Project Synopsis

Title:-
“A Brief Study on National Stock Exchange and its
Shares’ Trading”

By

“Khushboo Sanjay Brahmankar”

Under the guidance of

“Mr. Ram Kalani”

Submitted to

“Dr. Babasaheb Ambedkar Marathwada University”

In complete fulfillment of the requirement for the award of the

degree of
Master of Business Administration (MBA)
Through
University Department of Management Science,
Aurangabad
(Year 2020 – 2021)
 1. TITLE
A Brief Study on National Stock Exchange and its Shares’ Trading.

2. ABSTRACT
In current pandemic situation and the locking-unlocking scenario, lot of people are running
their businesses in loss and the service people are either getting less salaries or losing their jobs.
The women of the house who are mothers or are pregnant, who used to earn before, cannot go to
jobs now for their or their kid’s safety. This study aims at providing a quick guide about NSE, its
market indices and how to do trading at NSE so that shares’ trading can act as an alternative income
source for anyone who is willing to earn. The main objective will be to make learning these things
easy through easy explanation of rather difficult things. The study will conclude at providing some
suggestions of what type of trading to do, which companies are to be trusted and so.

3. INTRODUCTION
The stock exchange or market is a place where stocks, shares and other long-term
commitments or investment are bought and sold. The first organized stock exchange in India was
started in 1875 at Bombay and it is stated to be the oldest in Asia. In 1894 the Ahmedabad Stock
Exchange was started to facilitate dealings in the shares of textile mills there. The Calcutta stock
exchange was started in 1908 to provide a market for shares of plantations and jute mills. [1]
Then the madras stock exchange was started in 1920. At present there are 24 stock
exchanges in the country, 21 of them being regional ones with allotted areas. Two others set up in
the reform era, viz., the National Stock Exchange (NSE) and Over the Counter Exchange of India
(OICEI), have mandate to have nation-wise trading. [1]
They are located at Ahmedabad, Vadodara, Bangalore, Bhubaneswar, Mumbai, Kolkata,
Kochi, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur’ Kanpur, Ludhiana, Chennai
Mangalore, Meerut, Patna, Pune, Rajkot. [1]
The Stock Exchanges are being administered by their governing boards and executive
chiefs. Policies relating to their regulation and control are laid down by the Ministry of Finance.
Government also Constituted Securities and Exchange Board of India (SEBI) in April 1988 for
orderly development and regulation of securities industry and stock exchanges. [1]
National Stock Exchange of India Limited (NSE) is the leading government owned stock
exchange of India, located in Mumbai, Maharashtra. It is under the ownership of some leading
financial institutions, Banks and Insurance companies. NSE was established in 1992 as the first
dematerialized electronic exchange in the country. NSE was the first exchange in the country to
provide a modern, fully automated screen-based electronic trading system that offered easy trading
facilities to investors spread across the length and breadth of the country. Vikram Limaye is
Managing Director & Chief Executive Officer of NSE. National Stock Exchange has a total market
capitalization of more than US$3 trillion, making it the world's 9th-largest stock exchange as of
May 2021. [2]
NIFTY is a market index introduced by the National Stock Exchange. It is a blended
word – National Stock Exchange and Fifty coined by NSE on 21st April 1996. NIFTY 50 is a
benchmark based index and also the flagship of NSE, which showcases the top 50 equity stocks
traded in the stock exchange out of a total of 1600 stocks. [3]
These stocks span across 12 sectors of the Indian economy which include – information
technology, financial services, consumer goods, entertainment and media, financial services,
metals, pharmaceuticals, telecommunications, cement and its products, automobiles, pesticides
and fertilizers, energy, and other services. [3]
NIFTY is one of the two national indices, the other being SENSEX, a product of
the Bombay Stock Exchange. It is owned by the India Index Services and Products (IISL),
which is a fully-owned subsidiary of the National Stock Exchange Strategic Investment
Corporation Limited.
NIFTY 50 follows the trends and patterns of blue-chip companies, i.e. the most liquid
and largest Indian securities. NIFTY contains a host of indices – NIFTY 50, NIFTY IT, NIFTY
Bank, and NIFTY Next 50; and is a part of the Futures and Options (F&O) segment of NSE
which deals in derivatives. [3]
With the cost of living shooting up the roof and the current pandemic scenario, most people
are looking for a secondary source of income in order to live well. With the advent of online
trading, it has become extremely easy for a lot of working professionals to open a Demat account
and start trading. The fact that you are willing to put in an effort to earn extra money is good but
you have to learn how to earn it and the risks involved as well. You can start trading online with a
few thousand rupees and then gradually build your way up to lakhs and crores. This project aims
at helping you to understand how to do trading easily even if you are a working professional or
just a housewife.

4. LITERATURE REVIEW
Prabhu (1995) [4] participating in a seminar organized by the Cochin Stock Exchange on
‘Stock-broking in the changed scenario’, pointed out , “In order to become successful in share
broking business, the changed scenario looks for professional standards, functional strength
backed by corporate right, ethical behavior and a comprehensive and total approach to business
from the part of stock brokers.” He recommended that with corporatization of memberships, the
members should provide multiple services to investors. In his opinion, the brokerage charged has
to be responsive to the cost. He concludes his presentation with the remark the there is tremendous
opportunity in the state of Kerala for development of capital market activities.
Gupta (2002) [5] studied the Performance Evaluation of National Stock Exchange of India.
She found that National Stock Exchange (NSE) has played the catalytic role in bringing about
these transformations. The processes and procedures set by National Stock Exchange marked a
paradigm shift in the securities market. The relative importance of various stock exchanges in the
market has undergone dramatic change during last decade (1990’s). National Stock Exchange in
October 1995, within the first year of its operations became the largest exchange in terms of
volume transacted.
Sinha and Pan (2006) [6] have studied on The Power (Law) of Indian Markets: Analyzing
NSE and BSE trading statistics. They analyzed the nature of fluctuations in the Indian financial
market. They have looked at the price returns of individual stocks, with tick-by-tick data from the
National Stock Exchange (NSE) and daily closing price data from both NSE and the Bombay
Stock Exchange (BSE), the two largest exchanges in India. They found that the distributions of
trading volume and the number of trades had a different nature than that seen in the New York
Stock Exchange (NYSE). Further, the price movement of different stocks are highly correlated in
Indian markets.
Sah (2010) [7] worked on the topic “Stock Market Seasonality: A Study of the Indian Stock
Market”. In this study, he tried to examine the seasonality of stock market in India. He considered
the S&P CNX Nifty as the representative of stock market in India and tested whether seasonality
is present in Nifty and Nifty Junior returns using daily and monthly data sets. The study found that
daily and monthly seasonality are present in Nifty and Nifty Junior returns. The analysis of stock
market seasonality using daily data, he found Friday Effect in Nifty returns while Nifty Junior
returns were statistically significant on Friday, Monday and Wednesday. In case of monthly
analysis of returns, the study found that Nifty returns were statistically significant in July,
September, December and January. In case of Nifty Junior, June and December months were
statistically significant. The results established that the Indian stock market is not efficient and
investors can improve their returns by timing their investment.
Daan Struyven (2008) [8] studied on the battle between the Bombay Stock Exchange and
the National Stock Exchange. He compared BSE and NSE on various aspects like, Impact of
technology on transaction costs and access, Governance &Management, Product scope,
Geographical reach. He found that NSE surpassed BSE on the equity segment in only 12 months
because of 4 main raisons. First of all, non-Gujarati traders and/or investors with low needs to be
part of the Gujarati financial community were predominantly attracted by the fee structure and
customer oriented clearing-, settlement- and dematerialization processes of NSE. Secondly,
traders, investors and public policy makers with an important long-run financial and/or political
interest to transform the Indian equity market into a competitive and attractive market were
attracted by this potential to reshape the market and by the fee structure and the customer oriented
clearing-, settlement- and dematerialization processes of NSE. Thirdly, traders and/or investors -
who originally used brokers -become member of NSE because of the possibility to trade
electronically outside Bombay. Fourthly, price differences attracted arbitrage traders who
supported liquidity at both exchanges.

5. OBJECTIVES
The main purpose of undertaking this study is to create a quick guide for those who are
willing to do share market trading as an alternative earning source.
SPECIFIC OBJECTIVES ARE –
1. To study the working of Stock Exchange in India and specifically that of National Stock
Exchange.
2. To get acquainted with the various things regarding trading like market indices, IPO,
Demat account, etc.
3. To understand the different types of trends and how to draw meaning out of it to do proper
trading.
4. To make a quick guide of doing trading at NIFTY.

6. LIMITATIONS
The overall objective of this study is to prepare a brief guide for those who want to learn
NIFTY shares’ trading quickly so as to use it as an alternative income source.
The limitations of the study are –
It gives insight about NSE and NIFTY only; it does not talk much about BSE and
SENSEX and its trading. Also it provides suggestions but it does not guarantee profit. There
could be losses if trading is not done properly or due to market risks.

7. METHODOLOGY AND METHODS

The research methodology of the selected topic follows in these dimensions -

7.1 Population of the Study

In this study, National Stock Exchange is the census for the study. National stock exchange
is as the population for this study.
7.2 The Period of the Study
 The study is covered for twenty years from the year 2000 to 2021.This period is selected
by the researcher for the study because she wanted to study the current scenario of the
performances of various companies at National Stock Exchange.

7.3 Type of study

The study done is Empirical in nature. It provides basis for external validation. Empirical
study relies on experience or observation alone i.e. data based research. It is capable of being
verified by observation or experiment. In other words, this type of research relies solely on
evidence obtained through observation or scientific data collection methods.
7.4 Scope of the Study
This study is based on census National Stock Exchange for the period of twenty years from
2000 to 2021. It covers the evaluation and comparison of financial performance various companies
of NSE. This study will focus on the trading process and finding out the best performing companies
in NIFTY. So, the scope is still very wide.
The overall study seeks to answer the following questions as the scope of the study -
1. To know about financial performance of National Stock Exchange.
2. Which companies are the best performing companies at NIFTY?
3. To know about the whole trading process and how to do it.

8. WOULD BE LEARNING OUTCOMES

The following mentioned are the would be learning outcomes of this study –
1. This study will provide a brief on the history of stock exchanges in India and history of
National Stock Exchange.
2. This study will explain various terms related to trading like market indices, Demat
account, different types of trends and how to read them and draw meaning out of them.
3. This study will help in learning the NIFTY trading process.
4. This study will give suggestions on best performing companies in NIFTY.
5. This study will help as a quick guide for trading purpose.

9. REFRENCES
1. https://www.yourarticlelibrary.com/stock-exchange/history-of-stock-exchange-in-
india/23488
2. https://en.wikipedia.org/wiki/National_Stock_Exchange_of_India
3. https://groww.in/p/nifty/
4. Suresh Prabhu, “Seminar on Stock Broking in the Changed Scenario”, The Stock
Journal, Kochi, June 1995
5. Renu Gupta, “Performance Evaluation of National Stock Exchange of India”, Doctoral
thesis, Jamia Millia Islamia University, New Delhi, 2002
6. Sitabhra Sinha and Raj Kumar Pan, “The Power (Law) of Indian Markets: Analyzing
NSE and BSE trading statistics”, The Institute of Mathematical Sciences, C. I.
T. Campus, Taramani, Chennai, 2006
7. Ash Narayan Sah, “Stock Market Seasonality: A Study of the Indian Stock Market”,
University of Petroleum & Energy Studies, 2010
8. Daan Struyven, “The battle between the Bombay Stock Exchange and the National
Stock Exchange”, Indian Institute of Management (IIM) Bangalore, 2008