A Project Study Report On INDIABULLS Titled

A COMPARATIVE STUDY OF INDIABULLS WITH ITS COMPETITORS

Submitted in partial fulfillment for the Award of degree of Master of Business Administration

SUBMITTED BY: KHUSHBU DADHICH MBA IV SEM

SUBMITTED TO:DR. SHEHNAZ (PRINCIPAL)

2009-2011

Akashdeep Institute of Management & Technology, Jaipur

DECLARATION

I,Khushbu Dadhich Hereby declare that this project report is the record of authentic work carried out by me during the period of 15 days and has not been submitted earlier to any University or institute for the award of degree/diploma etc.

Name of the student: Date :

Khushbu Dadhich

PROJECT GUIDE CERTIFICATE

This is to certify that project report entitled
A COMPEITIVE STUDY OF INDIABULLS WITH ITS COMPETITORS Submitted towards the partial fulfillment of the requirement for the Degree of

MASTER OF BUSINESS ADMINISTRATION

TO
AKASHDEEP INSTITUTE OF MANAGEMENT & TECHNOLOGY

Affiliated to RAJASTHAN TECHNICAL UNIVERSITY OF KOTA Is a record of perfect programme carried out by ROLL NO. 09MAKXX613 Under my supervision and guidance. To the best of my knowledge and belief the represented report Has not been submitted earlier. The work done by him has found Satisfactory I wish his great success in his career.
Mr. Dakshit Patel (Project Guide)

Preface

A good broker system must be able to cope with an extremely complex and dynamic environment. The microstructure of the stock market in which brokers work is highly dynamic and volatile. Many stocks are available to be bought and sold, each exhibiting its own patterns and characteristics that are highly unpredictable. With so many options and considerations that need to be taken into account, it is an extremely arduous task for a broker to investigate aspects of the stock market and consistently provide effective advice to their clients. Thus, brokers perform their day-to-day tasks with the aid of a broker system. Such a system should provide tools for interacting with exchanges and performing analysis. As a consequence, these broker systems are quite large and complicated by themselves. This research aims is to analysis Stock broker on the basis of their services, products, growth, and their subsidiaries. Because Stockbrokers are one of the main participants in stock exchanges worldwide, they often act as an agent for their clients, making trades on their behalf. They also act as advisors, providing suggestions to their clients on what stocks to buy and sell.

Acknowledgement
I express my sincere thanks to my project guide, Mr. Dakshit Patel for guiding me right form the inception till the successful completion of the project. I sincerely acknowledge her them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support he had provided to me with all stages of this project.

I would also like to thank the supporting staff of sales and distribution Department, for their help and cooperation throughout our project.

(Signature) KHUSHBU DADHICH

EXECUTIVE SUMMARY

The commencement of E-broking and Demat has transformed the capital market in India. With the help of them today, buying and selling of shares has become a much faster and even process than trading with the assistance of a physical broker. It provides for the assimilation of bank, broker, stock exchange and depository participants. This helps to get rid of the painstaking procedure of investing in stock exchange. Today, if one wants to invest in stock market, he has to contact a broker on phone or meet him personally to place order.

A broker generally gives such importance and additional service only to high net worth customers. But the introduction of Internet trading, even a common or a small investor gets an opportunity to avail the service at an affordable price which is much lesser than what is charged by a physical broker over the phone. Online trading has given customer a real time access to account information, stock quotes elaborated market research and interactive trading. The prerequisites of Internet trading are a computer, a modem and a telephone connection, registration with broker, a bank a/c and depository account.

The basic objective of study is to understand the various concepts of Demat, ebroking and analyzing the investment pattern of individual, there knowledge about security market, finding potential customers for Indiabulls, increase the client base of the company by targeting new clients for Indiabulls, suggesting strategies to Indiabulls regarding marketing of demat and trading a/c. and study the factors affecting consumer behavior while taking decision before investing in Equities and Derivative market. The scope of the study is to analyze the awareness level of

customes and investment pattern of various individuals and examining the peer group companies proving Demat services - Industry analysis.

The method used in study would be a mix of exploratory and descriptive type that would provide help to investors and corporate houses related to these industries. The data collection includes primary as wel as secondary sources like company

brochures, journals, news paper articles, the internet, etc. Also, primary data would be collected by way of meeting some key people belonging to the concerned industries. A survey would be conducted so as to acquire the views of the investors regarding their investment preferences and to extract the factors that the investors consider in an investment before putting in their money. The various data collected would be analyzed through way of bar charts, tabular data and pie charts.

The major limitation of the study is the time and resource constraints, it involves investors chosen at random which may not be the true representative of the population. Hence cannot be generalized, the data collected pertains to the sample behavior which may not be consistent with time, lack of awareness among investors about the products and services, existence of strong competitors, especially Indian Private Banks in the industry, dominance of nationalized banks in India.

This study will help to know the decisions taken by small investors while investing in equity primary markets, the importance of investment based on the advice from the broker, personal analysis of the offer document, confidence pertaining to electronic trading and using analysts recommendations in investment decisions and the extent to which they consider online trading as reliable.

CONTENTS

Cover Page Certificate from the Company/Organization Preface/Prelude Acknowledgement Executive Summary Contents 1. Introduction to the Industry 2. Introduction to the Organization 3. Research Methodology 3.1 Title of the Study 3.2 Duration of the Project 3.3 Objective of Study 3.4 Type of Research 3.5 Sample Size and method of selecting sample 3.6 Scope of Study

1 2 3 4 5

9 38 75 77 77 77 77 78 79

3.7 Limitation of Study

80

4. Facts and Findings 5. Analysis and Interpretation 6. SWOT 7. Conclusion 8. Recommendation and Suggestions 9. Bibliography 10. Appendix

81 90 104 112 114 119 120

1
INTRODUCTION OF INDIAN RETAIL BROKERAGE INDUSTRY

INTRODUCTION OF INDIAN STOCK MARKET

Introduction
Stock markets refer to a market place where investors can buy and sell stocks. The price at which each buying and selling transaction takes is determined by the market forces (i.e. demand and supply for a particular stock).

Let us take an example for a better understanding of how market forces determine stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price. More and more people would want to buy this stock (i.e. high demand) and very few people will want to sell this stock at current market price (i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co. Ltd. On the contrary, if there are more sellers than buyers (i.e. high supply and low demand) for the stock of ABC Co. Ltd. in the market, its price will fall down.

In earlier times, buyers and sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, most of the operations are done electronically and the stock markets have become almost paperless. Now investors do not have to gather at the Exchanges, and can trade freely from their home or office over the phone or through Internet.

History of the Indian Stock Market - The Origin

One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old history 18th Century 1830's East India Company was the dominant institution and by end of the century, busuness in its loan securities gained full momentum. Business on corporate stocks and shares in Bank and Cotton presses started in Bombay. Trading list by the end of 1839 got broader 1840's 1850's Recognition from banks and merchants to about half a dozen brokers Rapid development of commercial enterprise saw brokerage business attracting more people into the business 1860's 1860-61 The number of brokers increased to 60 The American Civil War broke out which caused a stoppage of cotton supply from United States of America; marking the beginning of the "Share Mania" in India 1862-63 1865 The number of brokers increased to about 200 to 250 A disastrous slump began at the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87) Pre-Independance Scenario - Establishment of Different Stock Exchanges 1874 With the rapidly developing share trading business, brokers used to gather at a street (now well known as "Dalal Street") for the purpose of transacting business. 1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay 1880's Development of cotton mills industry and set up of many others

1894

Establishment of "The Ahmedabad Share and Stock Brokers' Association"

1880 90's 1908 1920

Sharp increase in share prices of jute industries in 1870's was followed by a boom in tea stocks and coal "The Calcutta Stock Exchange Association" was formed Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers.

1923

When recession followed, number of brokers came down to 3 and the Exchange was closed down

1934 1936 1937

Establishment of the Lahore Stock Exchange Merger of the Lahoe Stock Exchange with the Punjab Stock Exchange Re-organisation and set up of the Madras Stock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India with establishment of new textile mills and plantation companies

1940

Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established

1944 1947

Establishment of "The Hyderabad Stock Exchange Limited" "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited"

POST INDEPENDANCE SCENARIO The depression witnessed after the Independance led to closure of a lot of exchanges in the country. Lahore Estock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bnagalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963.

Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act were: 1. Bombay 2. Calcutta 3. Madras 4. Ahmedabad 5. Delhi 6. Hyderabad 7. Bangalore 8. Indore Many more stock exchanges were established during 1980's, namely:

Cochin Stock Exchange (1980) Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982) Pune Stock Exchange Limited (1982) Ludhiana Stock Exchange Association Limited (1983) Gauhati Stock Exchange Limited (1984) Kanara Stock Exchange Limited (at Mangalore, 1985) Magadh Stock Exchange Association (at Patna, 1986) Jaipur Stock Exchange Limited (1989) Bhubaneswar Stock Exchange Association Limited (1989) Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990) Coimbatore Stock Exchange Meerut Stock Exchange

At present, there are twenty one recognized stock exchanges in India which does not include the Over The Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).

Trading Pattern of the Indian Stock Market

Indian Stock Exchanges allow trading of securities of only those public limited companies that are listed on the Exchange(s). They are divided into two categories:

Listed securities of public limited companies

Specified securities (Forward listed)

Non-Specified securities (Cash listed)

Equity share of company that are Dividend paying Growth oriented companies Paid up capital at least Rs. 50 million Market capitalization at least Rs. 100 million Has more than 20,000 share holders

Equity share of companies not covered in specified securities.

Types of Transactions
The flowchart below describes the types of transactions that can be carried out on the Indian stock exchanges:

Transaction on Indian stock exchange

Spot delivery transaction

Forward transaction

Include transaction that requires Delivery and delivery within stipulated time period at the time of entering into the contract.

Transactions in which delivery and payment can be extended by further period of 14 days each.

The period shall not be more than 14 days following the date of the contract.

The overall period should not exceed 90 days from the date of contract. Transaction permitted only in case of specified share.

Indian stock exchange allows a member broker to perform following activities:

Act as an agent, Buy and sell securities for his clients and charge commission for the same, Act as a trader or dealer as a principal, Buy and sell securities on his own account and risk.

NATIONAL STOCK EXCHANGE-

In order to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. NSE provides exposure to investors in two types of markets, namely: 1. Wholesale debt market 2. Capital market

Wholesale Debt Market - Similar to money market operations, debt market operations involve institutional investors and corporate bodies entering into transactions of high value in financial instrumets like treasury bills, government securities, commercial papers etc.

Trading at NSE

Fully automated screen-based trading mechanism Strictly follows the principle of an order-driven market Trading members are linked through a communication network This network allows them to execute trade from their offices The prices at which the buyer and seller are willing to transact will appear on the screen

When the prices match the transaction will be completed A confirmation slip will be printed at the office of the trading member

Advantages of trading at NSE

Integrated network for trading in stock market of India Fully automated screen based system that provides higher degree of transparency

Investors can transact from any part of the country at uniform prices Greater functional efficiency supported by totally computerized network

TRADING AND SETTLEMENT

The procedure for buying and selling dematerialised securities is similar to the procedure for buying and selling physical securities. The difference lies in the process of settlement of shares i.e. delivery (in case of sale) and receipt (in case of purchase) of securities.

Following procedure is followed for settlement: In case of purchase: The broker will receive the securities in his account on the payout day from the clearing corporation of the stock exchange.

The broker will give instruction to its DP to debit his account and credit investor's account who has bough the shares.

Investor will give 'Receipt Instruction to DP for receiving credit by filling appropriate form. However one can also give standing instruction for credit account, which is convenient way of receiving shares as giving Receipt Instruction every time.

of securities in his

that will obviate the need of

In case of sale:-

The investor will give delivery instruction to DP to debit his account and credit the brokers account with correct ISIN of the number of securities sold by him. Such instruction should reach the DPs office at least 24 hours before the pay-in as other wise DP will accept the instruction only at the investors risk. DP will debit his account and credit the account of the broker through whom shares have been sold. The broker would then transfer the shares to the clearing corporation of the exchange where shares have been sold.

HISTORY OF ONLINE TRADING Indian exchanges and brokering houses have been slow to move their transactions online. This has been mainly due to Government regulations. There was initial delay in laying down specifications for creating Closed User Groups (CUGs). The issue was resolved between the DoT and the Finance Ministry around 1998 and soon trade portals like India bulls sec. ltd.,

ICICIDirect.com, motilaloswal.com, and smartjones.com came into being.

ABOUT ONLINE TRADING

Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase

enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading. Online Stock Market Trading is an internet based stock trading facility. Online trading refers to buying and selling securities via the Internet or other electronic means such as wireless access, touch-tone telephones, and other technologies. new

Investor can trade shares through a website without any manual

intervention from Stock Broker.

Though the spread of internet has been slow in India, the players are catching f a s t a t l e a s t i n t h e o n l i n e t r a d i n g b u s i n e s s . Given the suitability of the product and rising demand of internet there is no surprise that E-broking is picking up fast captivated the imagination of the consumer and created a new breed of investor- the day trader investor who is impulse to buy, own and to sell and must be matched by swift transaction processes.

Two different type of trading environments available for online equity trading.

1. Installable software based Stock Trading Terminals

This trading environment requires software to be installed on investors computer. This software is provided by the stock broker. These kind of trading terminals are used by high volume intraday equity traders.

Advantages

Orders directly send to stock exchanges rather than stock broker. This makes order execution very fast.

It provides almost each and every information which is required to a trader on a single screen including stock market charts, live data, alerts, stock market news etc.

Disadvantages

Location constrains - You cannot trade if you are not on the computer where you have installed trading terminal software.

It requires high speed internet connection.

These trading terminals are not easily available for low volume share traders.

2. Web (Internet) based trading application

These kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection.

Advantages of Online Stock Trading (Website based)

Real time stock trading without calling or visiting broker's office.

Check the trading history; demat account balance and bank account balance at any time.

Provide

online tools like

market

watch,

graphs and recommendations to do analysis of stocks.

Place offline orders for buying or selling stock.

Set alert to inform you certain activity on the stock through email or sms.

Disadvantages of Online Stock Trading (Website based)

Website performance - sometime the website is too slow or not enough user friendly. Little long learning curve especially for people who dont know much about computer and internet.

BENEFITS OF ONLINE TRADING

Internet trading is expected to:

o Increase transparency in the market o Provide management information system (MIS) o Introduce flexibility in the system, to handle growing volumes and to support nationwide expansion plans of market activity. o Through internet trading SEBI. o regulation can be easily achieved. These are: Investor protection Creation of fair and efficient market Reduce risk of systematic risk three fundamental objectives of

o Real time streaming quotes o Instant trade execution and order confirmation

Benefits from the online trading are so much day by day numbers of clients prefer online trading and also revenue coming from online trading is increasing at tremendous speed.

ONLINE TRADING PROCESS The various transactions involved in online trading can be shown from the point of view of the

Client Broker Stock Exchange

The client places an order via the net by logging onto his Brokers site.

The broker accepts and executes the order And places it with the exchange.

The exchange accepts the order after Checking the share limit for the day.

The broker makes the payment either Directly via the clients bank account or indirectly via broker

The exchange receives the money and Completes the settlement.

The client is intimated about the settlement either Through demat account or through e-mail.

INTRODUCTION OF INDIAN RETAIL BROKERAGE MARKET Overview of brokerage firm A brokerage is a firm that acts as an intermediary between a purchaser and a seller. More commonly, a brokerage is referred to as a brokerage firm. To broker a deal is to communicate with both the buyer and seller as to acceptable price on anything sold or purchased. A broker, a single person, or the brokerage firm completes any necessary legal paperwork, obtains the appropriate signatures, and collects money from the purchaser to give to the seller. Since the buyer and seller are employing the brokerage to complete the deal, the brokerage may collect a portion of the money obtained. In some cases, a brokerage receives money from both parties. In others, the brokerage receives a commission only from the seller. Brokerage firms are most commonly thought of in relationship to the sale and purchase of stock shares. Fees are variable, depending on the degree to which the brokerage is involved in decisions about purchase. Some stockowners give their brokers power of attorney to make decisions about when to buy or sell stock and depend upon their brokers for researching new stock for purchase. This type of brokerage firm usually assesses a fairly large fee, and regardless of whether the owner loses or earns money, the firm is paid. Though the Indian brokerage industry has been consolidating steadily over the last 10 years, the share of the top 10 brokers has risen to only around one-fourth of the total industry revenues. In this fragmented market, leading players like ICICI Direct, Kotak Securities, Indiabulls, Sharekhan, and 5 Paisa, apart from many small players, compete on the basis of low brokerage fees and customer service.

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Buoyed by the bullish Indian stock market, foreign banks such as Socit Gnrale (SocGen), BNP Paribas, Standard Chartered, and Macquarie Bank (Australia) are eyeing stakes in Indian retail brokerages.

The major growth drivers of the Indian retail brokerage industry are the increasing appetite for equities among investors as an asset class, the convenience of online trading, and declining brokerage fees. The major growth drivers for brokerage revenue and trading volume are:

Continuous fall in brokerage fees Adoption of technology screen-based trading, electronic matching, and paperless securities

Centralized operations, effective risk management, and control on large interconnected operations spanning multiple locations, which is enabled by telecom connectivity and low costs

Increasing access to capital and the ability to provide margin finance.

INDUSTRY DEFINITION AND SEGMENTATION The Indian retail brokerage industry consists of companies that primarily act as agents for the buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on a commission or transaction fee basis. It has two main interdependent segments: Primary market and the Secondary market. primary market The primary market is an intermittent and discrete market where the initially listed shares are traded first time, changing hands from the listed company to the investors. It refers to the process through which the companies, the issuers of stocks, acquire capital by offering their stocks to investors who supply the capital. In other words primary market is that part of the capital 27

markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of

securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is called an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus.

secondary market The secondary market is an on-going market, which is equipped and organized with a place, facilities and other resources required for trading securities after their initial offering. It refers to a specific place where securities transaction among many and unspecified persons is carried out through intermediation of the securities firms, i.e., a licensed broker, and the exchanges, a specialized trading organization, in accordance with the rules and regulations established by the exchanges. Products dealt in the Secondary Markets Following are the main financial products/instruments dealt in the Secondary market which may be divided broadly into Shares and Bonds: Shares: Equity Shares: An equity share, commonly referred to as ordinary share, represents the form of fractional ownership in a business venture.

Rights Issue/ Rights Shares: The issue of new securities to existing shareholders at a ratio to those already held, at a price. For e.g. a 2:3 rights issue at Rs. 125, would entitle a shareholder to receive 2 shares for every 3 shares held at a price of Rs. 125 per share.

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Bonus Shares: Shares issued by the companies to their shareholders free of cost based on the number of shares the shareholder owns. Preference shares: Owners of these kinds of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation,their claims rank below the claims of the companys

creditors, bondholders/debenture holders. Cumulative Preference Shares: A type of preference shares on which dividend accumulates if remained unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares.

Cumulative Convertible Preference Shares: 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.

TYPE OF BROKERAGE FIRM Full service brokerage firm offers advice on investment strategies, research and news. Since these firms offer multiple services, their fees are also higher. Discount brokerage firm is ideal for someone who is an experienced trader who makes his or her own decisions. Discount brokerage firms have lower commission costs than full service brokerage firms. An introducing brokerage firm is one that specializes in futures markets and buy or sell orders on commodities exchanges through established firms that are clearing members of exchanges.

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Market Size The Indian retail brokerage market is showing phenomenal growth. The total trading volume of brokerage companies has increased from US$1239.1 billion in 2004 to US$1492.1 billion in 2005, and is expected to reach US$6535.7 billion by 2015.

Name of Indian brokerage firm 1. Reliance money 2. 5paisa.com 3. Advani share brokers 4. Agroy 5. Anand rathi securities ltd. 6. Angel trade- part of angel group 7. Arcade share and stock broker 8. Dala and broacha stcok broking pvt. Ltd. 9. Dalmia securities 10. Emkay 11. Ethical investment solution pvt. Ltd. 12. Geojit financial services limited 13. Icici direct 14. IT&LS investsmart 15. Indiabull securities ltd. 16. Indianstockmarket.net 17. Indiara securities 18. Indus invest 19. Investmentor 20. Investment research & information services ltd. (IRIS) 21. Japyee capital services 22. Khandwala securities limited

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23. KRchoksey 24. LKP 25. Mangal keshav 26. Motilal oswal 27. Mumbaibull.com 28. Networth stock broking ltd. 29. Orient capital market 30. Pratibhuti 31. RBK share brokers 32. Religare securities Ltd. 33. Sivan securities 34. Toss financial services Pvt. Ltd. 35. UTI securities PRODUCT OFFERED BY BROKERAGE FIRM In the past couple of years, apart from trading, the firms have started offering various investment related value added services. The sustained growth of the economy in the past couple of years has resulted in broking firms offering many diversified services related to IPOs, mutual funds, company research etc. However, the core trading activity is still the predominant form of business, forming 90% of the firms in the india. 67% firms are engaged in offering IPO related services. The broking industry seems to have capitalised on the growth of the mutual fund industry, which was pegged at 40% in 2006. More than 50% of the broking houses deal in mutual fund investment services. The average growth in assets under management in the last two years is almost 48%. Company research is another lucrative area where the broking firms offer their services; more than 33% of the firms are engaged in providing company research services. Additionally, a host of other value added services such as fundamental and technical analysis, investment banking, arbitrage etc are offered by the firms at different levels.

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MAJOR

DEVELOPMENTS

IN

EQUITY

BROKERAGE

INDUSTRY IN INDIA
i) Corporate memberships There is a growing surge of corporate memberships (92% in NSE and 75% in BSE), and the scope of functioning of the brokerage firms has transformed from that of being a family run business to that of professional organised function that lays greater emphasis on observance of market principles and best practices. With proliferation of new markets and products, corporate nature of the memberships is enabling broking firms to expand the realm of their operations into other exchanges as also other product offerings. Memberships range from cash market to derivatives to commodities and a few broking firms are making forays into obtaining memberships in exchanges outside the country subject to their availability and eligibility. ii) Wider product offerings The product offerings of brokerage firms today go much beyond the traditional trading of equities. A typical brokerage firm today offers trading in equities and derivatives, most probably commodities futures, exchange traded funds, distributes mutual funds and insurance and also offers personal loans for housing, consumptions and other related loans, offers portfolio management services, and some even go to the extent of creating niche services such as a brokerage firm offering art advisory services. In the background of growing opportunities for Investors to invest in India as also abroad, the range of products and services will widen further. In the offing will be interesting opportunities that might arise in the exchange enabled corporate bond trading, soon after its commencement and futures trading that might be introduced in the near future in the areas of interest rates and Indian currency.

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iii) Greater reliance on research Client advising in India has graduated from personal insights, market tips to becoming extensively research oriented and governed by fundamentals and technical factors. Vast progress has been made in developing company research and refining methods in technical and fundamental analysis. The research and advice are made online giving ready and real time access to market research for investors and clients, thus making research important brand equity for the brokerage firms. iv) Accessing equity capital markets Access to reliable financial resources has been one of the major constraints faced by the equity brokerage industry in India since long. Since the banking system is not fully integrated with the securities markets, brokerage firms face limitations in raising financial resources for business and expansion. With buoyancy of the stock markets and the rising prospects of several well organized broking firms, important opportunity to access capital markets for resource mobilization has become available. The recent past witnessed several leading brokerage firms accessing capital markets for financial resources with success. v) Foreign collaborations and joint ventures The way the brokerage industry is run and the manner in which several of them pursued growth and development attracted foreign financial institutions and investment banks to buy stakes in domestic brokerage firms, paving the way for stronger brokerage entities and possible scope for consolidation in the future. Foreign firms picked up stake in some of the leading brokerage firms, which might lead to creating of greater interest in investing in brokerage firms by entities in India and abroad.

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vi) Specialised services/niche broking While supermarkets approach are adopted in general by broking firms, there are some which are creating niche services that attract a particular client group such as day traders, arbitrage trading, investing in small cap stocks etc, and providing complete range of research and other support to back up this function. vii) Online broking Several brokers are extending benefits of online trading through creation of separate windows. Some others have dedicated online broking portals. Emergence of online broking enabled reduction in transaction costs and costs of trading. Keen competition has emerged in online broking services, with some of these offering trading services at the cost of a few basis points or costs which are fixed in nature irrespective of the volume of trading conducted. A wide range of incentives are being created and offered by online brokerage firms to attract larger number of clients. viii) Compliance oriented With stringent regulatory norms in operation, broking industry is giving greater emphasis on regulatory compliance and observance of market principles and codes of conduct. Many brokerage firms are investing time, money and resources to create efficient and effective compliance and reporting systems that will help them in avoiding costly mistakes and possible market abuses. Brokerage firms now have a compliance officer who is responsible for all compliance related aspects and for interacting with clients and other stake holders on aspects of regulation and compliance.

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ix) Focus on training and skill sets Brokerage firms are giving importance and significance to aspects such as training on skill sets that could prove to be beneficial in the long run. With the nature of markets and products becoming more complex, it becomes imperative for the broking firms to keep their staff continuously updated with latest development in practices and procedures. Moreover, it is mandated for certain types of dealers/brokers to seek specific certification and examinations that will make them eligible to carry business or trade. Greater emphasis on aspects such as research and analysis is giving scope for indepth training and skills sets on topics such as trading programs, valuations, economic and financial forecasting and company research. x) From owners to traders A fundamental change that has taken place in the equity brokerage industry, which is a global trend as well, is the transformation of broking from owners of the stock exchange to traders of the stock market. Demutualization and corporatisation of stock exchanges bifurcated the ownership and trading rights with brokers vested only with the later and ownership being widely distributed. Demutualization is providing balanced welfare gains to both the stock exchanges and the members with the former being able to run as corporations and the latter being able to avoid conflict of interests that sometimes came as a major deterrent for the long term growth of the industry.

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EMERGING

CHALLENGES

AND

OUTLOOK

FOR

THE

BROKERAGE INDUSTRY
Brokerage firms in India made much progress in pursuing growth and building professionalism in operations. Given the nature of the brokerage industry being very dynamic, changes could be rapid and so as the challenges that emerge from time to time. A brief description on some of the prospects and challenges of the brokerage firms are discussed below. i) Fragmentation Indian brokerage industry is highly fragmented. Numerous small firms operate in this space. Given the growing importance of technology in operations and increasing emphasis on regulatory compliance, smaller firms might find it constrained to make right type of investments that will help in business growth and promotion of investor interests. ii) Capital Adequacy Capital adequacy has emerged as an important determinant that governs the scope of business in the financial sector. Current requirements stipulation capital adequacy in regard to trading exposure, but in future more tighter norms of capital adequacy might come into force as a part of the prudential norms in the financial sector. In this background, it becomes imperative for the brokerage firms to focus on raising capital resources that will enable to give continuous thrust and focus on business growth. iii) Global Opportunities Broking in the future will increasingly become international in character with the stock markets being open for domestic and international investors including institutions and individuals, as also opportunities for investing abroad. Keeping abreast with developments in international markets as also familiarization with global standards in broking operations and assimilating

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major practices and procedures will become relevant for the domestic brokerage firms. iv) Opportunities from regional finance Regional economic integration such as that under the European Union and the ASEAN have greatly benefited businesses in the individual countries with cross border opportunities that helped to expand the scope and significance of the business. Initial measures to promote South Asian economic integration is being made by governments in the region first at the political level to be followed up in regard to financial markets. South Asian economic integration will provide greater opportunities for broking firms in India to pursue cross border business. In view of several of common features prevailing in the markets, it would be easier to make progress in this regard. v) Product Dynamics As domestic finance matures and greater flow of cross border flows continue, new market segments will come into force, which could benefit the domestic brokerage firms, if they are well prepared. For instance, in the last three to four years, brokerage firms had newer opportunities in the form of commodities futures, distribution of insurance products, wealth

management, mutual funds etc, and as the market momentum continues, broking firms will have an opportunity to introduce a wider number of products. vi) Competition from foreign firms Surging markets and growing opportunities will attract a number of international firms that will increase the pace of competition. Global firms with higher levels of capital, expertise and market experience will bring dramatic changes in the brokerage industry space which the local firms should be able to absorb and compete. Domestic broking firms should always give due focus to emerging trends in competition and prepare accordingly. 37

vii) Investor Protection Issues of investor interest and protection will assume centre stage. Firms found not having suitable infrastructure and processes to ensure investor safety and protection will encounter constraints from regulation as also class action suits that investors might bring against erring firms. The nature of penalties and punitive damages would become more severe. It is important for brokerage firms to establish strong and streamlined systems and procedures for ensuring investor safety and protection.

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2
INTRODUCTION OF ORGANIZATION

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INTRODUCTION TO INDIABULLS
Indiabulls Group is one of the top business houses in the country with business interests in Real Estate, Infrastructure, Financial Services, Retail, Multiplex and Power sectors. Indiabulls Group companies are listed in Indian and overseas financial markets. The Networth of the Group exceeds USD 2 billion. Indiabulls has been conferred the status of a Business Superbrand by The Brand Council, Superbrands India. Indiabulls Financial Services is an integrated financial services powerhouse providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance, Asset Management and Advisory services. Indiabulls Financial Services Ltd is amongst 68 companies constituting MSCI - Morgan Stanley India Index. Indiabulls Financial is also part of CLSAs model portfolio of 30 Best Companies in Asia. Indiabulls Financial Services signed a joint venture agreement with Sogecap, the insurance arm of Societ Generale (SocGen) for its upcoming life insurance venture. Indiabulls Financial Services in partnership with MMTC Limited, the largest commodity trading company in India, is setting up Indias 4th Multi-Commodities Exchange. Indiabulls Real Estate Limited is Indias third largest property company with development projects spread across residential projects, commercial offices, hotels, malls, and Special Economic Zones (SEZs) infrastructure

development. Indiabulls Real Estate partnered with Farallon Capital Management LLC of USA to bring the first FDI into real estate. Indiabulls Real Estate is transforming 14 million sqft in 16 cities into premium quality, high-end commercial, residential and retail spaces. Indiabulls Real Estate has diversified significantly in the following three business verticals within the real estate space: Real Estate Development, Project Advisory & Facilities Management: Residential, Commercial (Office and Malls) and SEZ Development. Power: Thermal and Hydro Power Generation. Retail: Departmental Stores, Hypermarket Stores, Daily Needs Neighborhood Stores.

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Indiabulls Securities Limited is Indias leading capital markets company with All-India Presence and an extensive client base. Indiabulls Securities possesses state of the art trading platform, best broking practices and is the pioneer in trading product innovations. Power Indiabulls, in-house trading platform, is one of the fastest and most efficient trading platforms in the country. Indiabulls Securities Limited is the first and only brokerage house to be assigned the highest rating BQ 1 by CRISIL. RECENT GROWTH AND DEVELOPMENTS IN INDIABULLS One of Indias first trading platforms was set up by Indiabulls Financial Services Ltd. with the development of an in-house team. The service offered by Indiabulls was increased to include Equity, F&O, Wholesale Debt, Mutual fund, IPO Financing/Distribution and Equity Research. In this particular year Indiabulls ventured into Distribution and Commodities Trading business. Indiabulls came out with its initial public offer (IPO) in September 2004. Indiabulls started its Consumer Finance business. Indiabulls entered the Indian Real Estate market and became the first company to bring FDI in Indian Real Estate. Indiabulls won bids for landmark properties in Mumbai. The company acquired over 115 acres of land in Sonepat for residential home site development. The world renowned investment banks like Merrill Lynch and Goldman Sachs increased their shareholding in Indiabulls. It also became a market leader in securities brokerage industry, with around 31% share in Online Trading. The worlds largest hedge fund, Farallon Capital and its affiliates committed Rs. 2000 million for Indiabulls subsidiaries Viz. Indiabulls Credit Services Ltd. and Indiabulls Housing Finance Ltd. In the same year, the Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd. acquired 8.2% stake in Indiabulls Credit Services Ltd. Indiabulls Financial Services Ltd. was included in the prestigious Morgan Stanley Capital International Index (MSCI). Indiabulls

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Financial Services Ltd. was benefited with the Farallon Capital agreeing to invest Rs. 6,440 million in it. The company also received an in principle approval from Government of India for development of multi product SEZ in the state of Maharashtra. Indiabulls Financial Services Ltd acquired 100% of the equity share capital of Noble Realtors Pvt Ltd. Noble Realtors is a Company engaged in the business of construction and development of real estate projects. Indiabulls Real Estate Business was demerged to become a separate entity called Indiabulls Real Estate Ltd. The Board of Indiabulls Financial Services Ltd. Resolved to Amalgamate Indiabulls Credit

Services Ltd and demerge Indiabulls Securities Limited. PHILOSOPHY Indiabulls has created a unique organization that is designed for you the Smart Investor . it passionately believe in the Smart Investor who wants to make his own educated investment choices and demands world class access to a full range of services and products ranging from Equities to Insurance, combined with the highest level of integrity, service and professionalism.

Indiabulls is a full service investment firm offering clients access to a tremendous range of financial services from 135 locations across 95 cities. We have a strong team of over 1000 Client Relationship Managers focussed on serving customers unique needs. Our world class infrastructure, built with tens of crores of investment, provides our clients with real-time service, multichannel & 24/7 access to all information and products. As we've expanded and developed to serve the needs of all kinds of investors, we've been guided by one underlying philosophy: You come first. We are proud to introduce to you Indiabulls Professional NetworkTM that offers real-time prices, equity analysis, detailed data and news, intelligent analytics, and electronic trading capabilities, right at your finger-tips. This powerful technology is complemented by our knowledgeable and customer focussed Relationship Managers who are available to help with your financial planning and investment needs. 42

ABOUT FOUNDERS
The fast paced growth, diversification and consolidation of the Group has been possible due to the vision and leadership of the co-founders of Indiabulls. Sameer Gehlaut is the Chairman, CEO and Whole Time Director of Indiabulls. Sameer is an engineer from IIT, Delhi (1995) and has worked internationally with Halliburton in its international services business in 1995. He has utilized his experience with the international best practices and professional work culture at Halliburton to lead Indiabulls successfully. Rajiv Rattan is the President, CFO and Whole Time Director of Indiabulls. Rajiv is an engineer from IIT, Delhi (1994) and has rich experience in the oil industry, having worked extensively across the globe in highly responsible assignments with Schlumberger. Rajiv has managed remote exploration projects providing evaluation services for different clients in India as well as abroad. Saurabh Mittal is a Director at Indiabulls. Declared the best graduating student in IIT, Delhi in (1995), Saurabh was also one of the engineers selected by Schlumberger to work for its international services business in 1995 and gained experience of working in various global locations. He graduated as a Baker Scholar with an MBA from the Harvard Business School. He has also developed in-depth understanding of international financial markets

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Indiabulls Financial Services Ltd.

Board of directors

Chairman Director Director Director Director Director Director Director

Sameer Gehlaut Gagan Banga Karan Singh Prem Prakash Mirdha Rajiv Rattan Saurabh K Mittal Shamsher Singh Aishwarya Katoch

The Bankers of Indiabulls Financial Services Ltd. are as follows: ABN-Amro Bank Andra Bank Bank of Maharashtra Canara Bank Centurion Bank of Punjab Ltd. Citibank Punjab National Bank Dena Bank LKB Ltd State Bank Of India UTI Bank Ltd. Yes Bank Ltd. HDFC Bank Ltd HSBC Ltd. Corporation Bank ICICI Bank Ltd. IDBI Ltd Industrial Bank Ltd. ING Vysya Bank Ltd Standard Chartered Bank Karnataka Bank Syndicate Bank Union Bank Of India

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PERFORMANCE HIGHLIGHTS
The Consolidated Total Revenues of IndiaBulls have increased by 83% to Rs. 641.5 cr in Q2 FY09 from Rs. 350.5 cr in Q2 FY08. The Consolidated PAT has increased 21.4% to Rs. 135.7 cr from Rs. 111.8 cr in Q2 FY08. For Indiabulls Securities(ISL), the fifth biggest retail broker, income stood at Rs 193.2 cr (80% of total revenues) during H1FY09. It has declined by only 8% from the corresponding period of the last year despite significant slowdown in trading volumes. ISL gained market share in retail brokerage during this period. Its 12 lakh customers will help the group expand into other financial services.

Key Highlights
The debt equity ratio of 2.4 times signifies very low leverage. Personal Loans portfolio continued to shrink to Rs 274.4 cr representing 2.5% of their total loan portfolio. Indiabulls have 0% of Net NPAs and 1.1% of Gross NPAs. The company has provisions of 171.8%. Indiabulls has maintained a capital adequacy ratio of 27.11%. It has raised 1,000 cr in debt for a three-year period in addition to the Rs 10,000 cr of current bank funding. Disbursements during Q2 were at Rs 150 cr, which is almost half of the disbursements during previous quarters Indiabulls, the fifth-largest NBFC by sales , may be able to survive the financial crisis as it is well capitalized with $250 cr in assets and $100 cr in cash Indiabulls plans has put expansion plans on hold, plans to cut about 1,000 of its 20,000 staff by not replacing workers who quit. Some of its new ventures coming up are commodity exchange and life insurance business. Indiabulls is waiting for insurance regulator's approval for its life insurance venture with Societe Generale SA; while expects trading to begin on its planned commodity exchange by the end of this fiscal. Indiabulls plans to become a bank when the govt permits to offer services like cash management, forex and letters of credit. IB wants to emulate the conservative approach in banking. 45

Asset under management

AUM (Rs Cr.) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Q2FY08 Q1FY09 Q2FY09

Financial Snapshot
Q2FY08 INCOME FROM SEGMENT Investing & financing related activities Broking related activities Fee ncome other Total income from operation 143.01 11.51 2.59 493.32 0 3.18 11.35 643.7 -100% -72% 4199% 30% 336.19 529.17 57% Q2FY09 YOY growth (%)

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INDIABULLS SECURITIES LTD.

Indiabulls Securities Limited is Indias leading capital markets company with All-India Presence and an extensive client base. Indiabulls Securities is the first and only brokerage house in India to be assigned the highest rating BQ 1 by CRISIL. Indiabulls Securities Ltd is listed on NSE, BSE & Luxembourg stock exchange.

Products Indiabulls Securities Limited (ISL) is the pioneer in Retail Broking Industry having a pan India presence and providing services to a customer base exceeding half a million. ISL is in the business of providing securities broking and advisory services and is a corporate member of capital market, wholesale debt market and derivative segment of NSE and of the capital market and derivative segment of BSE. ISL is the first and only brokerage house to be assigned the highest rating BQ-1 by CRISIL.

The company through various types of brokerage accounts provides product and services related to purchase and sale of securities listed in NSE and BSE. It also provides depository services, equity research services, mutual fund, IPO distribution to its clients. The company provides these services through on-line and off-line distribution channel.

Power Indiabulls Power Indiabulls(PIB) is an online trading platform which brings you the power of a brokers terminal on your desktop. It is an in -house developed internet enabled trading solution that supports securities and derivatives trading with NSE and BSE. PIB is designed for the high volume traders that

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provide access to multiple market segments through the ease of a single terminal. Designed by the technology team of Indiabulls, PIB comes with several enhanced features, which makes it the best desktop trading application in the country today. You can create market watches where you can view live broadcast of stocks both in capital as well as F&O segment. Stock prices get updated automatically every second without any manual intervention. PIB provides you with extensive real time reports to evaluate the performance of your portfolio. Salient features of Power Indiabulls:

Integrated market watch for securities and derivatives Live Streaming Quotes Fast Order Entry Tic by Tic Live Charts Technical Analysis Live News and Alerts Extensive Reports for Real-time Accounting

Indiabulls Signature Account With Indiabulls Signature account you will always remain on top of your investments. It provides you the platform to trade in Equity and Derivatives. With an unmatched service and nationwide presence, the Indiabulls Signature account comes bundled with a variety of exclusive features. Ease of trading With Indiabulls Signature account you have the flexibility to place your orders either by logging on the website, calling at the branch or walking in the branch. Dedicated Service Branch and Relationship Manager: You can get in touch with your Relationship Manager and Service Branch for all your trading related requirements.

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Power Indiabulls (PIB): You can trade smarter and faster using the Power Indiabulls application. Access the broad spectrum of sophisticated trading tools and get an edge in the stock markets.

Online Payment Gateways: Use our online payment gateways facility and get instant credit in your Trading Account. We currently provide online gateway payment facility with four major banks HDFC, ICICI, AXIS and IDBI. IPOs Indiabulls provides you the flexibility to apply in ongoing IPOs through either online or offline channels. For applying online, you do not need to fill tedious forms and write cheques. You can apply conveniently in IPOs from the comfort of your home / office through our Website/PIB. For applying offline, you can contact your Relationship Manager/ Service Branch.

Portfolio Tracker: You can track your investments online through our portfolio tracker functionality. You can conveniently track the daily movement, notional / booked profits and losses in your portfolio. Equity Analysis Report A qualified and dedicated team of equity analysts at Indiabulls publishes various research reports. You can view these reports to gain insight into the companies of your interest.

News Room: The News Room provides real-time news from stock-markets, corporate sector, economy and other segments that have a bearing on the market sentiment.

Market Statistics: This functionality facilitates tracking the market trend by providing you real time data on top gainers, top losers, volume toppers and most volatile stocks.

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Documentary Requirements for Equity Trading Account

Documents Valid as ID Proof:i. ii. iii. iv. v. PAN card Mandatory* Voter id card Passport Driving License/ Learning License Photo Identity card issued by employer registered under MAPIN if photo is not clear on Pan card, either of ii, iii, iv, v documents can be given as additional ID proof.

Documents Valid as Address Proof:i. ii. iii. iv. v. vi. i. ii. iii. iv. v. Ration Card Driving License/ Learning License Lease and License Agreement/ Rent Agreement Passport Voter ID card Insurance Policy Certificate issued by employer registered under MAPIN. Electricity Bill (not more than 2 month old from bill generation date) Landline Bill (not more than 2 month old from bill generation date) Bank Passbook Bank Statement original/photocopy with Bank Logo (not more than 3 month old) must be accompanied with a Cheque copy vi. Bank statement original/photocopy without Bank Logo (not more than 3 month old) must be attested by bank official stamp and signature along with original cancelled Cheque copy Note- i to vii proofs are valid for individuals only, whereas proofs from viii to xii are acceptable both in the name of Firm & individual.

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Documents Valid as Bank Proof :i. ii. Personalized Cheque copy(Client signature should be match with kit) Non personalized Cheque copy (Client signature should be match with kit) iii. iv. Bank Statement with Bank Logo (not more than 3 month old) Bank statement original/photocopy without Bank Logo (not more than 3 month old) attestation by bank official stamp and signature. v. vi. Bank Passbook Original Banker verification letter

Documents required for individual account:1. Individual recent passport size photograph(s) 2. Individual pan card 3. Address proof in the name of the individual. 4. Bank proof in the name of the individual. Note:- All the documents must be duly Self-attested in original.

Documents required for Proprietorship Firm Account 1. Recent passport size Photograph of Proprietor. 2. Proprietor Pan card 3. Address Proof in the name of the Proprietorship firm and Proprietor. 4. Bank proof in the name of the Proprietorship firm 5. Declaration by Firm Sole Proprietorship on letter head of the firm as per Annexure-4. 6. Affix rubber stamp at all places except at the bottom of the declaration in Annexure-4.

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Documents required for HUF Account 1. Recent passport size Photographs of the Karta. 2. Pan card of the HUF & the Karta. 3. Address proof in the name of HUF & the Karta. 4. Bank proof in the name of HUF. 5. Signature of Karta and all the co-parceners(major &/Minor) on the Declaration given in Annexure-7 6. HUF Stamp to be affixed on all clients signature. Documents required for Partnership Firm Account 1. Recent passport size photographs of all authorized partners. 2. PAN card of all the partners & the partnership firm 3. Address proof in the name of all the partners & the partnership firm 4. Bank proof in the name of Partnership firm 5. Notarized Partnership Deed along with the list of partners duly certified and attested by all the partners. 6. Partnership firm stamp to be affixed with all signatures of partners. 7. Copy of the Latest ITR 8. Authority letter by all the partners in favour of Managing Partners on the Original letterhead of the partnership firm, along with stamp & signature as per Annexure-6. Documents required for Corporate Account 1. Photograph(s) of all the authorized signatories. 2. PAN Card Copy of all authorized signatories & Corporate. 3. Address proof of all the authorized signatories & Corporate. Only following documents can be accepted address proof of Corporate 4. Form 18 with ROC receipt 5. Bank statement

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6. Land line telephone bill or Electricity bill must be supported by ITR copy (Validity date- 2 months from bill date) 7. Bank proof for the Corporate 8. Board Resolution on the original letter head in specified format given in Trading kit & duly attested by Director / Chairman other than the authorized signatory. 9. True copy of MOA and AOA Certified by Authorized signatory. 10. Valid Certificate of Incorporation with ROC seal attested by authorized signatory 11. Certified true copy of Auditor Report with Balance Sheet for last 2 years 12. Networth certificate by a Chartered Accountant in original with their stamp. 13. Copy of ITR for last two years. 14. Certified true copy of Annual Reports of Last 2 years 15. Bankers Verification on Bankers original letter head certifying the signatures of the Authorized Signatories (as per the format given the corporate kit) 16. List of directors along with name, address and p hotographs across signed with company stamp to be provided along with their signatures on letterhead of the company. 17. List of Authorized Signatories along with their Name, address, signatures & Photographs across signed with company stamp on the companys letterhead 18. Copy of latest shareholding pattern including list of all those holding more than 5% in the share capital of the company duly certified by the company secretary/whole time director/MD) (copy of the updated shareholding pattern to be submitted every year)- Required On Company Letter Head (Original). 19. Form-32 along with ROC receipt in case of change in director. 20. Form-18 along with ROC receipt in case of company address change Note:- All the documents must be duly attested in original with company stamp

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 Depository Services
Indiabulls is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialised shares. Indiabulls performs clearing services for all securities transactions through its accounts. We offer depository services to create a seamless transaction platform execute trades through Indiabulls Securities and settle these transactions through the Indiabulls Depository Services. Indiabulls Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs.

NRI Online Trading Introduction to NRI Online Trading Non-Resident Indians (NRIs) can also enjoy the state of the art Online trading Platforms of Indiabulls to trade in Indian Capital Markets. We, at Indiabulls, provide NRI clients a fast and secure trading platform which would perfectly cater to NRI's Trading requirements. To start trading through Indiabulls , the following simple steps need to be followed: 1. Opening of Online NRI Trading and NRI Demat account with Indiabulls: Get in touch with your nearest Indiabulls service branch (Branch Locator) to complete all the Trading and Demat account opening formalities. 2. Opening of a NRI PIS account with Axis bank: A NRI is required to open a PIS account (Portfolio Investment Scheme) with a designated bank in India. Indiabulls Securities Limited has tied up Axis bank to offer this facility to NRIs to enable them to trade in the Indian Capital markets. The Indiabulls team would also help and assist you with opening a PIS account with Axis Bank.

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3. Documentation required: The following proofs need to be submitted along with the Trading and Demat account opening forms:
o o

Copy of PIS approval letter from Axis Bank Copy of passport (copy of the pages containing the Name, address and photographs)

Valid & self-attested Proof of Identity and Proof of Address (Indian and Foreign).

Salient features of NRI Trading Account Dedicated Service Branch and Relationship Manager: You can get in touch with your Relationship Manager and Service Branch for all your trading related requirements. Online Trading: You can place your orders through our state-of-theart Online trading platforms (Power Indiabulls (PIB) & Website) Power Indiabulls (PIB): You can trade smarter and faster using the Power Indiabulls application. Access the broad spectrum of

sophisticated trading tools and get an edge in the stock markets. Portfolio Tracker: You can track your investments online through our portfolio tracker functionality. You can conveniently track the daily movement, notional / booked profits and losses in your portfolio. Equity Analysis Report A qualified and dedicated team of equity analysts at Indiabulls publishes various research reports. You can view these reports to gain insight into the companies of your interest. News Room: The News Room provides real-time news from stockmarkets, corporate sector, economy and other segments that have a bearing on the market sentiment.

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Market Statistics: This functionality facilitates tracking the market trend by providing you real time data on top gainers, top losers, volume toppers and most volatile stocks

Electronic Contract Notes on Email: This facility enables you to get digitally signed Contract Notes on email within 24 hours of executing trades in your Trading Account. Reporting of transactions to RBI: Indiabulls facilitates the reporting of all transactions done in your account to RBI through the Axis bank. Orders on Phone: Indiabulls also offers the facility of placing orders through phone. IPO Online For various reasons, we often miss the opportunity of subscribing to an IPO. It can either be because we could not procure the application form or we did not have the time to fill up the form and submit it. The most important benefit of the 'ONLINE IPO facility offered by Indiabulls Securities Ltd. is the convenience in submission of applications from anywhere breaking the limitations of time and geography. You dont need to submit the application in paper form, or write a cheque or go to submit it anywhere. Now you have the convenience at your fingertip. You can quickly and seamlessly apply to the latest public offerings with just a few clicks. Indiabulls Securities Ltd. offers ONLINE IPO facility to its registered trading customers at absolutely no cost. Indiabulls Equity Analysis Indiabulls Equity Analysis complements its equity broking and advisory services with high quality comprehensive report which can be accessed online. Research report assess the potential strength and investment risk by doing in-depth and exhaustive analysis of operational and financial

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performance of company, Peer group analysis, present Industry scenario using advanced and sophisticated forecasting tools and models. These research reports identify, examine and distill attractive investment

opportunities to help you in building and maintaining your ideal portfolio.

Salient features of Indiabulls Equity Analysis:

Covers report of more than 540 company Updated on a daily basis Scorecard on Fundamentals, Valuations and risk Peer Analysis Valuation of potential growth Industry Scenario Expansion plan Details of Mergers and Acquisitions

These reports are available to clients without any additional cost. If you are not a client and wish to view a sample report, please share your details with us. Currency Derivatives Indiabulls offers trading in the Currency Derivatives Segment in National Stock Exchange (NSE)Currency Derivatives are similar in nature to Stock or Index Futures contracts. Currency Futures Contracts, with INR:

USD exchange rate as the underlying, are available with a monthly expiry. At any given time, Currency Future Contracts are available for trading for the next 12 months.The Mark-to-Market for Currency Derivatives is settled on a daily basis in a manner similar to Equity / Index Futures.

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Business Highlights
Brokerage & Capital Market related Income was Rs 193.22 crore (79.7% of total revenues) during the six months ended Sep.08, roughly flat in Q1 and Q2 of 08-09. This segment was down only 8% from last year first six months despite significant declines in market activity (trading volumes) as ISL gained market share in retail brokerage.

Sequential increase in Profits after tax despite market turmoil through strong cost controls.

During the quarter, the Board of Directors has authorized the Company at its meeting held on 23rd September, 2008 to subscribe to 24.5% of the paid up share capital of Indiabulls Life Insurance Company Limited (ILICL), a joint venture of Indiabulls Financial Services Limited (IBFSL) and Sogecap of France. IBFSL will continue to own 49.5% and Sogecap will own 26% of the life insurance business.

During the quarter, the final dividend of Rs. 7.50 per equity share (375% on the face value of Rs. 2/- per equity share) amounting to Rs.19,007.02 lakhs (excluding corporate dividend tax) approved at the Annual General Meeting of the Company held on September 05, 2008 and was paid by the Company on September 09, 2008 into the Dividend Account.

Networth of the company as on 30th September 2008 is Rs. 434.2 crores, as compared to Rs. 359.4 crores on March 31, 2008. Book Value per share as on 30th September 2008 is Rs. 17.14.

During the quarter, the company has launched its Trading Platform for trading in the Currency Derivatives Segment on National Stock Exchange.

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ISL.s Internet Based Trading System (IBT) was concluded as being .STRONG. based on an audit conducted by Tata Consultancy Services for The National Stock Exchange, across the following parameters; Risk Management Security Policy & Implementation Capacity Management Disaster Recovery and Back-up Vulnerability test. This is the highest grading for the audit - the other.s being Medium and Weak.

CRISIL has assigned a CRISIL BQ . 1 to ISL. This is an opinion on the quality of operations and service offered by the graded broker. The grading is expressed on a five point scale BQ-1 to BQ-5, with BQ-1 being the highest.

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THE COMPETITORS OF INDIABULLS SECURITIES LTD.

1. INDIA INFOLINE LTD.

INTRODUCTION: India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries, straddles the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites, www.indiainfoline.com and www.5paisa.com . India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and Exchange Board of India). It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where it is amongst the most read Indian brokers. India Infoline Securities Pvt Ltd India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of Equities broking and Portfolio Management Services. It holds memberships of both the leading stock exchanges of India viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE.

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As a SEBI authorized Portfolio Manager, it offers Portfolio Management Services to clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the varied risk-return preferences of clients. India Infoline.com is making a great move towards giving the investor in Indian equities market a choice. A choice of technologically advanced trading that is with the help of 5paisa.com. 5 paisa also represents the availability of world class service to investors at the lowest possible rate - 5 paisa for every trade of Rs100, i.e., a brokerage rate of 0.05%.

2. SHAREKHAN
Sharekhan was created when SSKI Investor Services Pvt. Ltd., a company in the securities and equities segment decided to harness the power of the Internet and offer services to its customers through an online stock trading portal. Sharekhan, one of India's leading brokerage houses, is the retail arm of SSKI. With over 510 share shops in 170 cities, and India's premier online trading firm. Sharekhan is an equities focused organization tracing its lineage to SSKI, a veteran equities solutions company with over five decades of experience in Indian stock markets. Sharekhan brings and provides a user-friendly online trading facility, coupled with a wealth of content that will help you stalk the right shares. They also have an extensive all-India ground network of franchisees across the country. The company offers its services through a combination of online and offline channels. The online model comprises a portal, chat facilities, and 'speed trade' terminals. And the offline model uses a combination of an IVR infrastructure and a team of customer agents to receive orders over the telephone. The company claims to have around 150,000 current registered users nationwide.

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The 'speed trade' channel offers the benefit of a terminal at the user end, which is connected to the company's systems through a TCP/IP link. Unlike a Web trade request, which travels with the help of HTTP or HTTPS a speed trade transaction is a direct transfer of information with the trading system, is live, and on real-time. Sharekhan Depository Services offers dematerialization services to individual and corporate investors. They have a team of professionals and the latest technological expertise dedicated exclusively to the demat department, apart from a national network of franchisee, making the services quick, convenient and efficient.

3. MOTILAL OSWAL Vision:To be a well respected and preferred global financial services organization enabling wealth creation for all our customers Introduction: Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge

technology have enabled them to blossom into an almost two thousandmember team. Motilal Oswal Securities Limited (MOSt) has established itself as the Best Local Brokerage House in India (Asia Money Brokers Poll 2005). Their Institutional Equities Division combines the efforts of the Research and Sales & Trading departments to best serve clients' needs. It believes that it is their unflinching commitment to providing superior client service that makes them stand out. They have a dedicated research team, which is engaged in analyzing the Indian economy and corporate sectors to identify equity investment ideas.

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They staunchly practice the value-investing philosophy and advise investors to take a long-term view of equity investments. Consistent delivery of high quality advice on individual stocks, sector trends and investment strategy has established them as a reliable research unit amongst leading Indian as well as international investors. Most is known for its equity research ideas. Asia Money Broker's Polls have consistently rated their research as one of the best in the industry. Their sales & trading team, comprising top equity professionals, translates the research findings into actionable advice for clients, based on their specific needs. Each of the sales personnel has at least five years experience in equity research. Sophisticated computerized tools are used to understand client investment profile and objectives, which ensures proactive and timely service.

4. KARVY

The birth of Karvy was on a modest scale in the year 1982. It began with the vision and enterprise of a small group of practicing Chartered Accountants based in Hyderabad, who founded Karvy. They started with consulting and financial accounting automation, and then carved inroads into the field of Registry and Share Transfers. Karvy has built a reputation as an integrated financial services provider, offering a wide spectrum of services for over 20 years.

In 1982, a group of Hyderabad-based practicing Chartered Accountants started Karvy Consultants Limited with a capital of Rs.150, 000 offering auditing and taxation services initially. Later, it forayed into the Registrar and Share Transfer activities and subsequently into financial services.

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A decade of commitment, professional integrity and vision helped Karvy achieve a leadership position in its field when it handled the largest number of issues ever handled in the history of the Indian stock market in a year. Thereafter, Karvy made inroads into a host of capital-market services, corporate and retail - which proved to be a sound business strategy.

Today, Karvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and half decades, Karvy has evolved as a veritable link between industry, finance and people. In January 1998, Karvy became the first Depository Participant in Andhra Pradesh. An ISO 9002 company, Karvy's commitment to quality and retail reach has made it an integrated financial services company. Associate Companies of Karvy

Karvy Securities Limited Deals in distribution of various investment products, viz., equities, mutual funds, bonds and debentures, fixed deposits, insurance policies for the investor. Karvy Investor Services Limited Deals in Issue management, Investment Banking and Merchant Banking.

Karvy Stock broking Limited Deals in buying and selling equity shares and debentures on the National Stock Exchange (NSE), the Hyderabad Stock Exchange (HSE) and the OverThe-Counter Exchange of India (OTCEI).

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5. KOTAK SECURITIES
Introduction Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. Kotak Securities was set up in 1994. Kotak Securities is a corporate member of both The Bombay Stock Exchange and the National Stock Exchange of India Limited. Its operations include stock broking and distribution of various financial products - including private and secondary placement of debt and equity and mutual funds. Currently, Kotak Securities is one of the largest broking houses in India with wide geographical reach. The company has four main areas of business: Institutional Equities, Retail (equities and other financial products), Portfolio Management and Depository Services.

Kotak Securities Ltd is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual benefit services wherein the investors can use the brokerage services of the company for executing the transactions and the depository services for settling them. Kotak Securities has 195 branches servicing more than 2, 20,000 customers and coverage of 231 Cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments. 65

6. ICICI SECURITIES
Introduction ICICI Securities, A subsidiary of ICICI Bank, was set up in February 1993 to provide investment-banking services to investors in India. As on date ICICI Bank holds 99.9% of the share capital of ICICI Securities. ICICI Securities Limited is Indias leading full service investment bank with a dominant position in all segments of its operations Corporate Finance Fixed Income and Equities.

In order to assist/provide corporate clients and institutional investors with investment banking services in the United States of America, ICICI Securities has set up two subsidiaries namely, ICICI Securities Holdings Inc and ICICI Securities Inc, ICICI Securities Inc, has become the registered broker dealer with the National Association of Securities Dealers Inc, empowering it to engage in a variety of securities transactions in the U.S. market. ICICI Securities Inc. is also registered with the Financial Services Authority, UK (FSA) and the Monetary Authority of Singapore (MAS) to carry out Corporate Advisory Services.

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COMPETITIVE ANALYSIS FOR INDIABULLS

The Indian retail brokerage industry consists of companies that primarily act as agents for the buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on a commission or transaction fee basis . It has two main interdependent segments: Primary market and the Secondary market. Objective: The main objective is to Analyze retail brokerage industry taking into account the health of the capital markets, Derivative Market and the intensity of competition among the brokerage companies. Doing Competitive Analysis for Indiabulls.

The major growth drivers for brokerage revenue and trading volume are: Continuous fall in brokerage fees Adoption of technology screen-based trading, electronic matching, and paperless securities Centralized operations, effective risk management, and control on large interconnected operations spanning multiple locations, which is enabled by telecom connectivity and low costs Increasing access to capital and the ability to provide margin finance Parameter Assessment for Doing Competitive analysis A differentiating aspect is a comparative assessment of the top retail brokerages on various value indicators, comprising of Product Pricing Service delivery model Unique selling proposition.

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Customers need to analyze the Brokerage Firms Based on these 5 Parameters. Brokerage & Miscellaneous charges Quote Software Execution Platform Demat Account, and finally Back office Support.

Brokerage & Miscellaneous charges: This accounts for all the charges that you incur for your trading/investing. A few examples would be: Demat Account maintenance, Brokerage, Annual account Fee, Telephone based trading charges, trading software usage charges, etc. We should understand what all charges we are bound to incur from our broker.

Quote Software: This is used mainly for technical study and for live quotes. Many people dont evaluate quote software. We typically use software that have stumbled upon and stick with it just because we have eventually grown comfortable using it. We dont pay attention to the quality of data (how accurate it is). Or how fast and often it refreshes. Does it allow us to back test our strategy? Does it allow customizing technical signals/parameters? Does it allow adding new indicators? Does it allow us to see historic data? For, what period is intra day data available? We might need all this information. We should be clear on what we need and ensure our quote software provides it all. Execution Platform: Its nothing but a platform that allows us to execute our trade fast. It should automate trade management and execution, and should automatically give protection against human errors. Demat Account: Demat account should only be opened with a well known and established brokerage firm in the market.

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Back office Support: People while trading face lots of problem because of lack of good back office support. Relationship Managers trading without their clients knowledge, funds not being transferred, trades not being executed, slow execution etc are a few examples.

COMPETITIVE STRENGTH OF INDIABULLS SECURITIES

Indiabulls securities Ltd have a distinct set of competitive advantages that make it uniquely capable of winning in the marketplace against its competitors Diverse Branch Network Bouquet of financial products and services Advanced technology team that delivers market leading product innovation Strong sales and marketing teams with continuous reinvestment and training Strong cross-selling opportunities. Strong and experienced promoters Leading product innovation and marketing strategies Well capitalized player, with strong banking relationships and credit ratings Ability to combine people and technology in unique ways Strong market presence and increased market share leading to a virtuous cycle of growth and Profitability.

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Core pillars of Business strategy

Increase the number of Client Relationships. Offer Diversified Financial Products & Services. Multiple Channels Enhance Customer Experience and

Opportunities. Low cost and highly scalable business.

Merits of Indiabulls Securities

Low brokerage charges (Competitive) with 0.10 for Intra-day and 0.50 % for delivery. Indiabulls securities provide 8 times margin for Intra-day and 4 times margin for delivery. Indiabulls is suitable for both Day trading & Long term investment IndiaBulls has software called Power IndiaBulls. It is a Java based application, with real-time streaming quotes. It is fast in terms of speed and execution Research reports are free of cost to trading members. They Provide 3 in 1 interface, i.e. Demat Account, Trading account & bank account all are linked in one interface.

De-Merits of Indiabulls Securities

You have to open a bank account with the banks mentioned in Indiabulls site for Credit/ Debit Facility as they dont have their own bank. And In ICICI direct , you have a direct debit/credit facility with the bank Most customers feel that it is difficult to understand the ledger reports of Indiabulls securities, so proper customer guidance should be given.

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Value Proposition of Indiabulls Securities

ISL provide a very good Trading tools like Power Indiabulls & Indiabulls market trader. Power Indiabulls: A desktop Trading application offering clients sophisticated trading tools accessible at lightning fast speed. Indiabulls Market Trader: Browser based trading application built for retail investor. Indiabulls Equity Analysis: Premium research on 400 plus companies. Indiabulls Professional Network: Offers real-time prices, detailed data and news, intelligent analytics and electronic trading capabilities. Relationship manager: Indiabulls securities robust technology is integrated with knowledgeable and customer-focused relationship managers who are available 24X7 to assist the clients. In Depth Market Analysis and Research Their special research cell bring you intensive research reports on how the stock market is faring, when is the right time to invest, when to execute your order and more. Depending on what kind of investor you are, they bring you fundamental or basic research and technical research.

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MERITS & DE-MERITS OF COMPETITORS

ICICI SECURITIES
ICICI securities: It provides products & services in fixed income, equity & corporate finance. Merits of ICICI Securities ICICI Direct is considered best for long term investment.( Indiabulls is suitable for both Day trading & Long term investment) A direct debit/credit facility with the bank. All facilities available under one umbrella. BTST (Buy today & sell tomorrow) is available; this facility is available only in ICICI Direct. Can apply for IPO online (we cant do this in Indiabulls). Can apply for mutual funds online and can also sell them online. Internet banking demo which gives customers an opportunity to learn.

De-Merits of ICICI Securities Brokerage charges are high - intraday 0.25% and 0.75% delivery compared to other brokerage firms (is considered as highest in the market). Day trading is a night mare in ICICI because of Web based terminal, which is very slow. Orders placed at or around 10.00 hrs may be queued for a while. So intra-day Margin trading could be annoying now & then. It's not much of a hassle for cash trading though. (Indiabulls offers you a trading terminal 'powerIndiabulls', which is java based software. It is fast in terms of speed and execution).

ICICI Direct brokerages are not negotiable ( Where as Indiabulls

Brokerage Charges are negotiable). 72

SHAREKHAN
Merits of ShareKhan Securities Low brokerage charges, intraday 0.1% and 0.5% for delivery. Live streaming quotes Customer support is good No monthly charges Can trade in both BSE and NSE

De-Merits of ShareKhan Securities No BTST (buy today sell tomorrow), in ShareKhan you cant sell a share today which you bought yesterday. You have to open a bank account with the banks mentioned in ShareKhan site. Streaming quotes requires JVM (Java Virtual Machine); this may be big headache for customers. Annual charges are Rs330. Their trading terminals are certainly not for "investors", only for active traders. That is because, you have to trade a certain volume every month, otherwise you end up paying a fine

INDIA INFOLINE Merits of India Infoline (5 Paisa.com) Securities Low brokerage charges, intraday 0.10% and 0.50% for delivery and it is negotiable. Minimum brokerage per share will be 1 paisa for trading transactions and 5 paisa for delivery based transactions. 5 paisa provides 6 times margin for Intraday & 8 times margin for Delivery. All customers will get Digital Contract Notes. Physical contract notes could be provided on request which would entail a nominal charge.

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De- Merits of India Infoline (5 Paisa.com) Securities Software License Fee Rs.799/- per month or 7999/- per annum and is non-refundable. There is lot of Hidden costs. Annual Service Charges Rs.250. Customers who just want to have a depository relationship will be required to pay Rs.1000/-, for each Demat account, which will be adjusted against service charges. The information in their web based terminal is too much compressed in one screen. Trader terminal is good, but the interface is too complicated

KOTAK SECURITIES
Merits Low Brokerage charges with 0.05% for Intra-day & 0.45% for delivery. Kotak Securities will offer small-time retail investors with invest able surpluses as low as Rs.5, 000 a chance to invest in capital markets. Transactions are transparent with effective back office support. They provide Simple Ledger reports, which customers feel easy to understand than any other brokerage firms. Mutual fund & IPO facility is available online. Flexibility of products - Once you invest with Kotak Securities, you can enjoy access to a wide range of products and services to help you make the most of your investments. De-Merits Unethical act: Geojit Securities Ltd has accused kotak securities stock broking firm of hacking into its account to steal critical business information and blocking information access. Some investors have bad experience with accounts opening & they complain that it takes a long time for opening accounts. 74

Value Proposition of Kotak Securities

Kotak Securities have a definite policy on brokerage, and they have different slabs for different clients based on their turnover. You can always choose your brokerage based on your style and quantum of trading.

High Quality of software (KEAT) K.E.A.T is a special software that Koataksecurities.com provides its customers using which they can view live market rates of scrips on both the NSE and BSE, create a watch list and simultaneously place orders, view order reports, research companies etc. It is a complete online trading terminal.

Mobile trading The facility is exclusively designed to give you instant access to the stock market through mobile phone.

Phone Trading Call and Trade Call & Trade is a service offered by Kotak Securities for its customers, which provides customers with a facility to trade over the phone. Kotak Securities provides you a toll free number that you can call from anywhere in India.

Kotak Securities offers Variety of account types for different investors Kotak Auto Invest Kotak flat Kotak Gateway Kotak privilege circle Kotak High Trader Kotak free way

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3
RESEARCH METHODOLOGY

76

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. The logic behind the method used, in context of research, is explained; so that research results are capable of being evaluated either by the researcher himself or by others. People undertake research in order to find things in a systematic way, thereby increasing their knowledge. The research project involves an explanation of the methods to collect information, argue why the results are meaningful and explain any limitations that are associated with them.

Research defined
Research in common parlance refers to a search for knowledge. One can also define research as a scientific and a systematic search for pertinent information on specific topic.

A careful investigation (or) inquiry especially through search for new facts in any branch of knowledge . -Oxford advance learner dictionary

Redman and Mory defined research as a systematized effort to gain new knowledge.

77

Title of the study

A comperitive study of Indiabulls with its competitors

Duration of the project

The Duration of the project of the study has 40 days period.

Objective of study
To make a comparative study of competitors of Indiabulls. To study Indiabulls products and services. To find out potential investors for Indiabulls and present attitude of investors regarding share market.

Type of research
A research design is considered as the framework or plan for a study that guides as well as helps the data collection and analysis of data. The research design may be exploratory, descriptive and experimental for the present study.

Exploratory research studies are also termed as formulative research studies. The major emphasis in such studies is the discovery of ideas and insights. The main objective of exploratory research is to fine-tune the broad problem (here, increasing turnover) into specific.

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 Descriptive research studies are those studies, which are concerned with describing the characteristics of a particular individual, or a group. A sample was taken and statements about the population on the basis of the samples were made. Descriptive research aims at drawing inferences and making predictions (here, the number of prospective Customers who may buy Nestle products).

The descriptive research design is adopted for this project.

Sample size
The study sample constitutes 100 respondents constituting in the research area.

Method of selecting sample

Most of the data collected by the researcher is primary data through questionnaire, where the researcher and the respondent operate face to face.

Research Instrument
The researcher has used a structured questionnaire as a research instrument tool which consists of open ended questions, multiple choice and dichotomous questions in order to get data. Thus, Questionnaire is the data collection instrument used in the study. All the questions in the questionnaire are organized in such a way that elicit all the relevant information that is needed for the study

79

Scope of the study

This study is limited to Jaipur city. This study emphasizes on the following aspects-

To identify the preferences of different investors in investment instrument. This study is helpful to that organisation for conducting further research. It is helpful to identify the customers interest level of investment in share market. This study is helpful to the organization for identifying the area of dissatisfaction of their clients. To identify the competitiveness of organization and its competitors. This study helps to make a managerial decision to the company

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Limitations of the study

Through the present study aims to achieve the above-mentioned objective in full earnest and accuracy, it may be hampered due to certain limitations. Some of the limitations of this study may be summarized as follows:

Questionnaires are not filled properly by the respondents.

Respondents are not interested in filling the questionnaire.

Investors are not interested sharing their investing pattern.

Sample size is limited.

The selection of customers to cover the various strata of the society is tedious and time consuming.

The data collected were totally depending on the respondents view, which could be bias in nature.

Getting accurate responses from the respondents due to their inherent problem is difficult .They may be partial or refuse to cooperate.

Since the study is wide in nature and the matters regarding the study could not be analyzed and taken for consideration.The sample size is small; it may not actually represent the whole population.

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4
FACTS AND FINDINGS

82

FINDING AND ANALYSIS

Number of Branches of Competitors compared with Indiabulls securities

Brokerage houses INDIABULLS ICICI DIRECT INDIAINFOLINE SHAREKHAN KARVY MOTILAL OSWAL KOTAK No. of branches 640 441 605 583 581 80 330

Number of Branches of Competitors compared with Indiabulls securities

700 600

no. of branches

500 400 300 200 100 0 No.of branches

S ID IR IN EC D IA T IN FO LI SH N AR E EK HA N M K O AR TI VY LA L O SW AL IC
competitors

LL

IN

IC

IA BU

83

KO TA

NUMBER OF CUSTOMERS OF COMPETITORS COMPARED WITH INDIABULLS

Brokerage houses INDIABULLS ICICI DIRECT INDIAINFOLINE SHAREKHAN MOTILAL OSWAL KOTAK

No. of customer 450,000 210,000 500,000 260,000 200,000 400,00

Number of Customers of competitors compared with Indiabulls

600,000

no. of competitors

500,000 400,000 300,000 200,000 100,000 0 No.of customer

NE

O SW AL

ID IR EC

EK HA N

LL

IA BU

FO

SH AR

IA IN

IC

IN

competitors

M O

84

TI LA

IN

IC

KO TA

LI

COMPARISON OF COST- PHYSICAL VS DEMAT OF SHARES

TYPE OF ACCOUNT Brokerage Stamp Duty on transfer Postal Transfer Deeds Follow Ups Settlement Changes

PHYSICAL 0.75-1.25% 0.5% of MV Actual INR 0.35/TD Actual NIL

DEMAT 0.25-0.75% NIL NIL NIL NIL 0.05% of Transaction Value

Custody Changes Bad Delivery Loss/Theft/Mutilation Non Receipt Of Bonus/right Shares

(Vault Cost) Not Quantifiable Actual Actual

0.02% of Share Value NIL NIL NIL

No bad delivery of shares. No loss of share certificate in postal transit. No courier\postal charges incurred in transferring them or changing your address etc. No requirement of stamp duty on transfer of shares. (This is 0.5% of value in case of physical) Shares are transferred in the name of purchaser within a day of completion of settlement as against 45-60 days in physical mode. Much faster payment on sale of shares. No scope for theft\forgery damage of share certificates. Minimum handling of paper.

85

Corporate Offer

Sno. Parameters
1

Competitors offer
Only offline or online or both

Indiabulls Offer

Facilities

Both offline and online

Rs 700(lifetime)

A/c Opening charges

Rs 0 to Rs.750 (initially)

Annual Maintenance charges

Rs 190 to Rs. 500

Nil

0.15% to 0.02%

0.10(negotiable) 0.50(negotiable) 1 Paisa 8 times 4 times

Brokerage-Intraday
5 0.75% to 0.20%

Delivery
6 7 8 Min Charges Margin-Intraday Margin on Delivery Rs 10 to Rs 25 Generally 6 to 10 times Most of the competitors do not provide 9 Automised margin lending facility 10 Equity analysis Do not have Equity Analysis of 400+ companies updated daily 11 Technical charts Do not provide Provided on trade terminal 12 Transparency Not so transparent Everything provided online Online trading through Power Indiabulls is extremely fast and convenient. User can open charts for any number of scrips. Do not have Provided

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Comparison of different Depository Participants SNO. Name Of DP Demat Charges initial 1 ICICI DIRECT.COM 2 3 4 IL&FS UTI SECURITIES KOTAK SECURITIES 5 6 SHAREKHAN INDIABULLS SECURITIES LTD. 7 ANAGRAM Rs. 50 Rs. 300/- PA Rs. 300 (AMC) 8 9 INDIAINFOLINE ALANKIT ASSIGNMENT 10 11 12 13 MOTILAL OSWAL ANANDRATHI FORTIS HEM SECURITIES Nil Nil Rs. 350 Rs. 100 Nil Rs. 330/- PA Rs. 190/- PA Rs.250/- PA Rs. 500 Rs. 200 Nil Nil Nil Rs.400 Rs. 250/-PA Rs. 260/-PA Rs. 425 Rs. 50 Nil Rs. 200 Rs. 270 Rs. 375 Rs. 360 Rs. 250/- PA Rs. 240/- PA Rs. 30/- Per Month Rs. 300/- PA NIL Rs. 750 Rs. 500 Rs. 670 Nil Nil Rs. 750 Account Maintenance (AMC) Rs. 500/- PA Charges for Trading Account Nil

Demat charges per year taken by the entire depository participants are almost similar.

87

 Local Brokers charges are the lowest among these. Many of them are free. Many depository participants are opening accounts in free but they are charging annual maintenance (AMC). A very few are not charging account maintenance (AMC) viz. Indiabulls and Motilal Oswal.

Comparison of brokerage charges by different Depository Participants SNO. Name Of DP Brokerage Charges on Delivery 1 2 3 4 5 6 7 8 9 10 11 12 13 ICICI DIRECT.COM IL&FS UTI SECURITIES KOTAK SECURITIES SHAREKHAN INDIABULLS SECURITIES LTD. ANAGRAM INDIAINFOLINE ALANKIT ASSIGNMENT MOTILAL OSWAL ANANDRATHI Religare HEM SECURITIES 0.75-0.25% 0.75% 0.3% 0.65-0.20% 0.35-0.20% 0.50-0.20% 0.30-0.25% 0.25-0.20% 0.50-0.30% 0 .40-0.30% 0.30-0.25% 0.30-0.20% 0.25-0.10% 0.10-0.08% 0.25% 0.08% 0.07-0.03% 0.08-0.06% 0.10-0.03% 0.03% 0.05-0.04% 0.05-0.03% 0.075% 0.08% 0.03-0.02% 0.03% Brokerage Charges on Intraday settlement

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 Brokerage charges of almost all the broking firms are negotiable according to the potential of the customer. But brokerage charged by icicidirect.com is not negotiable (according to slab-rate). In Alankit and Fortis brokerage is negotiable up to any level. Indiabulls Securities Ltd. is encouraging the investors to trade more by charging less brokerage as compared to other competitors.

Comparison of margin limits given by different Depository Participants S.NO. Name Of DP Margin on Delivery Margin on Intraday settlement 1 2 3 4 5 6 ICICI DIRECT.COM IL&FS UTI SECURITIES KOTAK SECURITIES SHAREKHAN INDIABULLS SECURITIES LTD. 7 8 9 10 11 12 13 ANAGRAM INDIAINFOLINE ALANKIT ASSIGNMENT MOTILAL OSWAL ANANDRATHI FORTIS HEM SECURITIES Nil 4t Nil Nil Negotiable 4t 5t Nil 5t 6t 10t 10t 5t 4t 8t 10t Nil Nil 4t 4t Depends on volume 4t 4t 20t Depends on volume 10t 6t Depends on volume 8t 15t

89

 Hem Securities requires Rs. 25000 as a minimum balance in trading account. One cannot trade through Hem Securities without having Rs. 25000 minimum. In UTI Securities it is Rs. 10000 and in Indiainfoline it is Rs. 5000. And in Indiabulls Securities it is Rs. 500. Most of the broking firms do not provide margin on delivery, on the other hand some are allowing their customer to trade up to any limit, which is very risky.

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5
ANALYSIS AND INTERPRETATION

91

The process by which sense and meaning are made of the data gathered in qualitative research, and by which the emergent knowledge is applied to clients' problems. This data often takes the form of records of group discussions and interviews, but is not limited to this. Through processes of revisiting and immersion in the data, and through complex activities of structuring, re-framing or otherwise exploring it, the researcher looks for patterns and insights relevant to the key research issues and uses these to address the client's brief. Q1. OCCUPATION CLASSClass

No. Of. Respondents

60 10 30

Business class Service class

Professionals

occupation wise classification

70

% of respondents

60 50 40 30 20 10 0 Business class Service class class Professionals Percentage of respondents (%)

92

Q2. AGE-WISE DISTRIBUTION Age Below 35 35-45 46-55 Above55 No. of Respondents 42 24 20 14

age wise classification

45 40

% of respondents

35 30 25 20 15 10 5 0 Below 35 35-45 46-55 Above55 Age range Percentage of Respondents (%)

Interpretation -This bar chart depicts the percentage of the respondents belonging to different age groups like 21 no. (42%) of persons belongs to the age group of below 35 years. This depicts that the maximum no. of investors belongs to the age group of below 35 years.

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Q3. INCOME RANGE-

Monthly Income Below 10000 Rs.10000 to Rs. 20000 Rs. 20001 to Rs. 30000 Above Rs. 30000

No. of Respondents 18 22 26 34

income wise classification

40 35 30 25 20 15 10 5 0 Below 10000 Rs.10000 Rs. 20001 above Rs. to Rs. to Rs. 30000 20000 30000 income range

% of respondents

Percentage of Respondents (%)

Interpretation - This bar chart depicts the no. of the respondents belonging to different income groups like 18% of persons belongs to the income level of below 10000 rupees per month. Maximum no. of investors are those who lies in the income group of above 30000.

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Q4. HOW MUCH PORTION OF YOUR SAVING DO YOU INVEST/WOULD INVEST IN SHARE MARKET-

% OF INVESTMENT 0-20% 20-40% 40-60% Above 60%

NO. OF RESPONDENTS
30 32 26 12

PERCENTAGE OF RESPONDENTS (%)

% of respondents

40 30 20 10 0 020% 2040% 40- Above 60% 60%

PERCENTAGE OF RESPONDENT S (%)

% of investment

Interpretation - Majority of the respondents say that they would like to invest in share market up to 20% to 40% of their savings.

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Q5.EXPERIENCE IN SHARE TRADE

EXPERIENCE (IN YEARS)

NO. OF RESPONDENTS 38 28 22 12

Less than 2 2-3 3-4 Above 4

PERCENTAGE OF RESPONDENTS (%) 40 35

% of respodent

30 25 20 15 10 5 0 1 2 3 4 experience in year PERCENTAGE OF RESPONDENTS (%)

Interpretation -This bar chart depicts the no. of the respondents having the experience of online trading .Like 19 person out of 50 are having the

experience of less than 2 years. This data shows high surge in investment trend in equity market in recent 2 years.

96

6. TAKING THE FACTORS LIKE SECURITY, RATE OF RETURNS AND TIME IN CONSIDERATION WHICH AMONG THE FOLLOWING YOU RATE AS PER THE BEST OPTIONAvenues
bank FDs small saving schemes bonds equities/derivatives mutual funds

Respondents
14 6 24 32 24

Percentage of Respondents (%) 35

% of respondents

30 25 20 15 10 5 0 Percentage of Respondents (%)

m es

FD s

nd

he

bo

nk

sc

in g

av

ls

sm al

investment avenues

Interpretation - Majority of the respondents rated equities / derivatives as the best option among the factors like security, rate of returns and time consideration.

eq

97

ui tie

s/

de r

ba

iv a

tiv

es

Q7.INVESTORS PERCEPTION ABOUT SHARE MARKET

INVESTORS VIEWS 100 % risk High risk less return Low risk , high return 100 % return

NO. OF RESPONDENT 15 20 21 44

45 40 35 30 25 20 15 10 5 0 100%risk high risk less return low risk, high return 100%return
Returns

Interpretation -This bar chart depicts the percentage of the respondents having different opinion about equity market. Like 14% are having the opinion that in equity market there is high risk and less return. Maximum no. of persons are having the perception that the equity market gives the 100% return on investment.

98

Q8. IF YOUR BASE TO CHOOSE THE SCRIP IS MARKET CALLS/ MARKET TIPS, AND THEN WHAT ARE THE SOURCES YOU TRUST UPON MOST-

SOURCES
Market tips by securities T.V channels stock brokers

NO. OF RESPONDENT
8 46 46

information sources
50 45 40 35 30 25 20 15 10 5 0 Market tips by T.V channels securities sources stock brokers

% of respondents

PERCENTAGE (%)

Interpretation - Majority of the respondents say that if their base is to choose the scrip is market calls/market tips, then the sources they will trust upon are share brokers, T.V. channels.

99

Q9. UP TO WHAT PERCENT MARKET TIPS ARE CORRECT ACCORDING TO YOU -

INVESTORS VIEW 30% or less 30%-50% 50%-60% More than 60%

NO. OF RESPONDENT
68 10 10 12

PERCENTAGE (%) 80 70 60 50 40 30 20 10 0 30% or less 30%-50% 50%-60% More than 60% investors view PERCENTAGE (%)

Interpretation - Majority of the respondents say that 30% or less percent of market tips are correct according to them.

% of respodent

100

10. WITH WHICH BROKERAGE HOUSES ARE YOU ENGAGEDBrokerage house Indiabulls India info line ICICI direct Karvy Motilal oswal Sharekhan NO. OF RESPONDENT 25 20 20 18 8 9

25

20

15

10

0 Indiabulls India info line ICICI direct Karvy Motilal oswal Sharekhan

Interpretation -22 % of the respondents out of 50 say that they are engaged with indiabulls sec. ltd., and minimum 2% with karvy.

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Q11. WHY YOU HAVE CHOSEN ABOVE BROKING HOUSE -

Criteria Low brokerage fess Services Fast query solution

No. Of respondent 66 18 16

Percentage (%) 70

% of respondent

60 50 40 30 20 10 0 Low brokerage fess Services Criteria Fast query solution Percentage (%)

Interpretation - 66 % of the respondents out of 50 say that they are engaged with their brokerage houses because of the low brokerage charges.

102

Q12. HOW WILL YOU RANKED YOUR BROKERAGE HOUSE Investors view Excellent Very good Good Satisfactory No. Of respondent 30 20 26 24

How will you ranked your brokerage house

% of respondents

35 30 25 20 15 10 5 0
Ex ce lle nt Ve ry go od Sa tis fa ct or y G oo d

Percentage (%)

investors view

Interpretation 30 % of the respondents out of 50 say that brokerage house with whom they are engaged are excellent and minimum 20% investors says that their brokerage house very good.

103

Q13. ARE YOU SATISFIED WITH SERVICES PROVIDED BY YOUR BROKERAGE HOUSES Investors view YES NO No. Of respondent 60 40

Are you satisfied with services provided by your brokerage houses

70 60

% of respondent

50 40 30 20 10 0 YES investors view NO Percentage (%)

Interpretation 60% of the respondents out of 50 say that they are satisfied with services provided by their brokerage houses.

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SWOT ANALYSIS OF ORGANIZATION

105

INTRODUCTION OF SWOT ANALYSIS Introduction

It has always been important for a business to know and understand how it fits in and interacts with the surrounding environment on both an internal (office/factory/shop environment) and external view (how your business operates with the outside world). Researching your environment will benefit you and/or your management team by putting you in a position to develop a strategy for both the long and short term.

Analyzing the Business The most influential way of doing this is to perform a SWOT analysis of the company. It is a common phrase used to abbreviate Strengths, Weaknesses, Opportunities and Threats. Each term is a heading for a separate analysis of the business but they can be related as seen below: Strengths provide an insight to your business Opportunities & Weaknesses in your business can cause immediate Threats A guideline of how to carry out the analysis is explained in the next section, but it is important to know that the SWOT analysis is only based upon information that is known by the assessors (you), and is seen as perhaps the more basic approach of analyzing a business position: but SWOT is still a powerful tool when looking for immediate benefits.

106

SWOT ANALYSIS OF INDIABULLS

107

STRENGTHS
Integrated technology platform: - Since the launch of their website, www.indiabulls.com their online trading platform, they have invested in building a technology platform. They have also developed software called power Indiabulls. Their trader terminal is an application which allows customers to trade on both the BSE and the NSE, has features like live intra-day tick by tick charts, historical charts, price alerts and other features. The features allow them to seamlessly integrate across delivery channels, online or offline through branches or telephone. Pan India distribution network: - They have 640 branches across India. These branches help in customer acquisition as well as customer service. Their distribution network is well spread to capture the target audience and cater to the needs of their potential customers. Relationship manager facility: - This is one of the unique services that Indiabulls offers its customers. Every customer is provided with a relationship manager, where in the customers can contact these managers at anytime of the day to get information on the market or get their queries clarified. Growth rate: - The Company is growing at a very rapid rate, from 25 branches in the year 2003 it has grown to 650 branches in the beginning of 2007. Not only has it seen a fast growth rate in the number of branches but also it has grown in the number of clients and the employee strength. They have a customer base of more than 450,000 and over 4500 relationship managers. Indiabulls has been rated as the Fastest Growing Large Cap Company in India in a report by Business Today magazine in April, 2006. Power Indiabulls has developed into brands: - Indiabulls.com and power Indiabulls which is their software are well known brands amongst retail investors across India. In all the cities that they have expanded into, they have been able to leverage upon brand awareness and have established a customer base.

108

Strong sales and marketing teams that deliver market leading product innovation: - their relationship manager channel offers a single point contact to all their retail customers. These managers offer personalized services to their customers and help to build strong and continuing relationships with them. The marketing associates help the company in client acquisition at minimal cost and they also help the company and its subsidiaries in increasing their penetration into smaller towns and cities.

Strong banking relations and credit ratings: - Indiabulls has banking relation with some of the major banking institutions in the country such as HDFC Bank, ICICI Bank, Standard Chartered Bank, etc, for easy mobilization of funds of the customers.

Strong market presence and increased market share: - Their growing client base and market share have increased their market presence and brand recognition has enhanced their profitability. Their brand and profitability allows them to recruit good and efficient employees, compensate them attractively and provides the flexibility for them to invest in the business and technology systems these attributes in turn has a positive effect on the growth of the company.

Diversified business model: -Our Company and our subsidiaries offer various financial services and products ranging from equity, F & O and wholesale debt, insurance and IPO distribution, depository services to cater to the specific needs of the retail and institutional investors thus providing all these services in a single platform. Thus Indiabulls is not dependent on any single of its subsidiary for survival and failure of any one subsidiary will not have an adverse effect on the company as a whole.

109

WEAKNESSES

Lack of a banking arm: - Indiabulls does not have a banking arm of its own which otherwise would have helped the company to a large extent. Whereas a few of its competitors like HDFC securities, ICICI securities, Kotak securities, etc have their own banking arms which make the transactions easier and simpler.

Loss of relationship managers leads to loss of clients: - Their business is dependent on the team of relationship managers who directly manage client relationships. Any events that harm these relationships including the loss of their relationship managers may lead to the loss of client.

OPPORTUNITIES
Changing demographics with higher disposable income: - India is one of the fastest growing economies in the world. It has a large and rapidly growing middle class of 300 million people with increasing levels of discretionary income available for consumption and investment purposes. The options they have for investments are fixed deposits, post office deposits etc,. This gives them a limited interest rate on their investment; where as the stock market provides a good scope for making good returns. The evolution in Ind ias demographic setup with a median age of 24 years and higher consumption expenditure is expected to have a virtuous cycle effect by improving the economic growth and per capita income which would result in higher savings and investments.

110

Rapid penetration of internet and computers: -Technology is vastly used in stock market trading. Now, with the use of the computers and internet the stock market trading has become fast. The traders can place orders through the internet and execute them. This saves the time of the investors, who earlier had to make calls to their brokers in order to trade. These people are willing to use advanced communication tools, such as computers and telephones, and want to take charge of their personal investment decisions. The use of technology is influencing more people to invest in the stock market.

Market size and Characteristics: -India is a large and growing economy with rapidly expanding financial services sector. The sector has witnessed a transformation over the last decade as a result of the economic liberalization which started in 1991. India is the worlds 12th largest economy in dollar terms and the 4th largest in PPP terms. The projected growth rate of real GDP is greater than 9% per annum with higher growth in many sectors such as financial services. Indian financial sector presents a huge retail finance opportunity. As a result of falling interest rates, bank deposits, other traditional investment opportunities are losing their attraction. Thus, Indian investors are getting attracted towards alternate investments such as the equity markets and are looking for newer financial products.

THREATS
Economic slowdown: - Terrorist attacks and other acts of violence or war, including those involving India or other countries could adversely affect national economy or world economy as a whole. Such act may also result in a loss of business confidence. Travel restrictions as a result of such incidents may have adverse affect on the ability to operate effectively. This will result in an economic slowdown

111

Political instability in the country: - The government of India has pursued the policy of economic liberalization, including relaxing restriction on the private sector. With the change in government, there is no assurance that these liberalization polices will continue in the future. Any political instability could delay the economic reforms and could have adverse effect on the market.

Volatile movement in market indices: - The Indian stock market is very volatile in nature and is capable of shedding or gaining several points in a single day. Unless and until the market stabilizes the investors will be very hesitant to invest in the market. Stock market falls will have a cascading effect on the investors and economy of the country.

Competition:

Indiabulls

faces

significant

competition

from

companies seeking to attract clients financial assets, including traditional and online brokerage firms, mutual fund companies, etc, which are having a wide presence and strong brand name. As the company enters new markets their bound to face additional competition from those who have longer operating history have grater retail and brand presence than Indiabulls. If the company is unable to manage its business it might impede their competitive position and their profitability. Substitutes: - Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and services. The stock market is very unpredictable with fluctuations; this may prompt many people to invest in fixed deposits, posy office deposits, etc in order to avoid risk. Low product differentiation: - The retail broking services provided by the various companies are homogeneous with very low product differentiation. This does not allow the company to freely fix their prices due to the threat of competition, which in turn reduces their profit.

112

7
CONCLUSION

113

CONCLUSION

This conclusion relates with not what is written in the report rather, it goes beyond that, Indiabulls Securities Ltd is a company which is having maximum number of branches and largest client base but stands second in term of brokerage generation, this shows that there is further scope for its growth. Since formation of Indiabulls in year 2000 Indiabulls have adopted strategy of downsizing twice in year 2002, 2004 and surprisingly it is under process of doing it again in year 2007. This cutting of cost center is not done directly; employees are given high target of sales and those employees who are uncomfortable with that leave the organization. Apart from this it has been found that Indiabulls is having high labor turnover ratio. The above given situation brings us to the conclusion that Indiabulls is incurring high salary expenses with high labor turnover, as explained in accounting a high turnover will always leads to high cost. This finally led us to believe that Indiabulls can become a better company if it handles the above mentioned issue efficiently. There is another problem that exists is, lack of good guidance to clients so that they can make better decision while making investments. The level of this problem is not serious & neither customer are aware of it, customer are given regular updates of stock market on daily basis they are quiet satisfied with it. Thus customer satisfaction can enhance if, more attention is given to technical analysis of stock which will help Relation Managers to deliver calculated information to their customer. The head office of Indiabulls is in Gurgoa (Haryana), on daily basis it sends tips to all its branches through mail, which in turn is given to customer, this transfer of data takes place only ones when market opens and for the rest of the day Relation Manager has to depend on their own. Thus if this flow of information is enhance customer as well as Relation Manager will reap more benefits. Hiring of technical analyst for branch will be too costly so the best way will be to improve the flow of information. 114

8
RECOMMENDATION AND SUGGESTION

115

RECOMMENDATION AND SUGGESTION

These are following problems that were observed while staying in Indiabulls which also includes recommendations. 1. As per NSDL guideline clients have to change their password every 15 th day. It becomes very difficult for a client to change and remember a new password after every 15 days. It increases the work of Relationship Manager also as he has to tell the clients their new password every time. Recommendation Since this guideline of changing the password by NSDL is not mandatory to follow. Other brokerage houses like ICICI DIRECT, HDFC, Share Khan, UTI etc. are not following this guideline. It is advisable for Indiabulls to reconsider this rule once again. It may be good for the company if they modify this guideline in terms of increasing the time limit from 15 days to 45-60 days. Another thing that can be done is software could be made in such a way that the client can directly send request of renewing password to the main server. The main server will automatically generate new password and send it to clients mail ID. For this the client has to make sure that his/her mail Id is updated regularly.

2. Both Screen Based and Power Indiabulls software do not show purchased price and current market price of underlying on same screen at a time. To see original purchased price of underlying, a client has to check from his/her transaction history. Thats way system does not show percentage gain/loss of client on screen. Recommendation It would be easy for the client to get this advantage on his/her screen. Consider this recommendation while updating the software

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3. Relationship manager is the person who takes care of clients account. Due to
frequent changes in the Relationship manager a client is in dilemma that to whom he/she is supposed to contact. In general when the client calls, he/she is not aware about his/her Relationship manager. This can be due to the high attrition rate.

Recommendation Client should be informed through Phone, E-mail by the new Relationship manager personally. Confirmation should be sent from the H.Q to the client about his/her new Relationship Manager.

4. Margin Product is the facility provided by Indiabulls through which clients can utilize fund beyond their capacity of cash margin + stock margin on the basis of predetermined rate of interest. Most of the clients are not aware about this facility Recommendation Explain the clients through a simple example of how margin product works. A format of the same can be prepared and send through E-mail to every client.

5. It is observed that majority of clients who have done trade in Futures and Option Market, are in loss. Due to the lack of proper strategies most of the clients losing their money in this segment. Recommendation Prepare some of the presentations in series starting from primary level to advanced level on Futures and Option Market and send it to every client who has signed Futures and Option agreement in time to time.

6. Most of the Brokerage Houses are using advertising strategy for promoting their products. This is in form of print ads, TV commercials, holding seminars, Web advertising etc. For example Share Khan advertises its product by placing its advertisement on different other web sites. Some other companies

117

like An and Rather, Stock Holding Corporation use seminars as a means to promote their product Recommendation It would be an advantage if Indiabulls follows some kind of advertising strategy. This can be done through,

Print Media. Banners and Hoardings. Web advertising (Placing ads into other popular web sites). By conducting seminars. For example, people can be called in the office at weekends, conducting presentations. SMS promotional schemes. Etc

7.

Indiabulls does not provide IPO subscription facility through its online

software. Many clients are facing this problem as they have to go through paper work subscription method. Whereas all other competitors are providing this facility online Recommendation Since most of the companies are coming with their IPOs/FPOs, it would be beneficial for Indiabulls customers if they are provided with this facility online. Consider this recommendation while updating the online software in future.

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SUGGESTIONS

Aggressive Promotions: Indiabulls Securities compared to its competitors concentrates less on advertising and promotions, especially through electronic media. Its competitors like Sharekhan, ICICI and Kotak are advertising aggressively through media. Hence Indiabulls should concentrate more on advertising through print and electronic media. Tapping Rural Market: The Indian rural investors market are relatively untapped, with only small and private firms meeting the current demand. Indiabulls Securities can gain the First Mover Advantage over its competitors, especially in areas were commercial crops are grown and the standard of living is high. These people do not have much option to invest other than banks and post offices. Reduce the initial account opening charges: The charge for opening a trading and demat account in Indiabulls securities is high compared to its competitors. This influences the potential investors to open their account with another company which provides the same at lower prices. Thus it acts as a mental barrier for potential customers, who tend to overlook all other benefits offered by Indiabulls. Hence Indiabulls should consider reducing their account opening charges. Bring in more product differentiation: Product differentiation here means that Indiabulls securities should bring in more customized services and more value proposition for large investors. It can reduce the brokerage charges for large investors which will encourage them to invest more in the company. Invest more on R&D: Indiabulls should concentrate on its research and development since most of its competitors are investing on R&D. This will help the company to read the market better and will also be in a better position to understand the needs of the customers. This can be extremely beneficial for Indiabulls in the long run.

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BIBLIOGRAPHY

Books:
Kotler Philip, Keller Kevin L., Koshy A., Jha Mithileshwar Marketing Management 12e, Pearson Education. Kothari C.R., Research Methodology Method &Techniques, Fourth Edition, Wishwa Prakashan, New Delhi.
Ramaswamy & Namakumari : MARKETING MANAGEMENT MACMILLAN NEW DELHI. Subhash C. Mehta: MARKETING ENVIRONMENT. CONCEPT AND CASES, TATA MCGRAW HILL, NEW DEHLI.

Website http://www.indiabulls.com/securities/ http://www.indiainfoline.com http://www. kotaksecurities.com http://www. karvy.com http://www. icicidirect.com http://www. sharekhan.com http://www.motilaloswal.com http://www.dnb.co.in/EquityBroking https://www.arthamoney.com/Articles/ http:/www.wikipedia.org

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8
APPENDICES

121

QUESTIONNAIRE
I am Rohit Jain A student of MBA 4th sem of AIMS Mansarover,Jaipur.I am conducting this research as part of MBA curriculum.The information provided by you will kept confidential.

Name : ________________________________________________ Address: _______________________________________________ _______________________________________________

1. YOUR OCCUPATION CLASS(A) Business class (B) Service class (C) Professionals

2.AGE GROUP(A) Below 35 (B) 35-45 (C) 46-55 (D) Above 55

3.YOUR INCOME RANGE(A) Below 1000 (C) Rs. 20001 to Rs. 30000 (B) Rs.10000 to Rs. 20000 (D) Above Rs. 30000

4. HOW MUCH PORTION OF YOUR SAVING DO YOU INVEST/WOULD INVEST IN SHARE MARKET (A) 0-20% (B) 20-40% (C) 40-60% (D) Above 60%

5. EXPERIENCE IN SHARE TRADE (A) Less than 2 (B) 2-3 (C) 3-4 (D) Above 4

6. TAKING THE FACTORS LIKE SECURITY, RATE OF RETURNS AND TIME IN CONSIDERATION WHICH AMONG THE FOLLOWING YOU RATE AS PER THE BEST OPTION(A) Bank FDs (C) Bonds (E) Mutual fund 122 (B) Small saving schemes (D) Equities/derivatives

7. INVESTORS PERCEPTION ABOUT SHARE MARKET (A) 100% risk (C) Low risks, high return (B) High risk less return (D) 100% return

8. IF YOUR BASE TO CHOOSE THE SCRIP IS MARKET CALLS/ MARKET TIPS, AND THEN WHAT ARE THE SOURCES YOU TRUST UPON MOST (A) Market tips by securities (C) Stock broker 9. UP TO WHAT PERCENT MARKET TIPS ARE CORRECT ACCORDING TO YOU (A) 30% or less (B) 30%-50% (C) 50%-60 (D) More than 60% (B) T.V. Channels

10. WITH WHICH BROKERAGE HOUSES ARE YOU ENGAGED(A) Indiabulls (E) Motilal oswal (B) India infoline (F) Sharekhan (C) Icici direct (D) Karvy

11 WHY YOU HAVE CHOSEN ABOVE BROKING HOUSE (A) Low brokerage charges (C) Fast query solution 12. HOW WILL YOU RANKED YOUR BROKERAGE HOUSE (A) Excellent (B) Very good (C) Good (D) Satisfactory (B) Services

13. ARE YOU SATISFIED WITH SERVICES PROVIDED BY YOUR BROKERAGE HOUSES (A) Yes 14. (B) No

WHAT PROBLEM DO YOU FACE WITH BROKERAGE FIRM__________________________________________________ __________________________________________________ Thank you

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Sr. no. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

Q.1 A C A C A C C B A C A A A A C A A C A C A B A C A A A C A A C A C B A C C A A C C

Q.2 A A A A D A C D A B C A A B C A A C C B C B D A A A A C B C B D C B A A C B A D A

Q.3 D D D B D A D D A D D D B D C B D C A D C D C B D A C D D C B D C D A A C C D D B

Q.4 B B A D C B B D C A A C D B B C B D A A A A B D C D A B C C B C B B A C B C C B A

Q.5 A B A B A A B B A A A B C C B A B C B A C A A B A A C A C B A A B C B C C B A B C

Q.6 E C B C D B C A E A C D C E D D D C C A E A C D D A C D E C E A E D A E B C D C C

Q.7 D C D C D B A D B B D D B D D D B D A D D C D C D B C D C D D D A A A B D C D D B

Q.8 C A C B B C C C B B A C B C B A C B B C C B C B C C B C B C B C B C B B C B C A B

Q.9 A A C D A C A A A C A D A A C A B A C D A D C A A B A A A C A A A A D A C B A A D

Q.10 F A B C C F B D E B F C F C A D D B A D D F B E C A D B B A D B C A D B F A B E C

Q.11 A A A C C A A B A A A A B A A A B C A A B A B C C A A A A C B A A A A B A A B A B

Q.12 A C C A C C A B B A B C C A C B B A C D A B A C D B A D B A C A C C D A B C D A C

Q.13 A A A A A A A B B A B A A A A B B A A B A B A A B B A B B A A A A A B A B A B A A

124

42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

A B C A B A C B A C C C A A C A A A B A B C A A A B A C A A A A C A C A C A A A A A A

A D B C C A D A C A D A A C A B D C C B A A B A C A B C A C B D A A A A B B D B B A B

D A B C D D D D C D B D D B A B D A C D B B B D B B D A B C B C A B A C B C C A D C C

B A B B B B A B A C C A C C A B C C A B C C B A C B C B A B A B C A C A B D A D A D A

C C A B A B A A C D A B A B A D A D A A B C A B A D C D B C A A D A A C B C B A A D A

A E D A E C D D D E C D C D D E D E A E D E A D C D E C D A E C D B E C D A C E D E B

C A D D B A D C A D C D C D B A B D B B D B A B D A C D C A D D C C A D B C D B D B A

B C B C B B B A B C B C B C B B A B B C C C C C B C B C B C B C A C B B B C C B C B C

C A A A B A A 0 A A A A A C A A A B A A A A D A A A A B A A A B A A A B A A D A A A A

C E F A D A A F C A A B A C C B C A B C C A C A D A B F A D F B A C F A A B F A A D A

A A C A C A A B A A A A C C A A B A B A A B A A A B A C A B A A A A A B A A C A A B C

C A C C A D A C C A A D A B B D D C B D D C A C D A D B A D A B A D A D D B D B A C D

A A A A A A A A A B A B A B B A B A B A B A A B A A B B A B A B A B A B A B B B A A A

125

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100

C A A C A A B A C A A A C A A A

A A B B D B A A A B B C A D A D

A B A C D C C A B A C C C A B C

B D B D D B A C A A B C A C A A

B C A B D B C C C A D B D B D D

D A D C D E C E D E D C E D B D

C B D D C D D C D D B A D C D C

B C B C B C B C B C A C B C B C

D A B A A A D A A A A C A A D A

D B D A B D C D B C D F C D C B

A A C C A A A A B A A A C A A A

A C A B D D B A B D A C D B C D

A B A B B A B A B A B A B B A B

A B C D E F

Q.1 60 10 30

Q.2 42 24 20 14

Q.3 18 22 26 34

Q.4 30 32 26 12

Q.5 38 28 22 12

Q.6 14 6 24 32 24

Q.7 15 20 21 44

Q.8 8 46 46

Q.9 68 10 10 12

Q.10 25 20 20 18 8 9

Q.11 66 18 16

Q.12 30 20 26 24

Q.13 60 40

TOTAL

100

100

100

100

100

100

100

100

100

100

100

100

100

126