SUMMER TRAINING REPORT

ON
Capital Market
(A study on perception and investment behavior of
investors of capital market)
Submitted in partial fulfillment of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Conducted by

DR APJ AK TECHNICAL UNIVERSITY, LUCKNOW

Under the guidance of
Mr. Sambhav Kumar Dr. PrarthanaShahi Territory
Manager Associate Professor
Department
Submitted By
RenuBisht
MBA III Semester
Roll No.1674870020
SESSION- 2017-18

ANSAL TECHNICAL
CAMPUS, LUCKNOW
SECTOR-C, POCKET-9, SUSHANT GOLF CITY, SHAHEED PATH, LUCKNOW
www.aitmlucknow.edu.in
Page i
 ACKNOWLEDGEMENT

We take this opportunity to express my deep sense of gratitude to all our friends and
seniorswho helped and guide me to complete this project successfully. I am highly
grateful andindebted to our project guide Mr.Sambhav Kumar for his valuable
guidance andencouragement throughout the entire research work. I would also take
opportunity toCoordinator, Department of Management Studies,Dr.PrarthanaShahifor
their immensesupport during the research period.

RenuBisht

Page ii
 Executive Summary

The project on capital study is an attempt to study an overall primary market and secondary
market in India. It’s helped to know and study the parameters opted by all the capital market and
the companies who are operating themselves under the rules and regulation of capital market.
The performance of capital market has registered a significant upward in recent times right from
the beginning capital market attract every person as it has become common to see car on road
every day and being a student of Finance I learned a lot from this project and it would help me a
lot in making my career. I come to know a lot about Indian as well as international capital
market and how they help there economy. The market for long term securities like Bonds,
Equity stock and Preferred stock is divided into primary and secondary market. The primary
market deals with the new issue of securities. Outstanding securities are traded in the secondary
market or stock exchange. In the secondary market the investor can sell and buy securities.
Stock market predominantly deals in the equity shares debts instrument like bonds and
debenture are also traded in the stock market. Well regulated and active stock market promotes
capital formation. Growth of the primary market depends on the secondary market. The health
of the economy is reflected by the growth of the stock market. Company raises funds to finance
the project to various methods. The promoters can bring the own money or borrow from the
financial institution or mobilize capital by issuing securities. The funds may be raise from issue
of fresh share at par, or at premium preference shares debentures or global depository receipts.
The main objectives of a capital issue are given below: -

 To promote a new company

 To expand an existing company
 To diversify the production
 To meet the regular working capital requirements
 To capitalize the reverses.

Securities market provides a channel of allocation of saving to those who have productiveness in
them. As a results the savers and investors are not constrained by their individualities but by the
economy’s ability to invest and save respectively, which inevitably enhance saving and
enhancement in the economy. The national stock exchange of India ltd (NSE) has genesis the
report of the high powered study group on establishment of new stock exchanges, which
recommended promotion of a national stock exchange by financial institution to provide access
to investors from all across the country on an equal footing, based on the recommendation, NSE
was promoted by leading financial institution at the behest of the government of India and was
incorporated in November 1992 as a tax paying company unlike other stock exchange in the
country.

Page iii
 TABLE OF CONTENT

1. Introduction 1-10

2. Instrument of Capital Market 11-14

3. Role Of Capital Market 15-17

4. Factors Affecting Capital Market 18-21

5. Role Of Regulatory Bodies 22-30

6. Company Profile 31-62

7. Conceptual Discussion 63-68

8. Research Methodology 69-72

Research Objectives 70
Research Design 71

10. Data Analysis & Interpretation 73-88

11. Conclusion / Findings 89-91

12. Suggestions 92-93

13. Limitations of the research 94-95

14. Bibliography/Reference 96-97

Annexure 98

Questionnaire 99-101

Page iv
 CHAPTER-1
INTRODUCTION

1|Page
 INTRODUCTION

Capital markets are markets where people, companies, and governments with more
funds than they need (because they save some of their income) transfer those funds to
people, companies, or governments who have a shortage of funds (because they spend
more than their income). Stock and bond markets are two major capital markets. Capital
markets promote economic efficiency by channelling money from those who do not
have an immediate productive use for it to those who do.

Capital markets carry out the desirable economic function of directing capital to
productive uses. The savers (governments, businesses, and people who save some
portion of their income) invest their money in capital markets like stocks and bonds. The
borrowers (governments, businesses, and people who spend more than their income)
borrow the savers' investments that have been entrusted to the capital markets.

For example, suppose A and B make Rs. 50,000 in one year, but they only spend
Rs.40,000 that year. They can invest the 10,000 - their savings - in a mutual fund
investing in stocks and bonds all over the world. They know that making such an
investment is riskier than keeping the 10,000 at home or in a savings account. But they
hope that over the long-term the investment will yield greater returns than cash holdings
or interest on a savings account. The borrowers in this example are the companies that
issued the stocks or bonds that are part of the mutual fund portfolio. Because the
companies have spending needs that exceeds their income, they finance their spending
needs by issuing securities in the capital markets.

2|Page
 Classification of Capital Markets

Capital Market

Primary Market Secondary Market

Public Issue RightIssue Bonus Private Stock

Issue Placement Exchange

Primary markets:

The primary market is where new securities (stocks and bonds are the most common)
are issued. The corporation or government agency that needs funds (the borrower) issues
securities to purchasers in the primary market. Big investment banks assist in this
issuing process. The banks underwrite the securities. That is, they guarantee a minimum
price for a business's securities and sell them to the public. Since the primary market is
limited to issuing new securities only, it is of lesser importance than the secondary
market.

The primary market is where securities are created. It's in this market that firms sell
(float) new stocks and bonds to the public for the first time. For our purposes, you can
think of the primary market as the market where an initial public offering (IPO) takes
place. Simply put, an IPO occurs when a private company sells stocks to the public for
the first time. The primary market is also the market where governments or public sector
institutions raise money through bond offerings.

3|Page
` The important thing to understand about the primary market is that securities are
purchased directly from an issuing company.

Capital or equity can be raised in primary market by any of the following four ways:

1. Public Issue:As the name suggests, public issue means selling securities to
public at large, such as IPO. It is the most vital method to sell financial
securities.

IPO's - Year Wise (IPO's in India Share Market)

Year No. Of IPO Amount Issue Issue

raised (in Succeed Failed
Rs. Cr)
2007 108 33,946.22 104 4
2008 39 18,339.92 36 3
2009 22 19,306.58 21 1
2010 66 36,362.18 64 2
2011 40 6,043.57 37 3
2012 13 6,770.17 11 2
2013 5 1,283.95 3 2
2014 7 1,200.94 5 2
2015 21 11,362.30 21 0
2016 27 26,372.48 26 1
2017 35 70,714.41 35 0

2. Rights Issue: Whenever a company needs to raise supplementary equity capital, the
shares have to be offered to present shareholders on a pro-rata basis, which is known as
the Rights Issue.

3.Bonus Issue:A bonus issue, also known as a scrip issue or a capitalization issue, is an offer

of free additional shares to existing shareholders. A company may decide to distribute further
shares as an alternative to increasing the dividend payout. For example, a company may give
one bonus share for every five shares held.

4|Page
4. Private Placement:This is about selling securities to restricted number of classy
investors like frequent investors, venture capital funds, mutual funds and banks comes
under Private Placement.

The primary market is also known as the New Issue Market (NIM) as it is the market
for issuing long-term equity capital. Since the companies issue securities directly to the
investors, it is responsible to issue the security certificates too. The creation of new
securities facilitates growth within the economy.

Secondary market:

The vast majority of capital transactions, take place in the secondary market. The
secondary market includes stock exchanges (like the New York Stock Exchange and the
Tokyo Nikkei), bond markets, and futures and options markets, among others. All of
these secondary markets deal in the trade of securities.

This is the market wherein the trading of securities is done. Secondary market consists
of both equity as well as debt markets. 

 Securities issued by a company for the first time are offered to the public in the primary
market. Once the IPO is done and the stock is listed, they are traded in the secondary
market. The main difference between the two is that in the primary market, an investor
gets securities directly from the company through IPOs, while in the secondary market,
one purchases securities from other investors willing to sell the same. 

Equity shares, bonds, preference shares, treasury bills, debentures, etc. are some of the
key products available in a secondary market. SEBI is the regulator of the same.

5|Page
 Stock Exchange
Stock exchange is a market in which securities are bought and sold and it is an essential
component of a developed capital market. The Securities Contracts
(Regulation)Act,1956, defines stock exchange as follows: “It is an association
,organizational body of individuals, whether incorporated or not, established for the
purpose of assisting regulating and controlling of business in buying , selling and
dealing in securities.”

The role of stock exchange are as follow:

 Trading in existing securities

 Listing of new securities for investment and disinvestment by savers/investors

 Imparting liquidity or encashability to stock and shares

Stock Exchange in India

 There are 24 Stock Exchanges in the country :

 UP Stock Exchange, Kanpur.

 Vadodara Stock Exchange, Vadodara.

 Koyambtour Stock Exchange, Coimbatore.

 Meerat Stock Exchange, Meerat.

 Bombay StockExchange, Mumbai.

 Over the Counter Exchange of India, Mumbai.

 National Stock Exchange, Mumbai.

 Ahmedabad Stock Exchange, Ahmedabad.

6|Page
 Bangalore Stock Exchange, Bangalore.

 BhubhaneshwarStockExchange, Bhubhaneshwar

 CalcuttaStock Exchange, Kolkata.

 Cochin Stock Exchange, Cochin.

 Delhi Stock Exchange, Delhi

 Guwahati Stock Exchange, Guwahati.

 Hyderabad Stock Exchange, Hyderabad.

 Jaipur Stock Exchange, Jaipur.

 Canara Stock Exchange, Mangalore.

 Ludhiana Stock Exchange, Ludhiana.

 Chennai Stock Exchange, Chennai.

 MP Stock Exchange, Indore.

 Magadh Stock Exchange, Patna.

 Pune Stock Exchange, Pune.

 Saurashtra Stock Exchange, Rajkot.

 Capital Stock Exchange Kerala

BSE and NSE are two major stock exchange of our country.

7|Page
BSE is established in 1875, the BSE is Asia’s first stock exchange, It claims to be the
world's fastest stock exchange, with a median trade speed of 6 microseconds,The BSE is
the world's 11th largest stock exchange with an overall market capitalization of more
than $ 2 Trillion as of July, 2017 More than 5500 companies are publicly listed on the
BSE. Of these, as of November 2016, there are only 7,800 listed companies of which
only 4000 trade on the stock exchanges at BSE and NSE. Hence the stocks trading at the
BSE and NSE account for only about 4% of the Indian economy.

Bombay Stock Exchange founded by PremchandRoychand. He was one of the most

influential businessmen in 19th-century Bombay. A man who made a fortune in the
stockbroking business and came to be known as the Cotton King, the Bullion King or
just the Big Bull. He was also the founder of the Native Share and Stock Brokers
Association, an institution that is now known as the BSE.
The Bombay Stock Exchange is the oldest exchange in Asia. Its history dates back to
1855, when 22 stockbrokerswould gather under banyan trees in front of Mumbai's Town
Hall. The location of these meetings changed many times to accommodate an increasing
number of brokers. The group eventually moved to Dalal Street in 1874 and became an
official organization known as "The Native Share & Stock Brokers Association" in
1875.
On August 31, 1957, the BSE became the first stock exchange to be recognized by
the Indian Government under the Securities Contracts Regulation Act. In 1980, the
exchange moved to the PhirozeJeejeebhoy Towers at Dalal Street, Fort area. In 1986, it
developed the S&P BSE SENSEX index, giving the BSE a means to measure the overall
performance of the exchange. In 2000, the BSE used this index to open its derivatives
market, trading S&P BSE SENSEX futures contracts. The development of S&P BSE

8|Page
SENSEX options along with equity derivatives followed in 2001 and 2002, expanding
the BSE's trading platform.
Historically an open outcry floor trading exchange, the Bombay Stock Exchange
switched to an electronic trading system developed by CMC Ltd. in 1995. It took the
exchange only 50 days to make this transition. This automated, screen-based
tradingplatform called BSE On-Line Trading (BOLT) had a capacity of 8 million orders
per day. The BSE has also introduced a centralized exchange-based internet trading
system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE
platform.Now BSE has raised capital by issuing shares and as on 3rd may 2017 the BSE
share which is traded in NSE only closed with Rs.999. 
The BSE is also a Partner Exchange of the United Nations Sustainable Stock Exchange
initiative, joining in September 2012.

9|Page
The National Stock Exchange of India Limited (NSE) is the leading stock exchange of
India, located in Mumbai. The NSE was established in 1992 as the first demutualized
electronic exchange in the country. NSE was the first exchange in the country to provide
a modern, fully automated screen-based electronic trading system which offered easy
trading facility to the investors spread across the length and breadth of the country.Mr.
VikramLimaye is Managing Director & Chief Executive Officer (MD & CEO) of NSE.

National Stock Exchange has a total market capitalization of more than US$1.41 trillion,

making it the world’s 12th-largest stock exchange as of March 2016. NSE's flagship
index, the NIFTY 50, the 51 stock index (50 companies with 51 securities inclusive of
DVR), is used extensively by investors in India and around the world as a barometer of
the Indian capital markets. However, only about 4% of the Indian economy / GDP is
actually derived from the stock exchanges in India.
NSE offers trading, clearing and settlement services in equity, equity derivatives, debt
and currency derivatives segments. It is the first exchange in India to introduce
electronic trading facility thus connecting together the investor base of the entire
country. NSE has 2500 VSATs and 3000 leased lines spread over more than 2000 cities
across India.
The exchange was incorporated in 1992 as a tax-paying company and was recognized as
a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when P.
V.Narasimha Rao was the Prime Minister of India and Manmohan Singh was the
Finance Minister. NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The capital market (equities) segment of the NSE commenced
operations in November 1994, while operations in the derivatives segment commenced
in June 2000.
Unlike countries like the United States where nearly 70% of the GDP is derived from
larger companies and the corporate sector, the corporate sector in India accounts for only
12-14% of the national GDP (as of October 2016). Of these only 7,800 companies are
listed of which only 4000 trade on the stock exchanges at BSE and NSE. Hence the
stocks trading at the BSE and NSE account for only around 4% of the Indian economy,
which derives most of its income related activity from the so-called unorganized sector
and households.

10 | P a g e
 CHAPTER-2

INSTRUMENTS OF
CAPITAL MARKET

11 | P a g e
 Instruments of Capital Market

The following instrument are being used for raising resources:

 Equity Shares

 Preference Shares

 Non- voting Shares

 Cumulative Convertible Preference Shares

 Company Fixed deposits

 Warrants

 Debentures/Bonds

 Secured Premium Notes(SPNs)

 Euro Convertible Bonds(ECBs)/Global Depository Receipts (GDRs)

 Equity shares: An equity share, commonly referred to as ordinary share also

represents the form of fractional or part ownership in which a shareholder, as a
fractional owner, undertakes the maximum entrepreneurial risk associated with a
business venture. The holders of such shares are members of the company and
have voting rights.

 Preference Shares: Preference shares, more commonly referred to as

preferred stock, are shares of a company's stock with dividends that are paid out
to shareholders before common stock dividends are issued. If the company enters

12 | P a g e
 bankruptcy, the shareholders with preferred stock are entitled to be paid from
company assets first.

 Non- voting Shares: Corporate securities which stand on equal footing with
ordinaryshares (common stock) in terms of dividend and capital return rights, but
their owners cannot vote on company resolutions or in the election of board of
directors.

 Cumulative Convertible Preference Shares:Cumulative

ConvertiblePreference Share are a type of preference shares where the dividend
payable on the same accumulates, if not paid. After a specified date,
these shares will be converted into equity capital of the company.

 Company Fixed deposits:  The deposit placed by investors

with companies for a fixed term carrying a prescribed rate of interest is
called Company Fixed Deposit. Financial institutions and Non-Banking
Finance Companies (NBFCs) also accept such deposits.

 Warrants:  Warrant is a derivative that confers the right, but not the
obligation, to buy or sell a security–normally an equity – at a certain price before
expiration. The price at which the underlying security can be bought or sold is
referred to as the exercise price or strike price.

 Debentures/Bonds: A debenture is a type of debt instrument that is not

secured by physical assets or collateral. Debenturesare backed only by the
general creditworthiness and reputation of the issuer. Both corporations and
governments frequently issue this type of bond to secure capital.

 Secured Premium Notes(SPNs): Secured premium notes (SPNs) are

financial instruments which are issued with detachable warrants and are
redeemable after certain period. SPN is a kind of non-convertible debenture
(NCD) attached with warrant. It can be issued by the companies with the lock-in-
period of say four to seven years.

13 | P a g e
 Euro Convertible Bonds(ECBs)/Global Depository Receipts (GDRs):
A Euro-Convertible Bond (ECB) is a hybrid security with the properties of both
stock and bond. Further, since there are two currencies involved in this hybrid
security, in addition to the conversion option, there is also a currency option
embedded.And global depository receipt (GDR) is a certificate issued by
a depository bank, which purchases shares of foreign companies and deposits it
on the account. They are the global equivalent of the original
American depository receipts (ADR) on which they are based.

14 | P a g e
 CHAPTER-3
ROLE OF CAPITAL
MARKET

15 | P a g e
 ROLE OF CAPITAL MARKET

Capital market enables corporations to raise capital/funds to finance their investment in

real assets. It also helps in diffusing stresses on the banking system by matching long-
term investments with long-term capital. It encourages broader ownership of productive
assets by small savers. The role of capital market as follow:

1. Mobilization of Savings : Capital market is an important source for mobilizing

idle savings from the economy. It mobilizes funds from people for
further investments in the productive channels of an economy. In that sense it activate
the ideal monetary resources and puts them in proper investments.

2. Capital Formation : Capital market helps in capital formation. Capital

formation is net addition to the existing stock of capital in the economy. Through
mobilization of ideal resources it generates savings; the mobilized savings are made
available to various segments such as agriculture, industry, etc. This helps in
increasing capital formation.

3. Provision of Investment Avenue :Capital market raises resources for longer

periods of time. Thus it provides an investment avenue for people who wish to invest
resources for a long period of time. It provides suitable interest rate returns also to
investors. Instruments such as bonds, equities, units of mutual
funds, insurance policies, etc. definitely provides diverse investment avenue for the
public.

4. Speed up Economic Growth and Development : Capital market

enhances production and productivity in the national economy. As it makes funds
available for long period of time, the financial requirements of business houses are
met by the capital market. It helps in research and development. This helps in,
increasing production and productivity in economy by generation of employment and
development of infrastructure.

16 | P a g e
5. Proper Regulation of Funds : Capital markets not only helps in fund
mobilization, but it also helps in proper allocation of these resources. It can have
regulation over the resources so that it can direct funds in a qualitative manner.

6. Service Provision : As an important financial set up capital market provides

various types of services. It includes long term and medium term loans to industry,
underwriting services, consultancy services, export finance, etc. These services help
the manufacturing sector in a large spectrum.

7. Continuous Availability of Funds : Capital market is place where the

investment avenue is continuously available for long term investment. This is a liquid
market as it makes fund available on continues basis. Both buyers and seller can easily
buy and sell securities as they are continuously available. Basically capital market
transactions are related to the stock exchanges. Thus marketability in the capital
market becomes easy.
These are the important functions of the capital market.

17 | P a g e
 Chapter-4

Factors Affecting Capital

Market

18 | P a g e
 Factors Affecting Capital Market

The capital market is affected by arrange of factors. Some of the factors which influence
capital market are as follow:

A)Performance of domestic companies:-The performance of the companies or rather

corporate earnings is one of the factors which has direct impact or effect on capital
market in a country. Weak corporate earnings indicate that the demand for goods and
services in the economy is less due to slow growth in per capita income of people.
Because of slow growth in demand there is slow growth in employment which means
slow growth in demand in the near future. Thus weak corporate earnings indicate
average or not so good prospects for the economy as a whole in the near term. In such a
scenario the investors (both domestic as well as foreign) would be wary to invest in the
capital market and thus there is bear market like situation. The opposite case of it would
be robust corporate earnings and it’s positive impact on the capital market.

B) Environmental Factors :-Environmental Factor in India’s context primarily means-

Monsoon . In India around 60 % of agricultural production is dependent on monsoon.
Thus there is heavy dependence on monsoon.The major chunk of agricultural production
comes from the states of Punjab, Haryana & Uttar Pradesh. Thus deficient or delayed
monsoon in this part of the country would directly affect the agricultural output in the
country. Apart from monsoon other natural calamities like Floods, tsunami, drought,
earthquake, etc. also have an impact on the capital market of a country.

C) Macro Economic Numbers :-The macro economic numbers also influence the
capital market. It includes Index of Industrial Production (IIP) which is released every
month, annual Inflation number indicated by Wholesale Price Index (WPI) which is
released every week, Export – Import numbers which are declared every month, Core
Industries growth rate (It includes Six Core infrastructure industries – Coal, Crude oil,
refining, power, cement and finished steel) which comes out every month, etc. This

19 | P a g e
macro –economic indicators indicate the state of the economy and the direction in which
the economy is headed and therefore impacts the capital market in India.

D) Global Cues :-In this world of globalization various economies are interdependent
and interconnected. An event in one part of the world is bound to affect other parts of
the world, however the magnitude and intensity of impact would vary. Thus capital
market in India is also affected by developments in other parts of the world i.e. U.S.,
Europe, Japan, etc.Global cues includes corporate earnings of MNC’s, consumer
confidence index in developed countries, jobless claims in developed countries, global
growth outlook given by variousagencies like IMF, economic growth of major
economies, price of crude –oil, credit rating of various economies given by Moody’s, S
& P, etc.An obvious example at this point in time would be that of subprime crisis &
recession. Recession started in U.S. and some parts of the Europe in early 2008 .Since
then it has impacted all the countries of the world- developed, developing, less-
developed and even emerging economies.

E) Political stability and government policies:-For any economy to achieve and

sustain growth it has to have political stability and pro- growth government policies.
This is because when there is political stability there is stability and consistency in
government’s attitude which is communicated through various government policies. The
vice- versa is the case when there is no political stability .So capital market also reacts to
the nature of government, attitude of government, and various policies of the
government.

F) Growth prospectus of an economy:-When the national income of the country

increases and per capita income of people increases it is said that the economy is
growing. Higher income also means higher expenditure and higher savings. This augurs
well for the economy as higher expenditure means higher demand and higher savings
means higher investment. Thus when an economy is growing at a good pace capital
market of the country attracts more money from investors, both from within and outside
the country and vice -versa. So we can say that growth prospects of an economy do have
animpact on capital markets.

G) Investor Sentiment and risk appetite :-Another factor which influences capital
market is investor sentiment and their risk appetiteEven if the investors have the money

20 | P a g e
to invest but if they are not confident about the returns from their investment , they may
stay away from investment for some time.At the same time if the investors have low risk
appetite , which they were having in global and Indian capital market some four to five
months back due to global financial meltdown and recessionary situation in U.S. &
some parts of Europe , they may stay away from investment and wait for the right time
to come.

21 | P a g e
 CHAPTER-5

ROLE OF

REGULATORY BODIES

22 | P a g e
 ROLE OFREGULATORY BODIES

ROLE OF RBI

Modern day central banking extends far beyond the domain of traditional functions such
as currency management, banker to Government and promoting financial soundness.
These re-orientations have been the natural corollary of pursuing monetary policy
measures that are focused on definitive, well-defined and quantifiable objectives.
Central banks in emerging economies differ from their counterparts of developed
countries in several ways. In some developed countries, central banks are vested only
with the conduct of monetary policy. In most emerging countries, central banks, besides
monetary policy, also shoulder the responsibilities of debt management, and
regulation/supervision of banks and financial institutions. Even in regard to the conduct
of monetary policy, central banks in emerging economies have to contend with several
objectives, and distinct trade-offs as compared with some developed countries which
pursue a single objective of price stability. While pursuing multiple objectives, and
managing complex trade-offs, central banks in emerging countries assume the
responsibility of looking after the interests of several agents including depositors,
intermediaries, government, business, and external trade. In regard to choice of
instruments, given the level of market development, and multiple objectives, emerging
countries cannot entirely rely on single instrument such as interest rates. Rather, central
banks in emerging countries prefer a judicious mix of interest rates, cash reserves, and
other instruments. The most striking feature of central banking in emerging countries
pertains to their critical role in development of financial markets and active involvement
in the institution building process.
In the Indian context, the Reserve Bank of India (RBI), in consultation with the
Government, has played a major role in institution building since independence. Efforts
in this direction encompass RBI’s contribution to development of commercial banking,
development finance institutions in the areas of agriculture and industry, and specialised
institutions for development of financial markets. After initiation of the economic
reforms of the early 1990s, the role of RBI in the area of developing financial markets

23 | P a g e
particularly the government securities, money markets and payment and settlement
systems has come to the fore. Moreover, in a global environment, with increasing
integration of the international economy, the RBI’s role as the regulator and supervisor
of commercial banks and financial institutions has assumed a central place in promoting
transparency and credibility of institutions and monetary and financial policies.

ROLE OF SEBI
The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to
protect the interests of the investors in securities and to promote the development of, and
to regulate, the securities market and for matters connected therewith and incidental
thereto.
The following departments of SEBI take care of the activities in the secondary market.

S.No. Name of the Department Major Activities

1. Market Intermediaries Registration, supervision, compliance
Registration and Supervision monitoring and inspections of all market
department (MIRSD) intermediaries in respect of all segments of the
markets viz. equity, equity derivatives, debt
and debt related derivatives.

2. Market Regulation Formulating new policies and supervising the

Department (MRD) functioning and operations (except relating to
derivatives)of securities exchanges,their
subsidiaries, and market institutions such as
Clearing and settlement organizations and
Depositories (Collectively referred to as
‘Market SROs’.)

3. Derivatives and New Supervising trading at derivatives segments of

Products Departments stock exchanges, introducing new products to
(DNPD) be traded, and consequent policy changes

The issue of debt securities having maturity period of more than 365 days by listed
companies (i.e. which have any of their securities, either equity or debt, offered through
an offer document, and listed on a recognized stock exchange and also includes Public

24 | P a g e
Sector Undertakings whose securities are listed on a recognized stock exchange) on
private placement basis must comply with the conditions prescribed by SEBI from time
to time for getting them listed on the stock exchanges. Further, unlisted
companies/statutory corporations/other entities, if they so desire, may get their privately
placed debt securities listed on the stock exchanges, by complying with the relevant
conditions. Briefly, these conditions are:
Compliance with disclosure requirements under Chapter VI of the SEBI (Disclosure and
Investor Protection) Guidelines, 2000, Listing Agreement with the exchanges and
provisions of the Companies Act.
Such disclosures may be made through the web site of the stock exchanges where the
debt securities are sought to be listed if the privately placed debt securities are issued in
the standard denomination of Rs.10 lakhs.
The company shall sign a separate listing agreement with the exchange in respect of debt
securities.
The debt securities shall carry a credit rating from a Credit Rating Agency registered
with SEBI.
The company shall appoint a debenture trustee registered with SEBI in respect of the
issue of the debt securities.
The debt securities shall be issued and traded in demat form.
All trades with the exception of spot transactions, in a listed debt security, shall be
executed only on the trading platform of a stock exchange.
Guidelines on Advertisements

 An issue advertisement shall be truthful, fair and clear and shall not contain any
statement which is untrue or misleading.

 Any advertisement reproducing or purporting to reproduce any information

contained in a offer document shall reproduce such information in full and
disclose all relevant facts and not be restricted to select extracts relating to that
item.
An issue advertisement shall be considered to be misleading, if it contains -

 Statements made about the performance or activities of the company in the

absence of necessary explanatory or qualifying statements, which may give an
exaggerated picture of the performance or activities, than what it really is.

25 | P a g e
  An inaccurate portrayal of past performance or its portrayal in a manner which
implies that past gains or income will be repeated in the future.

 An advertisement shall be set forth in a clear, concise and understandable

language.

 Extensive use of technical, legal terminology or complex language and

 the inclusion of excessive details which may distract the investor, shall be
avoided.

 An issue advertisement shall not contain statements which promise or guarantee

rapid increase in profits.

 An issue advertisement shall not contain any information that is not contained in
the offer document.

 No models, celebrities, fictional characters, landmarks or caricatures or the likes

shall be displayed on or form part of the offer documents or issue
advertisements.

 Issue advertisements shall not appear in the form of crawlers (theadvertisements

which run simultaneously with the programme in a narrow strip at the bottom of
the television screen) on television.

.FUNCTIONS OF SEBI
SEBI has been obligated to protect the interests of the investors in securities and to
promote and development of, and to regulate the securities market by such measures as
it thinks fit. The measures referred to therein may provide for:-
(a) Regulating the business in stock exchanges and any other securities markets;
(b) registering and regulating the working of stock brokers, sub-brokers, share transfer
agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant
bankers, underwriters, portfolio managers, investment advisers and such other
intermediaries who may be associated with securities markets in any manner;
(c) registering and regulating the working of the depositories, participants, custodians of
securities, foreign institutional investors, credit rating agencies and such other
intermediaries as SEBI may, by notification, specify in this behalf;
(d) Registering and regulating the working of venture capital funds and collective
investment schemes including mutual funds;

26 | P a g e
(e) Promoting and regulating self-regulatory organizations;
(f) Prohibiting fraudulent and unfair trade practices relating to securities markets;
(g) Promoting investors' education and training of intermediaries of securities markets;
(h) Prohibiting insider trading in securities;
(i) Regulating substantial acquisition of shares and take-over of companies;
(j) calling for information from, undertaking inspection, conducting inquiries and audits
of the stock exchanges, mutual funds, other persons associated with the securities
market, intermediaries and self- regulatory organizations in the securities market;
(k) calling for information and record from any bank or any other authority or board or
corporation established or constituted by or under any Central, State or Provincial Act in
respect of any transaction in securities which is under investigation or inquiry by the
Board;
(l) Performing such functions and exercising according to Securities Contracts
(Regulation) Act, 1956, as may be delegated to it by the Central Government;
(m) Levying fees or other charges for carrying out the purpose of this section;
(N) Conducting Research For The Above Purposes;
(o) Calling from or furnishing to any such agencies, as may be specified by SEBI, such
information as may be considered necessary by it for the efficient discharge of its
functions;
(P) Performing Such Other Functions As May Be Prescribed.
SEBI may, for the protection of investors, (a) specify, by regulations, (i) the matters
relating to issue of capital, transfer of securities and other matters incidental thereto; and
(ii) the manner in which such matters, shall be disclosed by the companies and (b) by
general or special orders, (i) prohibit any company from issuing of prospectus, any offer
document, or advertisement soliciting money from the public for the issue of securities,
(ii) specify the conditions subject to which the prospectus, such offer document or
advertisement, if not prohibited may be issued (Section 11A).
SEBI may issue directions to any person or class of persons referred to in section 12, or
associated with the securities market or to any company in respect of matters specified
in section 11A. if it is in the interest of investors, or orderly development of securities
market to prevent the affairs of any intermediary or other persons referred to in section
12 being conducted in a manner detrimental to the interests of investors or securities

27 | P a g e
market to secure the proper management of any such intermediary or person (Section
11B).
Registration of Intermediaries
The intermediaries and persons associated with securities market shall buy sell or deal in
securities after obtaining a certificate of registration from SEBI, as required by Section
12:
1) Stock-broker,
2) Sub- broker,
3) Share transfer agent,
4) Banker to an issue,
5) Trustee of trust deed,
6) Registrar to an issue,
7) Merchant banker,
8) Underwriter,
9) Portfolio manager,
10) Investment adviser
11) Depository,
12) Depository Participant
13) Custodian of securities,
14) Foreign institutional investor,
15) Credit rating agency or
16) Collective investment schemes,
17) Venture capital funds,
18) Mutual fund, and
19) Any other intermediary associated with the securities market
SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992
In terms of regulation 1(g), ‘small investor' means any investor buying or selling
securities on a cash transaction for a market value not exceeding rupees fifty thousand in
aggregate on any day as shown in a contract note issued by the stockbroker Registration
of Stock Broker

28 | P a g e
A stock broker applies in the prescribed format for grant of a certificate through the
stock exchange or stock exchanges, as the case may be, of which he is admitted as a
member (Regulation 3). The stock exchange forwards the application form to SEBI as
early as possible as but not later than thirty days from the date of its receipt.
SEBI takes into account for considering the grant of a certificate all matters relating to
buying, selling, or dealing in securities and in particular the following, namely, whether
the stock broker:
(a) is eligible to be admitted as a member of a stock exchange,
(b) Has the necessary infrastructure like adequate office space, equipment and man
power to effectively discharge his activities,
(c) Has any past experience in the business of buying, selling or dealing in securities,
(d) Is subjected to disciplinary proceedings under the rules, regulations and byelaws
Of a stock exchange with respect to his business as a stock-broker involving either
himself or any of his partners, directors or employees, and
(e) Is a fit and proper person.
SEBI on being satisfied that the stock-broker is eligible, grants a certificate to the stock-
broker and sends intimation to that effect to the stock exchange or stock exchanges, as
the case may be. Where an application for grant of a certificate does not fulfill the
requirements, SEBI may reject the application after giving a reasonable opportunity of
being heard.
Fees by stock brokers
Every applicant eligible for grant of a certificate shall pay such fees and in such manner
as specified in Schedule III. Provided that SEBI may on sufficient cause being shown
permit the stock-broker to pay such fees at any time before the expiry of six months
from the date for which such fees become due (Regulation 10).
Where a stock-broker fails to pay the fees, SEBI may suspend the registration certificate,
whereupon the stock- broker shall cease to buy, sell or deal in securities as a stock-
broker.
Appointment of Compliance Officer
Every stock broker shall appoint a compliance officer who shall be responsible for
monitoring the compliance of the Act, rules and regulations, notifications, guidelines,
instructions etc. issued by SEBI or the Central Government and for redressal of

29 | P a g e
investors’ grievances. The compliance officer shall immediately and independently
report to SEBI any non-compliance observed by him (Regulation 18A).

30 | P a g e
 CHAPTER-6
COMPANY PROFILE

31 | P a g e
Sharekhan is the largest standalone retail brokerage in the country and the third largest
in terms of customer base after ICICI Direct and HDFC Securities.Sharekhan is one of
the pioneers of online trading in India.It offers a broad range of financial products and
services including securities brokerage, mutual fund distribution, loan against shares,
ESOP financing, IPO financing and wealth management.

Background
Sharekhan Ltd. is one the leading retail stock broking house of SSKKI group
which is running successfully since 1922 in the country. It is the retail broking
arm of the Mumbai-based SSKI Group, which has over eight decades of
experience in the stock broking business. Sharekhan offers its customer a wide
range of equity related services including trade execution on BSE, NSE,
Derivatives, depository services online trading, investment advice etc. The firm’s
online trading and investment site- WWW.Sharekhan.com – was launched on Feb
8, 2000. The site gives access to superior content and transaction facility to retail
customers across the country. Known for its Jargon-free, investor friendly laugh
and high quality research, the site has a registered base of over one lakh
customers. The content-rich and research oriented portal has stood out among its
contemporaries because of its steadfast dedication to offering customers best-of-
breed technology and superior market information. The objective has to let customers
make informed decisions and to simplify the process investing in stocks.

32 | P a g e
On April 17, 2002 Sharekhan launched Speed trade, a net-based executable application
that emulates the broker terminals along with host of other information relevant to the
Day traders. This was for the first time that a net based trading station of this caliber was
offered to the traders.

In the last six months speed Trade has become a de facto standard for the day trading
community over the net.

In 2016Sharekhan is a fully owned subsidiary of BNP Paribas, it was rebranded as

Sharekhan by BNP Paribas.

In India, Sharekhan has over 3500 employees, and is present in over 500 cities through
154 branches, more than 2,300 business partners. The company has 14 lakh clients and
on an average, executes more than 4 lakh trades per day.

In Brief
Founded February 2000

Mumbai, India
Headquarters

Country of origin India

CEO JaideepArora

Industry Financial Services

Parent BNP Paribas

Website Sharekhan.com

33 | P a g e
 WORK STRUCUTRE OF SHAREKHAN

Sharekhan has always believed in investing in technology to build its business. The
company has used some of the best-known names in the IT industry, like Sun
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette,
Verisign Financial Technologies India Ltd, Spider Software Pvt. Ltd. to build its trading
engine and content. The City Venture holds a majority stake in the company. HSBC,
Intel & Carlyle are the other investors.

On April 17, 2002 Sharekhan launched Speed Trade and Trade Tiger, are net-based
executable application that emulates the broker terminals along with host of other
information relevant to the Day Traders. This was for the first time that a net-based
trading station of this caliber was offered to the traders. In the last six months
SpeedTrade has become a de facto standard for the Day Trading community over the
net. Sharekhan’s ground network includes over 700+ Shareshops in 130+ cities in India.

The firm’s online trading and investment site www.sharekhan.com - was launched on
Feb 8, 2000. The site gives access to superior content and transaction facility to retail
customers across the country. Known for its jargon-free, investor friendly language and
high quality research, the site has a registered base of over 3Lacs customers. The
number of trading members currently stands at over 7Lacs. While online trading
currently accounts for just over 5 per cent of the daily trading in stocks in India,
Sharekhan alone accounts for 27 per cent of the volumes traded online.

The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’
to its credit, in terms of the size of deal, sector tapped etc. The group has placed over
US$ 5 billion in private equity deals. Some of the clients include BPL Cellular Holding,
Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop. Finally, Sharekhan
shifted hands and Citi venture get holds on it.

34 | P a g e
 VISION& MISSION

VISION

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

MISSION

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

 Continuous up-gradation with changing technology, while maintaining human

values.

 Respond to progressive globalization and achieving international standard.

 Efficiency and effectiveness built on ethical practices.

CORE VALUE

 Customer satisfaction through

 Providing quality service effectively and efficiently
 “Smile, it enhances your face value ” is a service quality stressed on
periodic customer service Audits
 Maximization of stakeholder value
 Success through Teamwork, integrity and People

35 | P a g e
SEVEN P’S OF SHAREKHAN

PRODUCT
Product Variety
Share khan offers 3 types of online trading accounts for its customers specially designed
according to their volume in share trading. Those 3 varieties are:
 Classic- for retail investors
 Speed Trade: for high net worth investors with large and active equity
portfolio who need to monitor and action swiftly
 Speed trade Plus- for high net worth investors dealing in derivative market.

Quality
User Friendly,attractive& colorful Website.

Design
The website of Share khan namely www.sharekhan.com has been specially designed to
facilitate its users to buy and sell shares in an instant at anytime and from anywhere they
like. The site is user friendly allowing even a layman to easily operate without any
hassles.

Features:
Share khan’s product comes with the following features:
 Trade execution in a fraction of a second!

 Single Screen Trading Terminal

 Real time streaming quotes. Price watch on any number of scripts.

 Hot keys similar to Brokers Terminal.

 Customized Alerts based on Multiple Parameters.

 Back up Facility to place trades on Direct Phone Lines.

 Intraday charts, updated live, tick-by-tick.

36 | P a g e
  Instant Order\ Trade Confirmation in the same window

 Live margin, position, marked to market profit & loss report.

 Competitive Brokerage.

 Flexibility to customize screen layout and setting.

 Facility to customize any number of portfolios & watch lists.

 Facility to cancel all pending orders at one click.

 Facility to square off all transactions at one click.

 Top Gainers, Top Losers, and Most Active, updated live.

 Index information; index chart, index stock information live.

 Market depth, i.e. Best 5 bids and offers, updated live for all scripts

 Online access to both accounts and DP.

 Live updated Order and Trade Book.

 Details of pending executed and rejected orders.

 Online access to Customer Service.

 128 - bit super safe encryption.

 Facility to place after market orders

 Online fund transfer facility from leading Banks

 Online intra-day technical calls.

 Exhaustive database of over 2000 companies

 Historical charts and technical analysis tools.

 Last but not the least, ideas that help you to make money!!!

Brand Name
The company as a whole in its offline business has named itself as SSKI Securities Pvt.
Ltd –SevaklalSevantilalKantilal and Ishwarlal Securities Pvt. Ltd. The company has
preferred to name themselves under a Blanket Family Name.

37 | P a g e
But in its online division started since 1997, the company preferred to name itself as
“SHARE KHAN”. The Brand Name “SHARE KHAN” itself suggests the business in
which
the company is dealing so that the consumer could easily identify the product or service
category.

Services

Share khan offers its customers, depository services and trade execution facilities for
equities, derivatives and commodities backed with investment advice tempered by
decades of broking experience. The teams of its dedicated analysts are constantly at
work to track performance and trends.

Dial-n-trade is also an exclusive service available to all Sharekhan customers for trading
in shares via the telephone. On dialing the toll free number 1600-22-7050 and on
entering the customers TPIN number, the customer will be directed to a telebroker who
will buy or sell shares for him.

PRICE

 List Price

Charges CLASSIC SPEED SPEED

TRADE TRADE PLUS
One time 750 1000 1500
registration fee
Minimum brokerage Nil 1000 1500
Charges –Quarterly

 Brokerage
Share khan in its online business charges brokerage as follows:
- In equity Market:

38 | P a g e
 On Trading: 0.1% On Delivery: 0.5%
- In Derivative Market
On Trading: 0.12% (Total brokerage) On Delivery: 0.1%

 Service Tax
-8% on Brokerage.
 Turnover tax + Stamp duty
-0.015% (Rs.15 on every turnover of Rs.100000)
 Custody Charge
Re. 1 per script held per month.
 Discounts
For investors with High Net worth, there are slabs in brokerage rates.
 Payment Period
The transaction settlement date in the securities market is T+ 2 days i.e. the
payment of the transaction taken place has to be made within two days of its
occurrence.
 Credit terms
Share khan allows its customers to trade up to 4 times i.e. by keeping 1/4th
margin with them.

PROMOTION
Online share trading is totally a new concept in Indian Market. Generally investor
doesn’t like to come out from conventional way of share trading. Share khan has
introduced this product in. The concept and Product are still new in the market.
Therefore the company has undertaken extensive promotion campaign to create
awareness about the product. Sharekhan adopts the following tools for promoting the
product

 Advertising
Company advertises its product through TV media on channels like CNBC, Print
Media-in leading dailies and outdoors media. It advertises itself as an innovative
Brand with a cartoon of tiger-called SHERU. Besides attractive and colorful
brochures as well as posters are used giving full details about the product.

39 | P a g e
 Mails are sent to people logging on to sites like moneycontrol.com and
rediff.com.
Also, stalls are opened up now and then at places where prospective customers
can be approached.

 Sales Promotion
The Company offers Rs.500 instead of Rs.750 for corporate accounts (more than
20 accounts).
Also, it provides online trading accounts for just Rs.300 for IIM students.

 Sales Force
The Company has an aggressive sales force, which is given incentives, based on
their sales. The sales force is given intensive training continuously.
 Seminar
The Company also arranges seminar in corporate world for creating awareness
about the product. Recently, it had organized for a seminar in ONGC, IIM.
 Direct Marketing
Company emphasizes more on direct marketing, as many people are still not
aware of this new way of smart trading. For this, the company recruits and trains
sales representatives so as to explain the product and solve customer queries
related to the product. This is the most effective way to communicate the three-
in-one concept which company offers.
 Telemarketing
This is another promotional tool company is using to boost up its sales. For this,
the company collects the database of the people belonging to different
professional segments.

PLACE
 Channels
Share khan uses various channel alternatives to reach to its customers through
 Internet
 Tele Marketing

40 | P a g e
  Retail Share Shops
 Franchisee Owners
 Power Brokers
 Sales Force
 Coverage
Access to the website from any part of the globe.
 Locations
Share khan has the largest chain of retail share shops in India. It has 180 share
shops located in 90 cities all over India like Pune, Thane, Chennai, Kolkata,
Bengaluru, Luckhnow, Darjleeng, Kanpur, Baroda, Midnapore, Surat, Delhi,
Gaziabad, Hydrabad, Allahbad, etc.

PEOPLE
 Employees
 Selection: Employees are selected on the basis of their experience
and qualification as applicable to the job.
 Training: Intensive training is provided to the employees till a week
once they join and even at times required after that.
 Motivation: The employees are motivated through incentives they
are provided.
 Research Team
Share khan has a team of dedicated analysts who have years of working
experience in the industries that they track, and a proven track record in using
their knowledge of the investment science to deliver results.

 Customers,
The heart of sharekhan is really treated loyally like the kings. The customer care,
which comprises of highly trained executives operating from 9:30 to 8:00 p.m.
PHYSICAL EVIDENCE
 Locality of the office:
In Ahmedabad, two franchise outlets are located in posh areas like Navrangpura
and Maninagar. A new franchise is going to open up in Vastrapur.
 Office Environment:

41 | P a g e
 The ambience within the office is what can make the customer feel comfortable
in trading. The cordial and friendly atmosphere at office is like a full time
motivation for the employees.
 Interiors and Infrastructure:
The office is well furnished and has 24 computer terminals on which tick-by-tick
price movements of the securities are displayed.

PROCESS
 In this service organization, the ways in which the customers receive
delivery of the service constitutes the process. Here, the process involves adding
‘value’ or ‘utility’ so that the customers get full satisfaction for the money spent
by them.
 Here the process begins from the step when customer wants to open e-
invest account and ends when his account is actually activated.
 All Indian residents and NRI are eligible to avail this service.
 Customers can open a sharekhan e-invest account by filling a single
application form.
This form includes 9 agreements like
1. Main form with customer details
2. Agreement between sharekhan and client in respect of the
ONLINE-INVESTMENT SUPPORT service offered.
3. Agreement between the Depository Participant and the client for
providing the transaction statement through Internet.
4. Irrevocable power of attorney
5. Agreement between the DP and the person seeking to open an
account with the DP.
6. Maintenance of client’s account on a running account bases by
SSKI.
7. Agreement giving the right of lien on the credit balance of client in
NSE trading.
8. Agreement giving the right of lien on the credit balance of client in
BSE trading.
9. Risk disclosure document (cash segment)

42 | P a g e
 SEVEN ‘S’ MODEL

Structure

Strategy Systems

Super ordinate
Goals goals

Style
Skills

Staff

STRUCTURE:
Share khan is flexible in terms of making temporary structural changes to
cope up with specific strategic tasks without any hassles. If need arises, the
top management can assign the role to any of its employees which it
considers capable and skillful.
STRATEGY:
Share khan believes not only in developing the strategies but also in its
successful execution.
SYSTEMS:
This constitutes of all the training and development systems, estimating
budgets and the accounting system of Share khan.
STYLE:

43 | P a g e
 Style refers to all the symbolic actions undertaken by top managers of Share
khan and its influence on the subordinates.
STAFF:
Share khan values its employees as its assets and therefore carefully trains
and motivates them by giving them incentives at regular intervals. Talented
employees are assigned as mentors and given real responsibility and moved
into higher positions.
SKILLS:
The term skills refer to those activities organizations do best and for which
they are known. Share khan is known for its timely advice (suggestions/tips),
which it caters to its customers and it boasts of 70-90% strike rates in
booking recommendations.
SUPERORDINATE GOALS:
This refers to guiding concepts, values and aspirations that unite an
organization in some common purpose. It provides the customers the best
service as it believes in customer satisfaction and retention.

44 | P a g e
 SHAREKHAN’S STOCK CLUSTER

We categorize all the scrip’s that are under coverage into six clusters. Each cluster
represents a certain profile in terms of business fundamentals as well as the kind of
returns you can expect over a certain time horizons and return objectives best.

 Evergreen
Dominant players with strong brands, robust management
credentials, supernormal shareholder returns. Will steadily compound 18-
20% per year for next five to ten years.

 Applegreen
Potentially steady compounders, but five to ten years graph bit unclear.
Could gallop at 25-30 per year over the next two to three years.

 Emerging Star
Young companies likely to rule chosen niches. Even better, the niches
could balloon into full-blow markets. Potentially ten-baggers if you’re
patient.

 Ugly Duckling
Trading below fair value or at huge discount to peer group. But
somtehing’scooking.Could double in two to three year’s time.

 Vulture’s Pick
Companies with valueable assets at throwaway prices.Buy& await
predators.Stratlingly high returns possible.
 Cannonball
Season’s favourites. Typically fast gainers in rising markets, could return
30-50% within six months. Get in, cash in, get out.

45 | P a g e
Publications of sharekhan

 Sharekhan’sValueline

 Derivatives Digest

 Eagle Eye

 High Noon

 Investor’s Eye

 Commodities Buzz

 Commodities Beat

 Commodity Trader’s Corner

 SharekhanXclusive

46 | P a g e
 PRODUCTS OF THE SHAREKHAN COMPANY

ShareKhan’s product

Offline Online Other Services

Classic A/C Speed Trade A/C

47 | P a g e
Other Services:

1. Dial-n-Trade

2. Depository Services

3. Commodity Trading

4. Derivative Trading

5. Mutual fund

6. Portfolio Management Services

7. Online IPO

8. Research Based Information Provided

OFFLINE

 Offline A/c is the A/c for the investors who are not familiar with the use of
computer.

 The A/C opening charges Rs.500(One time)

 For 1st Year Demat A/C is Free,On 2nd Year AMC charge is applicable.

48 | P a g e
ONLINE

 A/C Opening Charges Rs.750(onetime Charge).

 For 1st Year Demat A/C is Free,On 2nd Year AMC charge is applicable.
 Type with 7 banks through which one can transfer or withdraw his fund
online.Which are as follows
1. HDFC Bank
2. IDBI Bank
3. UTI Bank
4. OBC Bank
5. CITY Bank
6. Indusind Bank
7. Union Bank of India
Anyone who have A/C either of above banks they can use this facility.Otherwise one
has to make fund transfer or withdraw by cheque.

49 | P a g e
This account enables you to buy and sell shares through our website. You get features
like
a) Streaming quotes (using the applet based system)
b) Mutltiplewatchlists
c) Integrated Banking, demat and digital contracts
d) Instant credit and transfer
e) Real-time portfolio tracking with price alert and, of course, the assurance of secure
transactions.

Features of Classic Account

 That enables you to invest effortlessly

 Online trading account for investing in Equities and Derivatives via
sharekhan.com
 Integration of: Online trading + Bank + Demat account
 Instant cash transfer facility against purchase & sale of shares
 Make IPO booking
 You get Instant order and trade confirmations by e-mail
 Streaming Quotes
 Personalized Market Scan with your own customized stock ticker!
 Single screen interface for cash and derivatives
 Your very own Portfolio Tracker!

50 | P a g e
SPEEDTRADE

A/C Opening Charges Rs.1000/-(onetime Charge).

Monthly charges Rs.500/-(But if Client give Brokerage of Rs.1500/-in a Quarter, then
Rs.1500/-that was charged of a Quarter will be Reimbursed).
For 1st Year Demat A/C is Free, On 2nd Year AMC charge is applicable.
Type with 7 banks through which one can transfer or withdraw his fund online.Which
are as follows:
HDFC Bank
IDBI Bank
UTI Bank
OBC Bank
CITY Bank
Indusind Bank
Union Bank of India
Anyone who have A/C either of above banks they can use this facility. Otherwise one
has to make fund transfer or withdraw by cheque.

Features of SpeedTrade
that enable you to trade effortlessly
 Instant order Execution & Confirmation
 Single screen trading terminal
 Real-time streaming quotes, tic-by-tic charts
 Market summary (most traded scrip, highest value and lots of other relevant
statistics)
 Hot keys similar to a brokers terminal
 Alerts and reminders
 Back-up facility to place trades on Direct Phone lines
 Single screen interface for cash and derivatives

51 | P a g e
 Charges of Different companies for online A/C

Parameters Opening Fee Brokerage Interface

Trading Demate Delivery Square Bank Associated

A/C A/c Off
Sharekhan Nil NIL 0.50 0.10 HDFC,UTI,OBC,
IDBI, City Bank
ICICI Direct 750 NIL 0.75 0.18 ICICI Bank

IndiaBulls 750 250 0.40 0.10

5 Paisa NIL 0.20 0.05 ICICI Bank

,UTI,OBC,HDFC,
City Bank
Kotak Street 500 0.59 0.06 Kotak Bank, City
Bank
HDFC Securities 700 NIL 0.50 0.15 HDFC & Other
Bank

Dial-n-Trade

52 | P a g e
Trade in Equity by using your phone!
Free with your Sharekhan Classic Account, the Dial-n-Trade service enables you to
place orders for buying and selling shares through your telephone.
All you have to do is dial any one of our two dedicated numbers (1-800-22-7050 or
30307600), enter your TPIN number (which is provided at the time of opening your
account) and on authentication you'll be directed to a telebroker who will buy and sell
shares for you.
Features of Dial-n-Trade
that enable you to trade effortlessly
TWO dedicated numbers for placing your orders with your cellphone or landline. Toll
free number: 1-800-22-7050. For people with difficulty in accessing the toll-free
number, we also have a Reliance number 30307600 which is charged at Rs.1.50 per
minute for STD calls.
Automatic funds transfer with phone banking (for Citibank and HDFC bank customers)
Simple and Secure Interactive Voice Response based system for authentication
No waiting time. Enter your TPIN to be transferred to our telebrokers
You also get the trusted, professional advice of our telebrokers
After hours order placement facility between 8.00 am and 9.30 am (timings to be
extended soon)
Reliable service, wherever you are
Requirements
All you need is access to a phone - either a landline or a cellphone: (the type of phone
doesn't matter)
If calling from a cellphone, please dial 022-1-800-22-7050
Currently for Citibank and HDFC customers. More banks to be added soon
After hour order timings: 8.00 am to 9.30 am
It takes approximately 10 minutes of your time to place an order
PORTFOLIO MANAGEMENT SYSTEM

53 | P a g e
With the Sharekhan Team Managing Your Portfolio, you can be assured that your
investments are in safe hands!

We follow a multi-disciplined approach incorporating quantitative analysis, fundamental

analysis and technical analysis. This multi-pronged approach enables us to provide risk-
controlled returns for you.

Right from choosing the combination of stocks most suitable for you based on your risk
appetite to monitoring their movements and discussing them with you at special events.

MUTUAL FUND

54 | P a g e
Introduction
Everybody talks about mutual funds, but what exactly are they? Are they like shares in a
company, or are they like bonds and fixed deposits? Will I lose all my money in funds or
will I become an overnight millionaire? Big questions that get answered in just five
minutes.

Meaning
A mutual fund is a pool of money that is invested according to a common investment
objective by an asset management company (AMC). The AMC offers to invest the
money of hundreds of investors according to a certain objective - to keep money liquid
or give a regular income or grow the money long term. Investors buy a scheme if it fits
in with their investment goals, like getting a regular income now or letting the money
accumulate over the long term. Investors pay a small fraction of their total funds to the
AMC each year as investment management fees.
Categories of Mutual Fund
There are three broad categories of funds in the Indian market - money market,
debt and equity. A money market fund invests in short-term government debt paper and
is good for parking money for the short term since the principal is safe, returns better
than a bank deposit and liquidity high. Debt funds invest mainly in debt instruments like

55 | P a g e
government securities, corporate and institutional debt paper. They are also called
income funds since people buy them for their income needs. Equity funds invest in the
stock market and suit long term investors who want capital appreciation. Commodity,
property and gold funds are yet to come into India.

Investing in Mutual Funds through Sharekhan

We're glad to announce that you will now be able to invest in Mutual
Funds through us! We've started this service for a few mutual funds, and in the near
future will be expanding our scope to include a whole lot more. Applying for a mutual
fund through us is open to everybody, regardless of whether you are a Sharekhan
customer.
You have two choice through which you can invest in Mutual Fund.

A) On the main page of this micro-site and scheme snapshot page we have provided
with a link to PDF version of application form which you just need to download, print
and fill up relevant details. Submit the duly filled copy with payment either to Nearest
Sharekhan Branch Or Mutual Fund Company.
B) Alternatively you can call up our customer service 1600-22-7500 and give your
contact detail wherey we will arrange to mail you a hard copy of application of desired
schemes from the list offered by Sharekhan.
Sharekhan Depository Services

Dematerialization and trading in the demat mode is the safer and faster alternative to the
physical existence of securities. Demat as a parallel solution offers freedom from delays,
thefts, forgeries, settlement risks and paper work. This system works through depository
participants (DPs) who offer demat services and hold the securities in the electronic
form for the investor Sharekhan Depository services offers dematerialization services to
individual and corporate investors.We have a team of professionals and the latest
technological expertise dedicated exclusively to our demat department, apart from a
national network of franchisee, making our services quick, convenient and efficient. At
Sharekhan, our commitment is to provide a complete demat solution which is simple,
safe and secure.

56 | P a g e
The services offered by Depository Participant

Convert your physical holding into electronic holding (which is called

"dematerialization" of securities)
Keep custody of your holdings in electronic form.
Transfer the shares in the electronic form from one account to another.
Facilitate pledge of your electronic securities.
Give electronic credit of new share allotments such as public issues, bonus, rights etc.
Convert your electronic holding into physical holding (which is called
"dematerialization of securities")

RESEARCH BASED ADVICE

Every investor’s needs and goals are different. To meet these needs, Sharekhan provides
a comprehensive set of research reports, so that one can take the right investment
decisions regardless of their investing preferences! The Research and Development at
Sharekhan is done at its Head office Mumbai.

The R&D department Head Mr.HemangJani forwards all the details regarding all stocks
and scripts to all the branches through Internet. At the end of each trading day there is a
Teleconference, through which the R&D department Head MR. HemangJani talks with
each Branch heads and discusses about each day’s closing position and shows their
predictions about next day’s opening position. The quarries regarding stock positions
and other relevant matter of the branch heads of each branch is being solved through
teleconference.

The various publications of Sharekhan viz. Derivatives Digest, Sharekhan’sValueline,

Eagle eye, High Noon, Investor’s Eye, Commodities Buzz, Commodities Beat,
Commodity Trader’s corner, SharekhanXclusive, etc. are being prepared by the research
team of Sharekhan made up of highly experienced people from diverse field. These all
publication provides:
 In-depth analysis of the markets

57 | P a g e
  Analysis Before, During (live market updates) and After market
timings
 Special sector tracking reports sent regularly

ONLINE IPO

Online IPO (Initial Public Offering) is a new service started by Sharekhan for
providing the application form of any company’s issues of shares just like the TCS issue
can be subscribed by filling an online form to reduce the paper work and the fund
transfer facility is also provided to the clients for transferring the funds online. It is given
on its web-site for helping the clients who are not able to collect the forms manually and
the speed of filling and reducing the risk of misplacing of forms, not reaching in time,
etc.

58 | P a g e
 REASON TO CHOOSE SAHREKHAN LIMITED

Experience
SSKI has more than eight decades of trust and credibility in the Indian stock market. In
the Asia Money broker's poll held recently, SSKI won the 'India's best broking house for
2004' award. Ever since it launched Sharekhan as its retail broking division in February
2000, it has been providing institutional-level research and broking services to
individual investors.

Technology
With their online trading account one can buy and sell shares in an instant from any PC
with an internet connection. Customers get access to the powerful online trading tools

that will help them to take complete control over their investment in shares.

Accessibility
Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for
investors. These services are accessible through many centers across the country (Over
650 locations in 150 cities), over the Internet (through the website www.sharekhan.com)
as well as over the Voice Tool.

Knowledge
In a business where the right information at the right time can translate into direct
profits, investors get access to a wide range of information on the content-rich portal,
www.sharekhan.com. Investors will also get a useful set of knowledge-based tools that

will empower them to take informed decisions.

Convenience

59 | P a g e
One can call Sharekhan’s Dial-N-Trade number to get investment advice and execute
his/her transactions. They have a dedicated call-center to provide this service via a Toll
Free Number 1800 22-7500 & 39707500 from anywhere in India.

Customer Service
Its customer service team assist their customer for any help that they need relating to
transactions, billing, demat and other queries. Their customer service can be contacted
via a toll-free number, email or live chat on www.sharekhan.com.

Investment Advice
Sharekhan has dedicated research teams of more than 30people for fundamental and
technical research. Theiranalysts constantly track the pulse of the market andprovide
timely investment advice to customer in the formof daily research emails, online chat,
printed reports etc.
Benefits
 Free Depository A/c
 Instant Cash Transfer
 Multiple Bank Option.
 Secure Order by Voice Tool Dial-n-Trade.
 Automated Portfolio to keep track of the value of your actual purchases.
 24x7 Voice Tool access to your trading account.
 Personalized Price and Account Alerts delivered instantly to your Mobile
Phone & E-mail address.
 Live Chat facility with Relationship Manager on Yahoo Messenger
 Special Personal Inbox for order and trade confirmations.
 On-line Customer Service via Web Chat.
 Enjoy Automated Portfolio.
 Buy or sell even single share
 Anytime Ordering.

60 | P a g e
 SWOT ANALYSIS

During this training at sharekhan, we had come to know the Strengths-Weaknesses-

Opportunities-Threats for the company and it is very useful for a company to analyze
them. Therefore, the SWOT analysis is presented here and the suggestions for
maintaining strengths and removing weaknesses are explained.

 Strengths:

 Well-maintained infrastructure.
 Dedicated, Intelligent and Loyal staff.
 On-line Trading products.
 Lowest brokerage and other charges w.r.t. Competitors.
 The best investment advice correct up to 70-90 % through dedicated
 research and reports.
 Wide product range to enable the clients to choose the best alternative.
 One of the best DPs in India.
 A positive image in the existing clients.

 Weaknesses:

 Less awareness in the market.

 Time consuming process for account opening, resolving the problems of the
customers, etc.
 Service quality is not maintained accordingly how they are promoted.

 Opportunities:

 Slope of stock market towards delivery based transaction.

61 | P a g e
 Large potential market for delivery and intra-day transactions.
 Open interest of the people to enter in stock market for investing.
 Attract the customers who are dissatisfied with other broker & DPs.
 An indirect opportunity generated by the market from its bullishness.
 Large untapped market in the Saurashtra region of Gujarat.

 Threats:

 Decreasing rates of brokerage in the market.

 Increasing competition against other brokers & DPs
 Poor marketing activities for making the company known among the
customers.
 A threat of loosing clients for any kind of weakness of the company.
 Loosing the untapped market with the entry of the competitors.

62 | P a g e
CHAPTER - 7
CONCEPTUAL
DISCUSSION

63 | P a g e
 CONCEPTUAL DISCUSSION

There has been a wide range of studies concerning financial sector reforms in general,
and capital market reforms in particular, since mid 1980s in India. This section
highlights certain important studies that are context relevant. Several studies such as
Sahni (1985), Kothari (1986), Mookerjee (1988), Lal (1990), Chandra (1990), Franscis
(1991), Ramesh Gupta (1991,1992), Raghunathan (1991), Varma (1991), Gupta (1992),
and Sinha (1993) comment upon the Indian capital market in general and trading
systems in the stock exchanges in particular and suggest that the systems therein are
rather antiquated and inefficient, and suffer from major weakness and malpractices.
According to most of these studies, significant reforms are required if the stock
exchanges are to be geared up to the envisaged growth in the Indian capital market.
Baruaet al (1994) undertakes a comprehensive assessment of the private corporate debt
market, the public sector bond market, the govt. securities market, the housing finance
and other debt markets in India. This provides a diagnostic study of the state of the
Indian debt market, recommending necessary measures for the development of the
secondary market for debt. It highlights the need to integrate the regulated debt market
with the free debt market, the necessity for market making for financing and hedging
options and interest rate derivatives, and tax reforms. Cho (1998) points out the reasons
for which reforms were made in Indian capital market stating the after reform
developments. Shah (1999) describes the financial sector reforms in India as an attempt
at developing financial markets as an alternative vehicle determining the allocation of
capital in the economy. Shah and Thomas (2003) review the changes which took place
on India’s equity and debt markets in the decade of the 1990s. This has focused on the
importance of crises as a mechanism for obtaining reforms. Mohan (2004) provides the
rationale of financial sector reforms in India, policy reforms in the financial sector, and
the outcomes of the financial sector reform process in some detail. Shirai (2004)
examines the impact of financial and capital market reforms on corporate finance in
India. India’s financial and capital market reforms since the early 1990s have had a
positive impact on both the banking sector and capital markets. Nevertheless, the capital
markets remain shallow, particularly when it comes to differentiating high-quality firms
from low-quality ones (and thus lowering capital costs for the former compared with the
latter). While some high-quality firms (e.g., large firms) have substituted bond finance

64 | P a g e
for bank loans, this has not occurred to any significant degree for many other types of
firms (e.g., old, export-oriented and commercial paper-issuing ones). This reflects the
fact that most bonds are privately placed, exempting issuers from the stringent
accounting and disclosure requirements necessary for public issues. As a result, banks
remain major financiers for both highand low-quality firms. The paper argues that India
should build an infrastructure that will foster sound capital markets and strengthen
banks’ incentives for better risk management.
Chakrabarti and Mohanty (2005) discuss how capital market in India is evolved in the
reform period. Thomas (2005) explains the financial sector reforms in India with stories
of success as well as failure. Bajpai (2006) concludes that the capital market in India has
gone through various stages of liberalization, bringing about fundamental and structural
changes in the market design and operation, resulting in broader investment choices,
drastic reduction in transaction costs, and efficiency, transparency and safety as also
increased integration with the global markets. The opening up of the economy for
investment and trade, the dismantling of administered interest and exchange rates
regimes and setting up of sound regulatory institutions have enabled time. Gurumurthy
(2006) arrives at the conclusion that the achievements in the financial sector indicate
that the financial sector could become competitive without involving unhealthy
competition, within the constraints imposed by the macroeconomic policy stance.
Mohan (2007) reviews India’s approach to financial sector reforms that set in process
since early 1990s. Allen, Chakrabarti, and De (2007) concludes that with recent growth
rates among large countries second only to China’s, India has experienced nothing short
of an economic transformation since the liberalisation process began in the early 1990s.
Chhaochharia (2008) arrives at the conclusion that India has a more modern financial
and banking system than China that allocates capital in a more efficient manner.
However, the study is skeptical about who would emerge with the stronger capital
market, as both the country is facing challenges regarding their capital markets. Prasad
and Rajan (2008) argues that the time has come to make a more concerted push toward
the next generation of financial reforms. The study advocates that a growing and
increasingly complex market-oriented economy and its greater integration with global
trade and finance will require deeper, more efficient, and wellregulated financial
markets.
The survey and review of literature about the financial sector reforms in India reveals
that the reforms have been pursued vigorously and the results of the reforms have

65 | P a g e
brought about improved efficiency and transparency in the financial sector. The reforms
also brought into inter-linkage of financial markets across the globe leading to new
product development and sophisticated risk management tools. Derivatives in general
perform as an instrument to hedge the risk arising from movement in prices not only in
commodity markets but also in securities market. Bose, Suchismita conducted research
on (2006) found that Derivatives products provide certain important economic benefits
such as risk management or redistribution of risk away from risk-averse investors
towards those more willing and able to bear risk. Derivatives also help price discovery,
i.e. the process of determining the price level for any asset based on supply and demand.
These functions of derivatives help in efficient capital allocation in the economy. At the
same time their misuse also poses threat to the stability of the financial sector and the
overall economy. Routledge, Bryan and Zin, Stanley E of Carnegie Mellon University
conducted research on “Model Uncertainty and Liquidity” in year 2001. Extreme market
outcomes are often followed by a lack of liquidity and a lack of trade. This market
collapse seems particularly acute for markets where traders rely heavily on a specific
empirical model such as in derivative markets. Sen Shankar Som and GhoshSantanu
Kumar (2006) studied the relationship between stock market liquidity and volatility and
risk. The paper also deals with time series data by applying “Cochrane Orchutt two step
procedures”. An effort has been made to establish a relation between liquidity and
volatility in their paper. It has been found that there is a statistically significant negative
relationship between risk and stock market liquidity. Finally it is concluded that there is
no significant relationship between liquidity and trading activity in terms of turnover.
Shenbagraman (2004) reviewed the role of some non-price variables such as open
interests, trading volume and other factors, in the stock option market for determining
the price of underlying shares in cash market. The study covered stock option contracts
for four months from Nov. 2002 to Feb. 2003 consisting 77 trading days. The study
concluded that net open interest of stock option is one of the significant variables in
determining future spot price of underlying share. The results clearly indicated that open
interest based predictors are statistically more significant than volume based predictors
in Indian context. All the existing studies found that the Equity return has a significant
and positive impact on the FII (Agarwal, 1997; Chakrabarti, 2001; and Trivedi& Nair,
2003). But given the huge volume of investments, foreign investors could play a role of
market makers and book their profits i.e., they can buy financial assets when the prices
are declining thereby jacking-up the asset prices and sell when the asset prices are

66 | P a g e
increasing (Gordon & Gupta, 2003). Hence, there is a possibility of bi-directional
relationship between FII and the equity returns. Masih AM, Masih R, (2007), had
studied “Global Stock Futures: A Diagstinoc Analysis of a Selected Emerging and
Developed Markets with Special Reference to India”, by using tools correlation
coefficients , granger’s causality test, augmented Dicky Fuller test (ADF), Elliott,
Rothenberg and Stock point optimal test. The Authors, through this paper, have tried to
find out what kind of relationship exists between emerging and developed futures
markets of selected countries. Kumar, R. and Chandra, A. (2000), had studied that
Individuals often invest in securities based on approximate rule of thumb, not strictly in
tune with market conditions. Their emotions drive their trading behavior, which in turn
drives asset (stock) prices. Investors fall prey to their own mistakes and sometimes
other’s mistakes, referred to as herd behavior. Markets are efficient, increasingly
proving a theoretical concept as in practice they hardly move efficiently. The purely
rational approach is being subsumed by a broader approach based upon the trading
sentiments of investors. The present paper documents the role of emotional biases
towards investment (or disinvestment) decisions of individuals, which in turn force stock
prices to move. Srivastava, S.Yadav, S. S., Jain, P. K. (2008), had conducted a survey of
brokers in the recently introduced derivatives markets in India to examine the brokers’
assessment of market activity and their perception of benefits and costs of derivative
trading. The need for such a study was felt as previous studies relating to the impact of
derivatives securities on Indian Stock market do not cover the perception of market
participants who form an integral part of the functioning of derivatives markets. The
issues covered in the survey included: perception of brokers about the attractiveness of
different derivative securities for clients; profile of clients dealing in derivative
securities; popularity of a particular derivative security out of the total set; different
purposes for which the clients are using these securities in order of preference; issues
concerning derivatives trading; reasons for non usage of derivatives by some investors.
The investors are using derivative securities for different purposes after its penetration
into the Indian Capital market. They use these securities not only for risk management
and profit enhancement but also for speculation and arbitrage. High net worth
individuals and proprietary traders account for a large proportion of broker turnover.
Interestingly, some retail participation was also witnessed despite the fact that these
securities are beyond the reach of retail investors (because of complexity and high initial
cost). Naresh, G., (2006), studied the dynamic growth of the Derivatives market,

67 | P a g e
particularly Futures & Options and the perceived risks to the financial sector continue to
stimulate debate on the proper regulation of these instruments. Even though this market
was initially fuelled by various expert teams survey, regulatory framework,
recommendations byelaws and rules there is still a debate on the existing regulations
such as why is regulation needed? When and where regulation needed? What are
reasonable and attainable goals of these regulations? Therefore this article critically
examines the views of market participants on the existing regulatory issues in trading
Derivative securities in Indian capital market conditions.

68 | P a g e
 CHAPTER-8
RESEARCH
METHODOLOGY

69 | P a g e
 RESEARCH OBJECTIVES

 To study investor perception and investment behavior of capital market

investors.
 To identify the problems faced by the investors while on market through
brokers.
 To study the investors satisfaction level for the various services provided
by the broker relationship.
 To get the brief knowledge of trading system in securities.

70 | P a g e
 RESEARCH DESIGN:
Descriptive Research Design
Descriptive research is a study designed to depict the participants in an accurate way.
The three main ways to collect this information are: Observational, defined as a
method of viewing and recording the participants. Case study, defined as an in-depth
study of an individual or group of individuals.

Data Source
Primary Sources
These include the survey or questionnaire method as well as the personal interview
methods of data collection.
Secondary Sources

These include books, the internet, company brochures, product brochures, the company
website, competitor’s websites, newspaper articles etc.

Data collection instrument was structured schedule.

Questionnaire:-Schedule reservation filled with data by asking questions from
respondents.
Sample Design:-
Sample Unit:-Customer of Sharekhan in Lucknow City.
Scope of the study: - Scope of the study is Limited to Lucknow City.
Time Frame: - 45 Days
Sampling Frame: - Lucknow City
Sample Technique: Simple Random Techniques
Sample Size: 200

71 | P a g e
 CHAPTER-9
DATA ANALYSIS
&
INTERPRETATION

72 | P a g e
 DATA ANALYSIS & INTERPRETATION
DEMOGRAPHIC FINDINGS
AGE GROUP

Age group(years) % of respondents

Below 20 0%
20-35 15%
36-50 39%
51-65 30%
Above 65 30%

No. of respondents
90

80 78

70
59
60

50 No. of respondents

40
31 32
30

20

10
0
0
Below 20 20-35 36-50 51-65 above 65

Interpretation: Out of total 200 respondents, below 20 years of age were none, 39%
of the respondents falls in the age group of 36-50 years where as 29% were in the age
group of 51-65 years and next 16% falls in the group of more than 65 years.

JOB PROFILE
Category % of respondents
Service 47

73 | P a g e
 %
Business 40
%
Others 13
%

Job profile of respondents

26; 13%

Service
Business
94; 47% Others

80; 40%

Interpretation: Out of total respondents, most of respondents were from service

class and 40 % were during business and rest of the respondents include retired person,
other people, other professional’s students etc.

74 | P a g e
ANNUAL INCOME (IN LACS)

Income group % of respondents

Less than 1 lac 25%
1-5 lacs 46%
More than 5 lacs 2
9%

Annual income of Respondents

57; 29% 50; 25%

Less than 1 lac

1-5 lacs
More than 5 lacs

93; 47%

Interpretation: Most of the respondents belong to the income group of 1-5 lacs
followed by the respondents belong to income group of more than 5 lacs which is 29%
of total respondents and rest of Respondents belonging to the income group below 1 lac.

75 | P a g e
EDUCATIONAL BACKGROUND:-

Qualification % of respondents
Under graduate (U.G) 26
%
Graduate 39%
Post graduate(PG) 28%
Others(O) 13%

Educational background of respondents

13; 7%

53; 27%
Under graduate
Graduate
55; 28%
Post graduate
Other

79; 40%

Interpretation: Most of the respondents were graduate and 26% were post graduate
and rest 6% belong to other category.

76 | P a g e
When the respondent were asked their preference of investment, the
following respondents were obtained .

No. of respondents
15; 8%

25; 13%
80; 40%

35; 18%

Mutual Fund
Equity
45; 23%
IPO
Derivatives
currency

Interpretation: Out of 200 respondents amount 40% respondents investtheir fund

inMutual fund, 22% respondents invest their fund in Equity, 17% respondents invest
their fund in IPO,13% respondents invest their fund in derivatives, 15% respondents
invest their fund in currency.

77 | P a g e
When the respondents were asked about the time period for which they
are investing, the following responses were obtained.

Investment time period of respondents

25; 13%

78; 39% Less than 1 year

1-5 year
more than 5 year

97; 49%

Interpretation: Out of total 200 respondents 12% respondents were new investors,
48% were investing for 1-5 year and rest were for more than 5 year.

78 | P a g e
When the respondents were asked about proportion of income they
invest in shares and securities, the following responses were obtained.

No. of respondents

31; 16% 47; 24%

Up to 5%
5to 10 %
10 to 25%
more than 25%

63; 32%

59; 30%

Interpretation: When the respondents asked about the proportions of income they
invest in shares and securities, it was found that most of the 32% respondents invest 10-
25% of their income, 29% of respondents invest 5-10% of their income, 23% of them
invest up to 5% and rest invest more than 25% of their income.

79 | P a g e
When the respondents were asked trading frequency, the following
responses were obtained.

Trading frequency of respondents

140 131

120

100

80 No. of respondents

60 49

40

20 13
7

0
Daily Monthly Weekly According to the market

Interpretation: On analyzing the trading practices it was found that majority, 65% of
the investors trade according to the market 25% trade daily followed by weekly traders
7%.

80 | P a g e
When the respondents were asked about trading advice , the following
responses were obtained.

120

100 98

80

60

40 37 35
No. of respondents
19
20
11

0
ea n ice e r
id tio v vic the
n op ad ad O
ow rt'
s nd ker
ur
pe rf ie Br
o
yo x
On
E On

Interpretation: Regarding the decision of amount and investment area, 98 out of

200 takes the idea on their own and 37 on expert’s opinion, 35 on brokers advice, and 19
on friends advice.

81 | P a g e
When the respondents asked whether any professional advice is
available to them when required, the following responses were
obtained.

No. of Responding

19; 10%

73; 37% Yes

No
Sometime

108; 54%

Interpretation: Out of 200, 108 respondents said that they don’t and professional
advice , 73 said that they get it sometimes, and 19 of them get advice when needed.

82 | P a g e
When the respondents were asked about the motive for making
investment in capital market, the following responses were obtained.

Motive for making investment

120 98
82
80
40 20
0
Respondents

Interpretation: On analyzing motives for investment in capital market it was found

that capital gain was the most important factor that influences investment decisions
followed by regular income and tax planning.

83 | P a g e
When the respondents were asked whether they are satisfied with the
different charges by their brokerage, the following responses were
obtained.

No. of Respondents
140 124
120

100

80

60 51

40 25
20

0
Satisfied Somehow satisfied dissatisfied

No. of Respondents

Interpretation: Out of the 200 respondents 124 dissatisfied with the different
charges, 51 respondents show nuteral response and rest of the satisfied.

84 | P a g e
When the respondents were asked whether they are satisfied with their
Investment or not.

90; 45% Yes

110; 55% No

Interpretation: Out of the 200 respondents 55% were not satisfied with their
investment and rest of the satisfied.

85 | P a g e
When the respondents were asked whether investors want to keep their
shares in demat form or physical form.

Physical form Vs Demat

Physical
Demat

100; 100%

Interpretation: Above Graph shows that every investors want to keep their shares in
Demat form, no one is ready to prefer physical form

86 | P a g e
When the respondents were asked if you did not invest in stock market
then what will be the other option?

Alternatives of Investment

20; 10%

Insurance
34; 17% Fixed Deposit
80; 40%
Property
Gold

66; 33%

Interpretation: Above Graph shows that 40% investors said that if theydid not invested in
stock market then they prefer to insurance, 33% call for fixed deposit, 17% prefer to property
and 10% said that they prefer to invest in gold.

87 | P a g e
CHAPTER-10
CONCLUSION
/FINDINGS

88 | P a g e
 CONCLUSION

 Business class investors more proportion of their income in shares & securities as
compared to service class investors.
 Majority of investors trade according to expert the daily traders.
 Majority of investors take the decision on investment (where/what amount to invest) on
their own idea and some rely on expert’s opinion and broker’s advice.
 In cash segment, capital gain is the prior motive of the investors followed by regular of
the investors followed by regular income and tax income and tax planning.
 The satisfaction level regarding services by brokers of phone service & professional
advice is very low.
 Professional advice available is not adequate regarding investment in secondary market.
 Most of the investors feel that online trading is more transparent than the older form of
trading (Ring trading).
 Most of the people are aware of different charges charged by the brokers (Demat
charges, transaction charges, service charges, service charges etc.).
 While selecting a broker, brokerage & frequent payments were considered as main
factors followed by personal relations.
 Most of the investors are not satisfied with “phone services” provided by the brokers,
 The major problem faced by the investors is of broker’s attitude towards small investors
is not same as with the big investors.
 Another major problems faced by the investors is to decide where/what amount is
invested.

89 | P a g e
 FINDINGS

Job Profile and Investment Proportion

Out of 94 services class investors, about 32% invest 10-25% of their total income in
shares and securities, 29% invest 5-10%, 23% invest up to 5% where as only 16% invest
more than 25%. Out of 80 investors belonging to business class, 26% invest more than
25% of their income in shares and securities where as 30.15% invest 10-25% and rest
invest 5-10. Out of 26 respondents having job other profession, 73% invest up to 5%
where as rest invest 5-10% of the total income/earning in shares & securities.

Annual Income & Investment Proportion

Out of 57 respondents having annual income than 5 lacs, 45% invest more than 25% of
their income in shares and securities, 34% invest 10-25% and rest invest 5-10% in
shares and securities. In 1-5 lacs annual income category 63% invest in 10-25%, 12%
more than 25% and rest invest 5-10% of their earnings in shares and securities.
Respondents having annual income up to 1 lac, mostly invest only up to 5-10% of total
income in shares & securities.

Age Group and Motive of Trading

While trading in each segment, the main motive of the respondents Is the age group of
51-65 years and above 65 years was regular income in the form of dividend/interest.
About 81% of the total respondents in these capital gain and 2 nd Tax Planning. 64%
respondent in the age group of 36-50 years have given priority to regular income,
followed by capital gain & Tax planning.

90 | P a g e
CHAPTER-11
SUGGESTIONS

91 | P a g e
 SUGGESTIONS

 Professional advice should be made available in the city.

 Brokers should transfer the deliveries/payments to the investors in time.
 Brokers should deal all the investors in same respect.
 The phone service should be made prompt.

92 | P a g e
 CHAPTER-12
LIMITATIONS OF THE
STUDY

93 | P a g e
 LIMITATIONS OF THE STUDY

 The number of respondents include for the study is limited due to the time
constraints.
 All the findings and observations made in this study are purely based on
respondents answer; the response may be due to personal factor.
 Since the sample is very small when compared to the universe the findings and
suggestions made are not applicable to the universe.
 This study has contained only Lucknow population.
 Some of the respondents were reluctant to share information with the researcher.

94 | P a g e
BIBLIOGRAPHY /
REFERENCE

95 | P a g e
 Bibliography
BOOKS

1. The Mindful Investor, by Maria Gonzalez and Graham Bayron.

2. Understanding Indian Investors, by JawaharLal.
3. Security Analysis and Portfolio Management by PunithavathiPandian.
4. Investment Analysis and Portfolio Management, by Prasanna Chandra.

RESEARCH PAPERS

An Empirical study on Indian individual investor’s behaviour, by Syed Tabassum

Sultana.

WEB SITES

WWW.NSEINDIA.COM
WWW.BSEINDIA.COM
WWW.SEBIINDIA.COM
MONEYCONTROL.COM
NFCM, DEALERS MODULE HAND BOOK
RESEARCH METHODOLOGY
KOTHARI C.R. –EDITION 2000

96 | P a g e
ANNEXURE

97 | P a g e
 QUESTIONNAIRE

Name:……………………………………………………………………
Address:…………………………………………………………………
Phone No:………………………………………………………………
Age: ( ) 20 to 35 ( ) 36 to 50 ( ) 51 to 65 ( ) 36 to 50 ( ) more than65
Job profile: ( ) Govt. Servant () Business ( ) Others
Annual Income (in lacs): ( ) less than 1 ()1-5 lacs ( ) More than 5 lacs
Qualification:
Under Graduate Graduate Post Graduate Others

(1) Where do you invest your funds?

(a) Mutual Fund
(b) Equity
(c) IPO
(d) Derivatives
(e) Currency

(2) For long you have been dealing instock market?

(a) Less than 1 year (b) 1-5 year
(c) More than 5 year

(3)How much share or your income do you invest?

(a) Up to 5% (b) 5-10%

(c) 10-25% (d) More than 25%

(4) How often do you trade ?

(a) Daily (b) Weekly
(c)Monthly (d) According to Market

98 | P a g e
(5) Whom do you Consult before taking decision about the investment ?
(a) On your own idea
(b) Expert’s Opinion
(c) On Friend’s/Family members advice
(d) Broker’s advice
(e) Other source

(6) Whether the professional advice is available to you ?

(a) Yes (b) No (c) Sometimes

(7) What do you consider the most important while investing in stock market?

(a)Regular Income in form of dividend/ Interest
(b)Tax Planning
(c)Capital Gain

(8) What is your satisfaction level pertaining to different charges charged by your
broker ?
(a) satisfied
(b) Neutral
(c) Dissatisfied

(9)Are you satisfied with your investment?

(a)yes  (b) No

(10)According to you what is the better form to keep the security?

(a)Physical form
(b) Demat form

(11)If you did not invest in stock market then what will be the other option?
(a)Insurance 
(b)Saving
(c)Property 
(d)Others

99 | P a g e
Suggestion, if any:
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
…………………………………………………………

100 | P a g e