summer trainning report07

8/12/2019 Summer Trainning Report07

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SUMMER TRAINING REPORT

On

IL&FS INVESTSMART (HSBC GROUP)

COMPARATIVE STUDY ON CORPORATE

BROKERS IN INDIA

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A$*# Intitut O nin$in & t1+n'%'*

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ACKNO3LEDGEMENT

As an essential part of the learning process of the management programme

A$*# Intitut O nin$in & t1+n'%'*, I undertook my Summer

Training at IL&FS In4tm#$t Limit! (HSBC G$'u"), Jaipur branch. The

40 days journey gae me an opportunity to bridge the gap bet!een the

academics and the practical corporate e"perience.

I e"press my sincere thanks to my project guide at the organisation M$5 K#"i%

N# (A'1i#t S#% M#n$6 T$#!in P$'!u1t) for being a mentor and

guiding me right from the inception till the successful completion of the

project. I sincerely ackno!ledge him for e"tending his aluable guidance,

support for literature, critical reie!s of project and the report, and aboe all,

the moral support he had proided me !ith all stages of this report. Also, I#m

thankful to him for helping me understand the intricacies of the stock market.

I am grateful to $r. N5C5 Bin'* (Fin#n1i#% P%#nnin M#n#$7 HSBC

B#n87 2#i"u$ B$#n1+) for paying his precious time to!ards my research

!ork for the project and incomparable support.

I am also indebted to the supporting staff, as !ell as my fello! trainees for

their help and cooperation through the project.

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CONTENTS

3. refatory art

- (ertificate of Training from the (ompany.

- Ackno!ledgement

- 5"ecutie Summary

6. (ompany Study

- Introduction to the Industry

- About (ompany I+-S Inestsmart/

- 7rganisation Structure of the (ompany

- (ompany &istory

- 7!nership attern

- 8iisions

- 9umber of eople

- (hain of (ommand and 8epartments

- -inancial rofile of the (ompany

- Associate (ompanies

- (ompany#s roducts Serices

- About &S'(

- (ompany#s (ompetitors

1. roject

- Introduction

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- Statement of the roblem

- 7bjecties of the Study

- :esearch $ethodology

- -indings Analysis

- (onclusion :ecommendations

- Appendices

- :eferences

2. Company Study

Fin#n1 #n! In4tmnt In!ut$*

-inance and Inestment Industry is a fairly broad ranging group of institutionsthat proide arious financial serices. 5"amples of such institutions includecommercial banks, merchant or inestment/ banks, insurance companies,brokerage firms, asset managers, and an assortment of other institutions.Serices proided range from money management for priate indiiduals, todebt and e*uity under!riting for corporations to issuance of insurancepolicies, and many other serices. In today#s global markets, this industry isthe engine of the global economy, enabling corporations and the goernmentto gro! and e"pand. In 600;.? per cent. According to the latest (entral Statistical 7rganisation(S7/ data, financial serices and real estate sector rose by =.@ per cent in thefirst *uarter of 600=


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personal !ealth, more priate funding of pensions and health care and thedesire for eer more accessible and personalied financial products andserices. In turn, intense competition has s*ueeed industry margins andforced organiations to cut costs !hile still seeking to enhance the *uality of

client choice and serice. The battle for talent is also heating up as companiesseek to enhance innoation, customer loyalty and inestment returns.

The corollary of this market eolution is increasing risk as products becomemore comple", organiations more diffuse and the business enironment eermore uncertain. :egulation is also tightening in the !ake of public andgoernment pressure for improed goernance, transparency andaccountability.

In this enironment, the !inners !ill be companies that can turn thechallenges into opportunities to build stronger and more enduring customer

relationshipsB sharpen process efficiencyB unlock talent and creatiityB useimproed risk management processes to delier more sustainable returnsB anduse ne! regulatory demands as a catalyst for strengthening the business andenhancing market confidence.

The goernment has taken a number of steps in recent months to reie theeconomy, including slashing interest rates, lo!ering factory leies and morethan doubling the limit on foreign inestment in corporate bonds. Thefinancial serices space is a rapidly gro!ing one in India. The countryreceied CSD 4@ billion in foreign currency remittances from non. Indiancompanies may raise CSD 4 billion billion from I7s in the fiscal yearending $arch 13, 6030.

April


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more than tripled from CSD 46.= million on $ay 3@ to CSD 314.6 million on$ay 13, 600=.

There is optimism in the economy as funds are inesting in corporate bonds,

making li*uidity aailable to enterprises. The total amount traded in corporatebonds tripled from CSD 3?.; million to CSD @@.? million during $ay 3@ to$ay 63, 600=.

The (entral 'oard of 8irect Ta"es ('8T/ has changed the inestmentpattern for recognised proident funds and superannuation trusts managed bythe priate sector under the income


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of stock to raise money for start


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7ptions gie the buyer the right to buy or sell an underlying asset at a certainprice !ithin a specified time period. Selling or buying options inoles t!oparties, namely a buyer and a seller. The strategy of selling options is popularmostly !ith traders !ho are capable of managing the element of risk that is

inherent in such transactions. 7ptions trading inoles understanding marketconditions and predicting !here the markets are headed. So, !hen a traderbeliees that an asset !ill appreciate in the future, heGshe is likely to buy theasset at a premium alue.The instrument that gies an options holder this rightto buy the underlying asset is called a call option. A put option gies the buyerthe right to sell the asset before the predetermined date.

7ptions are particularly used for2

o Speculation2 'uyers speculate on the e"tent of price moement in a financial

instrument oer a specific period.

o &edging2 ou can use options to hedge your inestments or business contracts

against a possible do!nside.

T*" ' O"ti'n:

The arious types of options include2

o 5"change traded options 2 These options hae standard contracts that are

settled through clearing houses. Some of the e"change traded options includestock options, bond options and options in futures contracts.

o 7er


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should inest in the commodity market. 8espite risk factors, commoditytrading is preferred by inestors !ho like to take risks so as to earn highreturns een !hen trends are unpredictable.

R#% t#t:

This inestment inoles a long


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7n the basis of their structure and objectie, mutual funds can be classifiedinto follo!ing major types2

(losed


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I+-S Inestsmart is one of IndiaHs leading financial serices organiationproiding aried range of -inancial Serices for corporates and indiiduals.Inestsmart has a strong presence across !ide range of products and operatesin the areas of Inestment $anagement and Adisory Serices, 'roking

Serices, $erchant 'anking, roject Syndication, 5*uity and 8ebt 'roking,(ommodity 'roking and 8istribution of -inancial roducts.

The company is no! held by &S'(, one of the !orldHs largest banking andfinancial serices organisations.

I+-S Inestsmart +td has an all India presence through its net!ork ofbranches and franchisees oer 36> cities. -ollo!ing a successful Initial ublic7ffer I7/, II+ has been listed on both the 9ational Stock 5"change 9S5/and the 'ombay Stock 5"change 'S5/. II+ is geared to!ards understandingand achieing the financial goals of all its customers, through its specialists in

the aforesaid areas.

Note: 5"change rate used2

3CS8 M 4?.@6 I9: as on $ay 600=/

ORGANISATION STRUCTURE

COMPANY HISTORY

The company is proiding customied financial management solutions toindiiduals and corporate. Their principal actiities are to proide brokeragerelated, inesting and financial serices. They also proide loan and creditactiities, insurance products and security dealing serices. I+-SInestsmart +td !as incorporated as Inestsmart India +td on September 3,3==?, as a !holly o!ned subsidiary of Infrastructure +easing -inancialSerices +td. The company commenced e*uity broking on 9S5 and 'S5 in-ebruary 3==; and August 3=== respectiely. In June 6000, the company

commenced deriatie broking on 9S5 and in January 6003, they launchedinestment adisory products. In January 6006, !ith the ie! of consolidatethe I+-SHs interests in the capital markets, I+-S $erchant 'ankingSerices +td and 8ebton9et India +td !ere merged !ith the company. Thecompany also forayed into insurance distribution by setting up !holly o!nedsubsidiaries namely Inestsmart Insurance Agency t +td and InestsmartInsurance 8istribution t +td. In $arch 6001, the name of the company !aschanged from Inestsmart India +td to I+-S Inestsmart +td. 8uring the

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year 6001 per cent of I+-S Inestsmart +imited in the

year 600;. The deal !as settled for a total consideration of I9: 3,133.0 crore

appro"imately CSD6=>.4 million/. Inestsmart gies &S'( access to the

!orld#s third@ percent of InestsmartHs capital. 5NT:A85 $auritius +imited, I+-S and thosethat tendered shares through the open offer receied I9:600 per share fortheir Inestsmart shares. In addition, I+-S !as paid, as part of a three


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&S'( !as adised on the ac*uisition by the inestment banking diision&S'( )lobal 'anking and $arkets.

O3NERSHIP PATTERN

T#b% 6@,>=6 41.;@

7thers 4,6;?,;10 >.34

Total >=,;1>,6?1 300.00

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C+#$t


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DIVISIONS OF THE COMPANY

The follo!ing are the diisions of I+-S Inestsmart +imited2

The Investment Advisory and Broking Division

Merchant Banking Division

The Project Syndication Division

Institutional Equity Broking Division

Institutional Debt Broking division

NUMBER OF PEOPLE

I+-S Inestsmart#s 3@3; employees proide a complete range of inestment

solutions to oer 3>0,000 customers in India through its ?; branches and 3>;

franchisee outlets from oer 36> cities. The ac*uisition by &S'( )roup raises

the customer base to 60 million retail inestors across the country.

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THE CHAIN OF COMMAND AND DEPARTMENTS

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FINANCIAL PROFILE OF THE COMPANY

I+-S Inestsmart is listed on the 9ational Stock 5"change 9S5/ and

'ombay Stock 5"change 'S5/ and its )lobal 8epository Shares are listed onthe +u"embourg Stock 5"change.

(onsolidated net loss after ta" of :s30=.41 crore CSD63.@4 million/ for the

year ended 13 $arch 600= O do!n :s3>4.1= crore CSD16.1> million/compared !ith a profit of :s@4.=> crore CSD30.;6 million/ for the preiousyear.

7perating income of :s63;.=3 crore CSD41.0; million/ for the year ended 13$arch 600= O do!n :s3?1.3; CSD14.0; million/, or 44.6 per cent, compared!ith :s1=6.0= crore CSD??.3> million/ for the preious year.

+oss per share of :s3@.>? CSD0.10;/ for the year ended 13 $arch 600= O

do!n from earnings per share of :s?.;? CSD0.3@@/ for the preious year.

C'mmnt#$*I+-S Inestsmart recorded a net loss of :s30=.41 crore CSD63.@4 million/for the year ended 13 $arch 600=. This represents a :s3>4.1= croreCSD16.1> million/ decrease compared !ith the year ended 13 $arch 600;.

The do!nturn in the e*uity markets has lead to a steep fall of @0.@ per cent ine*uity broking reenue from :s314 crore CSD6>.1? million/ to :s>>.4 croreCSD31.0? million/. -inancing income has reduced 64.1 per cent from:s36=.4 crore [email protected]? million/ to :s=?.= crore CSD3=.6? million/ onaccount of deteriorating market conditions coupled !ith implementation ofmore prudent credit policies.

7perating e"penses increased by :s30.?0 crore CSD6.33 million/, or 1.@ percent, compared to the preious year mainly due to the costs associated !ithaligning the business !ith &S'( and increased proisions for losscontingencies. In addition, a good!ill impairment charge of :s;.; crore !as

recognised against one of the subsidiaries.

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ASSOCIATE COMPANIES

IL&FS In4tm#$t S1u$iti Limit! (IISL):

I+-S Inestsmart Securities +imited IIS+/ is the !holly o!ned subsidiaryof the II+ and is engaged in 5*uity market through its memberships on9ational Stock 5"change 9S5/ 'ombay Stock 5"change 'S5/

IIS+ offers 5*uity 8eriaties 'roking, $S, I7 $obilisation, $utual-unds 8istribution and other Inestment Adisory Serices to both retail as!ell as institutional clients through a net!ork of branches and franchiseesacross India. IIS+ also, has a *uality team of researchers that adise the clientsacross industries on a regular basis.

IL&FS Inu$#n1 & Ri8 M#n#mnt S$4i1 (IIIRMSL):

II:$S+ is a !holly o!ned subsidiary of II+ and offers Insurance 'rokingserices for indiiduals, groups as !ell as corporate clients. As a broker, !ealso proide adisory serices for all insurance products offered by ariousinsurance companies.

The current set up is spread across 33 locations inoling dedicated teamsdoing retail distribution of insurance products. %ithin a short span of less than3 year, II:$S+ has managed be become one of the top 30 insurance brokingcompanies in India.

IL&FS A1#!m* '$ Inu$#n1 #n! Fin#n1 Limit! (IAIFL):

IAI-+ is a !holly o!ned subsidiary of II+ and is one of the first and thelargest Insurance Training Institution licensed by the I:8A and hasestablished a first moer adantage in this business. It is the largest traininginstitution in the pre


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to ensure *uality and uniformity of approach across multiple locations in thecountry.

IL&FS In4tm#$t Ai# P#1ii1 P$i4#t Limit! (IIAPPL):

I+-S Inestsmart Asia acific riate +imited IIA+/ is the !hollyo!ned subsidiary of the II+ and is based out of Singapore. IIA+ is inoledin sericing 9:IHs and -IIHs from the Asia acific region to access the Indiancapital markets. IIA+ !orks in close association !ith both the :etail asInstitutional 'usiness 8iisions in India

IL&FS Fin#n1i#% S$4i1 Limit! (IIFSL):

I+-S Inestsmart -inancial Serices +imited II-S+/ -ormerly kno!n asTajir Inestment roperties +imited/ is a 9on.&o!eer, in ie! of the buoyancy obsered in Indian financial sector and itsoutlook for the coming years, management decided to diersify into financialsector by offering ne! products. After reie!ing arious options, themanagement of the company decided to take up securities financing related

actiities !.e.f. July 3, 600> and the (ompany is currently offering financingproducts such as $argin Trade -inancing, +oan Against Shares, I7-inancing and 5S7 -inancing.

PRODUCTS & SERVICES

The products and serices at II+ can be categoried as follo!s2

05 Rt#i% '$in

These can further be categoried as follo!s2

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ADVISORY PRODUCTS

Mutu#% Fun!: As a part of II+#s $utual -und Adisory Serices, a team ofe"perts across India helps its customers in selecting the right scheme from

oer @00 offerings, matching their needs, goals and risks. In addition to this,II+ also helps its customers constantly monitor their $- portfolio, makingchanges according to their changing needs as per the market scenario, in orderto make their money !ork for them.

At I+-S Inestsmart II+/, the e"pert teams of relationship managersinteract !ith the customers on a regular basis to discern their changing needs,in tune !ith the changing enironment. $ost of us re*uire some assistance inmaking selections appropriate to our indiidual needs. %e need sound adicefrom people !ho hae e"pertise to decipher the financial jargon of inestmentoptions aailable today. The Inestment Adisory Team at II+ helps its

customers customie and e"ecute plans, based on their indiidual needsto!ards !ealth ma"imiation.

P'$t'%i' M#n#mnt: -inancial markets today offer enormous gro!thpotential. 'ut managing one#s o!n inestments can be an e"tremely challengingtask. Anticipating market trends, assessing the impact of socio


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IPO A!4i'$* & Dit$ibuti'n S$4i1

I+-S Inestsmart II+/ is one of IndiaHs leading companies engaged in theactiity I7 Adisory and 8istribution. Its primary markets diision does acomprehensie research before recommending issues to clients. II+#s panIndia reach helps it in mobilising large number of applications across Indiaduring public offerings, this has ensured that it constantly figures amongst thetop ranking performers in the primary market distribution space.

As a part of the online offering of II+, customers can inest in I7Hs not only

through its branches but also through its !ebsite, !hich also proides its

customers !ith regular updates on the I7 scenario, 7pen I7s as !ell as allthe forthcoming I7Hs at any gien point of time. The primary markets

distribution diision !orks in conjunction !ith the retail and !holesale

distribution net!orks, as !ell as its priate client group.

Inu$#n1 A!4i'$* S$4i1

I+-S Inestsmart II+/ !orks as a one stop shop for all Insurance

:etirement needs. II+ has also been recognied as Bt Rt#i% Fin#n1i#%

A!4i'$by (9'( TE 3; for t!o years in a ro! 600>


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o (ontinuous monitoring of client account

TRADING PRODUCTS

E;uiti & D$i4#ti4

As a part of the Inestment Adisory and 'roking Serices for indiiduals,

II+ offers end


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A 4i, ' t+ "%#t'$m # it ,'u%! #""#$ 'n t+ 1$n

SmartTrade is an 5P5 based desktop soft!are designed for actie traders !hotransact fre*uently to capture faorable short


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Alert %indo! allo!s the traders to be free from !atching eery tick. They

can be notified once a security has reached the set parameters. $ultiple

securities can be monitored using the set parameters. These alerts can be

triggered both isually and audibly.

o +ie order status

Tracking all the orders of the trader is made easy through the order status

screen. -urther drill do!n into all details pertaining to an order is aailable in

the order detail sub report.

o Track orders real


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If the trader#s system is unattended this function locks the trading platform for

the trader and can be accessed again only on proiding the proper login

details.

o $essage !indo! docking

This feature enables the trader to receie trading messages, intra


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Sm#$tINVEST: T$#!in "%#t'$m '$ t+ S$i'u In4t'$

A 4i, ' t+ "%#t'$m # it ,'u%! #""#$ 'n t+ 1$n

It is a bro!ser


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o %orks behind a pro"y

This platform can be accessed on any Internet enabled net!ork. Inestors canaccess it een from their place of !ork.

o +ie streaming *uotes

Inestors can keep an eye on the stocks they care about most !ith streaming,

real


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Csing a single keystroke &ot Qey/ function, inestor can achiee important

tasks ery similar to a brokerHs terminal. Accessing important reports is also

one keystroke a!ay.

o $arket 8epth %indo!

It gies an immediate Rat a glanceR info about the stock the inestor is

follo!ing. The ie! proides the best @ bid and offer *uotes and the

outstanding order *uantities.

o 'ack 7ffice Access

Eie! segment !ise ledger bills and contract notes, trades, positions, account

balance, realiedGunrealied profit loss, and buying po!er all in real time.

Sm#$tSTART: T$#!in "%#t'$m '$ t+ Binn$

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A 4i, ' t+ "%#t'$m # it ,'u%! #""#$ 'n t+ 1$n


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It is a po!erful bro!ser based trading system for those !ho are relatiely ne!

to online inesting. A uni*ue integrated account, !hich integrates the

inestor#s banking, broking, and 8emat accounts. A comprehensie trading

serice, !hich allo!s one to inest in e*uities and deriaties. SmartStart

trading platform allo!s the inestor the fle"ibility of trading on any internet

capable system, !ith access to both the 9S5 and 'S5. Its features include2

Trade on 9S5 and 'S5

-le"ibility of trading on both the 9S5 'S5 ia a single screen.

-ully customiable display

The sae desktop option allo!s you to sae your created trade screen layout,

so the ne"t time you access the application the created layout is not lost.

Integrated accounts 'ank, 8emat Trading/

Integrates your banking, broking and demat accounts. This enables you to

trade in shares !ithout going through the hassles of tracking settlement cycles,

!riting che*ues and Transfer Instructions, chasing your broker for che*ues or

Transfer Instructions etc.

+ie order status

Tracking all your orders is made easy through the order status screen. -urther

drill do!n into all details pertaining to an order is aailable in the order detail

sub report.

8ynamic buying po!er

:eflects your credits and debits instantly on eery trade e"ecution. 9o need to

refresh each statement to kno! your latest buying limits.

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%orks behind a ro"y

This platform can be accessed on any Internet enabled net!ork. ou can

access it een from your place of !ork.

'ack office access

Eie! segment !ise ledger bills and contract notes, trades, positions, account

balance, realiedGunrealied profit loss, and buying po!er all in real time.

7ne additional feature that applies to all the Trading latforms is Sm#$tC#%%,

!here the inestor can enjoy the conenience to trade oer the phone.

The e"perienced team of :esearch Analysts and Adisory $anagers guide the

inestors !ith appropriate solutions, backed by in


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soft!are based trading platforms !hich is e*uipped !ith a host of uni*uefeatures to cater to their trading needs.

I+-S Inestsmart, offers its customers a smooth online trading e"perience

!ith e"ceptional trading tools, serice and client support enabling them tomake *uick trading decisions.Its 1


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II+ offers an opportunity to spend in a broad spectrum of $utual -unds !ithmore than @00 schemes to choose from to match indiidual needs, goals andrisk profiles. (ustomers can constantly monitor their $- portfolio and makechanges according to their needs as per the market scenario, in order to make

their money !ork for them.

IPO

As a part of !ide range of offerings, 9:Is can also inest in I7s in India byapplying through any of the branches in India or by calling the customerserice desk. Through the company !ebsite, one can receie regular updateson the I7 scenario, ongoing I7s as !ell the forthcoming I7s at any gienpoint of time.

Inu$#n1

II+ seres as the one stop shop for all the Insurance and :etirement needs. Asa composite Insurance 'roker, II+ proides comprehensie risk managementsolutions. II+ offers both life insurance and general insurance products for allinsurance companies in India.

Ot+$ 3#%t+ M#n#mnt P$'!u1t

II+#s basket of %ealth $anagement products includes :eal 5state products,riate 5*uity -unds and structured products in order to suit aried indiidual

inestment needs.

V#%u A!!! S$4i1 t' NRI

I+-S Inestsmart through its rich inestment solutions and arious alliances,endeaours to proide the serices and support that 9:Is need to manage theirinestments in India. It helps its customers through the entire inestmentprocess, step


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difficult and daunting for 9:Is. II+ proides the conenience of applying forthe an (ard at the comfort of the customer#s home at the time of aailing theserice itself.

6 A11'untin #n! In1'm T#= Rtu$n i%in in In!i# / $aking ta" filing inIndia easy.

II+ proides assistance and e"pert guidance in filing of ta"ation returns to its9:I customers in India, through its e"clusie alliances. This helps in betteraccountability and maintenance of ta" records.

6 R#$1+ #n! A!4i'$* / -or sound inestment decisions

The Inestment solutions offered by II+ are backed by in


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They identify, analyse and respond instantly to the customer#s needs. Sinceinception, II+ has been structuring and deliering financial solutions gearedto!ards its customer#s needs. This is implemented through an understandingof inestor#s business needs and their preferences. II+#s distribution reach and

financial structuring capabilities of the team ensures a !inning combinationfor the client company.

Intituti'n#% E;uit* B$'8in S$4i1:

7ur efficient e"ecution, *uality research, top *uality human resources andcomplete compliance !ith stock e"change regulations, as !ell as businessstandard ethics lend to!ards our e"emplary serices to inestors, throughI7s, e*uities, deriaties and mutual funds

II+ also focuses on identifying undiscoered alue stocks to inestors.Through its gamut of serices, this diision is !ell


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Secondary debt broking is the principle serice proided by this diision. Theclients mainly comprise of institutional debt players, such as banks, primarydealers, mutual funds, large proident funds and in some cases corporatetreasuries. The diision empanelled !ith almost all banks, primary dealers and

mutual funds, on !hose behalf it acts either on the buying or selling side. Alltypes of debt papers are coered, including goernment securities, treasurybills, public sector bonds, corporate bonds etc. This desk also proidestransacting and adisory serices to arious proident funds and &9I clients.

The primary market serices coer placement of debt paper issued bycorporates, !ith institutional segments coering banks, mutual funds etc.These serices coer follo!ing actiities 2 cities of

Ahmedabad, 'angalore, (handigarh, (hennai, (oimbatore, )urgaon,

&yderabad, Indore, Jaipur, Jodhpur, Qochi, Qolkata, +udhiana, +uckno!,

$umbai, $ysore, 9agpur, 9oida, 9e! 8elhi, atna, une, :aipur,

Triandrum, Thane, Eadodara and Eisakhapatnam.

The &S'( )roup ac*uired a majority stake in Inestsmart to enable itself to

offer retail brokerage serices to its customers across a !ider geography in the

country. It has also entered into a joint enture !ith t!o of India#s leading

public sector banks to establish the (anara &S'( 7riental 'ank of

(ommerce +ife Insurance (ompany.

&S'( &oldings plc, the parent company of the &S'( )roup, ishead*uartered in +ondon. The )roup seres customers !orld!ide fromaround =,@00 offices in ;> countries and territories in 5urope, the Asia


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COMPETITORS

-ollo!ing are the major competitors of I+-SInestsmart as a (orporate 'roker2

ICICI Di$1t

The C:+ I(I(I8irect is o!ned by I(I(I and managed by I(I(I %eb Trade

+imited. I(I(I %eb Trade +imited facilitates trading and related serices on

the internet through maintenance of the !ebsite. Trades put through

I(I(I8irect.com are e"ecuted by I(I(I %eb Trade +imited, !hich is atrading member of the 9ational Stock 5"change and The Stock 5"change,

$umbai. Its products and serices include2

Trading on 9S5 and 'S5

Inesting in $utual -unds

ersonal -inance

I7s

$argin Trading

Trading in 8eriaties

HDFC S1u$iti Limit!

&8-( Securities +imited is one of India#s premier broking houses and ispromoted by the &8-( &ousing 8eelopment -inancial (orporation/

)roup. &8-( Securities proides 7nline Trading in both 5*uity 8eriaties Segment on 9S5 'S5. roducts offered by &8-( Securitiesinclude2

7nline Trading for :esident and 9on :esident Indians

8ay Trading at both 9S5 and 'S5

Trading on -utures and 7ptions on the 9S5

7nline I7s

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Telephone


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one can inest in mutual funds, e*uity shares, I7s, and deriaties. The

trading platform is kno!n as aisapo!er (lassic.

A9IS B#n8

A"is 'ank is a priate sector Indian bank. The bank has a net !orth of :s.

6;?6.3= crores. ublic holding of A"is 'ank shares stood at @?.>0L ending

13st $arch, 600;.A"is 'ank, in alliance !ith the )eojit -inancial Serices,proides its customers the 7nline Trading facility. The serice proides an

integrated 1


44/92

adisors and are specifically responsible for managing the day


45/92

To analye !hat gies I+-S Inestsmart a (ompetitie Adantage,

especially after its ac*uisition by the &S'( )roup.

To discoer I+-S Inestsmart#s loopholes, if any, and !ays to mend them.

METHODOLOGY

- P$'b%m Diniti'n

(omparatie Analysis of the arious leading (orporate 'rokers in India is


46/92

A part of the secondary data !as obtained from the flyers on the arious

inestment plans of the brokerage firms that !ere collected by personally

isiting them. Some data !as collected by gathering information from

concerned personnel at these firms and the rest !as collected from the arious

journals and !ebsites.

FINDINGS AND ANALYSIS

Since the study is based on both primary data and

secondary data, this section is diided into 6 parts

accordingly. -irst the analysis is dra!n on the basis of

secondary data and then the primary data2

Fin!in 'n t+ B#i ' S1'n!#$* D#t#:

T#b% >50 C+#$ '$ O"nin On%in T$#!in A11'unt

B$'8$ On%in T$#!in

A11'unt O"nin

C+#$

IL&FS In4tm#$t (HSBC) R5 -

ICICIDi$1t R5

HDFC S1u$iti R5 -

St#n!#$! C+#$t$! 6 STCI R5

IDBI P#i#bui%!$ R5

A9IS B#n8 R5 0--

[46]


47/92

C+#$t >50 On%in T$#!in AC O"nin C+#$ ' t+ C'$"'$#t

B$'8$

C'mmnt:

An online trading account enables the inestors to trade in the stock market

through online trading platforms. According to table 1.3 and chart 1.3, the

charges for opening an online trading aGc are the highest for APIS 'ank and

the lo!est for Standard (hartered. The charges at II+ are neither too high, nor

too lo!.

T#b% >5< B$'8$# R#t 'n D%i4$* (B#i1 P%#n)

B$'8$ B$'8$# 'n

D%i4$*

IL&FS

In4tm#$t

(HSBC)

-5-

ICICI Di$1t -5

HDFC S1u$iti -5-

St#n!#$!

C+#$t$!6STCI

-5-

IDBI -5

A9IS B#n8 -5

[47]


48/92

C+#$t >5< B$'8$# R#t 'n D%i4$*

C'mmnt:

The brokerage rates for the deliery of shares are the highest for I(I(I8irect

and the lo!est for II+, &8-( Securities and Standard (hartered.

T#b% >5> B$'8$# R#t 'n Int$#!#* T$#!in (B#i1 P%#n)

B$'8$ B$'8$# 'n

Int$#!#* T$#!in

IL&FS

In4tm#$t

(HSBC)

-5-

ICICI Di$1t -5-

HDFC S1u$iti -50St#n!#$!

C+#$t$!6 STCI

-5-

IDBI P#i#bui%!$ -5-

A9IS B#n8 -50-

[48]


49/92

C+#$t >5> B$'8$# R#t 'n Int$#!#* T$#!in

C'mmnt:

Intraday trading refers to opening and closing a position in a security in the

same trading day. 'rokerage rates for the Intraday Trading are the highest for

&8-( Securities and the lo!est for II+, I(I(I8irect and Standard (hartered.

T#b% >5 Annu#% M#intn#n1 C+#$ '$ Dm#t AC (B#i1 P%#n)

B$'8$ AMC '$ Dm#t AC

IL&FS In4tm#$t

(HSBC)

R5 >--

ICICI Di$1t R5 --

HDFC S1u$iti R5 --

St#n!#$! C+#$t$! 6STCI R5 --

IDBI P#i#bui%!$ R5 >-

A9IS B#n8 R5 --

[49]


50/92

C+#$t >5 Annu#% M#intn#n1 C+#$ '$ t+ Dm#t AC

C'mmnt:

A 8emat aGc holder needs to pay annual maintenance charges, !hich on a

certain turnoer leel is refunded by some of the brokers. The charges are the

highest for I(I(I8irect, &8-( Securities and APIS 'ank !hile the lo!est

for only II+.

T#b% >5 B$'8$# R#t '$ Futu$ (B#i1 P%#n)

B$'8$ B$'8$# 'n Futu$

IL&FS In4tm#$t

(HSBC)

-5-

ICICI Di$1t -5-

HDFC S1u$iti -5-St#n!#$! C+#$t$! 6

STCI

-5-

IDBI P#i#bui%!$ -5-

A9IS B#n8 -5-

[50]


51/92

C+#$t >5 B$'8$# R#t '$ Futu$ b* !i$nt B$'8$

C'mmnt:

The brokerage rates for futures are the highest for I8'I aisabuilder !hile all

the other brokers charge the e*ual rates.

T#b% >5 Minimum B$'8$# "$ E=1ut! O$!$ V#%u

B$'8$ B$'8$#

IL&FS In4tm#$t (HSBC) R5


52/92

The plan for minimum brokerage that is chargeable per e"ecuted order alue

aries for different brokers, in a !ay that :s. 6@ is ma"imum amount

chargeable by II+ and I(I(I8irect, :s. 6@ is the minimum amount chargeable

by Standard (hartered, :s. 60 is the minimum amount chargeable by I8'I

aisabuilder and :s. 60 is the ma"imum amount chargeable by APIS 'ank.

The charges for &8-( Securities are not aailable. &ence, among the @

brokers, the highest !ould be for Standard (hartered and the lo!est !ould be

for APIS 'ank.

T#b% >5 SMS A%$t S$4i1

B$'8$ C+#$

IL&FS In4tm#$t (HSBC) NIL

ICICI Di$1t C+#$#b%

HDFC S1u$iti NIL

St#n!#$! C+#$t$!6 STCI C+#$#b%

IDBI P#i#bui%!$ C+#$#b%

A9IS B#n8 C+#$#b%

C'mmnt:

The brokers proide S$S Alerts Serice updating their customers on the

share market and giing adice on inestments on a regular basis. Some

brokers like II+ and &8-( Securities proide this facility free of cost. %hile

the others charge some fee.

T#b% >5. R#$1+ R"'$t

B$'8$ C+#$

IL&FS In4tm#$t (HSBC) Ni%

[52]


53/92

ICICI Di$1t Ni%

HDFC S1u$iti Ni%

St#n!#$! C+#$t$! 6STCI C+#$#b%

IDBI P#i#bui%!$ C+#$#b%

A9IS B#n8 C+#$#b%

C'mmnt:

Earious brokers aail their customers of research reports on topics like trends

in the market, position of mutual funds, I7s, comparatie studies of different

companies, inestment opportunities in a particular sector etc. II+, I(I(I and

&8-( proide these for free, !hile the others charge a certain amount.

T#b% >5 F#i%! Int$u1ti'n C+#$

B$'8$ C+#$

IL&FS In4tm#$t (HSBC) R5 -

HDFC S1u$iti N't A4#i%#b%

St#n!#$! C+#$t$!6 STCI -

A9IS B#n8 0-

[53]


54/92

C+#$t >5 F#i%! Int$u1ti'n C+#$

C'mmnt:

The (harges in this category are the highest for I8'I and I(I(I, !hile lo!est

for APIS. -or I++, these charges are neither too high nor too lo!.

T#b% >50- Dm#t C+#$

B$'8$ C+#$

IL&FS In4tm#$t (HSBC) >ICICI Di$1t >


St#n!#$! C+#$t$!6 STCI >-

IDBI P#i#bui%!$ >-

A9IS B#n8 -

[54]


55/92

C+#$t >5 Dm#t C+#$

C'mmnt:

8emat refers to a dematerialied account. Just as one has to open an account

!ith a bank, if heGshe !ants to sae hisGher money, make che*ue payments

etc., one needs to open a demat account if heGshe !ants to buy or sell and

transact shares8emat (harges are the highest for APIS !hile lo!est for

Standard (hartered and I8'I. II+ charges are neither too high nor too lo!.

T#b% >500 C+#$ '$ Rm#t

B$'8$ C+#$

IL&FS In4tm#$t (HSBC)


56/92

C+#$t >5. C+#$ '$ Rm#t

C'mmnt:

The electronic holdings can be conerted back into certificates if one !ishes

to get back hisGher shares in physical form. This is called :ematerialisation or

:emat. :emat (harges are highest for Standard (hartered and APIS and

lo!est for I(I(I and I8'I. II+ charges are neither too high nor too lo!.

T#b% >50< C+#$ '$ P%! C$#ti'n

B$'8$ C+#$

IL&FS In4tm#$t (HSBC) -


St#n!#$! C+#$t$!6 STCI -

IDBI P#i#bui%!$ 0--

A9IS B#n8


57/92

C+#$t >5 C+#$ '$ P%! C$#ti'n

C'mmnt:

ledge is an actiity of taking loan against securities by the inestor. The inestor iscalled as pledgor# and he entity !ho is giing the loan against the securities is called aspledgee#. (harges in this category are the highest for Standard (hartered and APIS!hile lo!est for II+ and I8'I.

T#b% >50> C+#$ '$ P%! C%'u$

B$'8$ C+#$IL&FS In4tm#$t (HSBC) -

HDFC N't A4#i%#b%

St#nC+#$t -

IDBI


58/92

C+#$t >50- C+#$ '$ P%! C%'u$

C'mmnt:

After the pledgor repays the loan to the pledgee, the pledgor !ill submit an instruction to

its 8 to initiate the closure of pledgeGhypothecation by indicating the option Rclose the

pledgeGhypothecationR in the pledgeGhypothecation form. This is kno!n as ledge

(losure. &ere, the charges are highest for Standard (hartered and APIS and lo!est for

II+ and I8'I.

T#b% >50 A11'unt St#tmnt C+#$

B$'8$ C+#$

IL&FS In4tm#$t (HSBC)


59/92

C+#$t >500 A11'unt St#tmnt C+#$

C'mmnt:

&ere, the APIS charges e"traordinarily high fee !hile I(I( and I8'I charge

the lo!est. II+, on the other hand, charges just a little aboe the lo!est rates.

T#b% >50 P%! In4'1#ti'n C+#$

B$'8$ C+#$

IL&FS In4tm#$t (HSBC) -ICICI Di$1t >-

HDFC N't A4#i%#b%

St#nC+#$t -

IDBI 0--

A9IS B#n8 -

[59]


60/92

C+#$t >50< P%! In4'1#ti'n C+#$

C'mmnt:

%hen a pledgee does not repay the loan amount, the shares pledged !ith the 'ank can betransferred in their faor. This is similar to the physical shares being transferred in thename of the lender in the eent of a default, !ho !ill receie the corporate actions likediidends, bonus etc in ledged shares. This is pledge inocation. The charges for these

are e"tremely high for I8'I, !hile lo!est for only I(I(I. II+, Standard (hartered andAPIS charge aerage rates.

T#b% >50 Tu$n'4$ 'n t+ b#i ' D"'it Am'unt

B$'8$ Tu$n'4$

IL&FS In4tm#$t (HSBC) Tim

ICICI Di$1t Tim

HDFC > Tim

St#nC+#$t > Tim

IDBI Tim

A9IS B#n8 > Tim

[60]


61/92

C+#$t >50> Tu$n'4$ 'n t+ D"'it A11'unt

C'mmnt:

Turnoer on the basis of deposit account is the limit !hich is gien by the

broker to the customer for doing intraday trading on hisGher deposit amount.

The higher it is, the better. The results of the research sho! that it is the

highest for II+, I(I(I and I8'I.

Fin!in 'n t+ b#i ' P$im#$* D#t#:

The respondents !ere asked 4 *uestions in all to check their a!areness on the

(orporate 'rokers that are taken under the study, as !ell as their a!areness

and participation in arious Inestments.

[61]


62/92

05 D' *'u +#4 # Dm#t #n! T$#!in A11'unt?

C+#$t >50 Dm#t #n! T$#!in AC H'%!$

C'mmnt:

About >1L of the ?0 respondents said they do hae 8emat and Trading

accounts. :est 1?L gae a negatie response either because they had little or

no kno!ledge of the share marketB or because of the risk factor inoled.


63/92

T#b% >50 P$$n1 ' V#$i'u In4tmnt O"ti'n

In4tmnt O"ti'n P$1nt#

D$i4#ti4 & S1u$iti M#$8t >0

B#n8


64/92

T#b% >50. Pu$"' ' m#8in t+ In4tmnt

In4tmnt Pu$"' P$1nt#

Rtu$n


65/92

T#b% >50 B$'8$ #11'$!in t' t+ "$$n1

B$'8$ P$1nt#

IL&FS In4tm#$t

(HSBC)


66/92

DIFFERENT INVESTMENT PLANS OF

DIFFERENT CORPORATE HOUSES

0) HSBC (IL&FS) / SOME ADVANCE BROKREAGE PLANS OF

IL&FS

SMART PO3ER

A!4#n1 ub1$i"ti'n 4#%u (R)


67/92

SMART ELITE

A!4#n1 ub1$i"ti'n 4#%u (R)


68/92


69/92

FUTURES TRANSACTIONS

T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

L t+#n R 0- C$ -5--

M'$ t+#n R 0- C$ -5--

OPTIONS TRANSACTIONS

Min B$'8$# 0 '$ R 0-- 3+i1+4$ i

Minimum

In t+i "%#n 1'm"#n* "$'4i!! # 't,#$ t' !' 'n%in t$#!in5

A!4#n1 T$#! !i$nti#% b$'8$# 1+#$ +#%% b !bit! $'m

@Bu*in P',$ #t t+ n! ' ;u#$t$

SUPER TRADE

A11'unt '"nin / R 06

S't,#$ / R 0--6 ;u#$t$%*

DELIVERY BASED TRANSACTIONS

T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

B%', R %#1 -5-

R %#1 /R 0- %#1 -5

R 0- %#1 6 R

R -

M'$ t+#n R - %#1 -5


70/92

INTRADAY TRANSACTIONS

T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

B%', R < C$ -5--

R < C$ 6 R C$ -5--

R C$ / R 0- C$ -5->

M'$ t+#n R 0- C$ -5->-

Min5 1+#$ R


71/92

>)ICICI / SOME PLANS OF ICICI ON THE BASIS OFMONTHLY SUBSCRIPTION AND TURNOVER

PLAN A

F P#*#b% / R


72/92

R 0- C$ 6 R

Ab'4 R

FUTURES BASED TRANSACTIONS

T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

B%', R C$ -5-

R C$ /R 0- C$ -5-

R 0- C$ 6 R

Ab'4 R

OPTIONS BASED TRANSACTIONS

T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# (R) 'n #1+ %

B%', R < %#1

R < %#1 /R %#1 .

R %#1 6 R 0- %#1

R 0- %#1 / R


73/92


T't#% E%iib% tu$n'4$ "$

;u#$t$

B$'8$# () 'n #1+ %

B%', R 0- %#1 -5R 0- %#1 /R -

Ab'4 C$ -5


74/92

M'nt+

B%', R < %#1

R < %#1 /R %#1 .

R %#1 6 R 0- %#1

R 0- %#1 / R


75/92


T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

B%', R C$ -5-

R C$ /R 0- C$ -5-

R 0- C$ 6 R

Ab'4 R

OPTIONS BASED TRANSACTIONS

T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# (R) 'n #1+ %

B%', R < %#1

R < %#1 /R %#1 .

R %#1 6 R 0- %#1

R 0- %#1 / R


76/92

) IDBI P#i#bui%!$ / SOME PLANS OF IDBI BANK

CLASSIC

A11'unt '"nin 1+#$ / --6


T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

B%', R < %#1 -5-

R < %#1 /R %#1 -5

R %#1 6 R 0- %#1 -5-

R 0- %#1 / R

R -

R - %#1 / R 0 C$ -5


77/92


T't#% E%iib% tu$n'4$ "$

M'nt+

B$'8$# () 'n #1+ %

B%', R < C$ -5-.

R < C$ /R C$ -5--

R C$ 6 R 0- C$ -5->

Ab'4 R 0- C$ -5-


78/92

INTRADAY BASED TRANSACTIONS

T't#% E%iib% tu$n'4$ #

"$ 4'%!#*

B$'8$# () 'n #1+

%

0 / 05 %#1 NIL

05 %#1 /


79/92

A11'unt O"nin F / 0--


T't#% E%iib% tu$n'4$ # "$ 4'%!#* B$'8$# () 'n #1+ %

0 / 0--- NIL

0--- 6

-

---- / 0 %#1 -5


80/92

OPTIONS TRANSACTIONS

Min B$'8$# -5 '$ R 3+i1+4$ i

+i+$

A!4#n1 ub1$i"ti'n 4#%u i 4#%i! '$ i= m'nt+

T+ #m'unt ,+i1+ i i4n in '$m ' A!4#n1 ub1$i"ti'n 4#%u

#!ut! 'n%* in b$'8$#5

T+ #m'unt ,+i1+ i i4n in '$m ' A!4#n1 ub1$i"ti'n 4#%u i n't

$un!#b%5

A11'$!in t' t+i "%#n t+ #m'unt ' b$'8$# +# bn 1#%1u%#t! 'n

t+ b#i ' tu$n'4$ ' 4'%um ' +#$ "$ !#*5

CONCLUSION AND RECOMMENDATIONS

According to the study, I+-S Inestsmart takes the lead in the category of

(orporate 'rokers !ith an adantage of &S'( )roup at its side. II+ is better

serice proider than its competitors because of its alue added serices like

free S$S Alerts and free research reports and e"pert financial adice etc.. and

other serices at minimal charges.

The findings also sho!ed that APIS 'ank charges e"ceptionally high fee for

almost all of its serices, hence stands *uite behind as a competitor for I+-S

Inestmart, and infact !as least preferred among the respondents.

A large number of people hae their 8emat and Trading accounts and prefer

to inest in deriaties and securities market. $a"imum number of people

seeks returns and ta" benefits from their inestments. $ost of the respondents

that had 8emat and Trading accounts !ere businessmen.

The ma"imum number of respondents preferred II+ oer other (orporate

'rokers. &o!eer, I8'I is a close competitor to II+, be it the *uality of

serice or the charges and fees. &ence, there is still some room for

improement for II+. -ollo!ing recommendations might proe of some help2

[80]


81/92

There is a need to actiely promote the products and serices for I+-S

Inestsmart II+/. :ecent ac*uisition by &S'( )roup can proe a ery

effectie !eapon for II+, since &S'( )roup is one of the largest financial

organisations of the !orld. %ith merely its brand name, II+ can build a larger

customer base across the country.

(lients need to be ackno!ledged of the benefits of diersified inestments,

since most of the people are reluctant to inest due to the fear of capital loss

and lack of a!areness.

Trainings and seminars should be constantly held for the staff to improe their

strategies and skills, especially since they face bigger challenge on *uality

serices, being a part of &S'( )roup.

LIMITATIONS OF THE STUDY

Inui1int !#t#:

The data aailable for the report !as inade*uate. $ost companies are

reluctant to proiding accurate data. As a result, some parts of the study had to

be built on some assumptions as !ell.

Dii1u%t* in u#%it#ti4 C'm"#$i'n:

Since the different brokers offer different inestment plans, it becomes

difficult to compare them accurately on the *ualitatie grounds for serices.

-or e"ample, in the case of online trading, some brokers charge their

brokerage on a turnoer basis, !hile others don#t.

P$im#$* !#t# ' # "#$ti1u%#$ $i'n:

The primary data !as collected from a sample population of Jaipur city. The

responses may differ for different cities. &ence, a alid inference could not be

dra!n based on the primary data.

[81]


82/92

S#m"% Si:

The sample sie for the research !as *uite small and may not gie an accurate

picture of the actual scenario.

APPENDICES

D'1umnt #n! %*$ 1'%%1t! $'m (in $i#% '$!$):

ICICIDI$1t

A9IS B#n8

IDBI P#i#bui%!$

IL&FS In4tm#$t

St#n!#$! C+#$t$!

5

[82]


83/92

5

[83]


84/92

REGISTERED OFFICE : 5th Floor, Mafatlal Centre, Nariman Point, Mumbai 400 021.

BACK OFFICE OPERATIONS : IDBI Building, round Floor, !B" #ing, Plot No. $%&41, 'e(tor 11, CBD Bela)ur,

Na*i Mumbai & 400 +14.

Schedule A - IDBIpaisabuilder.i Fee S!ruc!ure "r#$ %!h Februar& '((%

[84]


85/92


86/92

[86]


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[87]


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[88]


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[89]


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[90]


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REFERENCES

Qristi A Tange, 8eriaties operations, )oldman Sachs (o., 9e! ork,

CSA 600;/

E((ircle analysis of the financials 600=/

)oldman Sachs $ay 600=/

8ealogic, the )lobal 8eal 8ata roider 600=/

Indian 'rand 5*uity -oundation June 600=/

9e!s :elease by &S'( &oldings plc April6=, 600=/

The Association of Inestment Trust (ompanies 7ctober 6004/

BIBLIOGRAPHY

,,,5in4tm#$t5in

,,,5+!1151'm

,,,5#=ib#n851'm

,,,5i1i1i!i$1t51'm

,,,5i!bi"#i#bui%!$51'm

[91]
http://www.investsmart.in/http://www.hdfcsec.com/http://www.axisbank.com/http://www.icicidirect.com/http://www.idbipaisabuilder.com/http://www.investsmart.in/http://www.hdfcsec.com/http://www.axisbank.com/http://www.icicidirect.com/http://www.idbipaisabuilder.com/


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,,,5t1i'n%in51'm

,,,5n#ti'n,i!51'm

,,,5buin,851'm

,,,5in#1i#%="$51'm

,,,5+b151'5in
http://www.stcionline.com/http://www.nationwide.com/http://www.businessweek.com/http://www.finacialexpress.com/http://www.hsbc.co.in/http://www.stcionline.com/http://www.nationwide.com/http://www.businessweek.com/http://www.finacialexpress.com/http://www.hsbc.co.in/

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