the Act;

(c) “agent” means any personwho is associated with se-curities market and whoconducts the business ofdistribution of securities products;

(d) “certificate” means a certificate of recogni-tion granted to a Self Regulatory Organiza-tion by the Board under sub-regulation (1) ofregulation 5 and includes a certificate re-newed under regulation 9;

(e) “company” means a company which has beengranted license under section 25 of the Com-panies Act, 1956 (1 of 1956);

(f) “economic offence” means an offence to whichthe Economic Offences (Inapplicability ofLimitation) Act, 1974 (12 of 1974), is appli-cable for the time being and includes an of-fence under the Securities and ExchangeBoard of India Act, 1992, Securities Contracts(Regulation) Act, 1956 and Depositories Act,1996;

(g) “governing norms” mean the governing normsof a Self Regulatory Organization made inaccordance with sub-regulation (1) of regula-tion 15;

(h) “intermediary” means any person who is reg-istered with the Board under section 12 of theAct;

(i) “member” means an intermediary who hasbeen admitted as a member of a Self Regula-tory Organization and includes an agent whohas been so admitted;

(j) “office bearer” in relation to a Self RegulatoryOrganization means its Chairman, ManagingDirector, any whole time director or Chief



48

Executive Officer, by whatever name called,and includes any person named as such bythe Self Regulatory Organization in its appli-cation for grant or renewal of recognitionmade under these regulations;

(k) “Self Regulatory Organization” means an or-ganization of intermediaries which is repre-senting a particular segment of the securitiesmarket and which is duly recognised by theBoard under these regulations, but excludesa stock exchange.

(2) Words and expressions used and not defined inthe regulations, but defined in the Act, shall havethe meanings respectively assigned to them in theAct.

CHAPTER II

RECOGNITION OF SELF REGULATORYORGANIZATION

Recognition of Self Regulatory Organization

3. (1) Any group or association of intermediaries,which is desirous of being recognized as a SelfRegulatory Organization, may form a companyregistered under section 25 of the Companies Act,1956 and such company may make an applicationto the Board for grant of certificate of recognitionas a Self Regulatory Organization.

(2) Every application made by such company un-der sub-regulation (1) shall contain such particu-lars as may be specified and shall be accompaniedby a copy of the governing norms of Self Regula-tory Organization and also a copy of the memoran-dum and articles of association relating in generalto the constitution of the Self Regulatory Organi-zation and in particular, to—

(a) Board of Directors of Self Regulatory Organi-zation, its constitution and powers of man-agement and the manner in which its busi-ness would be transacted;

(b) the powers and duties of the office bearers ofSelf Regulatory Organization;

(c) the admission into the Self Regulatory Orga-nization of members, agents, their qualifica-tions for membership, and the exclusion, sus-

pension, expulsion and readmission of mem-bers therefrom or thereinto;

(3) Every application under sub-regulation (1) shallbe signed on behalf of the applicant under author-ity of its Board of Directors by its Chairman,Managing Director, Chief Executive Officer orwhole time director.

(4) Every application under sub-regulation (1) shallbe made to the Board in Form A of the firstschedule and shall be accompanied by a non-refundable application fee, as specified in Part A ofthe second schedule, to be paid in the mannerspecified in Part B thereof.

Eligibility criteria

4. The Board shall not consider an application forgrant of a certificate under regulation 3 unless theapplicant satisfies the following conditions,namely:—(a) the applicant is a company which has been

granted license under section 25 of Compa-nies Act, 1956;

(b) the applicant has, in its memorandum of asso-ciation, specified admission of members anddischarging the functions of Self RegulatoryOrganization as one of its main objects;

(c) the applicant has a minimum networth of onecrore rupees;

(d) the applicant has adequate infrastructure, toenable it to discharge its functions as a SelfRegulatory Organization in accordance withthe provisions of the Act and these regula-tions;

(e) the applicant referred to in regulation 3 andits directors have the professional compe-tence, financial soundness and general repu-tation of fairness and integrity to the satisfac-tion of the Board;

(f) neither the applicant, nor any director of theapplicant is involved in any legal proceedingconnected with the securities market, whichmay have an adverse impact on the interestsof the investors;

(g) neither the applicant, nor any director has atany time in the past been convicted of any



49


offence involving moral turpitude or any eco-nomic offence;

(h) the applicant has, in its employment, personshaving adequate professional and other rel-evant experience to the satisfaction of theBoard;

(i) the applicant, in all other respects, is a fit andproper person for the grant of a certificate;

(j) grant of certificate to the applicant is in theinterest of investors and the securities mar-ket.

Grant of recognition as a Self Regulatory Organi-zation

5. (1) If the Board is satisfied, after making suchinquiry as may be necessary in this behalf andafter obtaining such further information, if any, asit may require,—

(a) that the articles and governing norms of theapplicant applying for recognition are in con-formity with such conditions as may be speci-fied by the Board;

(b) that the applicant is willing to comply withany other conditions which the Board mayimpose for the purpose of carrying out theobjects of these Regulations; and,

(c) that it would be in the interest of the trade andalso in the public interest to grant recognitionto the applicant as a Self Regulatory Organi-zation;

the Board may grant certificate of recognition tothe applicant as a Self Regulatory Organization inForm B1 of the First Schedule subject to suchterms and conditions as the Board may deem fitand appropriate.

(2) The conditions which the Board may specifyunder sub-regulation (1) for the grant of recogni-tion to the applicant as a Self Regulatory Organi-zation may include, among other matters, condi-tions relating to,—

(i) the qualification for membership of the SelfRegulatory Organization;

(ii) the representation of the Board in the Boardof Directors of the Self Regulatory Organiza-

tion by such number of directors not exceed-ing four as the Board may nominate in thisbehalf; and

(iii) the maintenance of accounts of membersand their audit by chartered accountantswhenever such audit is required by the Board.

(3) No articles of Self Regulatory Organizationrelating to any of the matters specified in clauses(a), (b) and (c) of sub-regulation (2) of Regulation3 shall be amended except with the prior writtenapproval of the Board.

Application to conform to the requirements

6. Any application for a certificate, which is notcomplete in all respects or does not conform to therequirements of these regulations and particu-larly regulations 3, 4 and 5 or instructions specifiedin Form A shall be rejected by the Board.

Provided that, before rejecting any such applica-tion, the Board shall give an opportunity to theapplicant to remove such objections as may beindicated by the Board, within 30 days of the dateof receipt of relevant communication, from theBoard.

Provided further that the Board may, on sufficientcause being shown, extend the time for removal ofobjections by such further time, not exceeding 30days as the Board may consider fit, to enable theapplicant to remove such objections.

Furnishing of information, clarification and per-sonal representation

7. (1) The Board may require the applicant tofurnish such further information or clarificationas it may consider necessary for the purpose ofprocessing of the application.

(2) The Board, if it so desires, may require theapplicant to appear before it through an autho-rized representative for personal representation inconnection with the grant of a certificate of recog-nition.

Conditions of certificate and validity period

8. (1) The certificate granted under regulation 5shall be, subject to the following conditions,namely:—

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(a) the applicant shall comply with the provisionsof the Act, applicable regulations and guide-lines, directions or circulars issued by theBoard from time to time;

(b) any information or particulars furnished tothe Board by the applicant shall not be false ormisleading in any material respect;

(c) where any material information or particu-lars furnished to the Board by the applicant,in or in connection with the application forrecognition, has undergone change subse-quent to its furnishing, the applicant shallforthwith inform the fact to the Board inwriting;

(2) The certificate of recognition shall be valid fora period of five years.

Renewal of certificate

9. (1) Any Self Regulatory Organization desirousof obtaining renewal of the recognition granted toit, shall make to the Board an application for therenewal of the certificate of recognition in Form Aof the First Schedule.

(2) Such application shall be made not less thanthree months before expiry of the period of valid-ity of the certificate, specified in sub-regulation (2)of regulation 8.

(3) The application for renewal made under sub-regulation (1),—

(a) shall be accompanied by a renewal fee asspecified in the second schedule; and,

(b) as far as may be, shall be dealt with in thesame manner as if it were an application forthe grant of a fresh certificate under regula-tion 3.

(4) If the Board is satisfied that the certificate ofrecognition already granted to the Self RegulatoryOrganization under sub-regulation (1) of regula-tion 5 or the certificate previously renewed underthis regulation deserves to be renewed, the Boardmay renew such certificate in Form B2 of the FirstSchedule subject to such terms and conditions asit may deem fit and appropriate.

Procedure where certificate is not granted

10. (1) If, after considering an application madeunder regulation 3 or regulation 9, as the case maybe, the Board is of the opinion that a certificateshould not be granted or renewed, it may, aftergiving the applicant a reasonable opportunity ofbeing heard, reject the application within a periodof thirty days of receipt of such application com-plete in all respects or within thirty days of receiptof further information or clarification sought un-der regulation 7.

(2) If any application is rejected under sub-regula-tion (1), the fact shall be communicated to theapplicant forthwith, stating the grounds for suchrejection.

Effect of refusal to grant certificate

11. (1) An applicant referred to in sub-regulation(1) of regulation 3 whose application for the grantof a certificate has been rejected under sub-regu-lation (1) of regulation 10 shall not undertake anyactivity as Self Regulatory Organization.

(2) A Self Regulatory Organization referred to inregulation 9 whose application for the renewal ofcertificate has been rejected by the Board shall onand from the date of the receipt of the communi-cation from the Board under sub regulation (2) ofregulation 10 cease to carry on any activity as SelfRegulatory Organization.

(3) If the Board is satisfied that it is in the interestsof investors to do so, it may permit the Self Regu-latory Organization referred to under sub-regula-tion (2) to complete the functions or obligationsalready initiated or undertaken by it during thependency of the application or during the period ofvalidity of the certificate.

(4) The Board may in order to protect the interestsof investors, issue directions with regard to thetransfer of records, documents or reports relatingto the functions of the Self Regulatory Organiza-tion, whose application for the grant or renewal ofa certificate has been rejected.

(5) The Board may, in order to protect the interestsof investors, appoint any person to take charge of



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the records, documents or reports relating to theorganization referred to in sub-regulation (4) andfor this purpose also determine the terms andconditions of such appointment.

CHAPTER III

COMPOSITION AND FUNCTIONS OF SELFREGULATORY ORGANIZATIONS

Composition of Board of Directors

12. (1) The Articles of Association of a Self Regu-latory Organization shall provide for the follow-ing:—

(a) There shall be a Board of Directors of the SelfRegulatory Organization and majority of di-rectors shall be independent directors.

(b) The independent directors shall not be re-quired to hold any qualification shares.

(c) The Board of Directors shall consist of ninedirectors out of which five directors shall benominated by the Board and the remainingfour shall be elected by the members of theSelf Regulatory Organization.

(d) The General Superintendence, direction andmanagement of the affairs of the Self Regu-latory Organization shall vest in its Board ofDirectors, which may exercise all powers anddo all acts and things which may be exercisedor done by the Self Regulatory Organization.

(e) There shall be a Chairman, who shall be anindependent professional, appointed by Boardof Directors, with the prior approval of theBoard.

(f) The Chairman shall be responsible for day-to-day administration of Self Regulatory Orga-nization and implementing the decisions ofBoard of Directors.

(g) The Board of Directors may establish com-mittees including disciplinary committee,screening committee, arbitration committeeor remuneration committee in order to carryout the purposes of these regulations.

Provided that the committees constitutedunder this regulation may consist wholly of

other persons or partly of directors and partlyof other persons.

Provided further that the majority of mem-bers of each such committee shall be inde-pendent.

(h) The office bearers of Board of Directors shallrelinquish their office, when the Board passesan order under clause (c) of sub-section (4) ofsection 11 of the Act.

(i) The Board of Directors of the Self RegulatoryOrganization shall be reconstituted as andwhen required by the Board.

Membership of Self Regulatory Organization

13. (1) After commencement of these regulations,any application for registration or renewal of reg-istration as an intermediary with the Board underthe respective regulations applicable to such inter-mediaries, shall in case of any applicant who is amember of a Self Regulatory Organization or whoought to be a member of a Self Regulatory Orga-nization, be made only through the Self Regula-tory Organization of which he is a member, in thespecified manner.

(2) The application under sub-regulation (1) shallbe forwarded by the Self Regulatory Organizationto the Board along with its recommendation forgrant or refusal of certificate of registration notlater than 30 days from the date of its receipt.

(3) The Self Regulatory Organization shall alsogive the reasons for its recommendation either forgranting certificate of recognition or for refusal ofcertificate of registration by the Board.

Functions and Obligations of Self RegulatoryOrganization

14. (1) A Self Regulatory Organization shall alwaysabide by the directions of the Board.

(2) The Self Regulatory Organization shall be re-sponsible for investor protection and education ofinvestors or its members and shall ensure obser-vance of Securities Laws by its members.

(3) The Self Regulatory Organization shall specifystandard of conduct for its members and also shall

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be responsible for the implementation of the sameby its members.

(4) The Self Regulatory Organization shall con-duct inspection and audit of its members, on regu-lar basis, through independent auditors.

(5) The Self Regulatory Organization shall submitits annual report to the Board.

(6) The Self Regulatory Organization shall treat allits members and the applications for membershipin a fair and transparent manner.

(7) The Self Regulatory Organization may collectadmission and membership fees from its mem-bers for carrying out the purposes of these regula-tions.

(8) The Self Regulatory Organization shall promptlyinform the Board of violations of the provisions ofthe Act, the rules, the regulations, the directions,the circulars or the guidelines by any of its mem-bers.

(9) The Self Regulatory Organization shall con-duct screening and certification tests for its mem-bers, agents and such other persons as it maydetermine.

(10) Self Regulatory Organization shall conducttraining programmes for its members or agentsand also conduct awareness programmes for se-curities market investors.

(11) The Self Regulatory Organization shall makeendeavours for introduction of best business prac-tices amongst its members.

(12) The Self Regulatory Organization shall act inutmost good faith and shall avoid conflict of inter-est in the conduct of its functions.

(13) The Self Regulatory Organization shall com-ply with the norms of corporate governance asapplicable to listed companies.

(14) The Self Regulatory Organization may dis-charge such other functions and obligations asmay be specified by the Board, from time to time.

Governing norms of Self Regulatory Organization

15. (1) A Self Regulatory Organization may, sub-ject to the previous approval of the Board, make

governing norms and articles consistent with theprovisions of the Act and these regulations.

(2) In particular, and without prejudice to thegenerality of the foregoing power, the governingnorms or articles may provide for:-

(i) eligibility criteria for admission and removalof members from Self Regulatory Organiza-tion;

(ii) manner and the periodicity of furnishing in-formation to the Board and to its members;

(iii) arbitration mechanism for resolving disputesbetween members and/or between membersand their constituents;

(iv) procedure for proceeding against the mem-ber committing breach of the governing normsor articles including provisions for suspen-sion or expulsion of members from the SelfRegulatory Organization;

(v) internal control standards including proce-dure for inspection, auditing, reviewing, moni-toring and surveillance of its members by SelfRegulatory Organization;

(vi) code of conduct specifying standards for itsmembers in the conduct of business;

(vii) procedure for conduct of election of the of-fice bearers and members of the committees;

(viii) obligation of members to supply such infor-mation or explanation and to produce suchdocuments relating to the business as Boardof Directors may require;

(ix) manner of disciplinary action against its mem-bers by Self Regulatory Organization;

(x) contents and format of the annual report;

(xi) procedure for conduct of the meetings, quo-rum etc of Board of Directors;

(xii) manner of maintaining accounts or recordsof the Self Regulatory Organization; and

(xiii) reporting requirements to the Board onmonthly basis about various aspects of itsfunctioning including policy initiatives,progress in certification, number of membersadmitted and disciplinary action taken againstmembers, if any.



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(3) The governing norms or articles shall alsoprovide that the contravention of any of the gov-erning norms shall render the member of SelfRegulatory Organization concerned liable to oneor more of the following punishments, namely:—

(i) forfeiture of shares;(ii) expulsion from membership;

(iii) suspension from membership for a specifiedperiod;

(iv) any other penalty of a like nature not involv-ing the payment of money.

(4) Where the Board considers it expedient so todo, it may, by order in writing, direct a Self Regu-latory Organization to make any governing normsor to amend or revoke any of them within suchperiod as it may specify in this behalf.(5) If a Self Regulatory Organization fails or ne-glects to comply with such order within the speci-fied period, the Board may make, amend or revokethe governing norms either in the form specified inthe order or with such modifications as the Boardmay think fit.

CHAPTER IV

INSPECTION AND AUDIT

Board’s right to inspect

16. (1) Where it appears to the Board so to do, itmay appoint one or more persons as inspectingauthority to undertake inspection of the books ofaccount, other records and documents of the SelfRegulatory Organization for any of the purposesspecified in sub-regulation (2).(2) The purposes referred to in sub-regulation (1)shall be as follows, namely:—(a) to ensure that the provisions of the Act, the

regulations, the directions and the circularsissued by the Board are being complied with;

(b) to inquire into the complaints received frommembers, investors, or any other person onany matter having a bearing on the activitiesof the Self Regulatory Organization; or

(c) to inquire suo motu, in the interest of securi-ties business or investors’ interest, into theaffairs of the Self Regulatory Organization.

Procedure for inspection

17. (1) Before undertaking any inspection underregulation 16, the Board shall give a reasonablenotice to the Self Regulatory Organization for thatpurpose.

(2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that inthe interest of the investors or in public interest, nosuch notice should be given, it may by an order inwriting, direct that the inspection of the affairs ofthe Self Regulatory Organization be taken up with-out such notice.

(3) On being empowered by the Board, the inspect-ing authority shall undertake the inspection andthe Self Regulatory Organization against whoman inspection is being carried out shall be bound todischarge its obligations as provided under regula-tion 18.

Obligations of Self Regulatory Organization oninspection by the Board

18. (1) It shall be the duty of the Chairman, everyDirector, officer and employee of the Self Regula-tory Organization, who is being inspected to pro-duce to the inspecting authority or to any personauthorized by him, such books, accounts and otherdocuments in their custody or control and furnishto the Board the statements and information relat-ing to the activities of Self Regulatory Organiza-tion in securities market within such time as theBoard may require.

(2) The Self Regulatory Organization shall allowthe inspecting authority or any person authorizedby him to have reasonable access to the premisesoccupied by the Self Regulatory Organization orby any other person on its behalf and also extendreasonable facility for examining any books,records, documents and computer data in thepossession of the Self Regulatory Organization orany other person and also provide copies of docu-ments or other materials which, in the opinion ofthe inspecting authority are relevant.

(3) The inspecting authority in the course of in-spection shall be entitled to examine or recordstatements of the Chairman, Director, any mem-

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ber and employee of the Self Regulatory Organi-zation.

(4) It shall be the duty of the Chairman, everyDirector, officer and employee of the Self Regula-tory Organization to give to the inspecting author-ity all assistance in connection with the inspection,which the Self Regulatory Organization may rea-sonably be expected to give.

Submission of report to the Board

19. The inspecting authority shall, as soon as pos-sible, submit an inspection report to the Board.

Appointment of auditor

20. (1) Notwithstanding anything contained above,the Board may appoint a qualified auditor to in-spect the books of account or the affairs of the SelfRegulatory Organization.

Provided that the auditor so appointed shall havethe same powers of the inspecting authority asmentioned in regulation 16 and the obligations ofSelf Regulatory Organization mentioned in regu-lation 18 shall be applicable to an inspection underthis regulation.

(2) The Board shall be entitled to recover theexpenses of such audit or inspection as may beincurred by it, including fees paid to the auditors,from the concerned Self Regulatory Organization.

Power of the Board to call for periodical returns ordirect inquiries to be made

21. (1) Every Self Regulatory Organization shallfurnish to the Board such periodical returns relat-ing to its affairs as may be specified.

(2) Every Self Regulatory Organization and everymember thereof shall maintain and preserve forsuch periods such books of account and otherdocuments as the Board after consultation withBoard of Directors of Self Regulatory Organiza-tion concerned, may specify in the interests of thetrade or in the public interest and such books ofaccount and other documents shall be subject toinspection at all reasonable times by the Board.

(3) Without prejudice to the provisions containedin sub-regulations (1) and (2), if the Board is satis-fied that it is in the interests of the trade or in the

public interest so to do, it may, by order, in writ-ing,—

(a) call upon Board of Directors of a Self Regula-tory Organization or any member thereof tofurnish in writing such information or expla-nation relating to the affairs of the Self Regu-latory Organization or of the member in rela-tion to the Self Regulatory Organization asthe Board may require; or

(b) appoint one or more persons to make aninquiry in the prescribed manner in relationto the affairs of a Self Regulatory Organiza-tion or the affairs of any members of the SelfRegulatory Organization in relation to theSelf Regulatory Organization and submit areport of the result of such inquiry to theBoard within such time as may be specified inthe order or, in the case of inquiry in relationto the affairs of any of the members of a SelfRegulatory Organization direct Board of Di-rectors to make the inquiry and submit itsreport to the Board.

(4) Where an inquiry in relation to the affairs of aSelf Regulatory Organization or the affairs of anyof its members in relation to the Self RegulatoryOrganization has been undertaken under sub-regulation (3),—

(a) the Chairman, every director, manager, sec-retary, or other officer of the Self RegulatoryOrganization.

(b) every member of such Self Regulatory Orga-nization.

(c) if the member of the Self Regulatory Organi-zation is a firm, every partner, manager, sec-retary or other officer of the firm; and

(d) every other person or body of persons whohas had dealings in the course of businesswith any of the persons mentioned in clause(a), (b) or (c) whether directly or indirectly;

shall be bound to produce before the authoritymaking the inquiry all such books of account, andother documents in his custody or power relatingto or having a bearing on the subject-matter ofsuch inquiry and also furnish to the authority such



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statement or information as he may require withinsuch time as may be specified by him.

CHAPTER V

ACTION IN CASE OF DEFAULT

Obligation of Board of Directors to take disciplin-ary action against a member if so directed by theBoard

22. (1) After receiving the report of an enquirymade under regulation 21, the Board may takesuch action as it deems proper and, in particular,may direct Board of Directors of the Self Regula-tory Organization to take such disciplinary actionagainst the delinquent member, including expul-sion, suspension or any other penalty of a likenature not involving the levy of monetary penalty,as may be specified by it and thereupon, notwith-standing anything to the contrary contained in thearticles or governing norms of the Self RegulatoryOrganization concerned, the Board of Directors ofthe Self Regulatory Organization shall give effectto the directions of the Board and shall not in anymanner commute, revoke or modify the actiontaken in pursuance of such directions, without theprior written approval of the Board.

(2) The Board may either on its own motion or onrepresentation of the member concerned, modifyor withdraw any of its directions issued under sub-regulation (1), if it is satisfied that there are suffi-cient grounds for doing so.

Withdrawal of recognition

23. (1) If the Board is of the opinion that therecognition granted to a Self Regulatory Organi-zation under the provisions of these Regulationsshould, in the interest of the trade or in the publicinterest, be withdrawn, it may serve a writtennotice in Form “C” on Board of Directors of the SelfRegulatory Organization calling upon it to showcause as to why the recognition should not bewithdrawn for the reasons stated in the notice.

(2) Where a notice is issued under sub-regulation(1), the Board may, after giving an opportunity toBoard of Directors of the Self Regulatory Organi-zation to be heard in the matter, withdraw, bypassing an order, the recognition granted to the

Self Regulatory Organization and thereupon sub-regulations (3), (4) and (5) of regulation 11 wouldapply as if the application of the Self RegulatoryOrganization for renewal of recognition has beenrejected under regulation 10.

(3) The Board shall promptly communicate suchorder to the concerned Self Regulatory Organiza-tion.

(4) On receipt of the order passed under sub-regulation (2), the Self Regulatory Organizationshall cease to carry on any activity as a Self Regu-latory Organization and shall comply with suchdirections as may be issued by the Board undersub-regulation (2) read with sub-regulation (3), (4)or (5) of regulation 11, as the case may be.

Action in case of violation

24. If any Self Regulatory Organization, any officebearer or member thereof violates any provisionsof the Act or these regulations, it may be liablefor—

(a) action under Chapter VIA of the Act;

(b) action under sub-section (3) of section 12 ofthe Act;

(c) action under sub-section (4) of section 11 andsection 11B of the Act;

(d) action under section 24 of the Act;

(e) such other action permissible under the Actwhich may be deemed appropriate in thefacts and circumstances of the case.

FIRST SCHEDULE

FORMS

FORM A

(See Regulations 3 and 9)

Application for recognition/renewal of a Self Regu-latory Organization under Regulation 3 of Securi-ties and Exchange Board of India (Self RegulatoryOrganizations) Regulations, 2003.

To..........................................................................

Subject : Application for recognition/renewal of aSelf Regulatory Organization under Regulation 3

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of Securities and Exchange Board of India (SelfRegulatory Organizations) Regulations, 2003.

Sir,

1. I, being duly authorized for the purpose,hereby apply on behalf of ............. (name andaddress of the applicant) being a companyeligible to be recognized as a Self RegulatoryOrganization as defined in Regulation 2(i) ofSecurities and Exchange Board of India (SelfRegulatory Organizations) Regulations, 2003for recognition/renewal for the purpose ofthe said Regulations.

2. Four copies of the memorandum and articlesof association of the Self Regulatory Organi-zation and four copies of the governing normsare enclosed, alongwith the applicant’s Boardresolution dated ............... authorizing the un-dersigned to make this application on its be-half.

3. All the necessary information required in theAnnexure to this Form is enclosed. Any addi-tional information will be furnished as andwhen called for by the Securities and Ex-change Board of India.

4. I, on behalf of the Self Regulatory Organiza-tion hereby undertake to comply with therequirements of Regulation 4 of the said Regu-lations and such other conditions and termsas may be contained in the certificate ofrecognition or be specified or imposed subse-quently.

5. Demand Draft No .... dated ........for Rs. ......... isattached.

Yours faithfully

Signature of authorized signatorywith name and designation

(On behalf of ................... <name of the applicant>)

ANNEXURE TO FORM ‘A’

Part I - General

1. Name of the applicant.

2. Address.

3. Date of establishment.

Part II - Membership

1. State the number of members at the time ofapplication. Also specify how many are inac-tive.

2. Do you insist on any minimum qualificationsand experience before enrolling new mem-bers? If so give details.

3. Do you collect any admission/entrance feefrom your member? If so, how much?

Part III - Board of Directors

1. What is the present strength of your Board ofDirectors? Give details of the constitution,powers of management, election and tenureof the office Board of Directors, and the man-ner in which its business is transacted.

2. How many SEBI’s representatives are there?Furnish their names.

3. Do you have any provision for the appoint-ment of disciplinary committee, screeningcommittee etc? If so, furnish the details of themethod of their appointment, terms of office,powers and functions.

4. Give the designations, powers and duties ofoffice-bearers of your organization. Are anyof these office - bearers in the pay of the SelfRegulatory Organization? If so, give details asto the mode of their appointment, tenure ofoffice and remuneration.

Part IV - Miscellaneous

1. Do you have any machinery for arbitration ofdisputes between members and/or betweenmembers and their constituents ? Give de-tails.

2. Are you charging admission fees from yourmembers ? If so, give details.

FORM B1

Securities and Exchange Board of India (SelfRegulatory Organizations) Regulations, 2003

(See Regulation 5)

Certificate of Recognition

1. In exercise of the powers conferred by regu-lation 5 of these regulations, the Board hereby



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grants a certificate of recognition No. ............ toM/s. ........................ to act as a Self RegulatoryOrganization in accordance with these regu-lations and the conditions mentioned in theannexure.

2. Recognition Code for Self Regulatory Orga-nization is .................

3. The certificate shall be valid from .............. to................ and may be renewed as specified inRegulation 9 of Securities and ExchangeBoard of India (Self Regulatory Organiza-tions) Regulations, 2003.

Place : By order

Date : Sd/-

For and on behalf ofSecurities and Exchange Board of India

Note: - Application for renewal of recognition shallbe made so as to reach the Board not less thanthree months before the expiry of the period.

FORM B2

Securities and Exchange Board of India (SelfRegulatory Organizations) Regulations, 2003

(See Regulation 9(4))

Certificate of renewal of Recognition

1. In exercise of the powers conferred by sub-regulation (4) of regulation 9, the Board herebyrenews the certificate of recognition No.................... dated ..................., issued to M/s......................................., to function as a Self Regu-latory Organization, for a further period of................... years from ....................

2. Recognition Code for Self Regulatory Orga-nization is .................

Place : By order

Date : Sd/-

For and on behalf ofSecurities and Exchange Board of India

Note: - Application for further renewal of recogni-tion shall be made so as to reach the Board not lessthan three months before the expiry of the validityperiod of this certificate.

FORM C

(See Regulation 23)Notice to show cause against the

withdrawal of registrationTHE SECURITIES AND EXCHANGE

BOARD OF INDIA

Mumbai, the ............day of ......2003To,..................................................................................................................................................................................(name and address of the Self Regulatory Organization)

You are hereby called upon to show cause on orbefore ...................... at the office of ............................(designation of the officer) why the certificate ofrecognition No. ........ granted to you under Regula-tion 5 of Securities and Exchange Board of India(Self Regulatory Organizations) Regulations, 2003,should not be withdrawn for the reasons givenbelow:..........................................................................................................................

Signature of the OfficerDesignation

SECOND SCHEDULE

PART ‘A’

Securities And Exchange Board of India (SelfRegulatory Organizations) Regulations, 2003

[See Regulations 3(4) and 9(3)]FEES

PART A

AMOUNT TO BE PAID AS FEES

(Rs.)

Application fee 25,000Recognition fee for grant of certificate 5,00,000Renewal fee 3,00,000

PART B

The fees specified above shall be paid by way of ademand draft in favour of ‘Securities and Ex-change Board of India’ payable at Mumbai.

G.N.BAJPAICHAIRMAN

[ADVT. III/IV/69ZB/2003/Exty.]

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Orders Passed by Chairman, Whole Time Members, SEBIA. Orders passed by Shri G.N.Bajpai, Chairman, SEBI

Sl. No. Order Date Name of Entity Type of Entity Violation(s) Punishment/Direction

1. 09/02/2004 Pratha Investment Consultants Company andSmt. Sharmila Gang Proprietor

2. 09/02/04 Ritesh Polyesters Limited Company

3. 26/02/2004 M/s N Khemani & Co Stock Broker

4. 26/02/04 Sanjay Khemani Member of CalcuttaStock Exchange

B. Orders Passed by Shri. T.M.Nagarajan, Whole-Time Member, SEBI


1. 12/02/04 Mukesh Babu Securities Depository ParticipantLimited

Violation of Regulation 4(a), (b) (c) and (d)of SEBI (Prohibition of Fraudulent andUnfair Trade Practices Relating to Securi-ties Market) Regulations, 1995 as priceand volume of the public issue of theRitesh Polyesters were found to be ma-nipulated.

Violation of Regulation 4(a), (b) (c) and (d)of SEBI (Prohibition of Fraudulent andUnfair Trade Practices Relating to Securi-ties Market) Regulations, 1995.

Entered in to off the floor transactionswhich interferes in the fair and smoothworking of the market.

Declaration of all the transactions executedby the broker as self or proprietary tradesand concealment of the existence of cli-ents like Ketan Parekh entities behind thistransactions.

Entered in to off the floor transactionswhich interferes in the fair and smoothworking of the market.

Violation of SEBI Regulations and circularson segregation of client money, marginwhich are for protection of investors andalso for maintaining safety and integrity ofthe market.

Taken into custody by CBI for interroga-tion in connection with cheating of co-operative bank. The case is still pending.

To disassociate itself in every re-spect from capital market relatedactivity and not to access capitalmarket for a period of 10 years.

To disassociate itself as well as itspromoter in every respect from thecapital market related activity andnot to access capital market for aperiod of 10 years.

Suspension of the Certificate of theRegistration of the stock brokerfor a period of 14 months. Debarredfrom associating itself from the se-curities market and dealing in se-curities market till the completionof investigation and enquiry.

Suspension of the registration ofthe stock broker for a period of twoyears. Debarred from associatinghimself with securities market ac-tivities and dealing in securitiesmarket till the completion of inves-tigation and enquiry.

Rejection of application for renewalof Certificate of Registration.


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C. Orders Passed by Shri. A.K.Batra, Whole Time Member, SEBI


1. 04/02/04 M/s Pioneer Equity Trade BrokerLimited

2. 09/02/04 M/s MKM Share Broking Stock BrokerServices Private Limited

3. 09/02/04 M/s Deepak Jhunjhunwala Stock Broker

4. 09/02/04 M/s Pradeep Kayan & Co. Stock Broker

5. 11/02/04 (i) Shri Kamlesh J Shroff (i) Promoter of M/sVB Desai.

(ii) Shri Pradeep R Shroff, (ii) Managing Direc-Marine Drive Investment, tor and Invest-Matunga Investment, ment CompaniesMahim Investment, Cu-mulative Investment,Desai Investment andMaxworth

6. 11/02/04 M/s Ace Finance Ltd Sub-Broker

7. 11/02/04 M/s Patel Investments Sub-Broker

Violation of Rule 3 of chapter IV of therules of NSE as well as Rule 4(b) of theSEBI (Stock Broker and Sub-Broker) Rules1992.

Violation of clause A(5) of the Code ofConduct for Stock Brokers and therebyRegulation 7 of the Broker Regulation.

Indulgence in large scale off the floor trans-actions which interfere with fair andsmooth functioning of price discoverymechanism of the exchange.



Manipulation of prices in the shares ofM/s V. B. Desai Financial Services Limitedfor the period of October 4, 1999 to May 31,2000.

Violation of section 12 of SEBI Act, readwith Rule 3 of SEBI(Stock Brokers andSub-Brokers) Rules, 1992, SEBI CircularNo.SMD/Policy/CIR/3 and 11/97 dated31/3/97 and 21/5/97 respectively.

Violation of section 12 of SEBI Act, readwith Rule 3 of SEBI(Stock Brokers andSub-Brokers) Rules, 1992.

Directed to be more diligent in com-plying with the SEBI Act and theRules and Regulations framedthere under in future.

Direction to note that any instancesof violation or non compliance withthe Acts, Rules, Regulations in fu-ture shall invite more stringent ac-tion.

Suspension of the Certificate ofRegistration for a period of sixmonths.



(i) Prohibited from dealing in se-curities for a period of 3 years.

(ii) Prohibited from dealing in se-curities for a period of oneyear.

Prohibited along with its propri-etor Shri Suketu Kapdia from deal-ing in securities for a period of oneyear.

Prohibited along with its propri-etor Shri Mohit Patel from dealingin securities for a period of oneyear.


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8. 11/02/04 M/s Jalaram Enterprises Sub-Broker

9. 11/02/2004 M/s Sai Dhwani Investments Unregistered Sub-Pvt. Ltd. Broker

10. 17/02/04 M/s Deluxe Polymers Ltd. Individual

11. 17/02/04 M/s Akash Fabrics Private IndividualLimited

12 23/02/04 M/s Chandravadan J Dalal Member, StockExchange, Mumbai

13. 26/02/04 Shri Shashikant G Badani Individual

NB : For details please see website at www.sebi.gov.in.

Prohibited along with its propri-etor Shri Sanjay Damani from deal-ing in securities for a period of oneyear.

Prohibited from dealing in securi-ties for a period of one year.

Prohibited from accessing the se-curities market and from dealingin securities for a period of twoyears.

Prohibited from accessing the se-curities market and from dealingin securities for a period of twoyears.

Suspension of Certificate of Regis-tration for a period 2 years.

Restrained from associating withany corporate body in accessingthe securities market and prohib-ited from buying, selling or dealingin securities directly or indirectlyfor period of one year.

Violation of Regulation 4(a) to (d) of SEBI(Prohibition of Fraudulent and UnfairTrade Practices relating to securities mar-kets) Regulations, 1995.

Also violated clause A(2),B(5) and D(5) ofCode of Conduct for sub-brokers pre-scribed under Regulation 15 of theSEBI(Stock Brokers and Sub-Brokers)Regulations, 1992.

Violation of Regulation 4(a) of SEBI (Pro-hibition of Fraudulent and Unfair TradePractices relating to securities markets)Regulations, 1995.

Also violated section 12 of the SEBI Act,1992 read with Rule 3 of SEBI (StockBrokers and Sub-Brokers) Rules, 1992.

Violated Regulation 4(a),(b), (c) of SEBI(Prohibition of Fraudulent and UnfairTrade Practices relating to securities mar-ket) Regulations, 1995.

Violated Regulation 4(a),(b), (c) of SEBI(Prohibition of Fraudulent and UnfairTrade Practices relating to securities mar-ket) Regulations, 1995.

Violated Regulation 4 (b), (c) and (d) ofSEBI (Prohibition of Fraudulent and Un-fair Trade Practices Relating to SecuritiesMarket) Regulations, 1995.

Also violated Regulation 7 read with sec-tion A(3) and (4) of Code of Conduct asspecified in Schedule II of the SEBI (StockBrokers and Sub-Brokers) Regulations,1992.

Manipulation of prices in the scrip ofCyberspace Limited, thus Violated Regu-lations 11 and 13 of SEBI (Prohibition ofFraudulent and Unfair Trade Practicesrelating to securities market) Regulations,2003.

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�� 1. SEC Proposes Mandatory Redemption Fees forMutual Fund Securities

The SEC has voted to propose new Rule 22c-2under the Investment Company Act of 1940.

Redemption FeeAll mutual funds to impose a 2 per cent fee on theredemption proceeds of shares redeemed within 5days of their purchase. The fund itself wouldretain the proceeds from the redemption fees. Therule is designed to require short-term sharehold-ers to reimburse the fund for the direct and indi-rect costs that the fund pays to redeem theseinvestors’ shares. In the past, these costs generallyhave been borne by the fund and its long-termshareholders. Thus, the redemption fee would bea “user fee” to reimburse the fund for the cost ofaccommodating frequent traders.

Smaller InvestorsThe proposed rule includes several provisions de-signed to prevent the fee from affecting mostordinary redemption transactions by smaller in-vestors.

Excepted FundsThe rule would not apply to money market fundsand exchange-traded funds. It also would not ap-ply to mutual funds that encourage active tradingand disclose to investors in the prospectus thatsuch trading will likely impose costs on the fund.

Omnibus AccountsMany funds that impose redemption fees do notimpose them on shareholders who hold their sharesthrough financial intermediaries such as broker-dealers and retirement plans. These intermediar-ies often are reluctant to provide enough share-holder information to the fund to allow it to assess

the redemption fee. The pro-posed rule would require thatfunds obtain the informationthey need to assess the redemp-tion fee, and to oversee the ef-forts of intermediaries to as-sess those fees and remit themto the fund.

Market TimingThe rule would supplement other measures theCommission has recently taken to address short-term trading, including abusive market timingactivity. The costs imposed on long-term investorsin funds by the cumulative effect of many smallershort-term traders may be greater than thoseimposed by a few large traders. If adopted, theproposal would allow funds to recoup some, if notall, of these costs.

The principal solution to abusive market timingtransactions is the accurate calculation of netasset value each day, using current and not staleprices. Accordingly, the Commission made clear ina release last December that the Investment Com-pany Act of 1940 requires funds to calculate theirnet asset value based on the “fair value” of aportfolio security if the market quotes are unavail-able or unreliable. Although fair value pricing canreduce the profits that market timers seek toextract from mutual funds, it is subjective in na-ture. Thus a redemption fee, together with fairvalue pricing, can serve to reduce, if not eliminate,the profits that market timers seek to extract fromthe fund.

Source: SEC, USA

2. SEC Adopts Enhanced Mutual Fund Expenseand Portfolio Disclosure

SEC proposes improved disclosure of Board ap-proval of Investment Advisory Contracts and pro-hibition on the use of Brokerage Commissions tofinance distribution


62 SECURITIES AND EXCHANGE BOARD OF INDIA


The amendments include:� Enhanced Mutual Fund Expense Disclosure

in Shareholder Reports.� Quarterly Disclosure of Fund Portfolio Hold-

ings.� Use of Summary Portfolio Schedule.� Exemption of Money Market Funds from

Portfolio Schedule Delivery Requirements.� Tabular or Graphic Presentation of Portfolio

Holdings in Shareholder Reports� Management’s Discussion of Fund Perfor-

mance.Source: SEC, USA

3. Disclosure Regarding Approval of InvestmentAdvisory Contracts by Directors of InvestmentCompaniesThe Commission proposed amendments to its rulesand forms that would improve the disclosure thatmutual funds and other registered managementinvestment companies provide to their sharehold-ers regarding the reasons for the fund board’sapproval of an investment advisory contract. Theproposals are intended to encourage fund boardsto consider investment advisory contracts morecarefully and to encourage investors to considermore carefully the costs and value of the servicesrendered by the fund’s investment adviser.The proposals would require fund shareholderreports to discuss, in reasonable detail, the mate-rial factors and the conclusions with respect tothese factors that formed the basis for the board ofdirectors’ approval of any investment advisorycontract. The proposals also include several en-hancements to the existing disclosure require-ments in the SAI and proxy statements that wouldparallel the proposed disclosure in fund share-holder reports. These enhancements would re-quire:

� Selection of Adviser and Approval of Advi-sory Fee.

� Certain Specific Factors� Comparison of Fees and Services Provided

by Adviser.Source: SEC, USA

4. Prohibition on the Use of Brokerage Commis-sions to Investment Companies

The SEC proposed an amendment to rule 12b-1under the Investment Company Act of 1940 thatwould prohibit open-end investment companies(mutual funds) from directing commissions fromtheir portfolio brokerage transactions to broker-dealers to compensate them for distributing fundshares.

The proposed rule amendment would:

� prohibit funds from compensating a broker-dealer for promoting or selling fund shares bydirecting brokerage transactions to that bro-ker-dealer;

� prohibit “step-out” and similar arrangementsunder which a fund directs brokerage com-missions to selling brokers that do not ex-ecute fund portfolio securities transactionsas compensation for selling fund shares; and

� require funds that use a selling broker-dealerto execute portfolio securities transactions toadopt, and the fund’s board of directors (in-cluding its independent directors) to approve,policies and procedures reasonably.

Source: SEC, USA

��!�� "��#1. FSA issues Freedom of Information PublicationScheme

The Financial Services Authority has issued itspublication scheme under the Freedom of Infor-mation Act (FOIA). The Scheme, as required by theFOIA, sets out:

� the types of information the FSA will publish(classes of information);

� the way in which the information will bepublished; and

� whether or not we will charge for providingpublished information.

The Scheme will be of particular interest toauthorised firms, approved persons, trade associa-


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tions, consumers and the media. The FSA’s gen-eral approach to implementing the FOI Act is touse this opportunity to enhance the existing ac-countability by disclosing more information. FromJanuary 2005 there is a general right under FOIAto request information not included in the publica-tion scheme. The FSA is preparing for this furtherstage in the implementation of FOIA.

Source: FSA, UK

�� ! � ��!��$��#��

1. SFC Submits Working Group’s Report to theFinancial Affairs Panel

The SFC has submitted a report to the Panel onFinancial Affairs (FA Panel) of the Legislative Coun-cil on the proposals made by the SFC WorkingGroup on Review of the Financial RegulatoryFramework for Licensed Corporations.

The proposals aim to address the risks involvedwith securities margin financing and the poolingand re-pledging of client collateral by securitiesmargin finance providers. Several measures havebeen recommended by the Working Group, whichcomprises many industry practitioners. The Work-ing Group also proposes that brokers comply withnew haircut percentages for brokers’ risk manage-ment and capital calculation but these percent-ages will still be more lenient than those adoptedby banks. These haircut percentages do not stopclients from freely trading any stocks or preventbrokers from lending on any stocks. The haircutwill not cause any stock to cease trading or bedelisted.

Source: SFC, Hong Kong

2. Measures to Enhance Regulation of the Broker-age Industry and Investor Protection

The SFC Working Group on Review of the Finan-cial Regulatory Framework for Licensed Corpora-tions has recommended:

(1) to limit the amount of client collateral thatcan be re-pledged by a broker to secure itsborrowings. In order to address the unre-

stricted pooling and re-pledging of client col-lateral, the Working Group recommends set-ting a limit on the re-lodging of client collat-eral on a per-firm basis, i.e. capping the aggre-gate value of client collateral that can be re-pledged by a firm at a percentage of the firm’stotal margin loans to clients. Although thismeasure would not meet the internationalstandard of prohibiting the re-pledging ofnon-borrowing clients’ collateral, investors’exposure to pooling risk would be reduced.

(2) to increase the haircut percentages under theFinancial Resources Rules(FRR).This mea-sure is designed to encourage SMF providersto adhere to prudent collateral ratios by ei-ther collecting additional collateral or betterquality collateral from clients. Those SMFproviders that lend on aggressive collateralratios would then be required to use their owncapital.

Other supplementary measures: to improve theCode of Conduct disclosure obligations by requir-ing a firm to disclose additional information to itsclients and/or the regulator and to step up inves-tor education on pooling risk.

Transitional Period: The Working Group recom-mends a 12-month transitional period for cur-rently licensed firms to attain full compliance withthe proposed measures. The SFC will work closelywith affected firms during the transitional period.

Source: SFC, Hong Kong

�%�� "��

1. Better investor protection with amended securi-ties laws

Investor protection, a cornerstone of capital mar-ket regulation, was the key driver of the recentamendments to the securities laws, which saw thecoming into effect of the Securities Industry(Amendment) Act 2003 (SIA), the Securities Com-mission (Amendment) Act 2003, the Futures In-dustry (Amendment) Act 2003 and the Securities

INTERNATIONAL




Industry (Central Depositories) (Amendment) Act,2003.

The significant changes introduced allow for bet-ter safeguarding of investor interests and furtherenhancement of corporate governance. Thechanges cover areas ranging from managementand custodianship of client funds to whistle blow-ing to civil and administrative actions available forbreaches of the laws. Additionally, the amend-ments were effected to provide for a more effec-tive regulatory framework, and to this end, thenew provisions have rationalized and clarified thescope of regulation, strengthened the SecuritiesCommission’s (SC) enforcement capabilities andenhanced the provisions relating to clearing andsettlement arrangements on the exchange.

Highlights of the amendments include enhancingclient asset protection, introducing whistle blow-ing provisions, strengthening framework on in-vestment advice, enhancing civil and administra-tive action powers and strengthening settlementarrangements.

Source : SC, Malaysia

2. Asia-Pacific securities regulators commit toenhancing co-operation efforts

The first meeting among the securities regulatorsin the Asia-Pacific region for the year was offici-ated by the Minister of Commerce of New Zealand.Particular emphasis was accorded to the enhance-ment of co-operation and collaboration amongstits members towards regional financial stability,coordinated enforcement activities and continueddevelopment of regional capital markets.

During the meeting, the regulators focused prima-rily on issues relating to investor protection, re-gional bond markets, corporate governance, regu-lation of stock exchanges, and co-operation for thepurpose of enforcement of securities laws, par-ticularly cross-border enforcement issues.

The chairman of APRC had expressed satisfactionat the significant achievement of the regional regu-lators in reinforcing commitment towards greaterco-operation for enforcement actions, in enhanc-ing capacity-building and mutual development ofregional capital markets.

In its continued efforts to enhance bilateral tieswith its foreign regulatory counterparts, the SCsigned a memorandum of understanding (MoU)with the New Zealand Securities Commission, thehost of this year’s meeting. This brings the numberof MoUs signed by the SC with its foreign counter-parts to 20.Source: SC, Malaysia

%� �� 1. ASIC warning: share scams re-emergingThe Australian Securities and Investments Com-mission (ASIC) warned consumers and investorsabout scams and ‘get rich quick’ schemes involv-ing shares, including those sold by unlicensedoffshore fraudsters. The recent recovery of stockmarkets is contributing to the re-emergence ofshare scams and share trading “get rich quick”schemes.

Offshore share scamsOver the past few months, unlicensed offshorestockbrokers have re-emerged in the marketplace.They are cold calling and e-mailing Australianinvestors, offering shares. In the past few months,they have targeted previous victims offering over-priced shares in start-up companies... Some off-shore cold callers target previous cold calling vic-tims, who may hold worthless or low value sharesbought a few years ago. The cold callers offer toswap those low value shares for shares such asMicrosoft, supposedly on behalf of offshore inves-tors who needed a tax loss. Once the investorbecomes interested, the cold callers ask for extramoney, sometimes for ‘fees’ and sometimes for‘options’ to get extra shares, to close the deal. Oncethis extra money is sent to offshore, it can be lostforever. Other cold callers offer overpriced sharesin start-up companies. Here, investors have beenadvised that a young company has developed anexciting new business that will soon be listed oninternational markets. The investors are told theyare being sold the chance to get in early by buyingshares ahead of the wider public.Source: ASIC


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2. ASIC guidelines for interim relief for low valuenon-cash payment facilities

The ASIC has provided some guidance on interimlicensing and disclosure relief it is willing to con-sider for some non-cash payment facilities. Theinterim reliefs, part of the licensing and disclosureprovisions of Parts 7.6 and 7.9 of the CorporationsAct 2001, apply to dealing in or advising by, or onbehalf of, the issuer of low value non-cash pay-ment facilities that are conducted on a small scaleor for a limited purpose and are not part of anotherfinancial product. This will allow the Federal Gov-ernment and ASIC to adequately consider techni-cal aspects of the application of the FSR licensingand disclosure regime, and its application to thevariety of non-cash payment facilities. This willinclude consideration of practical compliance prob-lems and whether any permanent ongoing relief isappropriate. ASIC intends to finalize any positionwith industry as early as possible before the end ofthe interim relief period. ASIC has also publishedguidance on interim relief it is willing to considerfor loyalty (or reward) schemes that constitute orinclude a non-cash payment facility.

Source: ASIC

3. ASIC guidelines for interim relief for loyaltyschemes

The Australian Securities and Investments Com-mission (ASIC) has provided some guidance oninterim licensing and disclosure relief it is willingto consider for loyalty (or reward) schemes thatconstitute or include a non-cash payment facility.Loyalty schemes are operated by, or on behalf of,a person (the ‘issuer’) linked to the goods andservices (for example, credit card services, flightservices and store goods) they offer or provide.The loyalty scheme is designed to encourage theissuer’s customers to use, or spend on, the issuer’sgoods and services. Loyalty schemes may includea rewards redemption facility whereby points or

credits (‘points’) allocated to the customer underthe loyalty scheme can be used to make payment,or cause payments to be made, for goods andservices; obtain a discount on goods and services;obtain points for other loyalty schemes.

Loyalty schemes may have different features.Some schemes may attribute a monetary value tothe customer’s points. Loyalty schemes may alsoallow the customer to ‘top up’ points by contribut-ing cash in exchange for the extra points they needto qualify for a particular point. This will allow theFederal Government and ASIC to adequately con-sider technical aspects of the application of theFSR licensing and disclosure regime to loyaltyschemes that constitute or include a non-cashpayment facility. This will include consideration ofany practical compliance problems and whetherany permanent ongoing relief is appropriate. Theseconditions are designed to address basic consumerprotection issues during the period of relief.

Source: ASIC

4. ASIC acts against poor disclosure of eligiblerollover fund information

The Australian Securities and Investments Com-mission (ASIC) has accepted a voluntary under-taking from the Printing Industry SuperannuationFund (Print Super) to provide members with addi-tional information about the circumstances inwhich their funds may be transferred to an Eli-gible Rollover Fund (ERF) and the effect of thattransfer. The deficient disclosures were identifiedas part of an ASIC review of disclosure practicesprovided by ERF. ASIC has accepted a voluntaryundertaking from the Trustees of Print Super toinform members of the circumstances in whichthe Trustee transfers a member’s benefit to anERF and the effect of that transfer. Print Superhas also undertaken to amend its ongoing disclo-sure to reflect the content of the corrective-notice.

Source: ASIC

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Daily Return and Volatility: Select World Stock Indices (in percent)

Year/Month USA UK France Australia Hongkong Singapore Malaysia

Return Volatility Return Volatility Return Volatility Return Volatility Return Volatility Return Volatility Return Volatility

1992 0.02 0.61 0.05 0.98 0.02 1.21 -0.02 0.70 0.10 1.43 0.01 0.9 0.06 0.77

1993 0.03 0.54 0.07 0.63 0.08 0.98 0.13 0.73 0.31 1.42 0.20 0.83 0.26 1.06

1994 -0.01 0.62 -0.04 0.85 -0.07 1.11 -0.05 0.88 -0.15 1.88 -0.04 1.25 -0.10 1.81

1995 0.12 0.49 0.07 0.62 0.00 1.10 0.06 0.66 0.08 1.27 0.01 1 0.01 1.09

1996 0.07 0.74 0.04 0.59 0.09 1.79 0.03 0.74 0.12 1.07 0.02 0.83 0.08 0.84

1997 0.11 1.14 0.09 0.96 0.10 1.40 0.02 0.99 -0.09 2.53 -0.11 1.52 -0.30 2.38

1998 0.09 1.28 0.05 1.33 0.11 1.66 0.04 0.93 -0.03 2.78 -0.03 2.45 -0.02 3.16

1999 0.07 1.14 0.07 1.13 0.16 1.21 0.04 0.76 0.21 1.68 0.23 1.51 0.14 1.76

2000 -0.04 1.40 -0.04 1.20 0.00 1.48 0.00 0.85 -0.05 1.98 -0.10 1.47 0.07 1.40

2001 -0.06 1.36 -0.07 1.37 -0.10 1.64 0.02 0.80 -0.12 1.76 -0.06 1.45 0.01 1.33

2002 0.11 1.64 -0.11 1.73 -0.16 2.22 -0.05 0.70 -0.08 1.22 -0.08 1.03 -0.03 0.75

Mar 2003 - Feb 2004 0.13 0.95 0.15 1.07 0.17 1.27 0.17 0.93 0.17 1.09 0.16 1.15 0.13 0.74

Daily Return and Volatility: Select World Stock Indices (in percent)

Year/Month Brazil Mexico South Africa Japan SENSEX S&P CNX Nifty

Return Volatility Return Volatility Return Volatility Return Volatility Return Volatility Return Volatility

1992 0.98 6.95 0.08 1.59 NA NA NA NA 0.11 3.33 NA NA

1993 1.63 3.36 0.16 1.26 NA NA 0.04 1.23 0.08 1.83 NA NA

1994 1.00 3.91 -0.04 1.83 NA NA 0.03 0.91 0.07 1.43 NA NA

1995 -0.01 3.39 0.06 2.27 0.11 0.53 0.01 1.2 -0.15 1.26 -0.24 1.31

1996 0.20 1.38 0.08 1.22 0.03 0.77 -0.02 0.78 -0.01 1.52 0.00 1.48

1997 0.14 2.98 0.18 1.75 -0.03 1.32 -0.07 0.44 0.03 1.62 0.07 1.69

1998 -0.16 3.54 -0.11 2.3 -0.04 1.78 -0.04 1.41 -0.11 1.9 -0.08 1.79

1999 0.37 2.88 0.23 1.86 0.21 1.02 0.19 1.22 0.19 1.82 0.20 1.80

2000 -0.04 2.00 -0.09 2.20 -0.01 1.31 -0.11 1.4 -0.12 2.20 -0.06 1.96

2001 -0.05 2.14 0.05 1.48 0.10 1.39 -0.09 1.55 -0.09 1.72 -0.07 1.59

2002 -0.07 1.89 -0.02 1.40 -0.05 1.19 -0.09 1.44 -0.01 1.10 0.01 1.06

Mar 2003 - Feb 2004 0.38 2.05 0.21 1.05 0.18 1.27 0.14 1.43 0.24 1.35 0.23 1.44

Source: Basic data are taken from Bloomberg L.P.


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Annexures

1A. Draft Offer Documents Received during Feb-ruary 2004

1B. Observations Issued on Draft Offer Docu-ments during February 2004

2A. Open Offers under SEBI Takeover Code dur-ing February 2004

2B. Buyback during February 2004

Statistical Tables

1. SEBI Registered Market Intermediaries

2. Offer Documents Received and ObservationsIssued by SEBI

3. Capital Raised

4. Industry-Wise Classification of Capital Raised

5. Sector-Wise and Region-Wise Distribution ofCapital Mobilised

6. Size-Wise Classification of Capital Raised

7. Growth and Distribution of Turnover on CashSegments of Exchanges

8. Cash Segment of BSE

9. Cash Segment of NSE

10. Trends in Cash Segment of BSE, February2004

11. Trends in Cash Segment of NSE, February2004

12. Turnover and Market Capitalisation at BSEand NSE, February 2004

13. Movement of Indices at BSE and NSE, Febru-ary 2004

14. Component Stocks: BSE Sensex, February2004

15. S&P CNX Nifty, February 2004

16. Volatility of Major Indices

17. City-Wise Distribution of Turnover on CashSegments of Exchanges

18. Advances/Declines (No. of Securities)

19. Trading Frequency on BSE and NSE

20. Percentage Share of Top ‘N’ Securities/Mem-bers in Turnover

21. Settlement Statistics for BSE

22. Settlement Statistics for NSE

23. Derivatives Segment at BSE

24. Derivatives Segment at NSE

25. Trends in Derivatives Trading at BSE, Febru-ary 2004

26. Trends in Derivatives Trading at NSE, Febru-ary 2004

27. Settlement Statistics in Derivative Segment

28. Trends in FII Investment

29. Daily Trends in FII Investment, February 2004

30. Trends in Mutual Funds ResourceMobilisation

31A. Scheme-Wise Resource Mobilisation by Mu-tual Funds

31B. Scheme-Wise Resource Mobilisation by Mu-tual Funds

32. Trends in Transactions by Mutual Funds

33. Substantial Acquisition of Shares and Take-overs

34. Progress of Dematerialisation at NSDL andCDSL

35. Receipt and Redressal of Investor Grievances

�� &��'�(��




36. Assets under the Custody of Custodians

37. Ratings Assigned for Long-term CorporateDebt Securities (Maturity ≥ 1 year)

38. Review of Accepted Ratings of CorporateDebt Securities (Maturity ≥ 1 year)

39. Macro Economic Indicators

N.B.:

1. NA = Not Applicable/Available.

2. 1 crore = 10 million = 100 lakh.

3. The total provided in the Annexures and Sta-tistical Tables may not always match with thesum total of the break-ups due to decimaldifferences.


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Annexure 1A Draft offer documents received during February 2004

Sr. Company LeadManager (Pre-Issue) Type of Type of Issue Price (Rs.) Issue Size (Rs. in Promoters Dealing OfficeNo. Issue Instrument (Face Value+ crores) (including

Premium) PromotersContribution)

1 Power Trading SBI Capital Markets Ltd. Public Equity (10 + **) * • Powergrid Corporation of India Ltd. HOCorporation of India Share • Power Finance Corporation Ltd.

•National Thermal Power Corporationof India Ltd.

•National Hydroelectric PowerCorporation Ltd.

2 Data Access (India) Ltd. SSKI Corporate Finance Pvt. Ltd. Public Equity (10 + **) * •Pacific Netinvest Ltd. HOand Enam Financial Consultants Share •SPA Enterprises Ltd.Pvt. Ltd.

3 Datamatics Technologies Ltd. Enam Financial Consultants Pvt. Public Equity (5 + **) * • Dr. Lalit S.Kanodia HOLtd. and IL & FS Investmart Ltd. and Offer Share •Mrs. Asha S. Kanodia

for Sale

4 MSP Steel & Power Ltd. Microsec India Ltd. Public Equity (10 + 0) 20 •Suresh Kumar Agarwal ERO

•Puran Mal Agarwal

•Saket Agarwal

• Manish Agarwal

5 SPS Steels Rolling Mills Ltd. UTI Bank Ltd. Public Equity (10 + 10) 40 •Bipin Kumar Vohra HOShare •Raja Ram Saraf

•Arun Kumar Santhalia

6 Crew B.O.S. Products Ltd. UTI Securities Ltd. Public Equity (10 + 25) 14 •Tarun Oberoi NRO

•Robin Bartholomew

7 IDBI Flexibonds Series 21 SBI Capital Markets Ltd. Public Bonds 5000 500 •Govt. of India HO


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Annexure 1B : Observations issued during February 2004

Sr. Company Lead Manager (Pre-Issue) Type of Type of Issue Price Issue Size (Rs. Date of Final DealingNo. Issue Instru- (Rs.) (Face in crores) (including Observation Office

ment Value+ PromotersPremium) Contribution)

1 *** Indian Petrochemicals Corporation Ltd. Kotak Mahindra Capital Co. Ltd. Offer for Equity (10 + **) * 07-February-04 HO

SBI Capital Markets Ltd. Sale Shares

JM Morgan Stanley Pvt. Ltd.

2 Power Trading Corporation of India Ltd. SBI Capital Markets Ltd. Public Equity (10 + **) * 07-February-04 HOShares

3 Bank of Maharashtra SBI Capital Markets Ltd. Public Equity (10 + 13 -17) (230-270) 11-February-04 HO

4 *** CMC Ltd. HSBC Securities and Capital Markets (India) Voluntary Equity (10 + 0) * 12-February-04 HOPvt. Ltd. and Enam Financial Consultants Offer forPvt. Ltd. Sale

5 ***Dredging Corporation of India Ltd. Kotak Mahindra Capital Co. Ltd. and Enam Voluntary Equity (10 + 0) * 13-February-04 HOFinancial Consultants Pvt. Ltd. Offer for

Sale

6 *** IBP Co. Ltd. ICICI Securities Ltd. and Kotak Mahindra Voluntary Equity (10 + 0) * 13-February-04 HOCapital Co. Ltd. Offer for

Sale

7 *** Oil and Natural Gas Corporation Ltd. J. M. Morgan Stanley Pvt. Ltd., Voluntary Equity (10 + **) * 16-February-04 HODSP Merrill Lynch, Offer forKotak Mahindra Capital Co. Ltd. Sale

8 *** Gail (India) Ltd. HSBC Securities and Capital Markets (India) Offer for Equity (10 + **) * 16-February-04 HOPvt. Ltd. Sale

9 Biocon Ltd. DSP Merrill Lynch Ltd. Public Equity (5 + **) * 19-February-04 HO

10 United Breweries Ltd. Ambit Corporate Finance Pvt. Ltd. Rights Equity (100 + 0) 213.85 12-February-04 HO

11 Dhandapani Finance Ltd. Karvy Investor Services Ltd. Composite Equity (10 + 0) 6.98 23-February-04 SRO(Rights +Public)

12 Century Plyboards (India) Ltd. Ashika Capital Ltd. Rights Equity (10 + 30) 7.8 26-February-04 ERO

* Issue size cannot be ascertained at this stage since it is a book building issue.

** Premium cannot be ascertained at this stage since it is a book building issue.

*** Guidance letter issued.

HO Head Office

NRO Northern Regional Office

SRO Southern Regional Office

ERO Eastern Regional Office


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Annexure 2A : Open Offers under SEBI Takeover code

Sl. Target Company Acquirer Offer Offer Offer Size OfferNo. Opening Closing No. of % of Equity Price

Date Date Shares Capital (Rs.)

1 SRF Polymers Ltd (Srf Chemicals Bhairav Farms Ltd 05-Jan-04 03-Feb-04 2350000 36.42 40Ltd)

2 Alembic Glass Industries Ltd Sierra Investments Ltd 07-Jan-04 05-Feb-04 109830 27 154

3 Fal Industries Ltd Sterling Investment Corporation 22-Jan-04 20-Feb-04 911756 20 25Private Ltd

4 Shriram City Union Finance Ltd/ Shriram Chits & Investments 29-Jan-04 27-Feb-04 5420000 20 15.35(Shriram Hire Purchase Finance Private LtdPrivate Ltd

5 Gestetner (India) Ltd/(D. Gestetner Ricoh Company Ltd 29-Jan-04 27-Feb-04 859592 24 32(India) Ltd/Gestetner (India) Ltd/Gestetner Duplicators Ltd/Gestetner Duplicators Private Ltd/Indian Dupli

* Offers which closed during Feb 2004.

Annexure 2B: Buyback documents filed with SEBI during February, 2004

Sl. No Company Mode of Buyback Maximum Maximum Date of Filing Date of Date ofPrice Payable Consideration of Public Opening Closing

(Rs.) Payable Notice/PA of Offer of Offer(Rs. mn.)

1 Solitaire Machine Tools Ltd. Open Market 8 5.56 18-02-04 15-03-04 15-02-05

2 International Conveyors Ltd. Tender Offer 30 10.8 12-02-04 23-03-04 07-04-04


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Table 1: SEBI Registered Market Intermediaries

Market Intermediaries As on 31st March As on 29-

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Feb-04

Stock Exchanges (Cash Market) 21 22 22 22 22 22 23 23 23 23 23 23

Stock Exchanges (Derivatives Market) NA NA NA NA NA NA NA 2 2 2 2 2

Brokers (Cash Segment) 5,290 6,413 6,711 8,476 8,867 9,005 9,069 9,192 9,782 9,687 9,519 9360

Corporate Brokers (Cash Segment) NA 143 616 1,917 2,360 2,976 3,173 3,316 3,808 3,862 3,835 3737

Sub-brokers (Cash Segment) NA 202 876 NA 1,798 3,760 4,589 5,675 9,957 12,208 13,291 13340

Brokers (Derivative) NA NA NA NA NA NA NA NA 519 705 795 828

Foreign Institutional Investors 18 158 308 367 439 496 450 506 527 490 502 534

Custodians NA NA NA NA NA NA NA 15 14 12 11 11

Depositories NA NA NA NA 1 1 2 2 2 2 2 2

Depository Participants NA NA NA NA 28 52 96 191 335 380 438 429

Merchant Bankers 74 422 790 1,012 1,163 802 415 186 233 145 124 119

Bankers to an Issue NA NA 70 77 80 72 66 68 69 68 67 55

Underwriters NA NA 36 40 38 43 17 42 57 54 43 49

Debenture Trustees NA NA 20 23 27 32 34 38 37 40 35 33

Credit Rating Agencies NA NA NA NA NA NA NA 4 4 4 4 4

Venture Capital Funds NA NA NA NA NA NA NA NA 35 34 43 44

Foreign Venture Capital Investors NA NA NA NA NA NA NA NA 1 2 6 9

Registrars to an Issue & Share Transfer Agents NA 100 264 334 386 334 251 242 186 161 143 76

Portfolio Managers 28 40 61 13 16 16 18 23 39 47 54 58

Mutual Funds NA 12 22 27 37 38 41 38 39 38 38 37

Collective Investment Schemes NA NA NA NA NA NA NA 0 0 0 0 0

Approved Intermediaries (Stock LendingSchemes) NA NA NA NA 1 1 4 6 8 10 4 3

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73ANNEXURES & STATISTICAL TABLES


Table 2: Offer Documents Received and Observations Issued by SEBI (Rs. mn.)

Year/Month Documents Received Observations Issued

No. Amount No. Amount

1994-95 2,612 427,293 1,973 353,723

1995-96 2,523 261,089 1,964 248,228

1996-97 787 161,256 815 183,733

1997-98 114 125,005 103 117,067

1998-99 60 48,021 55 18,027

1999-2000 165 89,670 125 120,255

2000-01 197 131,756 181 111,597

Apr-01 2 50,026 1 142

May-01 2 126 3 53,277

Jun-01 0 0 1 7

Jul-01 2 944 1 119

Aug-01 7 8,033 5 7,728

Sep-01 4 15,084 4 953

Oct-01 2 477 2 15,328

Nov-01 2 8,371 0 0

Dec-01 3 667 3 8,818

Jan-02 2 3,561 4 421

Feb-02 4 4,159 4 5,488

Mar-02 4 2,334 0 0

2001-02 34 93,782 28 92,279Apr-02 0 0 5 4,938

May-02 0 0 1 18

Jun-02 3 3,299 0 0

Jul-02 2 193 1 2,700

Aug-02 3 16,032 0 0

Sep-02 4 29,109 4 20,210

Oct-02 3 215 0 0

Nov-02 2 323 3 181

Dec-02 5 20,895 5 20,702

Jan-03 2 323 2 762

Feb-03 3 255 2 310

Mar-03 1 273 0 0

2002-03 28 70,917 23 49,821Apr-03 5 10,209 2 212

May-03 3 111 2 34

Jun-03 5 4,612 0 0

Jul-03 13 10,209 4 364

Aug-03 6 349 7 8,691

Sep-03 6 3,046 5 136

Oct-03 9 3,593 4 183

Nov-03 8 3,058 5 16,970

Dec-04 6 942 5 3,357

Jan-04** 18 4,223 2 199

Feb-04** 7 6,009 12 135,763

**Amount is exclusive of bookbuilt issues, where price not yet determined/intimated


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Table 3: Capital Raised(Amount in Rs. mn.)

Year/Month Total Category Wise Issue Type Instrument Wise

Public Rights Listed IPOs Equities CCPS Bonds Others

At Par At Premium

No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount

1993-94 1,143 243,720 773 154,491 370 89,229 451 165,084 692 78,636 608 38,076 383 92,204 1 17 9 19,912 142 93,510

1994-95 1,692 276,325 1,342 210,445 350 65,880 453 110,607 1,239 165,718 942 55,291 651 124,408 7 1,243 0 0 135 95,383

1995-96 1,725 208,037 1,426 142,395 299 65,641 368 98,795 1,357 109,241 1,181 49,582 480 97,267 8 1,452 6 20,856 63 38,881

1996-97 882 142,760 751 115,568 131 27,192 167 83,257 717 59,586 697 34,326 148 44,118 5 749 10 54,000 29 9,566

1997-98 111 45,700 62 28,619 49 17,080 59 35,224 52 10,475 64 2,714 33 16,103 3 101 4 15,500 10 11,283

1998-99 58 55,865 32 50,189 26 5,675 40 51,822 18 4,042 20 1,970 20 6,598 3 780 10 44,500 6 2,016

1999-2000 93 78,168 65 62,565 28 15,602 42 50,977 51 27,190 30 7,862 52 37,798 0 0 10 32,000 2 508

2000-01 151 61,078 124 53,784 27 7,294 37 33,854 114 27,223 84 8,178 54 24,076 2 1,421 10 27,040 1 363

Apr-01 1 52 1 52 0 0 0 0 1 52 1 52 0 0 0 0 0 0 0 0

May-01 1 510 0 0 1 510 1 510 0 0 0 0 0 0 0 0 0 0 1 510

Jun-01 1 4,000 1 4,000 0 0 1 4,000 0 0 0 0 0 0 0 0 1 4,000 0 0

Jul-01 2 4,077 1 4,000 1 77 2 4,077 0 0 0 0 0 0 0 0 2 4,077 0 0

Aug-01 3 4,182 3 4,182 0 0 1 4,000 2 182 1 37 1 145 0 0 1 4,000 0 0

Sep-01 4 10,784 1 4,000 3 6,784 4 10,784 0 0 1 68 0 0 0 0 2 6,559 1 4,158

Oct-01 1 190 0 0 1 190 1 190 0 0 0 0 1 190 0 0 0 0 0 0

Nov-01 4 5,634 1 4,000 3 1,634 4 5,634 0 0 1 754 1 503 0 0 2 4,377 0 0

Dec-01 4 8,300 4 8,300 0 0 2 6,500 2 1,800 1 100 0 0 0 0 2 6,500 1 1,700

Jan-02 3 14,668 2 14,340 1 328 2 6,328 1 8,340 0 0 1 8,340 0 0 1 6,000 1 328

Feb-02 4 8,999 2 8,500 2 499 4 8,999 0 0 2 499 0 0 0 0 2 8,500 0 0

Mar-02 7 14,035 4 13,645 3 390 6 12,390 1 1,645 0 0 4 2,035 0 0 3 12,000 0 0

2001-02 35 75,431 20 65,018 15 10,413 28 63,413 7 12,018 7 1,509 8 11,213 0 0 16 56,012 4 6,696

Apr-02 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

May-02 2 2,461 0 0 2 2,461 2 2,461 0 0 0 0 2 2,461 0 0 0 0 0 0

Jun-02 1 2,100 1 2,100 0 0 0 0 1 2,100 0 0 1 2,100 0 0 0 0 0 0

Jul-02 2 2,078 1 2,000 1 78 2 2,078 0 0 1 78 0 0 0 0 1 2,000 0 0

Aug-02 1 2,880 1 2,880 0 0 0 0 1 2,880 0 0 1 2,880 0 0 0 0 0 0

Sep-02 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Oct-02 3 4,018 2 4,000 1 18 2 3,018 1 1,000 2 1,018 0 0 0 0 1 3,000 0 0

Nov-02 2 6,350 2 6,350 0 0 1 2,500 1 3,850 0 0 1 3,850 0 0 1 2,500 0 0

Dec-02 3 619 0 0 3 619 3 619 0 0 1 124 1 360 0 0 0 0 1 134

Jan-03 2 7,000 2 7,000 0 0 2 7,000 0 0 0 0 0 0 0 0 2 7,000 0 0

Feb-03 6 5,354 3 4,557 3 797 4 4,797 2 557 1 156 4 1,198 0 0 1 4,000 0 0

Mar-03 4 7,844 2 7,500 2 344 4 7,844 0 0 1 49 1 295 0 0 2 7,500 0 0

2002-03 26 40,703 14 36,387 12 4,312 20 30,316 6 10,387 6 1,425 11 13,144 0 0 8 26,000 2 134

Apr-03 1 28 0 0 1 28 1 28 0 0 0 0 1 28 0 0 0 0 0 0

May-03 1 197 0 0 1 197 1 197 0 0 0 0 1 197 0 0 0 0 0 0

Jun-03 1 9,934 1 9,934 0 0 0 0 1 9,934 0 0 1 9,934 0 0 0 0 0 0

Jul-03 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Aug-03 3 3,049 1 3,000 2 49 3 3,049 0 0 2 49 0 0 0 0 1 3,000 0 0

Sep-03 9 9,053 5 5,320 4 3,733 5 6,133 4 2,920 1 271 8 8,782 0 0 0 0 0 0

Oct-03 4 6,655 4 6,655 0 0 2 4,155 2 2,500 2 255 1 2,400 0 0 1 4,000 0 0

Nov-03 4 2,842 2 1,975 2 867 2 867 2 1,975 2 136 2 2,706 0 0 0 0 0 0

Dec-03 6 6,234 3 5,378 3 857 5 4,857 1 1,378 1 260 3 1,974 0 0 2 4,000 0 0

Jan-04 6 8,966 3 649 3 8,318 5 4,660 1 4,307 3 566 2 4,400 0 0 1 4,000 0 0

Feb-04 9 30,856 8 30,512 1 344 6 28,305 3 2,552 1 53 8 30,803 0 0 0 0 0 0

Note: Instrument-wise break up may not tally to the total number of issues, as for one issue there could be more than one instruments.


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Table 4: Industry-Wise Classification of Capital Raised(Amount in Rs. mn.)

Industry 2000-01 2001-02 2002-03 Feb-03 Feb-04

No. Amount No. Amount No. Amount

Banking/FIs 13 31,393 14 51,420 13 34427 4337 2300

Cement & Construction 2 823 2 266 1 304 304 0

Chemical 5 315 3 1,868 1 156 156 10449

Electronics 4 694 0 0 0 0 0 0

Engineering 2 233 4 7,597 2 96 0 0

Entertainment 13 4,577 0 0 2 243 109 0

Finance 10 4,399 1 328 1 295 0 0

Food Processing 0 0 0 0 0 0 0 0

Health Care 4 476 0 0 2 735 449 0

Information Technology 89 8,035 6 380 3 2273 0 218

Paper & Pulp 0 0 0 0 0 0 0 0

Plastic 1 40 0 0 1 2175 0 0

Power 0 0 0 0 0 0 0 0

Printing 1 108 0 0 0 0 0 0

Telecommunication 2 9,222 1 8,340 0 0 0 0

Textile 0 0 2 1,264 0 0 0 0

Others 5 762 2 3,968 0 0 0 17889

Total 151 61,078 35 75,431 26 40,703 5354 30856


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Table 5: Sector-Wise and Region-Wise Distribution of Capital Mobilised(Amount in Rs. mn.)

Year/Month Total Sector Wise Region Wise

Private* Public Northern Eastern Western Southern

No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount

1993-94 1,143 243,720 NA NA NA NA 314 58,282 94 13,521 503 145,585 232 26,332

1994-95 1,692 276,325 1,684 262,702 8 13,623 399 65,537 178 22,157 740 108,242 375 80,389

1995-96 1,725 208,037 1,718 166,388 7 41,649 467 51,092 168 14,164 680 108,113 410 34,667

1996-97 882 142,760 872 102,410 10 40,350 221 33,807 114 7,669 360 90,410 187 10,874

1997-98 111 45,700 105 38,521 6 7,179 18 3,017 26 11,642 46 23,911 21 7,130

1998-99 58 55,865 57 55,161 1 703 10 1,712 10 2,655 29 48,562 9 2,934

1999-2000 93 78,168 91 76,167 2 2,000 13 18,999 7 1,055 46 52,345 27 5,766

2000-01 151 61,078 148 58,925 3 2,152 10 2,073 9 2,403 43 41,053 89 15,546

Apr-01 1 52 1 52 0 0 0 0 0 0 0 0 1 52

May-01 1 510 1 510 0 0 0 0 0 0 1 510 0 0

Jun-01 1 4,000 1 4,000 0 0 0 0 0 0 1 4,000 0 0

Jul-01 2 4,077 2 4,077 0 0 0 0 0 0 1 4,000 1 77

Aug-01 3 4,182 3 4,182 0 0 0 0 0 0 1 4,000 2 181

Sep-01 4 10,784 4 10,784 0 0 0 0 0 0 4 10,784 0 0

Oct-01 1 190 1 190 0 0 0 0 0 0 1 190 0 0

Nov-01 4 5,634 4 5,634 0 0 0 0 0 0 4 5,634 0 0

Dec-01 4 8,300 3 5,800 1 2,500 0 0 2 1,800 2 6,500 0 0

Jan-02 3 14,668 3 14,668 0 0 1 8,340 0 0 2 6,328 0 0

Feb-02 4 8,999 3 6,499 1 2,500 1 31 0 0 3 8,968 0 0

Mar-02 7 14,035 4 9,616 3 4,420 1 1,645 0 0 3 8,509 3 3,881

2001-02 35 75,431 30 66,011 5 9,419 3 10,016 2 1,800 23 59,423 7 4,191

Apr-02 0 0 0 0 0 0 0 0 0 0 0 0 0 0

May-02 2 2,461 2 2,461 0 0 0 0 0 0 2 2,461 0 0

Jun-02 1 2,100 1 2,100 0 0 0 0 0 0 1 2,100 0 0

Jul-02 2 2,078 1 78 1 2,000 1 78 0 0 1 2,000 0 0

Aug-02 1 2,880 0 0 1 2,880 0 0 0 0 1 2,880 0 0

Sep-02 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Oct-02 3 4,018 1 18 2 4,000 0 0 2 1,018 1 3,000 0 0

Nov-02 2 6,350 0 0 2 6,350 0 0 0 0 1 2,500 1 3,850

Dec-02 3 619 3 619 0 0 0 0 0 0 1 134 2 484

Jan-03 2 7,000 1 4,000 1 3,000 0 0 0 0 2 7,000 0 0

Feb-03 6 5,354 6 5,354 0 0 0 0 1 156 1 4,000 4 1,198

Mar-03 4 7,844 3 4,344 1 3,500 0 0 0 0 2 7,500 2 344

2002-03 26 40,703 18 18,973 8 21,730 1 78 3 1,174 13 33,575 9 5,876

Apr-03 1 28 1 28 0 0 0 0 0 0 1 28 0 0

May-03 1 197 1 197 0 0 0 0 0 0 1 197 0 0

Jun-03 1 9,934 1 9,934 0 0 1 9,934 0 0 0 0 0 0

Jul-03 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Aug-03 3 3,049 3 3,049 0 0 0 0 0 0 1 3,000 2 49

Sep-03 9 9,053 6 2,711 3 6,342 2 420 2 2,500 3 3,618 2 2,515

Oct-03 4 6,655 2 4,155 2 2,500 0 0 1 100 1 4,000 2 2,555

Nov-03 4 2,842 3 922 1 1,920 2 2,001 1 55 0 0 1 786

Dec-03 6 6,234 5 3,234 1 3,000 1 1,378 0 0 5 4,857 0 0

Jan-04 6 8,966 5 4,966 1 4,000 1 93 0 0 4 8,862 1 11

Feb-04 9 30,856 2 252 7 30,605 0 0 1 53 7 30,605 1 199

* Joint Sector Issues, if any, have been clubbed with private sector for the respective period.


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Table 6: Size Wise Classification of Capital Raised(Amount in Rs. mn.)

Year/Month Total ≥≥≥≥≥ 10 mn. - < 50 mn. ≥≥≥≥≥ 50 mn. - < 100 mn. ≥≥≥≥≥ 100 mn. - < 500 mn. ≥≥≥≥≥ 500 mn. - < 1000 mn. ≥≥≥≥≥1000 mn.

No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount1993-94 1,143 243,720 NA NA NA NA NA NA NA NA NA NA1994-95 1,692 276,325 853 25,686 442 30,330 305 63,564 51 35,842 41 120,9041995-96 1,725 208,037 1,066 31,830 418 28,326 175 33,438 43 29,339 23 85,1051996-97 882 142,760 547 17,596 215 14,725 87 16,711 14 9,083 19 84,6451997-98 111 45,700 52 1,216 26 1,766 15 3,675 6 4,204 12 34,8381998-99 58 55,865 15 349 9 631 14 2,965 9 5,812 11 46,1091999-2000 93 78,168 19 525 15 1,051 26 6,290 14 9,965 19 60,3362000-01 151 61,078 66 1,859 25 1,654 34 7,640 8 5,069 18 44,856Apr-01 1 52 0 0 1 52 0 0 0 0 0 0May-01 1 510 0 0 0 0 0 0 1 510 0 0Jun-01 1 4,000 0 0 0 0 0 0 0 0 1 4,000Jul-01 2 4,077 0 0 1 77 0 0 0 0 1 4,000Aug-01 3 4,181 1 37 0 0 1 145 0 0 1 4,000Sep-01 4 10,784 0 0 1 68 0 0 0 0 3 10,716Oct-01 1 190 0 0 0 0 1 190 0 0 0 0Nov-01 4 5,634 0 0 0 0 1 377 2 1,257 1 4,000Dec-01 4 8,300 0 0 0 0 1 100 0 0 3 8,200Jan-02 3 14,668 0 0 0 0 1 328 0 0 2 14,340Feb-02 4 8,999 1 31 0 0 1 468 0 0 2 8,500Mar-02 7 14,035 1 9 0 0 2 381 0 0 4 13,6452001-02 35 75,431 3 77 3 196 8 1,994 3 1,767 18 71,401Apr-02 0 0 0 0 0 0 0 0 0 0 0 0May-02 2 2,461 0 0 0 0 1 286 0 0 1 2,175Jun-02 1 2,100 0 0 0 0 0 0 0 0 1 2,100Jul-02 2 2,078 0 0 1 78 0 0 0 0 1 2,000Aug-02 1 2,880 0 0 0 0 0 0 0 0 1 2,880Sep-02 0 0 0 0 0 0 0 0 0 0 0 0Oct-02 3 4,018 1 18 0 0 0 0 0 0 2 4,000Nov-02 2 6,350 0 0 0 0 0 0 0 0 2 6,350Dec-02 3 619 0 0 0 0 3 619 0 0 0 0Jan-03 2 7,000 0 0 0 0 0 0 0 0 2 7,000Feb-03 6 5,354 0 0 0 0 5 1,354 0 0 1 4,000Mar-03 4 7,844 1 49 0 0 1 295 0 0 2 7,5002002-03 26 40,703 2 66 1 78 10 2,554 0 0 13 38,005Apr-03 1 28 1 28 0 0 0 0 0 0 0 0May-03 1 197 0 0 0 0 1 197 0 0 0 0Jun-03 1 9,934 0 0 0 0 0 0 0 0 1 9,934Jul-03 0 0 0 0 0 0 0 0 0 0 0 0Aug-03 3 3,049 2 49 0 0 0 0 0 0 1 3,000Sep-03 9 9,053 0 0 0 0 5 743 0 0 4 8,310Oct-03 4 6,655 2 255 0 0 2 6,400 0 0 0 0Nov-03 4 2,842 0 0 2 136 0 0 1 786 1 1,920Dec-03 6 6,234 0 0 0 0 3 857 0 0 3 5,378Jan-04 6 8,966 2 60 1 93 0 0 1 506 2 8,307Feb-04 9 30,856 2 55 1 53 2 543 0 0 4 30,205


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Table 7: Distribution of Turnover on Cash Segments of Exchanges

(Rs. mn.)

Stock Exchange 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 Feb-04

Ahmedabad 221,830 235,400 124,517 206,262 410,653 311,168 299,278 375,656 540,355.2 146,438.4 154,586.4 1,155.2

Bangalore 7,300 23,160 7,120 8,970 43,890 86,370 77,490 11,150 6,000.0 700.0 0.0 N.A

Bhubaneshwar 18,986 8,141 3,026 2,109 2,306 2,025 735 681 0.1 0.0 0.0 N.A

Calcutta NA 576,410 528,720 621,490 1,054,811 1,787,788 1,728,180 3,571,667 3,550,353.0 270,747.0 65,228.0 1705.5

Cochin 651 3,818 6,143 2,873 1,519 1,643 963 658 257.7 19.4 0.0 0.0

Coimbatore 269 20,518 31,918 50,070 47,983 42,738 7,690 777 0.0 0.0 0.0 0.0

Delhi 74,130 120,985 91,445 100,830 489,921 679,358 506,512 945,277 829,967.6 55,263.3 111.0 0.0

Gauhati 4,426 4,519 2,853 6,160 4,839 1,200 517 0 0.5 0.3 0.6 0.0

Hyderabad 6,760 9,845 11,605 11,073 4,800 18,609 12,699 12,365 9,777.9 412.6 45.8 1.5

ICSE NA NA NA NA NA NA NA 2,737 2,367.7 696.1 531.3 N.A

Jaipur 2,958 6,163 8,786 10,478 15,192 4,525 628 21 0.0 0.0 0.0 0.0

Ludhiana 10,500 31,500 49,750 48,490 52,740 83,160 60,700 68,720 91,540.0 9,640.0 0.0 N.A

Madhya Pradesh 3,564 1,320 1,183 2,018 53 13 9 100 23.9 159.3 0.0 0.0

Madras 34,066 46,177 61,171 32,592 39,121 24,585 7,393 5,005 2,184.2 483.1 756.4 126.6

Magadh(Patna) NA 19,382 7,968 16,290 27,550 3,230 6 90 15.8 1.1 1.8 N.A

Mangalore 119 1,076 615 387 3,799 3,138 112 1 0.0 0.0 0.0 0.0

Mumbai 456,958 845,360 677,487 500,642 1,241,904 2,071,129 3,107,497 6,864,276 10,000,315 3,072,924 3,140,732.1 514,635

NSE NA NA 18,050 672,870 2,954,030 3,701,930 4,144,740 8,390,515 13,395,102 5,131,674 6,179,887.0 1,087,181

OTCEI 16 384 3,650 2,241 2,187 2,832 1,978 36,034 1,257.9 37.9 0.9 0.2

Pune 7,519 34,590 36,720 70,960 100,842 86,245 48,271 60,898 61,705.3 11,710.4 0.4 N.A

SKSE 2,650 6,136 3,291 4,525 3,950 171 0 0 0.0 0.0 0.0 0.0

Uttar Pradesh 55,080 67,890 79,230 123,730 160,700 152,090 184,290 238,760 251,120.0 133,490.0 147,633.5 9,928.7

Vadodara 16,810 37,510 38,550 25,190 43,440 45,770 17,490 1,590 20.0 200.0 26.0 N.A

Source: Various Exchanges


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Table 8: Cash Segment of BSE

Month/ No. of No. of No. of No. of No. of No. of Traded Turnover Average Average Demat Demat Market BSE Sensex # BSE-100 Index ##Year Com- Com- Scrips Trad- Scrips Trades Quan- (Rs. mn.) Daily Trade Secu- Turn- Capitali- High Low Close High Low Close

panies panies Listed * ing Traded (Lakh) tity Turn- Size rities over sationListed * Per- Days (Lakh) over (Rs. (Rs.) Traded (Rs. (Rs.

mitted * mn.) (Lakh) mn.) mn.)*

1992-93 2,861 0 NA 192 NA 126 35031 456958 2380 36,316 NA NA 1,881,460 4546.58 2184.67 2280.52 2048.97 988.70 1021.401993-94 3,585 0 NA 218 NA 123 75834 845360 3878 68,875 NA NA 3,680,710 4299.36 1980.06 3778.99 2073.32 911.53 1829.531994-95 4,702 0 NA 231 NA 196 107,248 677,487 2,933 34,501 NA NA 4,688,370 4643.31 3228.94 3260.96 2192.74 1570.09 1605.571995-96 5,603 0 NA 232 NA 171 77,185 500,642 2,158 29,219 NA NA 5,637,480 3611.56 2820.26 3366.61 1691.63 1298.02 1549.251996-97 5,832 0 6,663 240 6,325 155 80,926 1,241,904 5,175 80,221 NA NA 5,051,370 4131.22 2713.12 3360.89 1865.29 1202.93 1463.691997-98 5,853 0 6,815 244 3,971 196 85,877 2,071,129 8,488 105,848 NA NA 6,302,210 4605.41 3164.66 3892.75 2007.06 1381.59 1697.141998-99 5,849 0 6,969 243 4,457 354 129,272 3,107,497 12,788 87,696 NA NA 6,195,320 4322.00 2741.22 3739.96 1908.73 1226.67 1651.371999-00 5,815 0 8,028 251 4,330 740 208,635 6,864,276 27,348 92,704 NA NA 9,128,420 6150.69 3183.47 5001.28 3906.41 1379.71 2902.202000-01 5,869 0 9,826 251 3,927 1,428 258,511 10,000,315 39,842 70,023 NA NA 5,715,530 5542.81 3436.75 3604.38 3055.14 1633.90 1691.71Apr-01 5,874 0 9,912 19 2,127 95 13,965 238,762 12,566 25,039 NA NA 5,677,287 3676.82 3096.51 3519.16 1756.14 1435.94 1682.01May-01 5,874 0 9,972 22 2,306 120 18,125 318,683 14,486 26,637 NA NA 5,959,384 3759.96 3420.14 3631.91 1830.98 1643.80 1763.35Jun-01 5,830 0 10,137 21 2,356 105 15,407 254,508 12,119 24,290 NA NA 5,532,300 3651.32 3287.94 3456.78 1773.78 1549.39 1630.02Jul-01 5,830 0 10,309 22 2,485 78 9,933 172,440 7,838 22,110 NA NA 5,315,764 3513.79 3241.66 3329.28 1644.80 1523.75 1564.46Aug-01 5,803 0 10,323 21 2,517 79 10,242 174,441 8,307 22,058 NA NA 5,230,365 3359.07 3241.12 3244.95 1591.87 1532.94 1534.73Sep-01 5,804 0 10,346 20 2,427 95 10,968 215,932 10,797 22,679 NA NA 4,562,634 3267.93 2594.87 2811.60 1542.67 1209.93 1312.50Oct-01 5,805 0 10,342 21 2,548 100 12,223 219,215 10,439 21,966 NA NA 4,818,510 3083.65 2718.41 2989.35 1427.29 1257.32 1389.17Nov-01 5,791 0 10,385 20 2,711 107 16,749 244,017 12,201 22,749 NA NA 5,357,237 3377.81 3003.95 3287.56 1605.94 1395.20 1557.01Dec-01 5,795 0 13,774 19 3,218 120 19,256 300,330 15,807 24,930 NA NA 5,323,280 3500.20 3100.57 3262.33 1693.65 1480.01 1557.22Jan-02 5,796 0 8,606 23 2,000 144 21,003 391,690 17,030 27,235 NA NA 5,443,968 3466.73 3236.76 3311.03 1653.18 1547.47 1592.27Feb-02 5,798 0 7,296 20 2,042 121 18,316 285,716 14,286 23,522 NA NA 5,967,163 3758.11 3290.00 3562.31 1813.25 1599.35 1707.72Mar-02 5,782 0 7,321 19 2,113 112 16,009 257,190 13,536 22,895 NA NA 6,122,241 3758.27 3454.27 3469.35 1798.34 1703.42 1716.282001-02 5,782 0 7,321 247 5,347 1,277 182,196 3,072,924 12,441 24,060 NA NA 6,122,241 3759.96 2594.87 3469.35 1830.98 1209.93 1716.28Apr-02 5,784 5 7,394 22 2,097 135 18,340 288,745 13,125 21,388 NA NA 6,255,866 3538.49 3296.88 3338.16 1763.49 1649.32 1671.63May-02 5,784 5 7,458 22 2,118 139 21,794 281,378 12,790 20,201 NA NA 6,050,653 3478.02 3097.73 3125.73 1735.78 1572.37 1596.71Jun-02 5,786 5 7,579 20 2,240 129 27,134 233,198 11,660 18,054 NA NA 6,377,530 3377.88 3148.57 3244.70 1714.03 1612.40 1650.34Jul-02 5,711 6 7,319 23 2,363 145 28,375 267,237 11,619 18,447 28,320 266,795 5,840,419 3366.74 2932.35 2987.65 1698.31 1476.18 1506.23Aug-02 5,710 6 7,324 21 2,304 115 15,623 237,797 11,324 20,670 15,603 237,622 6,053,027 3185.08 2931.78 3181.23 1582.53 1482.39 1580.55Sep-02 5,711 6 7,327 20 2,263 106 15,603 244,101 12,205 23,004 15,561 243,168 5,702,735 3227.62 2973.97 2991.36 1600.82 1466.76 1473.88Oct-02 5,654 6 7,278 21 2,225 114 15,833 276,409 13,162 24,319 15,803 275,878 5,637,501 3038.92 2828.48 2949.32 1508.49 1411.32 1458.78Nov-02 5,649 6 7,273 19 2,242 96 13,622 259,814 13,674 26,994 13,603 259,542 6,012,894 3245.98 2928.63 3228.82 1597.14 1451.53 1594.03Dec-02 5,650 6 7,279 21 2,307 123 18,703 305,816 14,563 24,842 18,660 304,963 6,281,974 3413.83 3186.62 3377.28 1676.23 1571.27 1664.67Jan-03 5,651 12 7,403 23 2,311 130 19,376 308,981 13,434 23,732 19,292 308,076 6,114,718 3416.92 3199.18 3250.38 1686.23 1577.91 1600.87Feb-03 5,647 12 7,355 19 2,221 95 14,334 234,610 12,348 24,610 14,293 233,893 6,198,726 3341.61 3218.37 3283.66 1650.78 1587.74 1628.72Mar-03 5,650 12 7,363 20 2,191 85 12,665 202,647 10,132 23,824 12,514 200,993 5,721,974 3311.57 3039.83 3048.72 1642.98 1496.59 1500.722002-03 5,650 12 7,363 251 2,679 1,413 221,401 3,140,732 12,513 22,226 NA NA 5,721,974 3538.49 2828.48 3048.72 1763.49 1411.32 1500.72Apr-03 5,644 13 7,338 20 2,094 96 14,144 208,226 10,411 21,643 13,593 206,573 5,725,255 3221.90 2904.44 2959.79 1593.59 1446.53 1470.31May-03 5,644 13 7,335 21 2,173 118 21,652 225,104 10,719 19,018 20,575 221,154 6,609,816 3200.48 2934.78 3180.75 1653.63 1466.23 1641.44Jun-03 5,641 13 7,349 21 2,245 139 26,493 249,329 11,873 17,957 26,321 246,680 7,343,889 3632.84 3170.38 3607.13 1833.97 1638.20 1819.36Jul-03 5,643 13 7,360 23 2,312 173 35,782 329,757 14,337 19,097 35,070 318,437 7,759,958 3835.75 3534.06 3792.61 1923.02 1771.73 1893.45Aug-03 5,637 13 7,347 20 2,363 181 46,431 363,343 18,167 20,079 44,787 350,222 9,051,925 4277.64 3722.08 4244.73 2246.58 1888.50 2229.25Sep-03 5,639 13 7,354 22 2,357 180 36,567 446,978 20,317 24,781 36,031 437,942 9,330,868 4473.57 4097.55 4,453.24 2357.54 2073.31 2,314.62Oct-03 5,639 13 7,343 23 1,692 189 36,381 526,306 22,883 27,782 35,113 510,728 10,004,941 4951.11 4432.93 4,906.87 2528.68 2310.24 2,485.43Nov-03 5,640 12 7,353 20 1,697 176 33,188 450,292 22,515 25,637 31,980 429,027 10,658,531 5135.00 4736.70 5,044.82 2630.18 2429.29 2,594.34Dec-03 5,644 12 7,368 22 2,230 233 47,355 548,155 24,916 23,540 45,999 527,657 12,733,610 5920.76 5082.82 5,838.96 3111.49 2610.12 3,074.87Jan-04 5,553 12 7,305 21 2,118 223 43,347 656,203 31,248 29,364 41,022 618,163 12,068,544 6249.60 5567.68 5,695.67 3373.24 2868.90 2,946.14Feb-04 5,521 12 7,332 19 2,075 158 24,349 514,635 27,086 32,586 22,588 461,739 11,962,215 6082.80 5550.17 5,667.51 3151.68 2825.63 2,923.99

* At the end of the period.# BSE Sensex commenced from January 2, 1986.## BSE-100 Index commenced from April 3, 1984.Source: BSE


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2004 ■ 80

Table 9: Cash Segment of NSE

Month/Year No. of No. of No. of No. of No. of No. of Traded Turnover Average Average Demat Demat Market S&P CNX Nifty Index # CNX Nifty Junior Index ##Com- Com- Com- Trading Com- Trades Quantity (Rs. mn.) Daily Trade Securities Turnover Capitali- High Low Close High Low Closepanies panies panies Days panies (Lakh) (Lakh) Turnover Size (Rs.) Traded (Rs. mn.) sation

Listed * Permitted * Available Traded (Rs. mn.) (Lakh) (Rs. mn.) *for

Trading * @

Nov 94-Mar 95 135 543 678 102 NA 3 1,391 18,050 170 56,310 NA NA 3,633,500 NA NA NA NA NA NA1995-96 422 847 1,269 246 NA 66 39,912 672,870 2,760 101,505 NA NA 4,014,590 1067.49 813.12 985.30 NA NA NA1996-97 550 934 1,484 250 NA 264 135,561 2,954,030 11,760 112,086 NA NA 4,193,670 1203.11 775.43 963.30 1208.87 907.02 1032.951997-98 612 745 1,357 244 NA 381 135,685 3,701,930 15,200 97,054 NA NA 4,815,030 1297.10 929.05 1116.90 1395.25 1016.65 1339.401998-99 648 609 1,254 251 NA 546 165,327 4,144,740 16,510 75,954 8,542 238,180 4,911,751 1247.15 800.10 1078.05 2079.10 1177.20 2069.201999-00 720 479 1,152 254 NA 984 242,704 8,390,515 33,030 85,244 153,772 7,117,057 10,204,257 1818.15 916.00 1528.45 5365.90 1631.90 3695.752000-01 785 320 1,029 251 1,201 1,676 329,536 13,395,102 533,669 86,980 307,222 12,643,372 6,578,470 1636.95 1098.75 1148.20 3771.80 1570.20 1601.80Apr-01 790 319 1,031 19 951 114 20,782 356,160 18,750 31,133 20,735 356,051 6,537,200 1171.85 1000.10 1125.25 1638.05 1362.50 1525.20May-01 789 318 1,030 22 954 141 25,715 483,290 21,970 34,276 25,714 483,290 5,924,370 1207.00 1096.25 1167.90 1676.25 1472.40 1627.15Jun-01 790 292 1,001 21 963 133 22,336 427,830 20,373 32,151 21,935 426,254 5,697,965 1175.80 1060.05 1107.90 1638.90 1397.60 1415.40Jul-01 785 294 994 22 924 99 13,142 272,278 12,376 27,476 13,137 272,266 5,742,599 1127.15 1046.90 1072.85 1438.25 1304.25 1342.55Aug-01 786 293 994 21 931 112 15,937 294,172 14,008 26,350 15,931 294,150 5,752,425 1084.00 1051.75 1053.75 1370.25 1275.20 1277.35Sep-01 788 293 987 20 917 135 17,342 353,230 17,660 26,095 17,342 353,227 5,091,050 1059.90 849.95 913.85 1292.00 1038.75 1084.40Oct-01 789 292 986 21 917 141 19,799 353,260 16,820 25,088 19,796 353,240 5,358,460 1000.95 884.65 971.90 1206.65 1044.90 1174.20Nov-01 788 268 956 20 920 153 25,349 421,320 21,070 27,572 25,295 421,210 5,813,860 1097.60 973.55 1067.15 1376.75 1173.35 1334.15Dec-01 788 268 956 19 895 177 31,777 544,680 28,670 30,834 31,775 544,646 5,529,080 1132.65 1010.45 1059.05 1415.85 1215.45 1298.30Jan-02 794 199 893 23 896 213 34,384 687,190 29,880 32,244 34,219 686,063 5,636,830 1121.75 1052.05 1075.40 1358.55 1273.80 1348.55Feb-02 791 198 889 20 840 177 28,552 495,640 24,782 27,944 28,547 495,640 6,215,230 1205.95 1069.40 1142.05 1617.05 1350.60 1495.55Mar-02 793 197 890 19 840 157 23,294 442,625 23,296 28,111 23,291 442,624 6,368,610 1201.10 1117.85 1129.55 1611.20 1489.25 1566.952001-02 793 197 890 247 1,019 1,753 278,408 5,131,674 20,776 29,270 277,717 5,128,660 6,368,610 1207.00 849.95 1129.55 1676.25 1038.75 1566.95Apr-02 800 173 865 22 843 201 28,798 533,200 24,240 26,512 28,782 533,159 6,495,510 1153.30 1073.30 1084.50 1658.50 1564.15 1607.75May-02 798 172 863 22 821 217 35,303 549,791 24,990 25,384 35,303 549,791 6,316,092 1136.55 1020.10 1028.80 1665.15 1448.35 1497.10Jun-02 799 170 848 20 825 189 38,519 442,411 22,120 23,378 38,519 442,411 6,599,910 1102.05 1029.25 1057.80 1682.00 1497.90 1617.40Jul-02 799 163 841 23 820 211 36,821 513,984 22,350 24,311 36,821 513,984 6,086,430 1087.40 943.60 958.90 1690.35 1429.05 1455.85Aug-02 799 161 839 21 806 191 26,000 461,131 21,960 24,090 26,000 461,131 6,326,180 1012.75 935.55 1010.60 1517.35 1433.05 1452.60Sep-02 801 161 840 20 806 185 25,581 464,986 23,249 25,177 25,581 464,986 5,996,032 1024.65 960.20 963.15 1468.85 1255.20 1257.85Oct-02 803 119 803 21 770 201 26,458 519,022 24,715 25,806 26,458 519,022 6,067,880 983.60 920.10 951.40 1321.00 1231.95 1255.30Nov-02 805 118 788 19 767 175 23,631 513,515 27,030 29,354 23,631 513,515 6,453,880 1057.40 946.40 1050.15 1340.85 1243.15 1337.10Dec-02 809 116 788 21 762 219 33,022 619,733 29,510 28,236 33,022 619,733 6,728,620 1103.95 1034.10 1093.50 1435.20 1337.20 1413.05Jan-03 814 112 789 23 763 239 36,336 647,622 28,158 2,705 36,336 647,622 5,722,766 1105.60 1026.20 1041.85 1462.90 1353.75 1376.85Feb-03 818 107 788 19 760 191 28,681 482,892 25,420 25,273 28,681 482,892 5,819,846 1075.50 1034.10 1063.40 1415.65 1333.75 1387.10Mar-03 818 107 788 20 762 177 24,917 431,599 21,580 24,378 24,917 431,599 5,371,330 1070.85 974.10 978.20 1409.30 1255.35 1259.552002-03 818 107 788 251 899 2,398 364,065 6,179,887 24,621 25,776 364,049 6,179,836 5,371,330 1153.30 920.10 978.20 1690.35 1231.95 1259.55Apr-03 830 78 738 20 749 207 31,448 489,713 24,486 23,658 31,448 489,713 5,306,304 1033.45 920.00 934.05 1370.80 1259.75 1339.75May-03 847 61 769 21 743 250 44,001 546,902 26,043 21,889 44,001 546,902 6,120,303 1013.85 930.80 1006.80 1693.15 1340.25 1664.15Jun-03 853 52 769 21 744 267 51,896 615,857 29,327 23,029 51,896 615,857 6,785,500 1141.30 1004.70 1134.15 1804.60 1598.60 1783.70Jul-03 865 44 774 23 755 320 64,906 788,776 34,295 24,672 64,906 788,776 7191448.50 1198.50 1089.30 1185.85 2056.85 1778.20 2012.30Aug-03 873 35 775 20 752 322 84,554 853,466 42,673 26,485 84,554 85,347 8366505.40 1365.80 1164.75 1356.55 2287.60 1959.50 2275.25Sep-03 883 27 774 22 761 346 71,848 1,033,455 46,975 29,852 71,848 1,033,455 8634805.00 1340.70 1285.25 1417.10 2459.35 2188.45 2456.95Oct-03 887 26 776 23 728 358 71,768 1,155,953 50,259 32,315 71,768 1,155,953 9,267,479 1574.10 1407.95 1555.90 2679.80 2448.00 2656.15Nov-03 891 23 777 20 738 307 56,716 928,858 46,443 30,304 56,716 928,858 9,795,410 1630.25 1509.15 1615.25 2807.05 2603.95 2801.20Dec-03 897 23 779 22 754 379 71,754 1,103,726 50,169 29,112 71,754 1,103,726 11,670,287 1914.40 1615.70 1879.75 3451.40 2816.80 3405.70Jan-04 904 22 786 21 761 398 73,340 1,342,687 63,937 33,740 73,340 1,342,687 11,161,500 2014.65 1756.25 1809.75 3702.60 3234.00 3367.65Feb-04 907 21 788 19 763 308 46,484 1,087,181 57,220 35,070 46,484 1,087,181 11,109,543 1935.80 1755.65 1800.30 3632.10 3193.80 3367.65

* At the end of the period.@ Excludes suspended companies.# S&P CNX Nifty Index commenced from November 3, 1995.## CNX Nifty Junior commenced from November 4, 1996.Source: NSE


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Table 10: Trends in Cash Segment of BSE, February 2004

Month/Year No. of No. of No. of No. of No. of Traded Turnover Average Demat Demat Market BSE Sensex # BSE-100 Index ##Companies Companies Scrips Scrips Trades Quantity (Rs. mn.) Trade Size Securities Turnover Capitalisation High Low Close High Low Close

Listed * Permitted * Listed Traded (Lakh) (Lakh) (Rs.) Traded (Rs. mn.) (Rs. mn.) *(Lakh)

3-Feb-2004 5,561 12 7,308 2,013 9.27 1,486 27,866 30,047 1,414 25,812 11,647,692 5715.46 5550.17 5620.98 2949.32 2825.63 2855.71

4-Feb-2004 5,561 12 7,308 2,037 9.34 1,505 28,364 30,382 1,408 25,730 11,956,720 5769.79 5574.68 5756.76 2945.11 2838.85 2937.70

5-Feb-2004 5,561 12 7,308 2,050 9.44 1,446 31,765 33,651 1,349 28,991 11,924,811 5820.45 5648.14 5720.63 2987.02 2891.59 2927.04

6-Feb-2004 5,561 12 7,308 2,010 7.84 1,159 25,140 32,065 1,090 23,394 12,101,100 5800.94 5683.61 5786.35 2988.90 2910.47 2984.11

9-Feb-2004 5,561 12 7,310 2,064 7.65 1,166 22,925 29,968 1,083 20,916 12,386,877 5935.68 5807.73 5926.22 3057.31 2995.97 3053.51

10-Feb-2004 5,561 12 7,310 2,061 8.98 1,362 30,227 33,675 1,287 28,299 12,390,618 5972.94 5866.62 5932.52 3080.59 3015.25 3054.66

11-Feb-2004 5,561 12 7,310 2,082 7.55 1,218 24,432 32,365 1,144 22,902 12,466,036 5958.91 5905.23 5949.78 3080.20 3050.50 3074.99

12-Feb-2004 5,562 12 7,313 2,062 8.48 1,381 28,492 33,591 1,275 26,390 12,473,454 5986.41 5886.98 5936.96 3097.14 3043.80 3070.88

13-Feb-2004 5,562 12 7,313 2,070 8.53 1,370 25,314 29,664 1,292 23,365 12,652,513 6017.01 5922.38 6011.66 3114.39 3053.98 3111.41

16-Feb-2004 5,561 12 7,313 2,068 8.59 1,416 27,180 31,639 1,295 23,381 12,671,354 6063.91 6001.57 6012.35 3136.34 3101.00 3105.34

17-Feb-2004 5,561 12 7,317 2,081 7.70 1,358 25,386 32,969 1,262 22,383 12,677,397 6058.99 5999.13 6035.80 3119.00 3092.49 3109.55

18-Feb-2004 5,561 12 7,318 2,055 8.05 1,190 25,739 31,974 1,134 23,798 12,735,190 6082.80 6018.81 6027.02 3151.68 3115.97 3128.32

19-Feb-2004 5,561 12 7,318 2,039 8.81 1,384 31,218 35,452 1,299 28,460 12,382,732 6041.36 5845.07 5855.10 3138.88 3029.99 3037.15

20-Feb-2004 5,561 12 7,318 1,998 9.01 1,322 31,528 34,982 1,202 27,053 12,377,515 5893.62 5770.87 5850.72 3063.74 2994.77 3037.84

23-Feb-2004 5,561 12 7,318 2,025 6.99 1,057 22,657 32,435 977 19,652 12,035,568 5875.23 5680.36 5698.04 3050.43 2938.93 2945.88

24-Feb-2004 5,561 12 7,331 1,985 8.53 1,220 28,907 33,907 1,115 24,837 12,079,644 5748.15 5606.84 5734.44 2967.78 2904.79 2961.07

25-Feb-2004 5,521 12 7,332 1,974 7.54 1,045 24,795 32,871 916 20,746 11,838,401 5746.79 5606.86 5618.15 2964.85 2878.02 2885.12

26-Feb-2004 5,521 12 7,147 2,017 7.60 1,099 25,347 33,343 972 21,370 11,784,484 5723.31 5556.31 5567.12 2954.73 2861.25 2869.73

27-Feb-2004 5,521 12 7,185 1,995 8.04 1,165 27,353 34,022 1,073 24,263 11,962,215 5683.29 5551.64 5667.51 2929.39 2869.43 2923.99

Feb-04 5,521 12 7,332 2,075 158 24,349 514,635 32,586 22,588 461,739 11,962,215 6082.80 5550.17 5,667.51 3151.68 2825.63 2923.99

* At the end of the period.

# SENSEX commenced from January 2, 1986.

## BSE-100 Index commenced from April 3, 1984.

Source: BSE


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2004 ■ 82

Table 11: Trends in Cash Segment of NSE, February 2004

Month/Year No. of No. of No. of No. of No. of Traded Turnover Average Demat Demat Market S&P CNX Nifty Index # CNX Nifty Junior Index ##Companies Companies Companies Companies Trades Quantity (Rs. mn.) Trade Securities Turnover Capitalisation

Listed* Permitted* Available for Traded (Lakh) (Lakh) Size (Rs.) Traded (Rs. mn.) (Rs. mn.)* High Low Close High Low CloseTrading* @ (Lakh)

03-Feb-2004 740 18 2,935 60,748.00 34,198 2,935 60,748.00 10,737,420 1815.95 1755.65 1769.00 3371.60 3201.10 3216.20

04-Feb-2004 743 18 2,958 61,143.10 34,107 2,958 61,143.10 11,059,660 1829.65 1761.75 1822.20 3300.30 3193.80 3283.40

05-Feb-2004 745 19 2,932 66,434.21 35,492 2,932 66,434.21 10,998,949 1846.75 1787.15 1804.50 3364.35 3274.65 3295.30

06-Feb-2004 NOT AVAILABLE 739 15 2,262 54,093.91 35,008 2,262 54,093.91 11,222,699 1837.95 1797.95 1833.65 3401.70 3314.10 3393.75

09-Feb-2004 745 15 2,165 49,524.37 33,373 2,165 49,524.37 11,488,033 1885.20 1833.05 1880.70 3462.40 3409.95 3452.35

10-Feb-2004 744 17 2,562 62,489.41 36,464 2,562 62,489.41 11,488,795 1897.00 1861.65 1880.75 3496.35 3410.95 3442.75

11-Feb-2004 744 14 2,227 50,039.88 34,597 2,227 50,039.88 11,572,854 1894.80 1874.50 1891.50 3483.80 3451.45 3478.80

12-Feb-2004 746 16 2,587 60,007.69 36,444 2,587 60,007.69 11,570,128 1906.10 1869.25 1885.30 3518.70 3483.05 3511.10

13-Feb-2004 749 16 2,682 53,049.17 33,138 2,682 53,049.17 11,742,866 1916.20 1873.25 1913.60 3565.00 3505.55 3562.60

16-Feb-2004 750 17 2,660 56,363.91 33,793 2,660 56,363.91 11,783,788 1929.50 1909.45 1913.55 3618.70 3572.65 3594.95

17-Feb-2004 747 15 2,545 53,895.09 35,516 2,545 53,895.09 11,793,316 1926.15 1905.50 1920.10 3614.55 3583.15 3608.15

18-Feb-2004 753 15 2,182 55,079.22 36,023 2,182 55,079.22 11,842,087 1935.80 1912.60 1916.45 3632.10 3582.90 3586.10

19-Feb-2004 745 17 2,620 63,052.77 36,732 2,620 63,052.77 11,518,564 1919.70 1851.80 1858.30 3599.45 3504.90 3513.10

20-Feb-2004 739 18 2,457 64,855.56 35,428 2,457 64,855.56 11,472,224 1872.85 1831.15 1852.65 3504.35 3435.25 3478.30

23-Feb-2004 749 14 1,938 47,724.78 34,492 1,938 47,724.78 11,185,621 1867.25 1800.20 1808.20 3511.35 3381.70 3393.60

24-Feb-2004 740 17 2,332 61,413.35 36,423 2,332 61,413.35 11,218,544 1826.85 1780.35 1821.35 3409.40 3323.25 3402.35

25-Feb-2004 745 15 2,015 52,438.10 34,474 2,015 52,438.10 11,015,383 1834.10 1779.00 1786.80 3412.35 3354.50 3364.10

26-Feb-2004 751 15 2,147 59,226.55 39,074 2,147 59,226.55 10,938,225 1818.60 1760.55 1765.80 3412.30 3305.65 3312.70

27-Feb-2004 753 16 2,277 55,601.50 35,323 2,277 55,601.50 11,109,543 1807.45 1763.95 1800.30 3357.00 3297.95 3330.60

Feb-04 907 21 788 763 308 46,484 1,087,181.00 35,070 46,484 1,087,181.00 11,109,543 1935.8 1755.65 1800.3 3632.1 3193.80 3367.65

* At the end of the period.

@ Excludes suspended companies.

# S&P CNX Nifty Index commenced from November 3, 1995.

## CNX Nifty Junior commenced from November 4, 1996.

Source: NSE


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2004 ■ 83

Table 12: Turnover and Market Capitalisation at BSE and NSE, February 2004

(Amount in Rs. mn.)

Date Turnover Market Capitalisation

BSE NSE BSE NSE

Sensex BSE-100 Total A# B# S&P CNX Total C# D# Sensex BSE-100 Total E# F# S&P CNX Total G# H#CNX Nifty CNX NiftyNifty Junior Nifty Junior

3-Feb-2004 17536.50 22184.50 27866.40 62.93 79.61 45,357 4,906 60,748 74.66 8.08 3,014,936 8,729,803 11,647,692 25.88 74.95 5,980,632 1,250,283 10,737,420 55.70 11.64

4-Feb-2004 17760.20 22175.60 28363.60 62.62 78.18 45,118 4,341 61,143 73.79 7.10 3,087,761 8,980,422 11,956,720 25.82 75.11 6,160,568 1,276,423 11,059,660 55.70 11.54

5-Feb-2004 20582.70 25230.70 31765.20 64.80 79.43 49,559 4,731 66,434 74.60 7.12 3,068,382 8,947,846 11,924,811 25.73 75.04 6,100,733 1,281,064 10,998,949 55.47 11.65

6-Feb-2004 16940.60 20701.20 25140.20 67.38 82.34 41,334 3,809 54,094 76.41 7.04 3,103,635 9,122,297 12,101,100 25.65 75.38 6,199,214 1,319,324 11,222,699 55.24 11.76

9-Feb-2004 13904.80 17538.20 22925.20 60.65 76.50 35,832 3,841 49,524 72.35 7.76 3,217,537 9,339,141 12,386,877 25.98 75.40 6,358,267 1,342,107 11,488,033 55.35 11.68

10-Feb-2004 19855.20 24614.70 30227.40 65.69 81.43 47,046 4,657 62,489 75.29 7.45 3,220,960 9,342,646 12,390,618 26.00 75.40 6,359,010 1,338,372 11,488,795 55.35 11.65

11-Feb-2004 16233.10 19813.60 24431.50 66.44 81.10 37,169 3,840 50,040 74.28 7.67 3,230,331 9,404,811 12,466,036 25.91 75.44 6,395,233 1,352,404 11,572,854 55.26 11.69

12-Feb-2004 17812.20 22400.60 28492.10 62.52 78.62 43,037 5,219 60,008 71.72 8.70 3,223,368 9,392,243 12,473,454 25.84 75.30 6,374,339 1,364,957 11,570,128 55.09 11.80

13-Feb-2004 14662.60 19023.30 25314.20 57.92 75.15 36,366 4,842 53,049 68.55 9.13 3,263,927 9,516,219 12,652,513 25.80 75.21 6,470,102 1,384,973 11,742,866 55.10 11.79

16-Feb-2004 14203.00 18698.50 27179.80 52.26 68.80 36,820 4,410 56,364 65.33 7.82 3,264,304 9,497,713 12,671,354 25.76 74.95 6,479,569 1,397,542 11,783,788 54.99 11.86

17-Feb-2004 14361.40 18365.50 25385.70 56.57 72.35 38,275 4,115 53,895 71.02 7.63 3,277,035 9,510,603 12,677,397 25.85 75.02 6,501,907 1,402,672 11,793,316 55.13 11.89

18-Feb-2004 15262.10 19819.30 25739.30 59.29 77.00 38,950 3,524 55,079 70.72 6.40 3,272,265 9,567,998 12,735,190 25.69 75.13 6,489,628 1,394,110 11,842,087 54.80 11.77

19-Feb-2004 18787.00 24522.20 31217.50 60.18 78.55 45,999 4,078 63,053 72.95 6.47 3,178,927 9,289,169 12,382,732 25.67 75.02 6,292,678 1,365,735 11,518,564 54.63 11.86

20-Feb-2004 19568.90 23178.90 31527.70 62.07 73.52 46,791 4,068 64,856 72.15 6.27 3,176,550 9,291,277 12,377,515 25.66 75.07 6,273,491 1,352,206 11,472,224 54.68 11.79

23-Feb-2004 13441.00 16821.00 22657.00 59.32 74.24 34,536 3,157 47,725 72.37 6.61 3,093,651 9,010,021 12,035,568 25.70 74.86 6,122,974 1,319,269 11,185,621 54.74 11.79

24-Feb-2004 18588.10 22000.00 28907.20 64.30 76.11 45,706 3,610 61,413 74.42 5.88 3,113,416 9,056,483 12,079,644 25.77 74.97 6,168,505 1,322,722 11,218,544 54.98 11.79

25-Feb-2004 15521.90 18017.70 24795.10 62.60 72.67 37,081 2,632 52,438 70.71 5.02 3,050,279 8,824,189 11,838,401 25.77 74.54 6,051,483 1,307,858 11,015,383 54.94 11.87

26-Feb-2004 15756.60 18820.80 25346.60 62.16 74.25 43,400 2,933 59,227 73.28 4.95 3,022,571 8,777,110 11,784,484 25.65 74.48 5,980,316 1,287,868 10,938,225 54.67 11.77

27-Feb-2004 18486.60 21806.60 27353.40 67.58 79.72 42,141 2,863 55,601 75.79 5.15 3,077,079 8,943,076 11,962,215 25.72 74.76 6,097,509 1,294,893 11,109,543 54.89 11.66

A# = % age share of Sensex securities in total BSE turnover E# = % age share of Sensex securities in total BSE Market Capitalisation.

B# = % age share of BSE-100 Index securities in total BSE turnover. F# = % age share of BSE-100 Index securities in total BSE Market Capitalisation

C# = % age share of S&P CNX Nifty securities in total NSE turnover. G# = % age share of S&P CNX Nifty securities in total NSE Market Capitalisation.

D# = % age share of CNX Nifty Junior securities in total NSE turnover. H# = % age share of CNX Nifty Junior securities in total NSE Market Capitalisation.

Source: BSE and NSE


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2004 ■ 84

Tabel 13 : M

ovement of Indices in B

SE

and NS

E, F

ebruary 2004

Date

Dol l ex 200*

S&

P C

NX

Defty

Cl ose

Open

Hi gh

Low

Cl ose

03-Feb

-04259.93

1383.951389.05

1342.901353.10

04-Feb

-04267.35

1353.151399.50

1347.601393.80

05-Feb

-04266.69

1395.101412.90

1367.301380.55

06-Feb

-04271.39

1381.051406.80

1376.201403.45

09-Feb

-04277.82

1404.151442.65

1402.701439.15

10-Feb

-04278.16

1440.551452.95

1425.851440.50

11-Feb

-04279.91

1448.651450.95

1435.401448.40

12-Feb

-04279.65

1448.651459.25

1431.051443.35

13-Feb

-04283.48

1436.251467.35

1434.451465.35

16-Feb

-04283.24

1466.651478.15

1462.801465.95

17-Feb

-04283.36

1463.651473.30

1457.551468.65

18-Feb

-04284.93

1469.601481.70

1463.901466.85

19-Feb

-04276.93

1467.051469.35

1417.351422.35

20-Feb

-04276.84

1422.651433.80

1401.901418.35

23-Feb

-04268.59

1418.651429.55

1378.201384.30

24-Feb

-04269.81

1383.251397.35

1361.801393.15

25-Feb

-04263.38

1402.851403.20

1361.051367.05

26-Feb

-04262.33

1368.751392.55

1348.151352.15

27-Feb

-04266.94

1352.251384.05

1350.751378.55

* Dollex 200 is calcu

lated at the end of trading session, hence open, high, low are not available.

Sou

rce : BS

E, N

SE


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2004 ■ 85

Table 14: Component Stocks: BSE Sensex, February 2004

Sl. No. Name of Security Issued Capital Market Weightage Beta R2 Average Daily Monthly Impact(Rs. mn.) Capitalisation (%) Volatility (%) Return (%) Cost (%)

(Rs. mn.)

1 A.C.C. 1711.81 40025.65 1.30 1.29 0.94 2.51 1.74 0.10

2 BAJAJ AUTO 1011.84 64213.08 2.09 0.66 0.95 2.06 (9.09) 0.38

3 BHARTI TELE-VENTURE 18533.67 52950.69 1.72 0.71 0.91 3.39 5.93 0.58

4 BHEL 2447.60 49763.38 1.62 1.07 0.96 2.44 13.29 1.57

5 BSES LTD. 1377.69 51136.29 1.66 1.17 0.93 2.72 38.45 0.14

6 CIPLA LTD. 599.72 43023.56 1.40 0.52 0.95 2.15 (0.48) 0.50

7 DR.REDDY’S LAB. 382.58 71162.70 2.31 0.63 0.85 2.34 (11.39) 0.28

8 GRASIM IND. 916.70 78549.92 2.55 0.97 0.98 2.40 (3.65) 0.39

9 GUJ AMB CEMENT 1556.77 33629.43 1.09 0.98 0.95 2.19 6.95 0.20

10 HDFC BANK 2847.92 85334.99 2.77 0.47 0.94 1.87 8.66 0.55

11 HDFC LTD. 2452.86 119680.00 3.89 0.41 0.98 2.32 (6.14) 0.21

12 HERO HONDA 399.38 49237.95 1.60 1.03 0.95 2.75 9.04 0.21

13 HIND.LEVER 2201.24 191563.24 6.23 0.91 0.76 1.94 (7.79) 0.11

14 HIND.PETROLEUM 3393.30 77180.61 2.51 0.75 0.75 2.40 2.00 0.23

15 HINDALCO 924.75 92456.78 3.00 0.80 0.96 2.13 7.45 0.99

16 ICICI BANK 6159.75 167422.05 5.44 0.89 0.97 2.54 (7.94) 0.26

17 INFOSYS TECHNOLOGIES 332.21 252740.39 8.21 1.39 0.81 3.23 (2.37) 0.17

18 ITC LTD. 2475.86 190554.62 6.19 0.61 0.94 1.69 7.52 0.20

19 LARSEN & TOUBRO 2486.40 126030.67 4.10 0.99 0.97 2.25 12.75 0.11

20 MAHANGR TELEPHONE 6300.00 38683.58 1.26 0.81 0.76 2.41 2.25 0.40

21 OIL & NATURAL GAS (ONGC) 14259.34 51198.16 1.66 1.14 0.91 2.69 (2.78) 0.10

22 RANBAXY LAB. 1856.21 122229.33 3.97 0.68 0.83 1.74 (5.35) 0.24

23 RELIANCE INDUSTRIES 13963.78 425975.44 13.84 1.14 0.99 1.94 (0.88) 0.02

24 SATYAM COMPUTERS 630.57 87851.59 2.86 1.83 0.91 3.49 (2.67) 0.03

25 STATE BANK OF INDIA 5262.99 138619.23 4.50 1.11 0.92 2.13 (1.76) 0.05

26 TATA MOTORS 3300.25 109403.15 3.56 1.37 0.97 2.58 (1.89) 0.05

27 TATA POWER 2035.38 49524.80 1.61 1.21 0.93 2.50 (7.33) 0.10

28 TISCO 3689.82 118913.64 3.86 1.39 0.99 2.57 6.24 0.71

29 WIPRO LTD. 465.36 67826.89 2.20 1.59 0.69 3.05 (6.43) 0.15

30 ZEE TELEFILM 412.51 30197.43 0.98 1.38 0.90 3.56 (12.12) 0.14

Total 104,388 3,077,079 100.00 1.00 - - (0.49) NA

* Beta & R2 are calculated for the period March 1, 2003 to February 27, 2004. Beta measures the degree to which any portfolio of stocks is affected as compared to theeffect on the market as a whole. The coefficient of determination (R2) measures the strength of relationship between two variables the return on a security versus thatof the market.

* Volatility is the standard deviation of the daily returns for the period February 1, 2004 to February 27, 2004.

* Impact cost is calculated as the difference between actual buy price and ideal buy price, divided by ideal buy price, multiplied by 100. Hence ideal price is calculatedas (best buy + best sell)/2. It is calculated for a month for the portfolio size of Rs. 2 lakh. It is calculated for the period February 1, 2004 to February 27, 2004.

Source: BSE


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2004 ■ 86

Table 15: S

&P

CN

X N

ifty Index, February 2004

Sl. N

o.N

ame of S

ecurityIssued C

apitalM

arketW

eightageB

etaR

2A

verage Daily

Monthly

Impact

(Rs. m

n.)C

apitalisation(%

)V

olatility (%)

Return

Cost

(Rs. m

n.)(%

)(%

)

1A

BB

42429,512

0.480.48

0.091.47

3.550.18

2A

CC

1,71044,298

0.731.21

0.482.90

1.470.08

3B

AJA

JAU

TO

1,01291,627

1.500.57

0.162.65

(9.36)0.12

4B

HE

L2,448

142,4502.34

1.000.35

2.8613.33

0.11

5B

PC

L3,000

138,0452.26

0.850.23

3.10(0.95)

0.11

6B

RIT

AN

NIA

25116,637

0.270.24

0.061.25

0.870.21

7B

SE

S1,528

113,5411.86

1.070.33

2.7338.09

0.11

8C

IPL

A600

71,7661.18

0.510.12

2.06(0.48)

0.11

9C

OL

GA

TE

1,36019,481

0.320.34

0.090.90

(4.02)0.17

10D

AB

UR

28623,158

0.380.79

0.181.89

(4.15)0.18

11D

IGIT

AL

EQ

P336

28,1360.46

1.000.17

0.210.13

0.08

12D

RR

ED

DY

38394,945

1.560.56

0.122.70

(11.26)0.10

13G

AIL

8,457170,948

2.801.39

0.423.65

(8.41)0.09

14G

LA

XO

74544,812

0.730.33

0.061.56

(1.94)0.18

15G

RA

SIM

91798,036

1.610.90

0.312.24

(3.93)0.14

16G

SK

CO

NS

45412,584

0.210.15

0.012.04

(3.82)0.29

17G

UJA

MB

CE

M1,583

48,7600.80

0.950.38

2.856.43

0.11

18H

CL

TE

CH

59185,474

1.401.45

0.353.27

(4.74)0.14

19H

DF

C2,455

149,7082.46

0.400.06

1.66(6.10)

0.11

20H

DF

CB

AN

K2,848

106,6971.75

0.470.12

1.718.61

0.12

21H

ER

OH

ON

DA

39998,356

1.610.94

0.243.04

8.950.12

22H

IND

AL

CO

925115,229

1.890.75

0.252.46

7.290.12

23H

IND

LE

VE

R2,201

382,9066.28

0.820.37

1.84(7.42)

0.10

24H

IND

PE

TR

O3,393

154,0052.53

0.740.20

2.691.82

0.11

25IC

ICIB

AN

K6,161

166,9462.74

0.810.20

3.43(8.17)

0.11

26IN

DH

OT

EL

45119,309

0.320.70

0.181.92

(2.93)0.17

27IN

FO

SY

ST

CH

332336,430

5.521.28

0.332.01

(2.88)0.07

28IP

CL

2,48246,666

0.771.26

0.393.81

5.120.11

29IT

C2,476

272,4684.47

0.520.20

1.767.38

0.10

30L

&T

2,487139,913

2.290.93

0.352.37

12.180.10

31M

&M

1,16053,915

0.881.25

0.442.96

13.560.11

32M

TN

L6,300

86,0901.41

0.810.23

2.553.09

0.14

33N

AT

ION

AL

UM

6,443114,494

1.881.31

0.383.77

19.260.17

34N

IIT386

7,1210.12

1.610.33

4.25(15.35)

0.14

35O

RIE

NT

BA

NK

1,92554,421

0.891.34

0.253.39

21.730.14

36R

AN

BA

XY

1,856174,214

2.860.61

0.251.56

(5.53)0.09

37R

EL

IAN

CE

13,964774,571

12.700.98

0.571.98

(1.04)0.07

38S

AIL

41,304172,651

2.831.75

0.293.52

(6.80)0.11

39S

AT

YA

MC

OM

P632

97,5901.60

1.750.51

3.60(2.94)

0.08

40S

BIN

5,263307,622

5.051.04

0.502.74

(2.27)0.09

41S

CI

2,82340,976

0.671.26

0.223.13

(4.19)0.18

42S

UN

PH

AR

MA

46460,328

0.990.51

0.092.68

6.490.20

43T

AT

AC

HE

M1,806

20,8550.34

1.020.28

3.64(6.14)

0.14

44T

AT

AP

OW

ER

1,97968,661

1.131.18

0.462.82

(7.54)0.11

45T

AT

AT

EA

56220,037

0.330.98

0.331.87

1.610.13

46T

AT

AM

OT

OR

S3,468

176,4712.89

1.270.53

3.08(2.22)

0.10

47T

ISC

O3,690

157,6842.59

1.320.57

3.105.21

0.08

48V

SN

L2,850

53,5520.88

0.630.11

2.6712.15

0.17

49W

IPR

O465

338,3865.55

1.500.51

2.35(6.69)

0.13

50Z

EE

TE

LE

41355,028

0.901.27

0.275.81

(11.98)0.11

150,4486,097,509

100.001.00

—1.70

(0.27)0.11

* Beta &

R2 are calcu

lated for the period March 1, 2003 to F

ebruary 27, 2004.

* Beta m

easures the degree to w

hich any portfolio of stocks is affected as compared to the effect

on the market as a w

hole.* T

he coefficient of determination (R

2) measu

res the strength of relationship between tw

o variablesthe retu

rn on a security versu

s that of the market.

* Volatility is the S

td. deviation of the daily returns for the period F

ebruary 1, 2004 to F

ebruary 27, 2004.

* Last day of trading w

as Febru

ary 27, 2004.* Im

pact Cost for S

&P

CN

X N

ifty is for a portfolio of Rs. 50 lakhs

* Impact C

ost for S&

P C

NX

Nifty is the w

eightage average impact cost


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CH

2004 ■ 87

Table 16: Volatility* of Major Indices

(In percent)

Month/Year Sensex BSE-100 Dollex-200 S&P CNX CNX Nifty S&P CNXIndex Nifty Junior Defty

Apr-01 2.41 2.77 2.74 2.17 2.39 2.25May-01 0.94 1.07 1.04 0.87 1.18 0.87Jun-01 1.28 1.44 1.37 1.24 1.28 1.25Jul-01 1.18 1.10 1.08 0.99 1.15 1.02Aug-01 0.71 0.69 0.67 0.55 0.57 0.56Sep-01 2.73 2.82 2.95 2.49 2.67 2.55Oct-01 1.44 1.37 1.33 1.17 0.96 1.20Nov-01 1.29 1.27 1.19 1.20 0.96 1.20Dec-01 1.33 1.52 1.52 1.18 1.76 1.19Jan-02 0.92 1.00 0.99 0.97 0.88 0.95Feb-02 1.51 1.69 1.87 1.21 1.65 1.21Mar-02 1.32 1.13 1.23 1.14 1.07 1.152001-02 1.50 1.60 1.62 1.40 1.58 1.42Apr-02 0.99 1.07 1.22 1.08 0.93 1.07May-02 1.55 1.42 1.37 1.31 1.71 1.29Jun-02 1.17 1.11 1.19 1.10 1.30 1.12Jul-02 1.07 1.09 1.15 0.99 1.44 1.00Aug-02 0.91 0.85 0.76 0.83 1.01 0.82Sep-02 0.82 0.71 0.69 0.71 1.34 0.72Oct-02 0.97 0.85 0.90 0.82 1.00 0.80Nov-02 0.68 0.58 0.55 0.67 0.59 0.66Dec-02 0.84 1.06 0.98 0.94 1.10 0.92Jan-03 0.71 0.73 0.73 0.78 1.03 0.77Feb-03 0.79 0.81 0.84 0.89 1.21 0.93Mar-03 1.12 1.04 0.89 1.09 1.15 1.092002-03 1.01 0.99 0.98 0.99 1.23 0.99Apr-03 1.21 1.28 1.18 1.38 1.16 1.40May-03 0.72 0.77 0.76 0.74 1.21 0.73Jun-03 1.02 0.92 0.92 0.94 1.46 1.07Jul-03 1.04 1.00 1.06 1.04 1.48 1.09Aug-03 1.10 1.17 1.16 1.17 1.41 1.20Sep-03 1.69 2.01 1.98 1.81 1.15 1.33Oct-03 1.44 1.59 1.64 1.52 1.65 1.61Nov-03 1.31 1.24 1.25 1.30 1.13 1.30Dec-03 0.91 0.90 0.91 0.96 1.02 0.98Jan-04 2.05 2.56 2.55 2.18 2.55 2.19Feb-04 1.50 1.79 1.76 1.69 1.78 1.68

* Volatility is calculated as the standard deviation of the natural log of returns in indices for the respective period.

** Index discontinued from April, 2003

Source: BSE and NSE.


88S

EC

UR

ITIE

S A

ND

EX

CH

AN

GE

BO

AR

D O

F IN

DIA

SE

BI B

UL

LE

TIN

■ VO

L. 2 ■ N

O. 3 ■ M

AR

CH

2004 ■ 88

Table 17: C

ity-Wise D

istribution of Turnover on C

ash Segm

ents of BS

E and N

SE

(% share in tu

rnover)

Sl. N

o.S

tock Exchange C

ityB

SE

NS

E

2001-022002-03

Feb-04

2001-022002-03

Feb-04

1A

hm

edab

ad0.97

2.343.83

2.492.28

3.25

2B

angalore

0.300.44

0.642.79

2.521.49

3B

aroda

0.540.82

0.030.62

0.680.66

4B

hu

ban

eshw

arN

A0.02

0.030.07

0.050.03

5C

hen

nai

0.160.26

0.263.56

3.592.57

6C

ochin

0.270.12

0.100.79

0.880.59

7C

oimb

atore0.04

0.040.02

0.600.55

0.38

8D

elhi

1.312.14

2.1919.40

18.3815.66

9G

auh

atiN

A0.03

0.040.12

0.050.01

10H

yderab

ad0.13

0.130.12

2.853.2

2.33

11In

dore

0.180.63

0.351.08

0.850.97

12Jaipu

r0.23

0.710.82

1.161.33

1.30

13K

anpu

r0.26

0.410.40

0.950.75

0.47

14K

olkata0.84

1.360.89

9.1512.03

12.94

15L

ud

hian

a0.01

0.240.30

0.530.44

0.41

16M

um

bai

84.0177.56

75.2140.20

40.0145.92

17P

atna

NA

0.030.09

0.110.12

0.09

18P

un

e0.60

0.350.47

1.031.06

0.92

19M

angalore

NA

0.120.07

0.120.12

0.07

20R

ajkot0.32

1.371.81

0.290.27

0.24

21O

thers

9.8310.88

12.3312.51

10.849.70

Total

100.00100.00

100.00100.00

100.00100.00

Sou

rce: BS

E, N

SE

C:\

BU

LL

ET

24\M

AR

CH

\SB

-MA

R-6

TA

N-1

4D

.S.

17-3

-200

4\O

.P>

17-3

-200

489



Table 18: Advances/Declines in cash segment of exchanges (No. of Securities)

Month/Date BSE NSE

Advances Declines Advance/ Advances Declines Advance/Decline DeclineRatio Ratio

Apr-01 433 1541 0.28 372 421 0.88May-01 1076 783 1.37 426 401 1.06June-01 748 1035 0.72 328 474 0.69July -01 424 1307 0.32 395 525 0.75Aug-01 547 1129 0.48 480 488 0.98Sep-01 417 1199 0.35 432 541 0.80Oct-01 756 815 0.93 527 446 1.18Nov-01 1277 275 4.64 597 458 1.30Dec-01 957 571 1.68 481 551 0.87Jan-02 390 1097 0.36 342 372 0.92Feb-02 815 630 1.29 361 361 1.00Mar-02 673 767 0.88 342 374 0.91Apr-02 1021 407 2.51 381 354 1.08May-02 938 483 1.94 329 412 0.80Jun-02 1055 358 2.95 412 352 1.17Jul-02 1018 393 2.59 304 464 0.66Aug-02 106 1300 0.08 355 376 0.94Sep-02 284 1106 0.26 302 419 0.72Oct-02 266 1110 0.24 301 369 0.82Nov-02 717 645 1.11 374 297 1.26Dec-02 1072 294 3.65 323 357 0.91Jan-03 903 1363 0.66 389 420 0.93Feb-03 612 1563 0.39 303 361 0.84Mar-03 433 1633 0.27 247 413 0.60Apr-03 1003 951 1.05 379 409 0.93May-03 1512 414 3.65 397 280 1.42Jun-03 1703 228 7.47 381 313 1.22Jul-03 1663 257 6.47 351 360 0.97Aug-03 1762 591 2.98 374 349 1.07Sep-03 782 1524 0.51 286 364 0.78Oct-03 892 1353 0.66 321 344 0.93Nov-03 1455 753 1.93 382 304 1.26Dec-03 2061 145 14.21 409 316 1.30Jan-04 1098 1092 1.01 290 446 0.653-Feb-2004 320 1629 0.20 61 673 0.094-Feb-2004 991 954 1.04 486 242 2.015-Feb-2004 917 1040 0.88 343 370 0.936-Feb-2004 780 1140 0.68 328 372 0.889-Feb-2004 1317 653 2.02 605 117 5.1710-Feb-2004 944 997 0.95 318 392 0.8111-Feb-2004 894 1077 0.83 355 357 0.9912-Feb-2004 921 1026 0.90 326 385 0.8513-Feb-2004 1277 675 1.89 533 188 2.8416-Feb-2004 1227 741 1.66 509 218 2.3317-Feb-2004 850 1115 0.76 259 460 0.5618-Feb-2004 868 1059 0.82 288 435 0.6619-Feb-2004 459 1489 0.31 71 660 0.1120-Feb-2004 755 1125 0.67 242 459 0.5323-Feb-2004 560 1364 0.41 122 603 0.2024-Feb-2004 850 1034 0.82 295 412 0.7225-Feb-2004 609 1265 0.48 173 540 0.3226-Feb-2004 791 1115 0.71 258 452 0.5727-Feb-2004 821 1045 0.79 319 398 0.80Feb-04 240 1933 0.12 310 407 0.76

Source: BSE and NSE


90S

EC

UR

ITIE

S A

ND

EX

CH

AN

GE

BO

AR

D O

F IN

DIA

SE

BI B

UL

LE

TIN

■ VO

L. 2 ■ N

O. 3 ■ M

AR

CH

2004 ■ 90

Table 19: T

rading Frequency in cash segm

ent of BS

E &

NS

E

Month/Y

earB

SE

NS

E

Scrips

Scrips

% of T

radedC

ompanies

Com

panies%

of Traded

Listed*

Traded

to Listed

Available

Traded

to Available

for Trading*

for Trading

Apr-01

99122127

21.461,031

95192.24

May-01

99722306

23.121,030

95492.62

June-0110137

235623.24

1,001963

96.20July -01

103092485

24.11994

92492.96

Aug-01

103232517

24.38994

93193.66

Sep-01

103462427

23.46987

91792.91

Oct-01

103422548

24.64986

91793.00

Nov-01

103852711

26.10956

92096.23

Dec-01

137743218

23.36956

89593.62

Jan-028606

200023.24

893896

100.00F

eb-027296

204227.99

889840

94.49M

ar-027321

211328.86

890840

94.38A

pr-027394

209728.36

865843

97.46M

ay-027458

211828.40

863821

95.13Jun-02

75792240

29.56848

82597.29

Jul-027319

236332.29

841820

97.50A

ug-027324

230431.46

839806

96.07S

ep-027327

226330.89

840806

95.95O

ct-027278

222530.57

803770

95.89N

ov-027273

224230.83

788767

97.34D

ec-027279

230731.69

788762

96.70Jan-03

74032311

31.22789

76396.70

Feb-03

73552221

30.20788

76096.45

Mar-03

73632191

29.76788

76296.70

Apr-03

73552094

28.47771

74997.15

May-03

73352173

29.63769

74396.62

Jun-037349

224530.55

769744

96.75Jul-03

73602405

32.68774

75597.55

Aug-03

73472363

32.16775

75297.03

Sep-03

73542357

32.05774

76198.32

Oct-03

7,3431,692

23.04776

72893.81

Nov-03

7,3531,697

23.08777

73894.98

Dec-03

7,3682,230

30.27779

75496.79

Jan-047,305

2,11828.99

786761

96.823-F

eb-20047308

201327.55

4-Feb-2004

73082037

27.875-F

eb-20047308

205028.05

6-Feb-2004

73082010

27.509-F

eb-20047310

206428.24

10-Feb-2004

73102061

28.1911-F

eb-20047310

208228.48

12-Feb-2004

73132062

28.2013-F

eb-20047313

207028.31

16-Feb-2004

73132068

28.2817-F

eb-20047317

208128.44

18-Feb-2004

73182055

28.0819-F

eb-20047318

203927.86

20-Feb-2004

73181998

27.3023-F

eb-20047318

202527.67

24-Feb-2004

73311985

27.0825-F

eb-20047332

197426.92

26-Feb-2004

71472017

28.2227-F

eb-20047185

199527.77

Feb-04

7,3322,075

28.30788

76396.83

*At the end of the period, inclu

des listed/permitted to trade com

panies but exclu

des suspended com

panies.S

ource: B

SE

, NS

E


91A

NN

EX

UR

ES

& S

TA

TIS

TIC

AL

TA

BL

ES

SE

BI B

UL

LE

TIN

■ VO

L. 2 ■ N

O. 3 ■ M

AR

CH

2004 ■ 91

Table 20: Percentage Share of Top ‘N’ Securities/Members in Turnover in Cash Segment

Month/Year BSE NSE

5 10 25 50 100 5 10 25 50 100

Securities1992-93 NA NA NA NA NA NA NA NA NA NA1993-94 NA NA NA NA NA NA NA NA NA NA1994-95 NA NA NA NA NA 48.77 55.92 68.98 81.14 91.071995-96 NA NA NA NA NA 82.98 86.60 90.89 93.54 95.871996-97 72.87 81.68 88.10 91.06 93.41 84.55 91.96 95.70 97.03 98.191997-98 67.09 79.91 89.00 93.72 96.83 72.98 85.17 92.41 95.76 97.901998-99 48.80 64.51 81.07 89.40 95.35 52.56 67.11 84.71 92.03 95.981999-00 36.95 55.10 77.75 87.29 92.95 39.56 59.22 82.31 88.69 93.662000-01 49.99 70.35 87.70 94.04 97.45 52.15 72.90 88.93 94.57 97.462001-02 30.67 43.94 66.24 81.66 91.51 44.43 62.92 82.24 91.56 95.912002-03 37.72 53.27 74.38 86.19 93.26 40.58 55.41 77.80 89.16 95.38Apr-03 53.42 64.33 82.04 92.19 97.07 52.42 64.35 82.94 93.81 98.24May-03 32.44 47.75 67.12 82.10 91.85 37.17 52.20 71.98 86.53 95.01Jun-03 26.95 39.07 58.40 74.43 87.09 30.13 43.92 64.58 80.19 92.39Jul-03 28.19 40.05 57.70 72.12 85.01 31.23 43.62 63.17 78.18 91.01Aug-03 26.62 40.50 56.17 70.05 83.72 29.48 44.98 62.16 77.64 90.81Sep-03 14.78 22.46 37.86 53.80 72.50 29.48 44.98 62.16 77.64 90.81Oct-03 32.48 47.91 65.23 78.39 90.07 33.18 49.12 69.02 83.02 94.05Nov-03 32.11 45.78 60.47 74.84 86.71 33.40 47.39 65.14 80.73 91.76Dec-03 25.77 36.58 52.44 65.78 78.71 27.22 38.69 56.56 72.65 85.88Jan-04 28.19 40.05 57.70 72.12 85.01 29.64 46.02 65.91 80.76 91.64Feb-04 39.91 56.17 73.27 85.35 92.77 36.26 55.14 74.09 88.02 95.02Members1992-93 5.73 10.39 22.30 36.40 56.37 NA NA NA NA NA1993-94 6.15 10.58 21.05 35.30 55.93 NA NA NA NA NA1994-95 4.59 8.46 17.85 29.59 48.17 18.19 26.60 44.37 61.71 81.121995-96 7.23 12.23 24.06 37.88 55.62 10.65 16.56 28.61 41.93 58.591996-97 11.82 18.28 31.32 45.55 64.17 5.94 10.08 19.67 30.57 45.951997-98 13.73 21.06 33.75 47.75 65.21 6.29 10.59 18.81 29.21 44.241998-99 9.78 16.04 28.31 44.00 64.30 7.73 11.96 20.77 31.66 47.021999-00 8.42 14.30 25.90 40.74 59.98 7.86 12.99 22.78 34.41 49.962000-01 7.87 13.56 25.70 40.40 59.90 7.78 12.76 23.00 33.86 48.792001-02 8.45 14.78 28.83 45.30 65.75 7.14 12.29 23.63 36.32 53.402002-03 13.65 20.78 35.79 52.85 72.55 10.26 16.41 29.07 42.49 59.15Apr-03 17.44 24.89 40.59 57.15 75.49 10.16 16.39 30.43 44.25 61.39May-03 16.31 23.94 39.20 55.24 74.28 10.86 17.07 29.44 43.06 60.67Jun-03 14.15 21.25 36.19 53.05 72.56 10.92 17.07 29.38 42.78 59.70Jul-03 13.65 21.29 36.94 52.94 72.48 10.94 16.73 29.86 43.28 60.42Aug-03 14.02 21.52 35.91 52.09 71.06 11.45 17.19 29.38 42.71 60.04Sep-03 32.46 45.53 61.57 75.87 88.59 11.55 17.28 29.92 43.25 60.86Oct-03 14.18 22.26 38.27 54.54 73.04 11.63 17.55 30.87 44.40 62.12Nov-03 13.88 21.64 36.94 53.19 71.91 11.64 17.21 29.65 43.28 61.26Dec-03 13.54 21.34 37.06 53.38 71.54 12.84 18.48 31.78 45.59 63.01Jan-04 13.94 21.79 38.45 54.39 72.99 12.47 18.40 31.95 46.19 63.77Feb-04 15.91 23.91 40.72 57.03 75.78 12.34 18.66 32.31 46.82 64.92

Source: BSE, NSE


92S

EC

UR

ITIE

S A

ND

EX

CH

AN

GE

BO

AR

D O

F IN

DIA

SE

BI B

UL

LE

TIN

■ VO

L. 2 ■ N

O. 3 ■ M

AR

CH

2004 ■ 92

Table 21: Settlement Statistics for Cash Segment of BSEMonth/Year No. of Traded Deli- % of Turnover Deli- % of Deli- % of Deli- % of Short % of Unrec- % of Funds Securities Trade

Trades Quan- vered Deli- (Rs. mn.) vered Deli- vered Demat vered Demat Delivery Short tified Unrec- Pay-in Pay-in Guarantee(Lakh) tity Quan- vered Value vered Quan- Deli- Value Deli- (Auc- Delivery Bad tified (Rs. (Rs. mn.) Fund

(Lakh) tity Quantity (Rs. Value tity in vered in vered tioned to Delivery Bad mn.) (Rs. mn.)*(Lakh) to mn.) to Total Demat Quantity Demat Value to quantity) Delivery (Auc- Delivery

Traded Turn- Mode to Total Mode Total (Lakh) tioned toQuantity over (Lakh) Deli- (Rs. Deli- quantity) Delivery

vered mn.) vered (Lakh)Quantity Value

1992-93 125.83 35031 NA NA 456,958 NA NA NA NA NA NA NA NA NA NA NA NA NA1993-94 122.74 75834 NA NA 845,360 158,608 18.76 NA NA NA NA NA NA NA NA NA NA NA1994-95 196.37 107,248 44,696 41.68 677,487 266,407 39.32 NA NA NA NA NA NA NA NA NA NA NA1995-96 171.34 77,185 26,763 34.67 500,642 115,271 23.02 NA NA NA NA NA NA NA NA NA NA NA1996-97 154.81 80,926 21,188 26.18 1,241,904 109,932 8.85 NA NA NA NA NA NA NA NA NA NA NA1997-98 195.67 85,877 24,360 28.37 2,071,129 225,119 10.87 NA NA NA NA NA NA NA NA NA NA NA1998-99 354.35 129,272 50,570 39.12 3,107,497 856,174 27.55 NA NA NA NA NA NA NA NA NA NA NA1999-00 740.45 208,635 94,312 45.20 6,864,276 1,747,400 25.46 NA NA NA NA NA NA NA NA NA NA NA2000-01 1,428.15 258,511 86,684 33.53 10,000,315 1,669,409 16.69 NA NA NA NA NA NA NA NA NA NA NAApr-01 95.35 13,965 5,947 42.59 238,762 63,018 26.39 NA NA NA NA NA NA NA NA NA NA NAMay-01 119.64 18,125 4,880 26.93 318,683 50,555 15.86 NA NA NA NA NA NA NA NA NA NA NAJun-01 104.78 15,407 5,398 35.04 254,508 52,893 20.78 NA NA NA NA NA NA NA NA NA NA NAJul-01 77.99 9,933 3,787 38.13 172,440 38,357 22.24 NA NA NA NA NA NA NA NA NA NA NAAug-01 79.08 10,242 2,890 28.22 174,441 31,635 18.13 NA NA NA NA NA NA NA NA NA NA NASep-01 95.21 10,968 3,305 30.13 215,932 34,098 15.79 NA NA NA NA NA NA NA NA NA NA NAOct-01 99.80 12,223 3,404 27.85 219,215 37,313 17.02 NA NA NA NA NA NA NA NA NA NA NANov-01 107.27 16,749 5,660 33.79 244,017 48,517 19.88 NA NA NA NA NA NA NA NA NA NA NADec-01 120.47 19,256 5,343 27.75 300,330 48,064 16.00 NA NA NA NA NA NA NA NA NA NA NAJan-02 143.82 21,003 5,234 24.92 391,690 66,958 17.09 NA NA NA NA NA NA NA NA NA NA NAFeb-02 121.47 18,316 5,948 32.47 285,716 66,491 23.27 NA NA NA NA NA NA NA NA NA NA NAMar-02 112.33 16,009 5,872 36.68 257,190 61,905 24.07 NA NA NA NA NA NA NA NA NA NA NA2001-02 1,277.22 182,196 57,668 31.65 3,072,924 599,803 19.52 NA NA NA NA NA NA NA NA NA NA NAApr-02 135.01 18,340 6,657 36.30 288,745 52,654 18.24 NA NA NA NA NA NA NA NA NA NA NAMay-02 139.29 21,794 7,425 34.07 281,378 45,991 16.34 NA NA NA NA NA NA NA NA NA NA NAJun-02 129.16 27,134 9,938 36.63 233,198 40,247 17.26 NA NA NA NA NA NA NA NA NA NA NAJul-02 144.87 28,375 9,837 34.67 267,237 43,165 16.15 NA NA NA NA NA NA NA NA NA NA NAAug-02 115.05 15,623 4,298 27.51 237,797 33,523 14.10 NA NA NA NA NA NA NA NA NA NA NASep-02 106.11 15,603 5,119 32.81 244,101 32,504 13.32 NA NA NA NA NA NA NA NA NA NA NAOct-02 113.66 15,833 3,880 24.51 276,409 34,854 12.61 NA NA NA NA NA NA NA NA NA NA NANov-02 96.25 13,622 3,767 27.65 259,814 36,642 14.10 NA NA NA NA NA NA NA NA NA NA NADec-02 123.11 18,703 5,894 31.51 305,816 47,854 15.65 NA NA NA NA NA NA NA NA NA NA NAJan-03 130.19 19,376 6,078 31.37 308,981 58,363 18.89 NA NA NA NA NA NA NA NA NA NA NAFeb-03 95.33 14,335 3,632 25.33 234,610 32,511 13.86 3,623 99.75 32,430 99.75 19.34 0.53 0.02 0.00 13,479 32,511 8,035Mar-03 85.06 12,664 3,368 26.60 202,647 29,105 14.36 3,363 99.85 29,001 99.64 27.53 0.82 0.02 0.00 14,163 29,105 7,4832002-03 1,413 221,401 69,893 31.57 3,140,732 487,413 15.52 NA NA NA NA NA NA NA NA NA NA 7,483Apr-03 96.21 14,144 3,754 26.54 208,226 35,799 17.19 3,749 99.86 35,699 99.72 40.99 1.09 0.02 0.00 18,173 35,799 7,297May-03 118.36 21,652 7,374 34.06 225,104 48,749 21.66 7,319 99.25 48,456 99.40 55.71 0.76 0.03 0.00 18,644 48,749 7,187Jun-03 138.85 26,493 9,284 35.04 249,329 59,411 23.83 9,278 99.93 58,760 98.90 85.31 0.92 0.01 0.00 21,793 59,411 7,208Jul-03 172.67 35,782 13,142 36.73 329,757 81,618 24.75 13,117 99.81 80,221 98.29 117.17 0.89 0.11 0.00 29,518 81,618 7,095Aug-03 180.96 46,431 16,079 34.63 363,343 86,668 23.85 16,067 99.92 86,469 99.77 168.06 1.03 0.13 0.00 28,166 86,668 7,608Sep-03 180.37 36,567 11,755 32.15 446,978 94,832 21.22 11,744 99.91 94,697 99.86 102.12 0.87 0.23 0.00 35,436 94,832 7,635Oct-03 189.44 36,381 11,019 30.29 530,655 106,975 20.16 10,940 99.29 106,451 99.51 106.94 0.98 0.11 0.00 40,733 106,975 7,819Nov-03 175.64 33,188 11,360 34.23 450,292 97,487 21.65 11,326 99.70 97,057 99.56 102.80 0.91 0.07 0.00 32,069 97,487 8,365Dec-03 232.86 47,355 20,452 43.19 548,155 144,828 26.42 20,412 99.80 144,404 99.71 248.50 1.22 0.12 0.00 50,812 144,828 9,685Jan-04 223.47 43,347 15,020 34.65 656,203 142,070 21.65 15,009 99.92 141,785 99.80 131.03 0.87 0.07 0.00 48,520 141,785 9,392Feb-04 157.93 24,349 6,678 27.43 514,635 87,026 16.91 6,671 99.90 86,892 99.85 82.12 1.23 0.03 0.00 36,040 86,892 9,238

* Balance at the end of period.Source: BSE


93A

NN

EX

UR

ES

& S

TA

TIS

TIC

AL

TA

BL

ES

SE

BI B

UL

LE

TIN

■ VO

L. 2 ■ N

O. 3 ■ M

AR

CH

2004 ■ 93

Table 22: Settlement Statistics for Cash Segment of NSE

Month/Year No. of Traded Deli- % of Turnover Delive- % of Deli- % of Deli- % of Short % of Unrec- % of Funds Securities SettlementTrades Quan- vered Deli- (Rs. mn.) red Value Deli- vered Demat vered Demat Delivery Short tified Unrec- Pay-in Pay-in Guarantee(Lakh) tity Quantity vered (Rs. mn.) vered Quantity Deli- Value Deli- (Auc- Delivery Bad tified (Rs. (Rs. mn.) Fund

(Lakh) (Lakh) Quantity Value to in vered in vered tioned to Delivery Bad mn.) (Rs. mn.)*to Traded Total Demat Quantity Demat Value to quan- Delivery (Auc- DeliveryQuantity Turn- Mode to Total Mode Total tity) tioned to

over (Lakh) Deli- (Rs. Deli- (Lakh) quantity) Deliveryvered mn.) vered (Lakh)

Quantity Value

Nov 94-Mar 95 3 1,330 688 51.74 17,280 8,980 51.98 NA NA NA NA 6 0.85 1.76 0.26 3,004 NA NA1995-96 64 39,010 7,264 18.62 657,420 117,750 17.91 NA NA NA NA 179 2.46 32.17 0.44 32,583 NA NA1996-97 262 134,317 16,453 12.25 2,923,140 326,400 11.17 NA NA NA NA 382 2.32 66.25 0.40 72,121 NA NA1997-98 383 135,217 22,051 16.31 3,700,100 597,748 16.15 NA NA NA NA 333 1.51 72.90 0.33 108,272 NA NA1998-99 550 165,310 27,991 16.93 4,135,730 662,038 16.01 6,179 22.08 115,712 17.48 305 1.09 69.73 0.25 121,754 NA 5,840

1999-00 958 238,605 48,713 20.42 8,030,497 826,070 10.29 26,063 53.50 670,474 81.16 635 1.30 110.13 0.23 279,921 797,828 13,9102000-01 1614 304,196 50,203 16.50 12,638,978 1,062,774 8.41 47,257 94.13 1,042,463 98.09 339 0.68 11.58 0.023 459,367 949,621 29,160Apr-01 87 16,323 5,643 34.57 282,261 60,829 21.55 5,620 99.59 60,699 99.79 16 0.28 0.04 0.0008 19,155 52,139 27,510

May-01 155 27,764 6,428 23.15 518,350 73,711 14.22 6,405 99.64 73,531 99.76 15 0.24 0.02 0.0003 19,758 37,519 26,200

Jun-01 127 22,797 5,134 22.52 431,360 59,601 13.82 5,114 99.61 59,454 99.75 14 0.27 0.01 0.0002 16,260 40,579 24,085

Jul-01 97 13,149 2,971 22.59 290,920 37,210 12.79 2,964 99.76 37,170 99.89 21 0.70 0.002 0.0001 18,300 40,205 21,100

Aug-01 111 15,512 3,018 19.46 285,720 39,620 13.87 3,006 99.60 39,510 99.72 31 1.03 0.003 0.0001 18,470 35,313 21,020

Sep-01 124 16,554 3,136 18.94 337,180 39,330 11.66 3,124 99.62 39,310 99.95 16 0.51 0.00 0.0000 20,680 38,074 18,695

Oct-01 145 19,775 3,485 17.62 352,250 42,470 12.06 3,477 99.77 42,450 99.95 40 1.15 0.00 0.0000 19,540 41,360 18,030

Nov-01 142 22,647 4,865 21.48 374,710 56,790 15.16 4,855 99.79 56,750 99.93 46 0.95 0.00 0.0000 23,110 54,678 18,758

Dec-01 168 29,221 5,929 20.29 530,976 71,844 13.53 5,916 99.78 71,774 99.90 48 0.81 0.00 0.0000 30,347 69,244 18,761

Jan-02 225 38,325 5,729 14.95 713,290 79,400 11.13 5,728 99.98 79,380 99.97 39 0.68 0.00 0.0000 34,400 78,486 18,365

Feb-02 170 26,866 6,600 24.57 488,230 79,820 16.35 6,600 100.00 79,820 100.00 39 0.59 0.00 0.0000 30,160 79,353 18,659

Mar-02 169 25,762 6,360 24.69 475,962 77,034 16.18 6,360 100.00 77,030 99.99 40 0.62 0.00 0.0000 30,301 76,577 17,880

2001-02 1,720 274,695 59,299 21.59 5,081,208 717,658 14.12 59,169 99.78 716,878 99.89 364 0.61 0.08 0.0001 280,481 643,525 17,880Apr-02 210 30,113 7,513 24.95 561,302 89,325 15.91 7,513 100.00 89,325 100.00 61 0.81 0.00 0.0000 32,156 88,556 17,450

May-02 211 33,785 8,317 24.62 534,145 87,320 16.35 8,317 100.00 87,320 100.00 55 0.66 0.00 0.0000 31,617 86,758 17,140

Jun-02 195 39,137 10,232 26.14 463,339 80,005 17.27 10,232 100.00 80,005 100.00 64 0.62 0.00 0.0000 27,277 79,551 17,193

Jul-02 206 36,835 10,348 28.09 502,623 84,070 16.73 10,348 100.00 84,070 100.00 69 0.67 0.00 0.0000 29,420 83,577 16,888

Aug-02 193 26,822 5,085 18.96 454,430 53,115 11.69 5,085 100.00 53,115 100.00 30 0.59 0.00 0.0000 21,522 52,748 16,510

Sep-02 183 25,254 4,433 17.55 468,940 52,712 11.24 4,433 100.00 52,712 100.00 25 0.56 0.00 0.0000 23,364 52,355 16,289

Oct-02 201 26,591 4,601 17.30 513,820 57,340 11.16 4,601 100.00 57,340 100.00 21 0.46 0.00 0.0000 25,990 57,043 15,878

Nov-02 174 23,070 4,433 19.22 501,710 64,515 12.86 4,433 100.00 64,515 100.00 23 0.52 0.00 0.0000 26,353 64,110 15,651

Dec-02 223 33,765 7,573 22.43 638,722 88,595 13.87 7,573 100.00 88,595 100.00 35 0.46 0.00 0.0000 33,914 88,233 15,665

Jan-03 231 35,017 8,152 23.28 628,151 91,694 14.60 8,152 100.00 91,694 100.00 38 0.47 0.00 0.0000 33,549 91,279 15,328

Feb-03 193 28,590 6,010 21.02 487,172 67,092 13.77 6,010 100.00 67,092 100.00 23 0.39 0.00 0.0000 26,442 67,092 15,206

Mar-03 182 26,424 5,608 21.22 461,341 63,169 13.69 5608 100.00 63,169 100.00 25 0.44 0.00 0.0000 29,316 63,169 14,867

2002-03 2,403 365,403 82,305 22.52 6,215,694 878,952 14.14 82305 100.00 878,951 100.00 469 0.57 0.00 0.0000 340,919 874,470 14,867Apr-03 214 32,488 7,741 23.83 511,586 82,749 16.17 7,741 100.00 82,749 100.00 87 1.13 0.00 0.0000 37,834 82,749 14,548

May-03 240 40,500 10,823 26.72 517,203 98,564 19.06 10,823 100.00 98,564 100.00 64 0.59 0.00 0.0000 35,839 98,564 14,776

Jun-03 253 50,054 13,952 27.87 575,238 124,805 21.70 13,952 100.00 124,805 100.00 78 0.56 0.00 0.0000 42,917 124,805 15,397

Jul-03 332 66,940 18,394 27.48 814,224 174,886 21.48 18,394 100.00 174,886 100.00 115 0.63 0.00 0.0000 59,148 174,886 16,645

Aug-03 317 81,301 20,433 25.13 827,344 176,928 21.39 20,433 100.00 176,928 100.00 146 0.71 0.00 0.0000 54,646 176,928 19,774

Sep-03 338 72,916 16,723 22.93 1,012,286 205,376 20.29 16,723 100.00 205,376 100.00 90 0.54 0.00 0.0000 74,122 205,376 19,384

Oct-03 367 72,444 16,078 22.19 1,167,489 228,598 19.58 16,078 100.00 228,598 100.00 79 0.49 0.00 0.0000 89,975 228,598 19,604

Nov-03 305 56,149 13,350 23.78 943,760 189,809 20.11 13,350 100.00 189,809 100.00 65 0.49 0.00 0.0000 71,574 189,809 21,231

Dec-03 370 68,161 18,868 27.68 1,078,981 256,872 23.81 18,868 100.00 256,872 100.00 109 0.58 0.00 0.0000 91,706 256,872 25,638

Jan-04 396 73,512 18,508 25.18 1,327,514 282,202 21.26 18,508 100.00 282,202 100.00 99 0.53 0.00 0.0000 96,770 282,202 23,140

Feb-04 311 47,223 9,779 20.71 1,100,700 196,276 17.83 9,779 100.00 196,276 100.00 32 0.33 0.00 0.0000 84,379 196,276 21,776

* Balance at the end of period.Source: NSE


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Table 23: Derivative Segments at BSE

Month/ No. of Index Futures Stock Futures Index Options Stock Options Total Open Interest atYear Trading

Call Put Call Put the end ofDays

No. of Turnover No. of Turnover No. of Notional No. of Notional No. of Notional No. of Notional No. of Turnover No. of TurnoverContracts (Rs. mn.) Contracts (Rs. mn.) Contracts Turnover Contracts Turnover Contracts Turnover Contracts Turnover Contracts (Rs. mn.) Contracts (Rs. mn.)

(Rs. mn.) (Rs. mn.) (Rs. mn.) (Rs. mn.)

Jun-00 toMar-01 207 77743 16726 NA NA NA NA NA NA NA NA NA NA 77743 16726 NA NA

Apr-01 19 1617 281 NA NA NA NA NA NA NA NA NA NA 1617 281 NA NA

May-01 22 656 118 NA NA NA NA NA NA NA NA NA NA 656 118 NA NA

Jun-01 21 2261 389 NA NA 167 62 375 135 NA NA NA NA 2708 546 NA NA

Jul-01 22 2417 406 NA NA 67 24 116 41 301 62 115 25 3014 549 NA NA

Aug-01 21 29717 4917 NA NA 811 276 740 255 1,508 331 886 211 33758 5961 NA NA

Sep-01 20 24361 3591 NA NA 73 24 40 14 910 199 389 99 26253 3989 NA NA

Oct-01 21 3604 522 NA NA 14 4 0 0 286 50 71 9 3965 556 NA NA

Nov-01 20 3360 523 3082 790 5 2 4 1 218 46 20 5 6690 1362 NA NA

Dec-01 19 817 135 3193 697 0 0 0 0 105 20 7 1 4143 857 NA NA

Jan-02 23 1688 284 4089 1104 1 0 1 0 211 62 1 0 5992 1449 NA NA

Feb-02 20 8813 1556 5951 1495 1 0 0 0 66 16 11 1 14833 3069 NA NA

Mar-02 19 241 41 1636 430 0 0 0 0 19 0 1 0 1898 477 NA NA

2001-02 247 79552 12763 17951 4516 1,139 392 1,276 446 3,624 786 1,501 352 105527 19217 NA NA

Apr-02 22 63 11 955 215 0 0 0 0 31 5 3 1 1079 238 NA NA

May-02 22 608 99 4124 1047 1 0 0 0 13 3 2 1 4747 1150 NA NA

Jun-02 20 752 123 3784 904 0 0 0 0 18 4 0 0 4554 1031 NA NA

Jul-02 23 54 9 3209 774 0 0 0 0 19 4 0 0 3282 787 166 34

Aug-02 21 1 0 2036 439 0 0 0 0 22 5 0 0 2059 444 97 21

Sep-02 20 6 1 813 181 0 0 0 0 90 20 1 0 910 202 45 9

Oct-02 21 0 0 611 139 0 0 0 0 6 1 1 0 618 140 81 20

Nov-02 19 0 0 539 131 0 0 0 0 5 1 2 0 546 132 37 9

Dec-02 21 0 0 591 155 0 0 0 0 15 4 5 1 611 160 52 13

Jan-03 23 32824 5466 3637 1003 0 0 0 0 6 2 3 1 36470 6471 322 65

Feb-03 19 35869 5894 3413 897 0 0 1 0 229 57 1 0 39513 6848 215 46

Mar-03 20 41,147 6,507 2,130 559 40 13 1 0 329 103 1 0 43,648 7,182 375 71

2002-03 251 111,324 18,110 25,842 6,443 41 13 2 1 783 207 19 4 138,037 24,784 375 71

Apr-03 20 4,221 648 979 208 0 0 0 0 73 17 7 1 5,280 873 141 25

May-03 21 542 81 427 105 1 0 0 0 140 33 45 11 1,155 229 115 39

Jun-03 21 35 6 265 61 0 0 0 0 123 25 0 0 423 92 32 7

Jul-03 23 2,747 508 1786 489 0 0 0 0 185 34 0 0 4,718 1,031 60 16

Aug-03 20 15,085 3,025 8546 2,063 0 0 0 0 3 1 0 0 23,634 5,090 103 33

Sep-03 22 18,850 4,079 15,355 4,415 0 0 0 0 60 12 9 3 34,274 8,509 215 72

Oct-03 23 17,704 4,196 12,939 4,351 0 0 0 0 25 27 0 0 30,668 8,574 39 11

Nov-03 20 18,137 4,496 13,185 4,776 0 0 0 0 5 2 10 13 31,337 9,287 240 114

Dec-03 22 65,345 17,850 41,274 18,440 0 0 0 0 311 202 615 347 107,545 36,840 1,370 700

Jan-04 21 73,551 22,132 28,374 14,984 0 0 0 0 903 369 745 384 103,573 37,869 606 193

Feb-04 19 19,086 5,551 1,647 787 0 0 0 0 865 494 614 468 22,212 7,299 106 53

Note:1. Notional Turnover = (Strike Price + Premium) * Quantity.2. Index Futures, Index Options, Stock Options and Stock Futures were introduced in June 2000, June 2001, July 2001 and November 2001, respectively.Source: BSE


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Table 24: Derivative Segments at NSE

Month/ No. of Index Futures Stock Futures Interest Rate Index Options Stock Options Total Open Interest atYear Trading Futures Call Put Call Put the end of

DaysNo. of Turn- No. of Turn- No. of Turn- No. of Notional No. of Notional No. of Notional No. of Notional No. of Turn- No. of Turn-Con- over Con- over Con over Con- Turn- Con- Turn- Con- Turn- Con- Turn- Con- over Con- overtracts (Rs. tracts (Rs. tracts- (Rs. tracts over tracts over tracts over tracts over tracts (Rs. tracts (Rs.

mn.) mn.) mn.) (Rs. (Rs. (Rs. (Rs. mn.) mn.)mn.) mn.) mn.) mn.)

Jun-00 toMar-01 211 90,580 23,650 NA NA NA NA NA NA NA NA NA NA NA NA 90,580 23,650 NA NAApr-01 19 13,274 2,917 NA NA NA NA NA NA NA NA NA NA NA NA 13,274 2,917 1,430 319May-01 22 10,048 2,305 NA NA NA NA NA NA NA NA NA NA NA NA 10,048 2,305 2,033 471Jun-01 21 26,805 5,902 NA NA NA NA 5,232 1,185 3,429 766 NA NA NA NA 35,466 7,854 4,071 904Jul-01 22 60,644 13,086 NA NA NA NA 8,613 1,908 6,221 1,352 13,082 2,902 4,746 1,057 93,306 20,306 14,040 2,948Aug-01 21 60,979 13,046 NA NA NA NA 7,598 1,653 5,533 1,193 38,971 8,437 12,508 2,633 125,589 26,962 19,096 3,961Sep-01 20 154,298 28,571 NA NA NA NA 12,188 2,432 8,262 1,687 64,344 13,221 33,480 6,900 272,572 52,810 16,204 2,780Oct-01 21 131,467 24,848 NA NA NA NA 16,787 3,263 12,324 2,329 85,844 16,319 43,787 8,015 290,209 54,775 25,051 4,628Nov-01 20 121,697 24,835 125,946 28,114 NA NA 14,994 3,099 7,189 1,453 112,499 23,722 31,484 6,379 413,809 87,601 60,414 13,291Dec-01 19 109,303 23,393 309,755 75,147 NA NA 12,890 2,866 5,513 1,184 84,134 19,859 28,425 6,740 550,020 129,187 37,891 8,024Jan-02 23 122,182 26,598 489,793 132,610 NA NA 11,285 2,528 3,933 853 133,947 38,361 44,498 12,529 805,638 213,479 78,384 17,753Feb-02 20 120,662 27,472 528,947 139,395 NA NA 13,941 3,235 4,749 1,068 133,630 36,347 33,055 8,643 834,984 216,159 89,560 20,104Mar-02 19 94,229 21,846 503,415 139,890 NA NA 10,446 2,487 4,773 1,113 101,708 28,628 37,387 10,936 751,958 204,899 93,917 21,4992001-02 247 1,025,588 214,819 1,957,856 515,155 NA NA 113,974 24,657 61,926 12,998 768,159 187,795 269,370 63,830 4,196,873 1,019,254 93,917 21,499Apr-02 22 73,635 16,562 552,727 150,651 NA NA 11,183 2,600 5,389 1,215 121,225 34,004 40,443 11,704 804,602 216,736 66,922 15,540May-02 22 94,312 20,223 605,284 159,810 NA NA 13,070 2,945 7,719 1,687 126,867 34,901 57,984 16,432 905,236 235,998 55,839 12,053Jun-02 20 99,514 21,228 616,461 161,783 NA NA 10,272 2,229 7,805 1,662 123,493 33,246 48,919 13,173 906,464 233,320 65,834 15,315Jul-02 23 122,663 25,133 789,290 212,047 NA NA 16,637 3,498 7,688 1,616 154,089 43,406 65,530 18,369 1,155,897 304,069 85,369 17,997Aug-02 21 152,375 29,778 726,310 178,806 NA NA 15,967 3,178 10,124 2,000 147,646 38,367 65,630 17,255 1,118,052 269,383 71,655 16,602Sep-02 20 144,303 28,357 700,051 175,011 NA NA 16,578 3,318 12,543 2,507 151,291 40,160 80,038 22,051 1,104,804 271,404 67,261 13,858Oct-02 21 164,934 31,448 856,930 212,134 NA NA 23,628 4,594 13,910 2,671 214,027 55,953 104,659 27,612 1,378,088 334,413 135,239 30,228Nov-02 19 175,567 35,000 970,251 254,630 NA NA 25,413 5,090 17,191 3,360 261,600 71,060 104,529 29,220 1,554,551 398,360 94,615 22,134Dec-02 21 277,403 59,580 1,217,873 355,316 NA NA 30,261 6,601 19,973 4,274 309,573 95,524 111,756 34,907 1,966,839 556,201 110,431 28,933Jan-03 23 258,955 55,570 1,304,122 382,990 NA NA 26,376 5,770 16,805 3,630 322,876 101,740 132,021 41790 2,061,155 591,490 100,764 23,888Feb-03 19 237,803 50,403 1,198,564 324,448 NA NA 26,501 5,711 17,681 3,749 268,156 76,444 114,512 33,192 1,863,217 493,948 109,192 27,378Mar-03 20 325,299 66,237 1,138,980 297,698 NA NA 53,788 11,165 35,739 7,397 255,658 71,634 140,540 39,186 1,950,004 493,317 97,025 21,9432002-03 251 2,126,763 439,515 10,675,786 2,865,319 NA NA 269,721 56,710 172,520 35,766 2,456,501 696,445 1,066,561 304,895 16,767,852 4,398,650 97,025 21,943Apr-03 20 362,157 69,939 1,291,493 297,492 NA NA 54,890 10,914 31,107 6,157 297,270 74,713 168,553 40,981 2,205,470 500,197 121,089 25,877May-03 21 325,784 62,826 1,354,581 327,517 NA NA 53,198 10,387 30,109 5,784 332,529 88,606 155,849 39,113 2,252,050 534,232 101,396 20,066June-03 21 439,151 93,475 1,694,505 465,047 NA NA 55,874 12,065 34,895 7,351 383,603 113,026 132,498 37,390 2,740,526 728,355 129,929 36,409July-03 23 641,002 147,430 2,282,426 705,146 963 193 87,149 20,395 50,669 11,634 495,853 161,801 162,501 51,895 3,720,563 1,098,495 254,332 74,811August-03 20 990,731 249,886 2,620,897 912,876 50 10 96,875 24,769 54,649 13,616 434,526 160,276 116,370 42,191 4,314,098 1,403,625 161,027 55,300Sept-03 22 1,676,358 458,610 3,122,432 1,138,735 0 0 110,014 30,877 69,920 19,250 401,660 163,785 101,555 40,252 5,481,939 1,851,509 192,544 66,084Oct-03 23 1,866,407 564,351 3,469,563 1,463,772 0 0 89,794 27,614 60,330 18,128 405,706 185,581 97,405 44,201 5,989,205 2,303,647 179,670 66,773Nov-03 20 1,557,909 494,862 2,761,725 1,224,630 0 0 71,696 23,135 48,281 15,342 269,032 133,135 61,295 30,610 4,769,938 1,921,714 179,704 69,197Dec-03 22 1,875,468 653,777 3,334,468 1,509,325 0 0 87,683 31,002 68,394 23,552 294,596 140,951 63,426 30,460 5,724,035 2,389,067 230,109 100,038Jan-04 21 2,611,649 998,777 3,791,114 1,957,883 0 0 105,431 41,204 72,869 27,929 327,135 178,042 67,825 36,797 6,976,023 3,240,631 182,708 76,158Feb-04 19 2,339,950 863,590 2,868,432 1,614,639 0 0 98,938 37,536 74,933 27,912 238,517 138,731 75,771 45,984 5,696,541 2,728,392 166,794 70,504

Note :Notional Value of Outstanding Contracts for FUTIDX - Open Interest * Close price of index future.Notional Value of Outstanding Contracts for FUTSTK - Open Interest * Close price of stock future.Notional Value of Outstanding Contracts for OPTIDX - Open Interest * Close price S&P CNX Nifty.Notional Value of Outstanding Contracts for OPTSTK - Open Interest * Close price of Underlying security.Notional Turnover = (Strike Price + Premium) * Quantity.Index Futures, Index Options, Stock Options, Stock Futures and Interest Rate Futures were introduced in June 2000, June 2001, July 2001, November 2001and June 2003respectively.


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Table 25: Derivatives Trading at BSE, February 2004

Date Index Futures Stock Futures Index Options Stock Options Total Open Interest at

Calls Puts Calls Putsthe end of

No. of Turnover No. of Turnover No. of Notional No. of Notional No. of Notional No. of Notional No. of Turnover No. of TurnoverContracts (Rs. mn.) Contracts (Rs. mn.) Contracts Turnover Contracts Turnover Contracts Turnover Contracts Turnover Contracts (Rs. mn.) Contracts (Rs. mn.)

(Rs. mn.) (Rs. mn.) (Rs. mn.) (Rs. mn.)

03-Feb-04 1,813 513.94 103 43.15 - - - - - - - - 1,916 557.09 610 186.63

04-Feb-04 1,468 415.68 14 6.74 - - - - - - - - 1,482 422.42 630 195.44

05-Feb-04 1,400 402.95 24 12.31 - - - - 20 37 60.00 36.02 1,504 488.68 643 193.28

06-Feb-04 1,220 347.97 2 0.96 - - - - - - - - 1,222 348.93 640 195.22

09-Feb-04 1,440 421.47 60 25.54 - - - - 50 29 80.00 33.08 1,630 508.87 685 221.40

10-Feb-04 1,167 345.74 156 84.69 - - - - 128 73 - - 1,451 503.04 676 215.32

11-Feb-04 541 160.53 19 9.84 - - - - 25 14 25.00 19.79 610 204.59 664 218.44

12-Feb-04 1,265 376.70 35 13.89 - - - - - - - - 1,300 390.59 692 226.55

13-Feb-04 955 284.20 96 43.64 - - - - - - 45.00 55.87 1,096 383.70 684 222.35

16-Feb-04 745 225.54 388 183.07 - - - - 60 21 30.00 24.29 1,223 454.33 646 205.77

17-Feb-04 678 204.58 62 42.01 - - - - - - - - 740 246.59 697 244.78

18-Feb-04 715 217.16 236 88.59 - - - - 121 62 25.00 21.30 1,097 388.87 726 275.02

19-Feb-04 336 100.21 32 10.06 - - - - 160 78 5.00 4.19 533 192.78 749 256.11

20-Feb-04 1,758 514.95 125 52.36 - - - - 63 25 30.00 44.13 1,976 635.94 593 224.92

23-Feb-04 302 87.71 20 10.73 - - - - 128 73 20.00 24.21 470 195.66 589 212.46

24-Feb-04 725 206.11 171 115.07 - - - - 40 22 120.00 77.75 1,056 420.62 626 254.87

25-Feb-04 588 167.54 23 8.87 - - - - 10 17 50.00 31.61 671 225.35 598 235.70

26-Feb-04 1,371 389.73 40 20.78 - - - - 60 43 124.00 95.34 1,595 548.81 98 49.72

27-Feb-04 599 167.89 41 14.19 - - - - - - - - 640 182.08 106 52.93

Feb-04 19,086 5,550.61 1,647 786.51 - - - - 865 494 614.00 467.56 22,212 7,298.95 106 52.93

Source : BSE


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Table 26: Derivatives Trading at NSE, February 2004

Date Index Futures Stock Futures Interest Rate Index Options Stock Options Total Turnover Open Interest at theFutures

Calls Puts Calls Putsend of

No. of Turnover No. of Turnover No. of Turnover No. of Turnover No. of Turnover No. of Turnover No. of Turnover No. of Turnover No. of TurnoverContracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.) Contracts (Rs. mn.)

03-Feb-04 142,487 51,164 140,371 77,445 0 0 4,896 1,850 3,245 1,200 11,001 6,036 2,998 1,765 304,998 139,459 185,082 73,837

04-Feb-04 150,024 53,921 157,114 87,038 0 0 5,179 1,951 3,182 1,167 11,811 7,109 3,266 2,032 330,576 153,218 190,780 80,122

05-Feb-04 169,642 61,804 174,286 101,357 0 0 5,329 2,019 3,876 1,437 12,845 7,846 3,200 2,094 369,178 176,557 190,961 79,370

06-Feb-04 115,318 41,858 127,812 71,278 0 0 3,117 1,175 2,974 1,092 10,751 6,381 2,924 1,810 262,896 123,594 189,370 80,898

09-Feb-04 98,243 36,657 128,283 71,899 0 0 5,463 2,098 3,522 1,305 12,108 6,731 3,226 1,800 250,845 120,489 194,443 85,775

10-Feb-04 140,859 52,970 163,234 88,296 0 0 4,769 1,840 3,632 1,361 13,676 7,281 3,217 1,780 329,387 153,529 197,481 86,730

11-Feb-04 92,242 34,886 130,197 71,762 0 0 3,216 1,243 2,543 953 11,456 6,343 3,527 2,028 243,181 117,215 204,399 90,973

12-Feb-04 105,572 39,996 137,659 79,386 0 0 3,730 1,446 2,783 1,049 10,710 6,317 3,416 2,060 263,870 130,254 208,240 92,528

13-Feb-04 82,963 31,573 120,183 68,767 0 0 4,252 1,649 3,009 1,131 11,749 6,594 3,526 2,143 225,682 111,857 213,136 96,773

16-Feb-04 87,017 33,498 137,462 85,798 0 0 4,708 1,842 3,042 1,156 11,453 7,455 3,520 2,286 247,202 132,035 217,628 99,543

17-Feb-04 84,209 32,373 134,843 77,912 0 0 3,745 1,461 2,359 898 11,605 6,523 3,268 1,886 240,029 121,053 227,168 103,966

18-Feb-04 78,685 30,367 150,016 85,031 0 0 4,051 1,583 2,450 932 13,403 7,541 4,012 2,235 252,617 127,688 229,891 104,789

19-Feb-04 139,669 52,694 173,113 99,551 0 0 7,917 3,042 5,799 2,211 16,867 9,716 5,678 3,321 349,043 170,534 230,582 101,280

20-Feb-04 166,583 61,753 165,994 97,484 0 0 6,967 2,636 6,611 2,479 14,140 8,365 5,261 3,158 365,556 175,875 227,909 99,800

23-Feb-04 117,918 43,261 139,391 77,370 0 0 5,864 2,202 5,411 2,015 11,652 6,739 5,107 2,820 285,343 134,407 232,206 98,921

24-Feb-04 172,590 62,383 183,728 99,330 0 0 6,430 2,384 6,322 2,338 13,084 7,690 5,528 3,380 387,682 177,505 236,357 101,477

25-Feb-04 133,834 48,270 172,359 95,881 0 0 5,030 1,854 4,664 1,713 12,468 7,919 4,833 3,517 333,188 159,154 241,046 101,747

26-Feb-04 156,394 56,339 203,998 106,512 0 0 8,268 3,035 6,853 2,502 15,759 9,235 5,953 3,821 397,225 181,444 254,554 106,513

27-Feb-04 105,701 37,824 128,389 72,544 0 0 6,007 2,226 2,656 973 11,979 6,909 3,311 2,050 258,043 122,525 166,794 70,504

Feb-04 2,339,950 863,590 2,868,432 1,614,639 0 0 98,938 37,536 74,933 27,912 238,517 138,731 75,771 45,984 5,696,541 2,728,392 166,794 70,504

Note :

Notional Value of Outstanding Contracts for FUTIDX - Open Interest * Close price of index future.

Notional Value of Outstanding Contracts for FUTSTK - Open Interest * Close price of stock future.

Notional Value of Outstanding Contracts for OPTIDX - Open Interest * Close price S&P CNX Nifty.

Notional Value of Outstanding Contracts for OPTSTK - Open Interest * Close price of Underlying security.

Notional Turnover = (Strike Price + Premium) * Quantity.

Index Futures, Index Options, Stock Options, Stock Futures and Interest Rate Futures were introduced in June 2000, June 2001, July 2001, November 2001and June 2003respectively.


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Table 27: Settlement Statistics in Derivatives Segment in BSE and NSE

(Rs. mn.)

Month/ BSE NSEYear

Index/Stock Futures Index/Stock Options Total Settlement Index/Stock Futures Index/Stock Options Total SettlementMTM Final Premium Exercise Guarantee MTM Final Premium Exercise Guarantee

Settlement Settlement Settlement Settlement Fund* Settlement Settlement Settlement Settlement Fund*

Jun-00 to Mar-01 505 11 NA NA 517 655 841 19 NA NA 860 NA

Apr-01 15 0 NA NA 16 635 80 1 NA NA 81 NA

May-01 0 0 NA NA 0 632 38 1 NA NA 39 NA

Jun-01 8 0 6.6 1.4 16 710 49 0 15 3 66 NA

Jul-01 8 0 6.1 2.0 17 700 67 1 59 14 141 NA

Aug-01 13 0 17.1 3.2 34 721 46 1 98 51 196 NA

Sep-01 61 7 13.1 12.1 93 677 337 5 156 139 637 NA

Oct-01 8 1 2.4 4.0 15 648 113 1 180 114 408 NA

Nov-01 23 0 2.4 3.0 29 640 284 7 246 202 739 NA

Dec-01 38 1 1.0 0.1 41 628 789 38 175 82 1,084 NA

Jan-02 42 2 2.0 0.4 46 587 1,125 22 306 178 1,630 NA

Feb-02 25 2 0.4 0.0 27 592 1,089 122 244 89 1,543 NA

Mar-02 16 1 0.2 0.1 17 493 1,036 20 170 68 1,294 6,480

2001-02 258 15 51.3 26.2 351 493 5,052 219 1,648 939 7,859 6,480

Apr-02 8 1 0.2 0.1 9 484 1,066 42 173 87 1,367 6,550

May-02 18 1 0.0 0.0 19 497 1,665 18 215 144 2,043 6,820

Jun-02 10 0 0.1 0.0 10 491 1,241 34 197 104 1,575 7,140

Jul-02 12 0 0.1 0.0 12 474 1,609 17 236 107 1,969 7,250

Aug-02 8 0 0.2 0.0 8 466 1,021 29 205 139 1,393 8,190

Sep-02 6 0 0.4 0.0 7 461 1,198 14 233 135 1,580 8,220

Oct-02 3 0 0.1 0.0 4 458 1,282 78 258 166 1,785 8,419

Nov-02 3 0 0.1 0.0 4 455 1,109 87 337 353 1,887 9,840

Dec-02 3 0 0.0 0.1 3 440 1,640 53 446 168 2,308 10,742

Jan-03 21 1 0.1 0.0 22 514 2,184 30 384 229 2,827 13,154

Feb-03 14 1 0.8 0.0 15 515 1,484 17 289 131 1,923 13,779

Mar-03 17 0 1.5 0.0 19 495 1,879 38 338 196 2,452 13,002

2002-03 122 6 3.5 0.2 131 495 17,379 458 3,312 1,959 23,109 13,002

Apr-03 19 0.4 0.4 0.0 20 493 2,058 48 460 300 2,866 13,087

May-03 5 0.5 1.2 0.12 7 494 1,637 57 380 304 2,379 14,035

Jun-03 9 0.3 0.4 0.08 10 456 2,202 39 488 465 3,194 16,395

Jul-03 5 0.2 0.5 0.00 6 468 3,898 80 694 448 5,120 19,703

Aug-03 23 0.6 0.0 0.03 24 472 5,696 86 773 588 7,143 23,399

Sep-03 22 0.2 1.4 0.44 24 483 10,319 92 78 304 11,496 27,509

Oct-03 46 0.1 0.3 0.44 47 486 11,880 141 991 603 13,616 33,586

Nov-03 22 0.1 0.2 0.00 22 502 9,393 239 634 221 10,487 37,097

Dec-03 83 2.0 7.5 0.33 92 500 9,055 179 700 411 10,344 45,719

Jan-04 231 4.5 15.5 0.43 251 755 26,682 128 1,075 427 28,312 51,774

Feb-04 45 1.4 18.3 0.01 65 657 13,297 164 683 244 14,388 48,905

* Balance at the end of period

Source: BSE, NSE

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Table 28: Trends in FII Investment

Period Gross Gross Net Investment Net Investment** Cumulative NetPurchases Sales (Rs. mn.) (US $ mn.) Investment** (US $ mn.)(Rs. mn.) (Rs. mn.)

1993-94 55,925 4,663 51,262 1,634 1,638

1994-95 76,310 28,348 47,963 1,528 3,167

1995-96 96,935 27,517 69,420 2,036 5,202

1996-97 155,539 69,794 85,745 2,432 7,634

1997-98 186,947 127,372 59,575 1,649 9,284

1998-99 161,150 176,994 -15,844 -386 8,898

1999-2000 568,555 467,335 101,219 2,339 11,237

2000-01 740,506 641,164 99,340 2,160 13,396

Apr-01 50,799 31,011 19,788 425 13,821

May-01 39,760 33,000 6,761 144 13,965

Jun-01 41,189 29,392 11,797 251 14,217

Jul-01 36,650 31,873 4,777 102 14,318

Aug-01 32,485 27,463 5,023 107 14,425

Sep-01 32,201 37,605 -5,405 -113 14,312

Oct-01 38,957 30,113 8,844 186 14,497

Nov-01 39,742 39,705 37 1 14,498

Dec-01 34,554 32,275 2,279 48 14,545

Jan-02 54,460 47,467 6,993 146 14,691

Feb-02 58,162 34,794 23,368 484 15,175

Mar-02 40,241 36,952 3,290 68 15,242

2001-02 499,200 411,650 87,552 1,846 15,242

Apr-02 51,090 52,210 -1,120 -23 15,219

May-02 43,540 43,080 460 9 15,229

Jun-02 33,510 42,170 -8,660 -177 15,052

Jul-02 35,000 32,620 2,380 49 15,101

Aug-02 26,680 24,940 1,740 36 15,136

Sep-02 37,657 34,432 3,224 67 15,203

Oct-02 28,129 36,878 -8,751 -181 15,023

Nov-02 41,353 33,977 7,376 152 15,175

Dec-02 42,873 36,398 6,479 134 15,309

Jan-03 53,145 43,292 9,852 205 15,514

Feb-03 34,707 30,421 4,281 89 15,603

Mar-03 42,917 33,292 9,628 202 15,804

2002-03 470,601 443,710 26,889 562 15,804

Apr-03 58,782 48,855 9,925 208 16,012

May-03 73,855 43,253 30,605 645 16,449

Jun-03 78,353 43,729 34,617 734 16,746

Jul-03 85,501 63,892 21,609 462 17,854

Aug-03 88,475 66,205 22,275 480 18,335

Sep-03 122,705 80,952 41,755 907 19,242

Oct-03 152,122 84,895 67,228 1,466 20,708

Nov-03 111,240 75,300 35,941 788 21,496

Dec-03 149,161 85,343 63,819 1,404 22,900

Jan-04 176,520 137,827 38,693 850 23,749

Feb-04 159,618 132,887 26,735 587 24,336

** Net Investment in US $ mn. at monthly exchange rate.


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2004 ■ 100

Table 29: Daily Trends in Foreign Institutional Investment, February 2004

Days Equity Debt Total

Gross Gross Net Net Gross Gross Net Net Gross Gross Net NetPurchase Sales Investment Investment Purchase Sales Investment Investment Purchase Sales Investment Investment(Rs. mn.) (Rs. mn.) (Rs. mn.) (US $ mn.) (Rs. mn.) (Rs. mn.) (Rs. mn.) (US $ mn.) (Rs. mn.) (Rs. mn.) (Rs. mn.) (US $ mn.)

3-Feb-2004 6,942 11,302 -4,360 -96 612 0 612 13 7,554 11,302 -3,748 -82

4-Feb-2004 11,612 8,354 3,257 72 99 0 99 2 11,711 8,354 3,356 74

5-Feb-2004 7,595 6,164 1,431 31 0 2,459 -2,459 -54 7,595 8,623 -1,028 -23

6-Feb-2004 7,983 5,664 2,320 51 1,351 602 749 16 9,334 6,266 3,069 67

9-Feb-2004 8,038 5,783 2,255 50 2,225 400 1,825 40 10,263 6,183 4,080 90

10-Feb-2004 7,893 5,385 2,508 55 2,156 4 2,152 47 10,049 5,389 4,660 102

11-Feb-2004 10,676 4,892 5,784 127 3 0 3 0 10,679 4,892 5,787 127

12-Feb-2004 3,749 4,139 -390 -9 0 148 -148 -3 3,749 4,287 -538 -12

13-Feb-2004 10,117 8,760 1,357 30 305 441 -136 -3 10,422 9,201 1,221 27

16-Feb-2004 6,700 6,187 514 11 2 1,604 -1,602 -35 6,702 7,791 -1,088 -24

17-Feb-2004 6,577 5,921 657 15 0 0 0 0 6,577 5,921 657 15

18-Feb-2004 7,488 3,812 3,677 81 1,343 203 1,140 25 8,831 4,015 4,817 106

19-Feb-2004 10,180 6,410 3,770 83 0 0 0 0 10,180 6,410 3,770 83

20-Feb-2004 8,829 6,241 2,589 57 0 0 0 0 8,829 6,241 2,589 57

23-Feb-2004 10,744 7,159 3,585 79 0 21 -21 -1 10,744 7,180 3,564 78

24-Feb-2004 5,418 7,099 -1,681 -37 909 950 -41 -1 6,327 8,049 -1,722 -38

25-Feb-2004 6,940 9,642 -2,702 -59 965 0 965 21 7,905 9,642 -1,737 -38

26-Feb-2004 5,610 5,079 530 12 127 505 -378 -8 5,737 5,584 152 3

27-Feb-2004 6,430 7,557 -1,126 -25 0 0 0 0 6,430 7,557 -1,126 -25

Total 149,521 125,550 23,975 527 10,097 7,337 2,760 60 159,618 132,887 26,735 587


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Table 30: Trends in Mutual Funds Resource Mobilisation (Amount in Rs. mn.)

Period Gross Redemption* Net Inflow Assets atPvt. Sec. Public Sector UTI Total Pvt. Sec. Public Sector UTI Total Pvt. Sec. Public Sector UTI Total the End of

1993-94 15,490 95,265 510,000 620,755 NA NA NA NA NA NA NA NA NA1994-95 20,840 21,430 95,000 137,270 NA NA NA NA NA NA NA NA NA1995-96 3,120 2,960 59,000 65,080 NA NA NA NA NA NA NA NA NA1996-97 3,460 1,510 42,800 47,770 NA NA NA NA NA NA NA NA NA1997-98 19,740 3,320 91,000 114,060 NA NA NA NA NA NA NA NA NA1998-99 78,465 16,713 131,929 227,107 63,938 13,362 159,304 236,604 14,527 3,352 -27,375 -9,497 681,9311999-2000 437,257 38,171 136,984 612,412 285,592 45,621 91,501 422,714 151,665 -7,449 45,483 189,699 1,079,4612000-01 750,091 55,353 124,130 929,574 651,595 65,798 120,900 838,293 98,496 -10,445 3,230 91,281 905,869Apr-01 71,040 3,442 4,500 78,982 49,124 1,998 7,470 58,592 21,916 1,444 -2,970 20,390 931,007May-01 64,303 7,462 3,760 75,525 36,555 3,738 23,020 63,312 27,748 3,725 -19,260 12,213 967,953Jun-01 98,884 13,938 18,580 131,401 67,870 4,120 22,650 94,641 31,013 9,818 -4,070 36,761 979,528Jul-01 113,291 800 2,370 116,461 88,339 5,931 8,730 103,000 24,952 -5,131 -6,360 13,461 989,694Aug-01 95,022 7,240 1,670 103,933 82,415 6,153 6,330 94,898 12,607 1,087 -4,660 9,034 993,358Sep-01 120,960 10,885 2,310 134,154 145,717 10,191 4,260 160,168 -24,757 693 -1,950 -26,014 918,106Oct-01 104,658 6,813 1,320 112,791 92,378 6,047 10,950 109,375 12,280 766 -9,630 3,416 945,701Nov-01 103,317 8,470 1,200 112,987 86,451 5,600 2,760 94,811 16,867 2,870 -1,560 18,176 998,413Dec-01 153,142 14,415 2,870 170,427 132,657 10,942 3,927 147,525 20,486 3,473 -1,057 22,902 1,018,218Jan-02 138,113 14,479 2,530 155,122 123,064 12,812 15,694 151,570 15,049 1,666 -13,164 3,552 1,041,149Feb-02 188,064 14,164 3,060 205,288 172,903 13,111 5,920 191,935 15,161 1,052 -2,860 13,353 1,068,141Mar-02 227,188 18,712 2,260 248,161 270,011 26,082 7,560 303,653 -42,822 -7,370 -5,300 -55,492 1,005,9422001-02 1,477,983 120,819 46,430 1,645,232 1,347,484 106,726 119,270 1,573,480 130,499 14,093 -72,840 71,752 1,005,942Apr-02 195,645 12,236 2,000 209,882 173,739 10,926 7,490 192,156 21,906 1,310 -5,490 17,726 1,028,308May-02 163,851 11,944 2,070 177,865 143,645 10,073 19,480 173,198 20,207 1,870 -17,410 4,667 1,022,310Jun-02 163,841 12,220 2,430 178,491 160,002 12,623 36,580 209,206 3,839 -403 -34,150 -30,714 1,007,035Jul-02 204,479 17,386 3,110 224,975 184,411 13,750 6,457 204,619 20,067 3,636 -3,347 20,356 1,023,936Aug-02 191,894 17,316 3,923 213,134 158,261 12,144 4,730 175,135 33,633 5,173 -807 37,998 1,076,211Sep-02 219,133 16,737 8,299 244,169 208,796 15,512 13,458 237,765 10,336 1,226 -5,158 6,404 1,069,295Oct-02 250,370 20,975 11,845 283,190 200,606 15,490 8,471 224,566 49,765 5,485 3,374 58,624 1,131,528Nov-02 260,453 25,135 10,118 295,707 208,761 17,567 20,753 247,081 51,693 7,568 -10,635 48,625 1,213,928Dec-02 279,132 24,957 4,593 308,682 289,263 20,029 8,724 318,016 -10,131 4,928 -4,131 -9,334 1,226,003Jan-03 313,381 33,653 6,659 353,693 289,914 35,902 16,109 341,926 23,467 -2,250 -9,450 11,767 1,218,056Feb-03 275,184 18,820 7,709 301,714 329,379 24,986 11,786 366,151 -54,195 -6,166 -4,077 -64,437 1,170,253Mar-03 323,591 23,769 8,202 355,561 373,483 30,536 11,262 415,280 -49,892 -6,767 -3,060 -59,719 1,092,9942002-03 2,840,955 235,149 70,958 3,147,062 2,720,260 219,538 165,299 3,105,098 120,694 15,611 -94,341 41,964 1,092,994Apr-03 379,310 32,600 7,945 419,854 299,032 22,851 7,435 329,318 80,278 9,749 510 90,536 892,381May-03 310,804 30,486 8,780 350,071 247,877 26,262 8,098 282,237 62,928 4224 682 67,834 977,264Jun-03 420,585 -1797# 21,918 440,706 378,859 4,657 15,327 398,843 41,726 -6454 6,591 41,863 1,047,621Jul-03 389,887 22,143 21,578 433,607 328,853 15,128 14,827 358,808 61,034 7015 6,750 74,799 1,125,739Aug-03 425,548 6,676 22,713 654,938 368,301 13,002 22,998 404,291 57,247 -6,328 -275 50,647 1,210,397Sep-03 472,702 11,341 30,152 514,195 466,098 13,174 27,336 506,609 6,604 -1,834 2,816 7,586 1,217,780Oct-03 489,000 7,867 26,899 523,766 459,517 10,646 27,226 497,388 29,484 -2,779 -327 26,378 1,267,258Nov-03 404,951 13,411 25,392 443,754 360,425 14,308 20,248 394,981 44,526 -897 5,144 48,774 1,323,657Dec-03 589,464 26,828 26,530 642,821 536,210 27,655 24,215 588,080 53,254 -828 2,315 54,741 1,400,946Jan-04 464,315 35,659 40,659 540,633 422,945 27,912 30,864 481,720 41,371 7,748 9,795 58,914 1,453,719

Feb-04 393,621 18,419 42,354 454,394 385,807 13,655 24,920 424,382 7,814 4,764 17,434 30,012 1,456,573

* Includes repurchases as well as redemption

# IDBI- Principal MF (earlier a public sector mutual fund) has now become Principal MF (a private sector mutual fund).

Note: Data in respect of UTI-I included upto January 2003.


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2004 ■ 102

Table 31A: Scheme-Wise Resource Mobilisation by Mutual Funds

(Rs. mn.)

Scheme 2001-02 2002-03 Net Assets as onSale Purchase Net Sale Purchase Net February 29, 2004

Open-ended 1,631,440 1,539,245 92,196 313160 276737 36423 1,414,994

Close-ended 13,792 34,235 -20,444 554 1012 -458 38,726

Total 1,645,232 1,573,480 71,752 313,714 277,749 35,964 1,453,719

Table 31B: Scheme-Wise Resource Mobilisation by Mutual Funds

(Rs. mn.)

Scheme 2001-02 2002-03 April 03-February 04

Sale Purchase Net Sale Purchase Net Sale Purchase Net

A. Income/Debt Oriented Schemes (i+ii+iii+iv) 1,620,065 1,489,420 130,644 3,096,722 3,038,916 57,806 4,532,838 4,066,765 466,073

i. Liquid/Money Market 1045462 1012548 32914 1950471 1900422 50050 2,961,605 2,715,530 246,075

ii. Gilt 64387 48754 15633 52017 58922 -6905 112,040 82,373 29,667

iii. Debt (other than assured return) 496336 424395 71941 1094234 1008724 85510 1,459,192 1,268,762 190,430

iv. Debt (assured return) 13880 3724 10156 0 70849 -70849 0 100 -100

B. Growth/Equity Oriented Schemes (i+ii) 20,398 25,746 -5,348 46,396 45,963 433 210,035 155,668 54,367

i. ELSS 327 3,144 -2,817 216 6,789 -6,573 271 4,514 -4,243

ii. Others 20,071 22,602 -2,531 46,180 39,174 7,007 209,764 151,154 58,610

C. Balanced Schemes 4,769 58,313 -53,544 3,944 20,219 -16,275 21,472 19,840 1,633

Total (A+B+C) 1,645,232 1,573,480 71,752 3,147,062 3,105,098 41,964 4,764,345 4,242,273 522,072


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2004 ■ 103

Table 32: Trends in Transactions on Stock Exchanges by Mutual Funds

(Rs. mn.)

Period Equity Debt Total

Gross Purchase Gross Sales Net Purchase/Sales Gross Purchase Gross Sales Net Purchase/Sales Gross Purchase Gross Sales Net Purchase/Sales

2000-01 173758 201428 -27670 135122 84887 50235 308880 286314 22565

Apr-01 7,465 10,395 -2,930 14,645 7,150 7,495 22,110 17,545 4,566

May-01 9,944 14,732 -4,788 25,483 14,068 11,414 35,426 28,800 6,626

Jun-01 6,586 7,706 -1,121 25,195 18,381 6,814 31,780 26,087 5,693

Jul-01 4,753 9,202 -4,449 25,535 14,763 10,773 30,289 23,965 6,324

Aug-01 6,437 10,213 -3,775 29,520 17,796 11,724 35,957 28,009 7,949

Sep-01 8,785 7,669 1,116 16,146 18,764 -2,618 24,931 26,434 -1,503

Oct-01 7,514 14,258 -6,744 26,260 16,489 9,772 33,775 30,747 3,028

Nov-01 10,035 13,484 -3,450 32,817 16,320 16,497 42,851 29,804 13,047

Dec-01 13,404 12,638 766 26,178 16,752 9,426 39,583 29,391 10,192

Jan-02 17,222 21,571 -4,349 49,223 28,245 20,978 66,445 49,816 16,629

Feb-02 17,053 20,570 -3,518 38,913 30,850 8,064 55,966 51,420 4,546

Mar-02 11,783 16,501 -4,718 25,659 26,365 -706 37,442 42,866 -5,424

2001-02 120,981 158,940 -37,959 335,573 225,942 109,632 456,555 384,882 71,673

Apr-02 13,001 16,826 -3,826 31,543 17,103 14,439 44,543 33,930 10,614

May-02 13,662 15,062 -1,400 25,119 20,849 4,270 38,781 35,911 2,870

Jun-02 10,832 14,777 -3,945 32,669 23,608 9,061 43,501 38,386 5,116

Jul-02 14,446 17,324 -2,878 42,327 25,378 16,949 56,773 42,702 14,072

Aug-02 10,202 12,229 -2,027 42,612 27,772 14,840 52,814 40,000 12,814

Sep-02 9,595 9,314 281 39,524 29,629 9,894 49,119 38,943 10,176

Oct-02 12,476 12,920 -444 55,980 31,576 24,404 68,457 44,497 23,960

Nov-02 10,594 13,949 -3,355 46,378 23,875 22,503 56,972 37,824 19,148

Dec-02 14,124 14,099 24 40,215 37,962 2,252 54,338 52,061 2,277

Jan-03 15,342 19,372 -4,030 52,590 41,085 11,505 67,932 60,458 7,474

Feb-03 10,777 10,466 311 31,153 36,120 -4,966 41,930 46,586 -4,655

Mar-03 10,157 9,536 621 26,530 25,637 893 36,687 35,173 1,514

2002-03 145,209 165,876 -20,667 466,638 340,594 126,044 611,847 506,470 105,377

Apr-03 13,328 15,110 -1,772 40,190 22,676 17,515 53,518 37,775 15,743

May-03 21,107 20,424 683 53,063 26,351 26,713 74,170 46,775 27,396

Jun-03 19,975 21,931 -1,956 50,510 28,095 22,414 70,485 50,026 20,458

Jul-03 26,422 25,711 711 64,739 33,121 31,617 91,161 58,832 32,328

Aug-03 31,485 27,451 4,034 65,599 38,840 26,759 97,084 66,291 30,793

Sep-03 28,126 31,027 -2,901 58,968 42,170 16,798 87,093 73,196 13,897

Oct-03 33,623 35,572 -1,948 48,447 33,660 14,787 82,070 69,232 12,838

Nov-03 29,173 27,268 1,905 43,759 23,381 20,378 72,932 50,649 22,283

Dec-03 46,474 37,954 8,521 53,475 36,735 16,740 99,949 74,689 25,261

Jan-04 50,983 41,604 9,379 55,653 38,322 17,331 106,636 79,926 26,710

Feb-04 26,062 31,399 -5,337 31,790 35,128 -3,338 57,852 66,527 -8,675


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Table 33: Substantial Acquisition of Shares and Takeovers

(Value in Rs. mn.)

Year Open Offers Automatic Exemption

Objectives Total Number Value

Change in Control Consolidation of Substantial Acquisitionof Management Holdings

Number Value Number Value Number Value Number Value

1997-98 17 1,428.5 10 3,398.3 13 956.3 40 5,783.1 93 35,022.2

1998-99 29 996.8 25 5,869.3 12 3,270.6 66 10,136.7 201 18,881.0

1999-2000 43 2,602.6 9 710.7 23 1,299.9 75 4,613.3 252 46,774.0

2000-01 70 11,404.2 5 1,889.9 2 424.8 77 13,719.0 248 48,731.8

2001-02 54 17,560.0 26 18,150.0 1 390.0 81 36,100.0 276 25,390.4

Apr-02 8 18,471.9 3 110.7 0 0.0 11 18,582.6 52 7,256.5

May-02 9 3,850.6 4 5,076.8 1 0.8 14 8,928.2 22 913.5

Jun-02 2 150.4 6 2,269.7 0 0.0 8 2,420.1 10 538.5

Jul-02 3 11,557.0 1 24.4 0 0.0 4 11,581.4 20 1,194.9

Aug-02 5 2,046.3 1 0.8 0 0.0 6 2,047.1 25 3,631.2

Sep-02 1 17.4 3 2,902.8 0 0.0 4 2,920.2 28 5,988.3

Oct-02 0 0.0 4 2,986.0 0 0.0 4 2,986.0 27 1,317.7

Nov-02 3 911.4 4 511.2 0 0.0 7 1,422.6 10 526.1

Dec-02 3 348.5 4 2,048.5 0 0.0 7 2,397.0 12 743.5

Jan-03 5 769.8 4 8,919.9 1 13.4 10 9,703.1 14 407.6

Feb-03 5 16.7 4 226.7 0 0.0 9 243.4 9 771.2

Mar-03 2 4.1 2 654.9 0 0.0 4 659.0 9 994.9

2002-03 46 38,144.2 40 25,732.6 2 14.2 88 63,891.0 238 24,283.8

Apr-03 1 11.2 1 536.4 2 225.6 4 773.2 37 3145.9

May-03 2 184.8 1 18.1 2 9649.8 5 9852.7 14 983.8

Jun-03 5 11.2 2 1.2 0 0.0 7 12.4 17 156.8

Jul-03 3 1.6 2 70.3 0 0.0 5 71.8 13 37.0

Aug-03 2 157.2 2 10.0 2 2.7 6 169.8 6 29.5

Sep-03 5 2659 1 85 3 47.49 9 27914 12 623

Oct-03 3 782 1 172 0 0 4 956 16 1268

Nov-03 3 24.5 1 924.5 1 21.5 5 970.5 12 3755.7

Dec-03 3 8.7 0 0 0 0 3 8.7 13 557.7

Jan-04 2 30.3 3 138.4 1 83.2 6 2519 11 860.2

Feb-04 5 1.74 1 0.64 0 0 6 2.38 4 29.62


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2004 ■ 105

Table 34: Progress of Dematerialisation at NSDL and CDSL

At the end of NSDL CDSLthe period Cos- Cos-Live DPs-Live DPs- Mkt. Cap. Demat Cos- Cos-Live DPs-Live DPs- Mkt. Cap. Demat

Agreement Locations (Rs. mn.)* Quantity Agreement Locations (Rs. mn.)# QuantitySigned (million Signed (million

shares) shares)

1996-97 40 23 24 24 908,180 22 NA NA NA NA NA NA1997-98 191 171 49 200 2,883,470 1,763 NA NA NA NA NA NA1998-99 375 365 84 750 3,965,510 7,109 15 15 NA NA NA NA1999-2000 918 821 124 1,425 7,658,754 15,501 541 541 NA NA NA NA2000-01 2,821 2,786 186 1,896 5,553,757 37,208 2,723 2,703 137 132 109,060 1,920Apr-01 2,909 2,848 190 1,902 5,503,064 38,048 2,821 2,802 138 132 90,530 1,890May-01 3,014 2,981 196 2,633 5,707,832 38,616 3,106 3,062 145 140 105,370 2,270Jun-01 3,183 3,154 202 2,639 5,398,317 39,948 3,299 3,279 144 148 105,720 2,290Jul-01 3,350 3,318 203 2,651 5,148,455 41,942 3,391 3,376 142 149 125,170 2,650Aug-01 3,446 3,425 204 2,652 5,103,420 42,840 3,463 3,461 141 151 110,410 2,830Sep-01 3,561 3,506 204 2,652 4,456,000 44,035 3,556 3,546 140 151 124,570 2,990Oct-01 3,651 3,602 205 2,653 4,748,980 44,934 3,758 3,751 142 157 107,520 3,470Nov-01 3,746 3,692 207 2,655 5,288,882 45,635 3,824 3,821 141 163 126,130 3,700Dec-01 3,847 3,760 209 1,655 5,233,400 47,027 4,056 4,038 143 168 127,360 3,720Jan-02 4,012 3,954 210 1,648 5,363,152 48,340 4,177 4,168 146 177 119,870 3,990Feb-02 4,120 4,088 212 1,648 5,882,299 49,688 4,224 4,222 146 176 213,880 4,540Mar-02 4,210 4,172 212 1,648 6,150,006 51,673 4,293 4,284 148 181 243,370 4,8202001-02 4,210 4,172 212 1,648 6,150,006 51,673 4,293 4,284 148 181 243,370 4,820Apr-02 4,294 4,252 213 1,649 6,276,870 54,544 4,361 4,356 149 180 285,940 5,450May-02 4,355 4,324 212 1,649 6,049,770 56,768 4,397 4,393 151 187 313,640 5,260Jun-02 4,405 4,369 212 1,650 6,429,628 58,279 4,428 4,428 152 187 302,540 5,660Jul-02 4,482 4,437 213 1,650 5,917,323 60,614 4,463 4,455 159 192 291,070 5,850Aug-02 4,533 4,500 213 1,718 6,122,881 61,687 4,481 4,479 160 197 309,920 6,240Sep-02 4,579 4,547 213 1,718 5,725,208 63,553 4,499 4,494 166 198 298,270 6,300Oct-02 4,631 4,598 213 1,718 5,679,546 64,702 4,540 4,537 169 202 291,050 6,790Nov-02 4,665 4,631 213 1,718 6,054,445 61,457 4,552 4,549 170 202 300,950 7,020Dec-02 4,690 4,664 212 1,717 6,298,920 62,939 4,562 4,562 170 206 339,220 7,280Jan-03 4,714 4,691 213 1,718 6,335,905 64,244 4,584 4,584 174 207 352,350 7,810Feb-03 4,744 4,705 213 1,718 6,484,082 67,613 4,604 4,604 175 208 375,250 8,040Mar-03 4,803 4,761 213 1,718 6,005,389 68,757 4,628 4,628 177 212 361,640 8,2102002-03 4,803 4,761 213 1,718 6,005,389 68,757 4,628 4,628 177 212 361,640 8,210Apr-03 4,839 4,806 213 1,718 6,023,204 69,244 4,637 4,637 179 215 369,710 8,270May-03 4,888 4,854 213 1,719 6,957,011 68,870 4,663 4,663 183 217 510,280 8,790Jun-03 4,918 4,888 211 1,717 7,503,136 68,692 4,675 4,675 185 221 589,570 9,980Jul-03 4,958 4,925 212 1,718 8,158,490 70,196 4,688 4,688 187 224 610,940 10,640Aug-03 4,971 4,937 212 1,718 9,294,600 71,993 4,696 4,696 192 226 681,850 10,980Sep-03 5,030 4,993 212 1,718 9,705,000 73,480 4,714 4,717 194 227 731,090 11,140Oct-03 5,062 5,015 212 1,718 10,339,000 75,498 4,730 4,730 192 229 758,910 11,310Nov-03 5,097 5,061 213 1,718 10,113,000 76,599 4,745 4,745 192 228 789,600 11,820Dec-03 5,107 5,076 214 1,719 13,289,000 77,749 4,765 4,765 194 230 962,880 12,110Jan-04 5,149 5,118 214 1,719 12,455,000 78,261 4,776 4,776 196 230 954,940 12,250Feb-04 5,212 5,177 214 1,719 12,354,000 79,486 4,784 4,784 196 233 1,072,780 13,690

Source: NSDL and CDSL* Market capitalisation of companies that have joined NSDL (inclusive of both physical and dematerialised shares)# Market capitalisation of securities in CDSL


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2004 ■ 106

Table 35: R

eceipt and Redressal of Investor G

rievances

Year

Grievances R

eceivedG

rievances Redressed

Cum

ulativeR

edressal Rate

During the period

Cum

ulativeD

uring the periodC

umul ati ve

(%)

1991-9218,794

18,7944,061

4,06121.61

1992-931,10,317

1,29,11122,946

27,00720.92

1993-945,84,662

7,13,7733,39,517

3,66,52451.35

1994-955,16,080

12,29,8533,51,842

7,18,36658.41

1995-963,76,478

16,06,3313,15,652

10,34,01864.37

1996-972,17,394

18,23,7254,31,865

14,65,88380.38

1997-985,11,507

23,35,2326,76,555

21,42,43891.74

1998-9999,132

24,34,3641,27,227

22,69,66593.24

1999-200098,605

25,32,9691,46,553

24,16,21895.39

2000-0196,913

26,29,88285,583

25,01,80195.13

2001-0281,600

27,11,48270,328

25,72,12994.86

2002-0337,434

27,48,91638,972

26,11,10194.99

Apr-03

2,52427,51,440

2,00626,13,107

94.97

May-03

4,7502,753,666

4,0372,615,138

94.97

Jun

-037,230

2,756,1465,849

2,616,95094.95

Jul-03

9,83327,58,749

7,77026,18,871

94.93

Au

g-0313,117

2,762,0339,577

2,620,67894.88

Sep-03

16,2542,765,170

11,6842,622,785

94.85

Oct-03

18,8322,767,748

12,4542,623,555

94.79

Nov-03

21,4382,770,354

13,8382,624,939

94.75

Dec-03

24,5752,773,491

15,6022,626,703

94.71

Jan-04

29,1032,778,019

17,3232,628,424

94.62

Feb-04

33,1222,782,038

19,1352,630,236

94.54


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2004 ■ 107

Table 36 : Assets under the Custody of Custodians(Amount in Rs. mn.)

Client FII/SA FI Mutual Fund NRIs OCBs Brokers Corporates Banks Foreign Others Total

At theDepositories

end of No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount

Apr-01 1,309 514,415 24 1,334,729 240 225,845 1,711 1,756 174 19,303 5 940 463 94,295 10 42,150 9 156,042 27,856 105,140 31,801 2,494,614

May-01 1,321 544,644 26 1,297,054 242 255,354 1,724 1,883 148 22,933 5 640 467 94,283 10 42,985 9 167,031 27,749 133,177 31,701 2,559,982

Jun-01 1,344 539,881 25 1,245,428 242 268,473 1,738 1,898 170 19,101 6 1,139 472 105,193 10 71,148 9 155,577 27,625 117,039 31,641 2,524,876

Jul-01 1,339 517,251 25 1,074,447 328 269,305 1,735 1,832 174 16,085 6 1,086 485 101,116 10 43,793 9 152,080 27,579 124,879 31,690 2,301,874

Aug-01 1,342 515,060 25 1,045,568 344 291,402 1,741 1,672 171 15,688 6 1,152 483 108,563 11 154,836 9 147,836 27,464 123,194 31,596 2,404,970

Sep-01 1,320 427,270 24 979,734 347 291,029 1,744 1,476 163 14,978 5 720 492 113,166 11 61,821 31 151,516 27,384 84,019 31,521 2,125,729

Oct-01 1,326 475,113 24 1,020,807 375 307,107 1,760 1,462 164 11,846 4 1,465 495 113,004 11 64,821 31 164,545 27,317 101,590 31,507 2,261,758

Nov-01 1,355 536,351 24 1,063,261 383 306,104 1,768 1,758 164 13,885 4 1,393 500 111,913 11 73,576 31 171,856 27,287 159,120 31,527 2,439,216

Dec-01 1,332 542,136 22 1,037,037 422 312,254 1,766 1,801 181 13,543 5 70 529 109,735 13 89,722 31 160,024 27,177 104,477 31,478 2,370,798

Jan-02 1,375 560,136 25 1,067,862 435 333,879 1,788 1,903 181 14,289 4 0 539 124,444 13 116,223 31 163,863 26,967 116,072 31,358 2,498,671

Feb-02 1,372 611,562 25 1,120,579 447 357,341 1,796 1,733 183 13,046 4 0 560 128,401 14 151,833 32 173,173 26,947 128,956 31,380 2,686,625

Mar-02 1,354 617,528 26 1,108,243 458 325,705 1,820 1,848 178 12,851 4 0 565 133,111 14 177,983 32 172,971 26,780 152,430 31,231 2,702,667

2001-02 1,354 617,528 26 1,108,243 458 325,705 1,820 1,848 178 12,851 4 0 565 133,111 14 177,983 32 172,971 26,780 152,430 31,231 2,702,667

Apr-02 1,358 590,579 26 1,110,479 464 314,421 1,832 1,911 175 13,103 4 850 563 136,182 14 176,542 32 166,952 26,723 148,443 31,191 2,659,462

May-02 1,320 552,905 26 1,094,152 469 348,481 1,837 2,740 171 12,340 4 608 559 138,520 14 179,300 33 160,271 26,742 156,736 31,175 2,646,052

Jun-02 1,314 561,685 31 1,104,173 432 380,008 1,838 2,793 168 12,749 4 490 524 143,429 15 193,160 33 161,485 27,101 156,160 31,460 2,716,133

Jul-02 1,308 517,612 29 1,113,261 446 397,803 1,843 2,555 168 11,121 4 650 529 147,721 15 196,099 33 147,280 29,689 150,453 34,064 2,684,556

Aug-02 1,307 546,088 29 1,125,646 449 426,894 1,861 2,730 168 10,585 4 150 532 149,738 15 210,997 33 157,728 27,928 156,485 32,326 2,787,040

Sep-02 1,301 523,864 31 1,096,407 451 428,588 1,880 2,641 169 9,368 4 850 540 150,176 13 207,469 33 150,230 28,152 158,887 32,574 2,728,480

Oct-02 1,307 511,141 31 1,083,169 432 459,806 1,901 2,637 167 9,325 4 450 542 144,880 13 206,604 33 145,229 28,302 157,409 32,732 2,720,649

Nov-02 1,310 574,454 32 1,129,162 440 487,368 1,909 3,101 165 10,033 4 1,305 548 146,704 13 210,930 33 160,489 28,271 164,977 32,725 2,888,522

Dec-02 1,309 593,237 34 1,168,716 454 490,038 1,916 3,202 156 10,038 4 2,806 553 154,734 13 214,775 33 171,856 28,242 162,632 32,714 2,972,034

Jan-03 1,304 590,696 33 1,152,741 463 504,426 1,922 2,950 156 8,869 4 816 559 141,088 13 217,519 33 168,715 28,261 173,432 32,748 2,961,250

Feb-03 1,291 599,091 34 813,061 465 419,289 1,936 2,842 155 9,177 3 0 576 151,714 12 216,677 35 168,889 28,304 164,659 32,811 2,545,399

Mar-03 1,313 561,394 33 1,131,545 496 413,683 1,930 2,627 141 11,357 3 0 540 134,979 12 208,137 33 158,897 28,051 165,925 32,552 2,788,545

2002-03 1,313 561,394 33 1,131,545 496 413,683 1,930 2,627 141 11,357 3 0 540 134,979 12 208,137 33 158,897 28,051 165,925 32,552 2,788,545

Apr-2003 1,333 544,228 33 1,098,849 499 416,637 1,918 2,398 139 12,244 3 0 532 135,023 12 202,306 33 156,622 28,049 171,200 32,551 2,739,507

May-2003 1,549 733,187 49 1,148,726 600 634,547 1,928 2,139 119 18,945 1 250 556 173,613 12 294,039 29 37,616 28,182 179,300 33,025 3,222,362

Jun-2003 1,344 717,872 30 1,216,757 488 522,786 1,946 3,025 135 18,196 4 306 543 166,715 12 204,936 35 192,895 28,102 196,364 32,639 3,239,853

Jul-2003 1,347 764,183 30 1,241,802 486 512,626 1,950 3,008 136 21,086 5 300 560 341,371 11 204,949 35 203,285 28,211 201,255 32,771 3,493,864

Aug-2003 1,364 890,398 31 1,329,815 498 573,856 1,958 3,542 132 24,298 5 50 566 187,451 11 212,459 32 223,021 28,286 219,641 32,888 3,664,571

Sep-03 1,376 985,064 31 1,387,942 498 599,276 1,968 3,432 135 27,005 5 130 576 178,836 14 177,700 33 247,520 28,469 234,963 33,105 3,841,868

Oct-03 1,382 1,151,701 34 1,436,774 508 633,837 1,984 5,608 134 32,582 4 0 588 141,085 11 178,586 34 268,756 28,538 237,805 33,216 4,149,383

Nov-03 1,404 1,228,192 35 1,527,293 515 666,992 2,007 4,510 134 45,530 4 0 594 180,720 11 176,524 34 297,041 28,607 239,320 33,345 4,366,121

Dec-03 1,417 1,480,110 37 1,520,030 518 881,120 2,004 5,956 133 14,769 4 0 589 209,376 11 174,051 33 348,224 27,839 278,944 32,585 4,912,579

Jan-04 1,441 1,497,324 39 1,491,240 536 915,461 2,030 5,361 133 14,542 4 0 596 211,279 12 217,502 36 335,622 27,572 292,425 32,399 4,980,757

Feb-04 1,469 1,497,837 36 1,459,939 355 692,315 2,074 5,577 120 12,831 5 350 606 164,435 10 177,219 36 341,455 27,586 278,445 32,297 4,630,403

Source: Various Custodians


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2004 ■ 108

Table 37: Ratings Assigned for Corporate Debt Securities (maturity ≥≥≥≥≥ 1year)(Amount in Rs. mn.)

Grade Investment Grade Non-Investment Grade Total

Highest Safety (AAA) High Safety (AA) Adequate Safety (A) Moderate Safety (BBB)

Period Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount

1999-00 77 977,225 57 111,055 55 72,268 17 8,958 14 7,231 220 1,176,7372000-01 113 979,879 99 128,801 63 148,898 9 16,885 11 4,045 295 1,278,508Apr-01 2 40,130 7 12,970 3 1,450 1 100 1 350 14 55,000May-01 5 10,852 5 8,820 3 930 0 0 0 0 13 20,602Jun-01 9 83,218 9 35,650 6 11,450 1 150 0 0 25 130,468Jul-01 9 46,027 13 42,647 8 20,700 4 990 4 450 38 110,814Aug-01 16 391,532 23 150,470 7 26,350 4 1,490 1 150 51 569,992Sep-01 15 46,355 12 96,780 8 9,270 7 1,000 0 0 42 153,405Oct-01 5 13,792 7 5,426 11 8,310 3 1,125 0 0 26 28,653Nov-01 12 90,749 5 9,720 8 9,930 3 10,240 0 0 28 120,639Dec-01 12 70,434 8 5,850 6 19,425 0 0 1 100 27 95,809Jan-02 10 50,708 11 6,835 9 15,040 1 50 0 0 31 72,633Feb-02 3 11,642 7 11,950 3 410 0 0 0 0 13 24,002Mar-02 8 14,428 5 6,000 8 7,590 2 100 3 1,865 26 29,9832001-02 106 869,867 112 393,118 80 130,855 26 15,245 10 2,915 334 1,412,000Apr-02 6 57,430 3 6,800 3 900 1 44 1 70 14 65,244May-02 15 78,362 6 35,680 4 7,250 1 230 0 0 26 121,522Jun-02 20 113,540 6 7,050 1 30 1 134 1 200 29 120,954Jul-02 16 95,745 9 18,850 7 7,466 4 2,750 0 0 36 124,811Aug-02 14 103,324 12 13,137 13 18,150 2 3,240 1 420 42 138,271Sep-02 12 83,854 9 7,260 12 15,250 3 590 0 0 36 106,954Oct-02 7 9,718 9 6,420 1 1,000 2 405 1 100 20 17,643Nov-02 15 44,114 9 4,040 5 36,200 1 3,000 1 1,000 31 88,354Dec-02 18 41,659 7 15,650 5 9,920 1 2,000 0 0 31 69,229Jan-03 10 342,350 9 34,100 4 3,200 1 200 1 1,000 25 380,850Feb-03 19 77,494 7 31,692 1 300 3 9,486 4 11,836 34 130,808Mar-03 8 30,490 9 14,447 8 6,852 2 1,270 0 0 27 53,0592002-03 160 1,078,080 95 195,126 64 106,518 22 23,349 10 14,626 351 1,417,698Apr-03 10 36,687 6 42,934 2 3,700 1 120 0 0 19 83,441May-03 12 172,264 8 4,310 3 2,300 2 135 1 150 26 179,159Jun-03 11 133,676 6 3,370 0 0 2 139 0 0 19 137,185Jul-03 22 343,095 12 13,577 3 6,150 0 0 0 0 37 362,822Aug-03 15 86,360 5 10,556 9 16,450 1 250 0 0 30 113,616Sep-03 17 112,174 5 2,900 7 7,700 4 2,431 0 0 11 125,205Oct-03 17 42,142 4 4,500 3 2,570 2 250 0 0 26 49,462Nov-03 5 34,326 9 5,083 5 22,052 1 40 1 100 21 61,601Dec-03 18 89,512 4 1,950 7 7,722 0 0 1 6,000 30 105,185Jan-04 17 45,770 6 3,350 7 9,500 3 5,300 0 0 33 63,920Feb-04 28 110,450 13 17,256 9 3,408 5 6,200 0 0 55 137,313

Source: Various Credit Rating Agencies


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Table 38: Review of Accepted Ratings of Corporate Debt Securities (maturity ≥≥≥≥≥ 1 year)

(Amount in Rs. mn.)

Grade Upgraded Downgraded Reaffirmed Rating Watch Withdrawn/ Not Meaning TotalSuspended Category

Period Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount

1999-00 1 262 2 640 6 1,433 0 0 2 330 NA NA 11 2,665

2000-01 6 1,551 4 732 26 33,017 0 0 6 1,325 NA NA 42 36,625

Apr-01 8 4,251 14 4,095 33 20,916 0 0 3 952 NA NA 58 30,214

May-01 13 3,166 46 148,786 80 412,745 1 50 10 2,243 NA NA 150 566,990

Jun-01 12 26,562 94 91,960 91 413,415 1 50 26 3,858 NA NA 224 535,845

Jul-01 12 144,003 104 84,276 137 1,327,647 5 2,067 27 3,599 NA NA 285 1,561,592

Aug-01 33 56,220 142 217,220 216 1,603,446 34 62,183 49 10,393 NA NA 474 1,949,462

Sep-01 56 107,056 123 261,357 278 2,678,079 27 81,218 115 48,818 NA NA 599 3,176,527

Oct-01 0 0 6 1,982 22 53,449 2 236 5 1,368 NA NA 35 57,035

Nov-01 0 0 11 7,710 11 60,642 0 0 8 943 NA NA 30 69,295

Dec-01 4 14,530 7 1,067 21 89,630 1 165 7 2,024 NA NA 40 107,417

Jan-02 2 1,060 7 24,132 48 188,220 14 116,540 7 7,441 NA NA 78 337,393

Feb-02 1 268 15 385,060 54 1,666,012 3 1,800 8 3,468 NA NA 81 2,056,608

Mar-02 0 0 22 127,811 32 105,882 2 3,569 7 3,693 NA NA 63 240,955

2001-02 141 357,115 591 1,355,456 1,023 8,620,083 90 267,878 272 88,800 NA NA 2,117 10,689,332

Apr-02 1 250 26 33,304 21 108,922 1 0 12 4,252 NA NA 61 146,728

May-02 0 19 201,761 36 209,732 0 0 6 9,150 NA NA 61 420,643

Jun-02 3 1,050 21 473,048 55 130,780 4 3,039 9 3,447 NA NA 92 611,364

Jul-02 1 200 23 52,680 40 219,182 3 607 8 1,599 NA NA 75 274,267

Aug-02 1 500 17 24,585 32 414,706 3 5,805 10 3,549 NA NA 63 449,145

Sep-02 1 1,000 8 2,678 35 373,163 6 125,099 13 6,972 NA NA 63 508,912

Oct-02 1 50 15 118,701 21 95,210 8 61,140 12 3,504 NA NA 57 278,605

Nov-02 3 1,373 8 57,830 24 141,992 3 19,950 18 33,495 NA NA 56 254,640

Dec-02 6 7,500 7 29,691 28 310,089 2 1,550 10 64,786 NA NA 53 413,616

Jan-03 2 1,500 34 316,514 37 312,706 13 44,825 8 3,387 NA NA 94 678,931

Feb-03 3 700 12 9,269 51 319,325 2 3,700 14 133,137 NA NA 82 466,130

Mar-03 4 2,331 11 34,165 30 160,389 0 0 7 1,730 NA NA 52 198,615

2002-03 26 16,453 201 1,354,226 410 2,796,194 45 265,715 127 269,009 NA NA 809 4,701,597

Apr-03 1 200 3 45,242 33 301,070 2 3,090 4 569 NA NA 43 350,171

May-03 3 3,850 3 1,210 32 731,020 1 159 9 2,374 3 380 53 738,993

Jun-03 4 6,164 3 1,020 26 286,424 4 31,200 7 1,525 NA NA 44 326,333

Jul-03 3 1,969 0 0 35 169,179 3 1,266 17 23,692 NA NA 58 196,106

Aug-03 7 13,700 1 20 31 420,048 1 250 11 5,547 0 0 51 439,564

Sep-03 4 67,640 3 398 77 1,337,023 0 0 13 6,863 0 0 99 1,411,924

Oct-03 2 2,254 4 1,887 38 119,776 2 2,750 8 1,833 0 0 54 128,500

Nov-03 6 1,965 12 5,542 51 723,147 1 3,100 7 4,059 1 607 78 738,420

Dec-03 6 10,350 3 3,755 37 234,424 1 3,460 15 3,135 5 1,294 67 256,417

Jan-04 7 2,169 3 1,648 36 291,284 13 29,405 4 710 1 10 64 325,225

Feb-04 5 35,703 4 1,650 76 1,476,564 3 57,140 13 47,903 1 7 102 1,618,967

Source: Various Credit Rating Agencies


110S

EC

UR

ITIE

S A

ND

EX

CH

AN

GE

BO

AR

D O

F IN

DIA

SE

BI B

UL

LE

TIN

■ VO

L. 2 ■ N

O. 3 ■ M

AR

CH

2004 ■ 110

Table 39 M

acro Econom

ic Indicators

I. GD

P at factor cost ( 2003-04 A

dvanced Estim

ates)1

1424507 (Rs.C

rore)II. G

ross Dom

estic Saving as a %

of GD

P (2001-02)

224

III. Gross D

omestic C

apital Form

ation as a % of G

DP

(2001-02)2

21.7IV

. Monetary and B

anking Indicators3

Oct, 2003

Nov,2003

Dec,2003

Jan,2004F

eb,2004C

ash Reserve R

atio (%)

4.54.5

4.54.5

4.5B

ank Rate (%

)6.00

6.006.00

6.006.00

Money su

pply(M3) (in R

s.Crores) #

18,52,97018,68,922

18,90,78619,25,368

19,62,720A

ggregate Deposit @

(in Rs.C

rores)13,85,842

13,92,.42714,09,945

14,39,68514,69,752

Bank C

redit (in Rs. C

rores) #7,52,411

7,61,9264

7,70,3685

7,95,3508,10,965

V. Interest R

ate1

Call M

oney Rate( lending/borrow

ing )-Max

4.8/4.84.75/4.60

4.7/4.64.70/4.70

4.50/4.5291-D

ay-Treasu

ry Bill **

4.776

4.247

4.168

4.329

4.4010

PL

R (M

aximu

m) (%

)11.5

11.511.00

11.011.00

Deposit R

ate (Maxim

um

) (%)

6.006.00

5.755.5

5.5V

I. Capital M

arket IndicatorsT

urnover(B

SE

+N

SE

) (in Rs. crores)

1,68,2261,37,915

1,65,1881,99,889

1,60,181M

arket Cap-B

SE

(in Rs. crores)

10,00,49410,65,853

12,73,36112,06,854

11,96,222M

arket Cap-N

SE

(in Rs. crores)

9,26,7489,79,541

11,67,02811,16,150

11,10,954F

II Equ

ity Flow

(in Rs. crores)

6,7973,300

6,1613,177

2,398V

II. Exchange R

ate and Reserves

11

Forex reserves(R

s Crores)

4,16,7484,41,109

4,58,6364,75,873

4,90,460R

e/ Dollar

45.3345.94

45.5845.31

45.00R

e/Eu

ro53.51

54.8056.77

56.1356.29

6- months Inter B

ank Forw

ard Prem

ia of US

Dollar(%

per annum

)0.71

-0.150.18

0.990.48

VIII. P

ublic Borrow

ing 12 and InflationG

ovt. Market B

orrowing 13 (in R

s. Crores)

99,4341,04,434

1,09,4341,25,934

141,35,934

15

Whole P

rice Index(Base 1993-94)#

175.9176.5

176.4178.2

179.4IX

. Index of Industrial Production (y-o-y)%

General

182.9187.0

199.6-

-M

ining143.4

147.9155.6

--

Manu

facturing

189.3194.1

208.1-

-E

lectricity173.8

171.4178.6

--

X. E

xternal Sector Indicators

Exports (in R

s. Crores)

22,17020,459

--

-Im

ports (in Rs. C

rores)31,343

29,192-

--

Trade B

alance (in Rs.C

rores)-9,173

-8,734-

--

Export G

rowth (%

)- 1.4%

7.3%-

--

Import G

rowth (%

)15.85%

19.28%-

--

Provisional figu

res@In

cludes R

s. 25,662 crore on accou

nt of proceeds from

India M

illeniu

m D

eposits (IMD

s) since N

ovember 17, 2000. D

ata also reflect redemption

of Resu

rgent

India B

onds(R

IBs) of R

s.22,693crores since O

ct1, 2003.**M

ention

ed as Implicit Y

ield at Cu

t-off-Price(%) in

RB

I Weekly S

tatistical Su

pplemen

t1 S

ource : C

SO

website

2 Sou

rce : Econ

omic S

urvey 2002-03

3 Data as on

October 17, 2003, N

ovember 21, 2003, D

ecember 19, 2003, Jan

uary 23, 2003, Febru

ary20,20034 A

s on N

ovember 14, 2003,

5 As on

Decem

ber 12, 20036 A

s on O

ctober 22, 20037 A

s on N

ovember 25, 2003

8 As on

Decem

ber 24, 20039 A

s on Jan

uary 28, 2003

10 As on

February 25, 2003

11 As on

October 24, 2003, N

ovember 28, 2003, D

ecember 26, 2003, Jan

uary 30, 2003, Febru

ary 27, 200312 A

s on O

ctober 24, 2003, Novem

ber 28, 2003, Decem

ber 26, 2003, Janu

ary 30, 200313 R

BI’s sales an

d purch

ase inclu

de transaction

s in oth

er office also14 In

cludes th

e private placemen

t of Rs.9,500 crores w

ith R

BI on

Janau

ary2, 2004 towards repaym

ent of extern

al debt by Govern

men

t of India

15 Inclu

des the private placem

ent of R

s. 9,500 crores, Rs. 2,000 crores an

d Rs. 5,000 crores w

ith R

BI on

Janu

ary 2, 2004, Janu

ary 30, 2004 and Febru

ary 16, 2004respectively.

C:\BULLET24\MARCH\SB-MAR-7 Tan-14 Mg 17-3-2004\O.P> 17-3-2004 111

111


��

1. Social Interaction and Stock-Market Participa-tion

Hong, Harrison; Kubik, Jeffrey D.; Stein, Jeremy C.

Journal of Finance

Vol. 59 Issue 1(Feb 2004): 37- 64

The authors propose that stock-market participa-tion is influenced by social interaction. In themodel proposed by authors, any given “social”investor finds the market more attractive whenmore of his peers participate. To test this theory,they use data from the Health and RetirementStudy, and find that social households—those whointeract with their neighbours, or attend church—are substantially more likely to invest in the mar-ket than non-social households, controlling forwealth, race, education, and risk tolerance. More-over, consistent with a peer-effects story, the im-pact of sociability is stronger in states where stock-market participation rates are higher.

2. The Index Futures Markets: Is Screen TradingMore Efficient?

Copeland, Laurence; Lam, Kin; Jones, Sally-Ann

Journal of Futures Markets

Vol. 24, Issue 4(Apr 2004)

This article uses a nonparametric test based on thearc-sine law (see, e.g., Feller, 1965), which involvescomparing the theoretical distribution implied byan intraday random walk with the empirical fre-quency distribution of the daily high/low times, inorder to address the question of whether the aban-donment of pit trading has been associated withgreater market efficiency. If market inefficienciesresult from flaws in the market microstructure ofpit trading, they ought to have been eliminated bythe introduction of screen trading. If, on the otherhand, the inefficiencies are a reflection of investorpsychology, they are likely to have survived, unaf-fected by the changeover. The authors here focuson four cases. Both the FTSE-100 and CAC-40index futures contracts were originally traded byopen outcry and have moved over to electronic

trading in recent years, so the authors are able tocompare pricing behaviour before and after thechangeover. The equivalent contracts in Germanyand Korea, on the other hand, have been tradedelectronically ever since their inception.

The results overwhelmingly reject the random-walk hypothesis both for open-outcry and elec-tronic-trading data sets, suggesting there has beenno increase in efficiency as a result of the introduc-tion of screen trading.

3. Corporate Governance, Corporate Ownership,and the Role of Institutional Investors: A GlobalPerspective

Gillan, Stuart L.; Starks, Laura T.

Journal of Applied Finance

Vol. 13, No. 2(Fall/Winter2003):4 - 23

The authors examine the relation between corpo-rate governance and ownership structure, focus-ing on the role of institutional investors. In manycountries, institutional investors have becomedominant players in the financial markets. Theauthors discuss the theoretical basis for, history of,and empirical evidence on institutional investorinvolvement in shareholder monitoring. They ex-amine cross-country differences in ownershipstructures and the implications of these differ-ences for institutional investor involvement in cor-porate governance. Although there may be someconvergence in governance practices across coun-tries over time, the endogenous nature of theinterrelation among governance factors suggeststhat variation in governance structures will per-sist.

4. Why are foreign firms listed in the US worthmore?

Doidge, Craig; Karolyi, G. Andrew; Stulz, René M.

Journal of Financial Economics

Vol. 71 Issue 2 (Feb2004):205 - 239

At the end of 1997, foreign companies with sharescross-listed in the U.S. had Tobin’s q ratios that

ABSTRACTS OF RESEARCH ARTICLE




were 16.5% higher than the q ratios of non-cross-listed firms from the same country. The valuationdifference is statistically significant and reaches37% for those companies that list on major U.S.exchanges, even after controlling for a number offirm and country characteristics. The authors sug-gest that a U.S. listing reduces the extent to whichcontrolling shareholders can engage in expropria-tion and thereby increases the firm’s ability to takeadvantage of growth opportunities. They showthat growth opportunities are more highly valuedfor firms that choose to cross-list in the U.S.,particularly those from countries with poorer in-vestor rights.

5. Crashes in Bond Markets and the Hedging ofMortgages- Backed Securities

Krause, Andreas.

Journal of Fixed Income

Vol. 13, Issue 3 (Dec2003) :19-33

In Summer 2003, the U.S. bond market saw signifi-cant movements of prices that by far exceededchanges in the underlying economic conditions.According to market commentators, the reasonwas hedging activities in mortgage-backed securi-ties. A simple model shows how this hedging activ-ity can cause crashes in the bond markets, and sois able to explain the observed developments. Some

general properties of the model are broadly con-sistent with the data, thus confirming the impor-tance of hedging mortgage-backed securities forprice developments in bond markets.

6. Leverage, insider ownership, and the under-pricing of IPOs in China

Su, Dongwei.

Journal of International Financial Markets, Insti-tutions & Money

Vol. 14, Issue 1(Feb 2004):37-55

Because of the high economic uncertainty inher-ent in the privatization process, financial marketsin China are characterized by large informationasymmetry. Using data of 348 non-financial firm-commitment initial public offerings (IPOs) betweenJanuary 1994 and December 1999, the authorinvestigates the informational role of leverage andthe signaling role of insider ownership and IPOunderpricing. The main findings are that : (1) incontrast to the prediction of conventional theoryof capital structure signaling, debt does not con-vey good news in the Chinese market; (2)underpricing is positively correlated with pre-IPOleverage, a proxy for ex ante information asymme-try; and (3) insider ownership and underpricingare a pair of reinforcing signals of firm quality.


113


Publication

A. Chairman’s Speech

1. The Valedictory Address At Nirma Institute of Management, Ahmedabad “Building EnlightenedCorporate Citizens Of India” by Shri G. N. Bajpai, Chairman, SEBI on April 5, 2002

2. The Valedictory Address At Amrita Institute Of Management “Fostering Knowledge Manage-ment (Acquiring, Assimilating, Accessing, Apportioning)” by Shri G.N. Bajpai, Chairman, SEBIon April 20, 2002

3. The Convocation Address At K.J.Somaiya Institute of Management Studies and Research,Mumbai, “The Challenge Of Leadership” by Shri G.N.Bajpai, Chairman, SEBI on May 11, 2002.

4. The Inaugural Address At Institute of Company Secretaries of India, New Delhi “Need forCentralised Listing and Simplification of Delisting Norms” by Shri G. N. Bajpai, Chairman,SEBI on June 14, 2002.

5. Speech at S.D.Gupte Memorial Lecture, Mumbai,“Significance of Securities Market in theGrowth of an Economy : An Indian context” on March 13, 2003

6. Speech for the Convocation Ceremony of Dr. Gauri Hari Singhania Institute of Management &Research, Kanpur “Cultivating Winning Habit” by Shri G. N. Bajpai, Chairman, SEBI on May 26,2003.

B. Research Working Paper Series

1. Price Discovery and Volatility on NSE Futures Market, March 2003, SEBI, By Dr. M. T. Raju andKiran Karande (out of print).

2. Trade Execution Cost For Equity Shares in India, January 2002, SEBI, By Dr. M.T. Raju, KiranKarande and Shikha Taneja.

3. Impact of Takeover Regulations on Corporate Sector in India - A Critical Appraisal, June 2001,SEBI, By Dr. M. T. Raju, Neelam Bhardwaj, Kiran Karande and Shikha Taneja.

4. Dematerialisation: A Silent Revolution in the Indian Capital Market, March 2001, SEBI By Dr. M.T. Raju, and Prabhakar R. Patil (out of print).

5. Transaction Cost for Equity Shares in India (Revised), November 2000, SEBI By Dr. M. T. Raju.

6. Stock Market Volatility - A Comparative Study of Selected Markets, January 2000, SEBI By PratipKar, Dr. M. T. Raju, Prabhakar R. Patil and Kiran Karande.

7. Transaction Cost for Equity Shares in India, August 1999, SEBI By Dr. M. T. Raju and Ms VarshaMarathe.

C. Other Publications

1. Survey of Indian Investors, 1998-99, published by SEBI - NCAER. Price: Rs. 1500.

2. Survey of Indian Investors, 2000-01, published by SEBI-NCAER. Price: Rs. 750.

3. Annual Reports : 2002-03, 2001-02, 2000-01, 1999-2000, 1998-99.

PUBLICATION




Interested people may contact the Research Division of SEBI to obtain a copy of speech/workingpaper/Survey of Indian Investors/Annual Report. The contact address is:

Securities and Exchange Board of IndiaMittal Court, ‘B’ Wing, 1st Floor,224 Nariman Point,Mumbai - 400021.Tel No. 22850451-56.Fax No. 22845761.


115


GUIDELINES TO AUTHORS

Guidelines to Authors

1. Articles on subjects of interest to professionals in the securities market are welcome.

2. The article must be original and should not have been published elsewhere. The authors mustcertify themselves that the work produced by them is original in every nature.

3. Each article will have an abstract (a brief write up on the problem/issue and the results, not morethan 100-120 words)

4. Authors are solely responsible for their commissions and omissions

5. The articles should be ordinarily about 3000 words and to be written with a font size of 12 inGaramond

6. The authors must submit a soft copy of the article in word document form by mailing it [email protected].

7. The cover page shall contain the title of the article, the author’s name, designation if any andaddress. The first page of text should show the title but not the author’s name.

8. Tables: Tables must be numbered with Roman numerals. Please check that the text contains areference to each table. For tables, the numbers should have a font size of 10 in Garamond

9. Figures: Figures must be numbered with Arabic numerals.

10. Equations: All but very short mathematical expression should be displayed on a separate line andcentered. Equations must be numbered consecutively on the right margin, using Arabic numeralsin parentheses. Use Greek letters only when necessary

11. Footnotes: Footnotes must be numbered with Arabic numerals and should have a font size of eightin Garamond

12. References: References must be typed on a separate page, double-spaced, at the end of the paper.Style of reference could be the following:

(a) For Research Articles:

Jensen, Michael C., and William H. Meckling, 1976, Theory of the Firm: Managerial Behaviour,Agency Costs and Ownership Structure, Journal of Financial Economics 3, 305-360.

(b) For Books:

Fama, Eugene F., and Merton H. Miller, 1972, The Thoery of Finance (Dryden Press,Hinsdale, III.)

(c) For Contributions to Collective Papers:

Grossman, Sanford J., and Eliser D. Hart, 1982, Corporate Financial Structure, and Manage-rial Incentives, in John J. McCall ed.: The Economics of Information and Uncertainty(University of Chicago Press, III.)

13. Articles are invited only from the employees of SEBI for publishing in the SEBI Bulletin.

Disclaimer: You are required to reproduce the disclaimer of SEBI.