Chapter - 1: The BSE and NSE
Chapter - 1: The BSE and NSE
Chapter - 1: The BSE and NSE
INTRODUCTION
Mark Twain once divided the world into two kinds of people: those who have seen the famous
Indian monument, the Taj Mahal, and those who haven't. The same could be said about
investors. There are two kinds of investors: those who know about the investment opportunities
in India and those who don't. India may look like a small dot to someone in the U.S., but upon
closer inspection, you will find the same things you would expect from any promising market.
Here we'll provide an overview of the Indian stock market and how interested investors can
gain exposure.
Most of the trading in the Indian stock market takes place on its two stock exchanges:
the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has
been in existence since 1875. The NSE, on the other hand, was founded in 1992 and started
trading in 1994. However, both exchanges follow the same trading mechanism, trading hours,
settlement process, etc. At the last count, the BSE had about 4,700 listed firms, whereas the
rival NSE had about 1,200. Out of all the listed firms on the BSE, only about 500 firms
constitute more than 90% of its market capitalization; the rest of the crowd consists of
highly liquid shares.
Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a
dominant share in spot trading, with about 70% of the market share, as of 2009, and almost a
complete monopoly in derivatives trading, with about a 98% share in this market, also as of
2009. Both exchanges compete for the order flow that leads to reduced costs, market
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efficiency and innovation. The presence of arbitrageurs keeps the prices on the two stock
OBJECTIVE OF STUDY
• To get the basic of the product , principle of investment ,players and functioning of the
stock market.
• To understand the terms and jargans of financial newspaper.
• To know the regulatory framework of Indian stock market.
• To learn about trading of stocks in stock exchange.
• To get in depth study of india and global stock market.
• To understand the concept of capital market.
• To organise stock in fair, transparent and competitive way.
• To get important lesson about the economy and financial responsibility.
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CHAPTER – 2
COMPANY PROFILE
STOCK MARKET
Definition: It is a place where shares of pubic listed companies are traded. The primary market
is where companies float shares to the general public in an initial public offering (IPO) to raise
capital.
Description: Once new securities have been sold in the primary market, they are traded in the
secondary market—where one investor buys shares from another investor at the prevailing
market price or at whatever price both the buyer and seller agree upon. The secondary market
or the stock exchanges are regulated by the regulatory authority. In India, the secondary and
primary markets are governed by the Security and Exchange Board of India (SEBI).
A stock exchange facilitates stock brokers to trade company stocks and other securities. A stock
may be bought or sold only if it is listed on an exchange. Thus, it is the meeting place of the
stock buyers and sellers. India's premier stock exchanges are the Bombay Stock Exchange
and the National Stock Exchange.
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Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first &
the Fastest Stock Exchange in world with the speed of 6 micro seconds and one of India's
leading exchange groups. Over the past 141 years, BSE has facilitated the growth of the Indian
corporate sector by providing it an efficient capital-raising platform. Popularly known as BSE,
the bourse was established as "The Native Share & Stock Brokers' Association" in 1875. Today
BSE provides an efficient and transparent market for trading in equity, currencies, debt
instruments, derivatives, mutual funds. It also has a platform for trading in equities of small-
and-medium enterprises (SME). India INX, India's 1st international exchange, located at GIFT
CITY IFSC in Ahmedabad is a fully owned subsidiary of BSE. BSE is also the 1st listed stock
exchange of India.
BSE provides a host of other services to capital market participants including risk management,
clearing, settlement, market data services and education. It has a global reach with customers
around the world and a nation-wide presence. BSE systems and processes are designed to
safeguard market integrity, drive the growth of the Indian capital market and stimulate
innovation and competition across all market segments. BSE is the first exchange in India and
second in the world to obtain an ISO 9001:2000 certification. It is also the first Exchange in
the country and second in the world to receive Information Security Management System
Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT). It operates one
of the most respected capital market educational institutes in the country (the BSE Institute
Ltd.). BSE also provides depository services through its Central Depository. .
BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock
market benchmark index. It is traded internationally on the EUREX as well as leading
exchanges of the BRCS nations (Brazil, Russia, China and South Africa).
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1. Adani Ports and Special Economic Port 426
Zone Ltd.
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19. Mahindra & Mahindra Ltd. Automobiles - Passenger 1422
Cars
22. Oil & Natural Gas Corporation Ltd. Oil Exploration 186
In the above list of top 30 companies listed in the BSE are largest companies of the Indian
share market. These companies are included in the list on the basis of their
turnover/sales/capitalization.
What is 'Sensex'
Sensex, otherwise known as the S&P BSE Sensex index, is the benchmark index of the
Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded
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stocks on the BSE, providing an accurate gauge of India's economy. Initially compiled in 1986,
the Sensex is the oldest stock index in India.
RATE OF RETURN
SENSEX ON 31 MAR 2017 29620
SENSEX ON 31 MAR 2018 33370 11.22%
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The National Stock Exchange (NSE) is the leading stock exchange in India and the fourth
largest in the world by equity trading volume in 2015, according to World Federation of
Exchanges (WFE).It began operations in 1994 and is ranked as the largest stock exchange in
India in terms of total and average daily turnover for equity shares every year since 1995, based
on annual reports of SEBI.
NSE launched electronic screen-based trading in 1994, derivatives trading (in the form of index
futures) and internet trading in 2000, which were each the first of its kind in India.
NSE has a fully-integrated business model comprising our exchange listings, trading services,
clearing and settlement services, indices, market data feeds, technology solutions and financial
education offerings. NSE also oversees compliance by trading and clearing members and listed
companies with the rules and regulations of the exchange.
NSE is a pioneer in technology and ensures the reliability and performance of its systems
through a culture of innovation and investment in technology. NSE believes that the scale and
breadth of its products and services, sustained leadership positions across multiple asset classes
in India and globally enable it to be highly reactive to market demands and changes and deliver
innovation in both trading and non-trading businesses to provide high-quality data and services
to market participants and clients.
Mr. Ashok Chawla is the Chairman of the Board of Directors of NSE and Mr. Vikram Limaye
is the Managing Director and CEO of NSE.
WHAT IS NIFTY
The NIFTY 50 index is National Stock Exchange of India's benchmark broad based stock
market index for the Indian equity market. It represents the weighted average of 50 Indian
company stocks in 12 sectors and is one of the two main stock indices used in India, the other
being the BSE sensex.
Nifty is owned and managed by India Index Services and Products (IISL), which is a wholly
owned subsidiary of the NSE Strategic Investment Corporation Limited. IISL had a marketing
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and licensing agreement with Standard & Poor's for co-branding equity indices until 2013. The
Nifty 50 was launched on 21st April 1996, and is one of the many stock indices of Nifty.
NIFTY 50 Index has shaped up as a largest single financial product in India, with an ecosystem
comprising: exchange traded funds (onshore and offshore), exchange-traded futures and
options (at NSE in India and at SGX and CME abroad), other index funds and OTC
derivatives (mostly offshore). NIFTY 50 is the world’s most actively traded contract. WFE,
IOMA and FIA surveys endorse NSE’s leadership position.
The NIFTY 50 covers 12 sectors (as on Oct 7, 2017) of the Indian economy and offers
investment managers exposure to the Indian market in one portfolio. During 2008-12, NIFTY
50 50 Index share of NSE market capitalisation fell from 65% to 29% due to the rise of sectoral
indices like NIFTY Bank, NIFTY IT, NIFTY Pharma, NIFTY SERV SECTOR, NIFTY Next
50, etc. The NIFTY 50 Index gives 29.70% weightage to financial services, 0.73% weightage
to industrial manufacturing and nil weightage to agricultural sector
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MUTUAL FUNDS
A mutual fund is a professionally-managed investment scheme, usually run by an asset
management company that brings together a group of people and invests their money in
stocks, bonds and other securities
A mutual fund is an investment vehicle made up of a pool of moneys collected from many
investors for the purpose of investing in securities such as stocks, bonds, money
market instruments and other assets. Mutual funds are operated by professional money
managers, who allocate the fund's investments and attempt to produce capital gains and
income for the fund's investors. A mutual fund's portfolio is structured and maintained to
match the investment objectives stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed portfolios
of equities, bonds and other securities. Each shareholder, therefore, participates proportionally
in the gains or losses of the fund. Mutual funds invest in a wide amount of securities, and
performance is usually tracked as the change in the total market cap of the fund, derived by
aggregating performance of the underlying investments.
Mutual fund units, or shares, can typically be purchased or redeemed as needed at the fund's
current net asset value (NAV) per share, which is sometimes expressed as NAVPS. A fund's
NAV is derived by dividing the total value of the securities in the portfolio by the total amount
of shares outstanding.
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TYPES OF MUTUAL FUNDS
The aim of diversified equity funds is to provide capital appreciation over the medium to
long- term. Such schemes normally invest a major part of their corpus in equities. Such funds
have comparatively high risks. These schemes are good for investors seeking appreciation
over a period of 5+ years.
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2. BALANCED EQUITY FUNDS
Equity Hybrid/Balanced funds invest both in equities and fixed income securities in the
proportion indicated in their offer documents. Such schemes provide capital appreciation with
less volatility. These schemes are suitable for investors looking for moderate growth with less
volatility over 5+ years.
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3.DEBT FUNDS
Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills.
Gilt fund, monthly income plans (MIPs), short term plans (STPs), liquid funds, and fixed
maturity plans (FMPs) are some of the investment options in debt funds. Apart from these
categories, debt funds include various funds investing in short term, medium term and long
term bonds.
invest in a highly volatile equity market. A debt fund provides a steady but low income relative
to equity. It is comparatively less volatile.
1. GOLD FUNDS
Gold-FoF invest primarily in gold exchange traded funds and a minor portion in liquid debt
instruments. Their objective is to provide easy access to investors to invest in Gold in electronic
form. Investors looking to invest in Gold without a demat account and on regular basis may
consider these funds.
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HOW MUTUAL FUNDS WORK ?
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WHY TO INVEST IN STOCK MARKET ?
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• Increasing Inflation
1.Professional Management
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2.Diversification
3.Convenient Administration
4.Return potential
5.Low cost
6.Liquidity
7.Transparency
8.Flexibility
9.Choice of schemes
10.Well regulated
11.Tax benefits
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CHAPTER – 3
a) Yes
b) No
S G E
YES 60 55
NO 50 45
INVESTING
YES NO
INTERPRETATION
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1. 68 % of investors i.e. 119investors are investing in stock market
a) 0-2 years
b) 2-4 years
c) 4-6 years
INTERPRETATION
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As shown above 35 % persons of my study have experience of about 2 years,
a) 0-2 lakhs
b) 2-4 lakhs
c) 4-6 lakhs
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INTERPRETATION
A s p e r m y r e s e a r c h a b o u t 5 0 % p e r s o n s w o u ld l i k e t o i n v e s t u p t o
would like to invest 4 to 6lack while only 5 % persons would like to invest more
than 6 lack. So company should focus on those customers who would like to invest
b) Newspaper
c) Advertise
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INTERPRETATION
As per above chart about 70 % persons would like to invest in stock market as per opinion
of their friends and relatives while 20 % persons would like to invest as per newspaper and
magazines and persons do not like to invest through advertising and about 10
% persons would like to invest as per mega public issue. So it can be conclude that most
a) Investment
b) Trading
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c) Both
INTERPRETATION
As per my research 60 % persons prefer investment while 30 % persons prefer trading and
only 10 % persons prefer both investment & trading. So we can conclude that
majority of the people prefer to invest rather than trading in the stock market.
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INTERPRETATION
As per above chart 10% persons have Very little knowledge & experience while about 70
% persons have Some investment knowledge & understanding and about 20%
persons have Very huge experience &good knowledge of investment. From above
information clear that majority of people who invest in capital market have average
knowledge about the market.-
a) Weekly
b) Monthly
c) Quarterly
d) Yearly
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INTERPRETATION
As per my research about 40 % persons would like to invest weekly in stock market while
30% persons would like to invest monthly in stock market and about 13.33% persons would
like to invest quarterly in stock market while about 16.67% persons would like
a) 10 - 20%
b) 20 – 40%
c) 40 – 60%
d) 60 – 80%
e) 80 – 100%
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INTERPRETATION
As per above chart about 16.66% persons invest 10 to 20% of their saving while about
40% persons invest 20 to 40% of their saving and about 30% persons invest 40
to 60% of their s a v i n g a n d a b o u t 6 . 6 7 % p e r s o n s i n v e s t 6 0 t o 8 0 % o f
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9. How much return do you expect on your investment decision?
a) 8 -12%
b) 12 -16%
c) 16 – 20%
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INTERPRETATION
As per my research 30% persons expect 8 to 12% return while 18.33% persons expect 12
to16% return and about 26.67% expect 16 to 20% return while 25% persons expect more
than 20%
a) Children education
b) Daughter’s marriage
c) Own Retirement
d) Others
NO OF PEOPLE
Children education 45
Daughters marriage 34
Own retirement 31
Others 5
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NO OF PEOPLE
Children education
Daughters marriage
Own retirement
Others
INTERPRETATION
There are three major financial goals in the life of people i.e. children higher education
(44 people agrees) ,Daughters Marriage (34 people agrees) and savings for the expenses
a) Brokers advice
b) Market situation
f) Own study
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broker advice
market situation
tips and paid service
newspaper and magazines
company result
own study
Ab ove c hart s how n t he var ious fact ors and its impac t on
i n v e s t m e n t a n d h o w i n v e s t o r consider such factors while investing.
The chart suggest that people much like to invest according to their own
study of stock market.
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12. At current which sector do you prefer more for investment ?
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13. What is your Investment strategy ?
RESPONSES
• Invest in company which give good return to shareholder & have good performance.
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14. In your opinion what are the mistakes made by common investors?
RESPONSES
15. What are your views for making money in stock market?
RESPONSES
• Buy in correction
• Study the companies, make your own policies for investment and do notfall victim of
fear and greed
• Buy shares when people sell and sell shares when people buy
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FOR THOSE WHO DON’T INVEST IN SHARE MARKET
a) Lack of funds
d) To avoid complications
NO OF PEOPLE
Lack of funds 3
To avoid complications 7
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NO OF PEOPLE
Lack of funds
High risk involved
Lack of financial knowledge
To avoid complications
NO. OF PEOPLE
deposits
Property 13
Don’t invest 5
Crypto currency 1
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NO. OF PEOPLE
Don’t invest
Crypto currency
INTERPRETATION
According to my study, those people who don’t invest in capital market prefer to invest in
fixed deposits and banks i.e. 31 people deposit their funds in FD’s and RD’s .13 people
invest in property whereas only 1 people invest in crypto currency and 4 people don’t invest
anywhere.
CHAPTER – 4
FINDINGS
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• People who invest in stock market have experience of stock market average 2 to
4years.
• Most of the people do not want to invest in stock market more than 2 lack.
• Many people take decision to invest in stock market as per opinion of their friends
and relatives.
• People who invest in stock market have some investment knowledge &understanding
regarding stock market.
• People would like to invest about 40% of their saving in stock market.
• Most of the people would like to invest for 1 to 3 months in stock market.
• Most of the people invest on the basis of their own study, broker’s advice & market
situation.
•
• Most of the people prefer to invest in energy & power sector and banking
&construction sector.
• Invest in company which give good return to shareholder & have good performance.
• Intention (market) environment based selection of sector and in that sector invest
in powerful companies
• Study the companies, make your own policies for investment and do not fall victim of
fear and greed
LIMITATIONS
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• Respondents might have feel hesitated in disclosing their personal
information e.g. Age, gender and Income so, some Data might be
questionable due to unwillingness of respondents to give right
information
CONCLUSIONS
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the strategies of the people who invest in stock market, their preference for investment, their
experience of stock market, frequency of investment, expected return, on which
basis they invest & their views to about to make money in stock market. In this project I have
gained knowledge of Various investment strategies , various options available and various
kinds of people who invest in stock market regularly. After making this project , I can suggest
those people who don’t have enough knowledge about stock market to go for mutual funds
ANNEXURE
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Dear Sir/ Madam, I am student of B.B.A (Banking and Insurance) in Vivekananda
college of professional studies .I am conducting a survey on the study of
Investor investment behavior in stock market and suggesting good investment
strategies in Delhi. Please help me in this by answering the following simple
questions. I will treat any information you give me in strictest confident and will use only for
academic purpose.
1. NAME…………………………………………………..
2. AGE
a) 18 -21
b) 21-30
c) 30 -40
d) 40 -60
e) 60 and ab ove
3. GENDER
a) Male
b ) F e m a le
c) Others
4. INCOME LEVEL
a) Yes b) No
a) 0-2 years
b) 2-4 years
c) 4-6 years
a) 0-2 lakhs
b) 2-4 lakhs
c) 4-6 lakhs
b) Newspaper
c) Advertise
a) Investment
b) Trading
c) Both
a) Weekly
b) Monthly
c) Quarterly
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d) Yearly
a) 10 - 20%
b) 20 – 40%
c) 40 – 60%
d) 60 – 80%
e) 80 – 100%
a) 8 -12%
b) 12 -16%
c) 16 – 20%
a) Children education
b) Daughter’s marriage
c) Own Retirement
d) Others
a) Brokers advice
b) Market situation
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d) Newspapers and magazines
f) Own study
…………. …………………………………………………..
………………………………………………………………
………………………………………………………………
18.In your opinion what are the mistakes made by common investors?
………………………………………………………………..
………………………………………………………………..
………………………………………………………………..
………………………………………………………………..
a) Lack of funds
d) To avoid complications
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b) Property
c) Crypto currency
d) Don’t invest
BIBLIOGRAPHY
BOOKS:
INTERNET WEBSITES:
• http://en.wikipedia.org/wiki/bse
• http://en.wikipedia.org/wiki/sensex
• htt://www.investopedia.in
• http://en.wikipedia.org/wiki/mutualfunds
• http://www.fintricks.com
• http://www.moneyrediff.com
• http://www.moneycontrol.com
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