A Project Report

On
STOCK MARKET TRADING OF INDIA BULLS SECURITIES
LIMITED

Submitted in Partial fulfillment for the award of the degree

MASTER IN BUSINESS ADMINISTRATION

University School Of Management Studies

Guru Gobind Singh Indraprastha University
Dwarka Sector-16 C, New Delhi-110006
Batch (2014-2016)

Under Guidance Of:

Submitted By:

Mr. Gaurav Talan

(Asst. Professor)

Amit Kumar
Enrl. No.-04716659314
1

STUDENT DECLARATION

I solely declare that the report titled STOCK MARKET TRADING OF INDIA
BULLS SECURITIES LIMITED is a bonafied record of work carried by me,
submitted partial fulfillment of requirement for the award of degree Master Of Business
administration under the guidance of Mr. Gaurav Talan, Assistant professor of
University School Of Management Studies (GGSIPU).

This research is solely the work of me based upon questionnaire, printed material
given in bibliography. The matter embodied in this report has not been submitted for the
award of any other degree.

Dated

Amit Kumar

Place

Enrl. No. 04716659314

ACKNOWLEDGEMENT
Dissertation Report is a bridge connecting the educational and professional use. It is the
path leading to success by shouldering responsibilities under the careful guidance of
seniors and experienced personnel without fear and failures.
It gives me immense pleasure to take the opportunity to remember and thanks to the
personalities who are involved with this project work during its study stage during my
days of hard work. I feel that it is my duty to express thanks and deep gratitude to
everyone who is directly or indirectly associated in the completion of this Dissertation
Report

With deep reverence, I offer my deepest regards gratitude to Mr. Gaurav Talan who is
my finance faculty of University School Of Management Studies (GGSIPU), without
whom this Report could not have been fulfilled.

Amit Kumar
Enrl.No. 04716659314

II

Certificate From The Guide

This is to certify that Amit Kumar is a student of MBA 4th semester and had completed
his project under my guidance.
This project is bonafied work of student and has not been submitted elsewhere for the
award of any degree.

Date
Place

Mr. Gaurav Talan

(Asst. Professor)

III

Executive Summary
Indian securities markets have undergone many changes during the last decade.
Exponential growth in trading volumes is pushing existing trading systems and processes
to capacity and increasing settlement risk. With Indian market moving to a T+3 rolling
settlement cycles in line with global markets, SEBI is continuing its efforts to increase the
efficiency and transparency in Indian markets. Indeed it has been SEBI endeavor to make
the Indian markets, one of the most competitive and efficient markets of the world.
Income, Savings mobilization and promotion of investment are functions of the stock and
capital markets, which are a part of the organized financial system in India.
This Project titled Stock market Trading Of India Bulls Securities limited is an
attempt to understand the stock market and role played by Indian retail Brokerage Firms
in stock market. The objective of brokerage firms is to help the investor to minimize the
risk involved in investment and maximize the return. Some of the main characteristics of
the brokerage industry include growth in e-broking; growing derivatives market, decline
in brokerage fees etc. An endeavor was also made to understand the role played by
Indiabulls Securities compared to its competitors in Indian retail brokerage market.
The role played by Indian retail brokerage industry is of immense significance, taking
into account the health of the capital markets and the intensity of competition among the
brokerage companies.

IV

Table of Contents
1. Student Declaration..I
2. Acknowledgement....II
3. Certificate from the guide......III
4. Executive summary.....IV

5. Introduction
5.1 Outlook on Indian Stock market(8-12)
5.2 Overview of Indiabulls.(13-20)
5.3 Overview of Indiabulls Securities..(21-25)
5.4 Competitors.(26-31)
6. Research Methodology(32-41)
7. Analysis
7.1 Financial analysis of India bulls securities.(43-51)
7.2 Competitive Analysis(52-65)
7.3 SWOT Analysis.(66-67)
8. Findings & Suggestions. 68
9. Conclusion...70
10. Bibliography.72
11. Annexure..74

INTRODUCTION

1. OUTLOOK ON INDIAN STOCK MARKET

1.1 Introduction
Indian Stock Markets is one of the oldest in Asia. Its history dates back to nearly 200
years ago. The earliest records of security dealings in India are meager and obscure. The
East India Company was the dominant institution in those days and business in its loan
securities used to be transacted towards the close of the eighteenth century.
By 1830's business on corporate stocks and shares in Bank and Cotton presses took place
in Bombay. Though the trading list was broader in 1839, there were only half a dozen
brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed
a rapid development of commercial enterprise and brokerage business attracted many
men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the
American Civil War broke out and cotton supply from United States to Europe was
stopped; thus, the 'Share Mania' in India began. The number of brokers increased to
about 200 to 250.
At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,
found a place in a street (now appropriately called as Dalal Street) where they would
conveniently assemble and transact business. In 1887, they formally established in
Bombay, the "Native Share and Stock Brokers' Association, which is alternatively
known as The Stock Exchange". In 1895, the Stock Exchange acquired a premise in
the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was
consolidated.
The Indian stock market has been assigned an important place in financing the Indian
corporate sector. The principal functions of the stock markets are

enabling mobilizing resources for investment directly from the investors

providing liquidity for the investors and monitoring

Disciplining company management.

The two major stock exchanges in India are National Stock Exchange (NSE) and
Bombay Stock Exchange (BSE).
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1.2 National Stock Exchange

With the liberalization of the Indian economy, it was found inevitable 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.
The National Stock Exchange (NSE) is India's leading stock exchange covering various
cities and towns across the country. NSE was set up by leading institutions to provide a
modern, fully automated screen-based trading system with national reach. The Exchange
has brought about unparalleled transparency, speed & efficiency, safety and market
integrity. It has set up facilities that serve as a model for the securities industry in terms of
systems, practices and procedures.
NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and
settlement mechanism, and has witnessed several innovations in products & services viz.
demutualization of stock exchange governance, screen based trading, compression of
settlement cycles, dematerialization and electronic transfer of securities, market of debt
and derivative instruments and intensive use of information technology.
Trading at NSE can be classified under two broad categories:

Wholesale debt market

Capital market

Wholesale debt market operations are similar to money market operations - institutions
and corporate bodies enter into high value transactions in financial instruments such as
government securities, treasury bills, public sector unit bonds, commercial paper,
certificate of deposit, etc.
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Capital market: A market where debt or equity securities are traded.

There are two kinds of players in NSE:

Trading members

Participants

Recognized members of NSE are called trading members who trade on behalf of
themselves and their clients. Participants include trading members and large players like
banks who take direct settlement responsibility.
Trading at NSE takes place through a fully automated screen-based trading mechanism
which adopts the principle of an order-driven market. Trading members can stay at their
offices and execute the trading, since they are linked through a communication network.
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 and a confirmation slip will be
printed at the office of the trading member.
NSE has several advantages over the traditional trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation.

Investors can trade at the same price from anywhere in the country since intermarket operations are streamlined coupled with the countrywide access to the
securities.

Delays in communication, late payments and the malpractices prevailing in the

traditional trading mechanism can be done away with greater operational
efficiency and informational transparency in the stock market operations, with the
support of total computerized network.
NSE Nifty S&P CNX Nifty is a well diversified 50 stock index accounting for
22 sectors of the economy. It is used for a variety of purposes such as
benchmarking fund portfolios, index based derivatives and index funds.
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NSE came to be owned and managed by India Index Services and Products Ltd. (IISL),
which is a joint venture between NSE and CRISIL. IISL is India's first specialised
company focused upon the index as a core product. IISL have a consulting and licensing
agreement with Standard & Poor's (S&P), who are world leaders in index services. CNX
stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the
identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N'
stands for NSE and X stands for Exchange or Index. The S&P prefix belongs to the USbased Standard & Poor's Financial Information Services.

1.3 Bombay Stock Exchange

The Bombay Stock Exchange is one of the oldest stock exchanges in Asia. It was
established as "The Native Share & Stock Brokers Association" in 1875. It is the first
stock exchange in the country to obtain permanent recognition in 1956 from the
Government of India under the Securities Contracts (Regulation) Act, 1956. The
Exchange's pivotal and pre-eminent role in the development of the Indian capital market
is widely recognized and its index, SENSEX, is tracked worldwide.
SENSEX
The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that
subsequently became the barometer of the Indian stock market.
SENSEX is not only scientifically designed but also based on globally accepted
construction and review methodology. First compiled in 1986, SENSEX is a basket of 30
constituent stocks representing a sample of large, liquid and representative companies.
The base year of SENSEX is 1978-79 and the base value is 100. The index is widely
reported in both domestic and international markets through print as well as electronic
media
The Index was initially calculated based on the "Full Market Capitalization" methodology
but was shifted to the free-float methodology with effect from September 1, 2003. The
"Free-float Market Capitalization" methodology of index construction is regarded as an
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industry best practice globally. All major index providers like MSCI, FTSE, STOXX,
S&P and Dow Jones use the Free-float methodology.
Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the
pulse of the Indian stock market. As the oldest index in the country, it provides the time
series data over a fairly long period of time. Small wonder, the SENSEX has over the
years become one of the most prominent brands in the country.
The SENSEX captured all these events in the most judicial manner. One can identify the
booms and busts of the Indian stock market through SENSEX.
The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of
BSE National Index (Base: 1983-84 = 100). It comprised of 100 stocks listed at five
major stock exchanges. The Exchange launched dollar-linked version of BSE-100 index
i.e. Dollex-100 on May 22, 2006.
In order to fulfill the need of the market participants for still broader, segment-specific
and sector-specific indices, the Exchange has continuously been increasing the range of
its indices. The launch of BSE-200 Index in 1994 was followed by the launch of BSE500 Index and 5 sectoral indices in 1999. In 2001, BSE launched the BSE-PSU Index,
DOLLEX-30 and the country's first free-float based index - the BSE TECK Index. The
Exchange shifted all its indices to a free-float methodology (except BSE PSU index) in a
phased manner.
The values of all BSE indices are updated every 15 seconds during the market hours and
displayed through the BOLT system, BSE website and news wire agencies.
All BSE-Indices are reviewed periodically by the "Index Committee" of the Exchange.

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2. OVERVIEW OF INDIABULLS
2.1 Introduction
Indiabulls is Indias leading Financial and Real Estate Company with a wide presence
throughout India. Indiabulls Financial Services Limited was established in the year 2000
by three promoters all of whom are engineers from Indian Institute of Technology, New
Delhi, and has attracted over Rs 700 million of investments from venture capital firms,
private equity funds and institutional investors.
History

Indiabulls Financial Services Limited was incorporated on January 10, 2000 as

Orbis Infotech Private Limited at New Delhi.

The name of the Company was changed to Indiabulls Financial Services Private
Limited on March 16, 2001 due to change in the main objects of our Company
from Infotech business to Investment & Financial Services business.

It became a Public Limited Company on February 27, 2004 and the name of the
Company was changed to Indiabulls Financial Services Limited.

Indiabulls has over 640 branches all over India. The customers of Indiabulls are more
than 4,50,000 which covers from a wide range of financial services and products from
securities, derivatives trading, depositary services, research & advisory services,
consumer secured & unsecured credit, loan against shares and mortgage & housing
finance. The company employs around 4000 Relationship managers who help the
clients to satisfy their customized financial goals. Indiabulls entered the Real Estate
business in the year 2005 with its group of companies.
Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay
Stock Exchange and Luxembourg Stock Exchange. The market capitalization of
Indiabulls is around USD 2500 million (29th December 2006). Indiabulls and its

13

group companies have attracted USD 500 million of equity capital in Foreign Direct
Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are
the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs,
Merrill Lynch, Morgan Stanley and Farallon Capital.

2.2 Growth of Indiabulls

Year 2000-05:
One of Indias first trading platforms was set up by Indiabulls Financial Services Ltd.
with the development of an in-house team.
Year 2005-09: The service offered by Indiabulls was increased to include Equity, F&O,
Wholesale Debt, Mutual fund, IPO Financing/Distribution and Equity Research.
Year 2009-12: In this particular year Indiabulls ventured into Distribution and
Commodities Trading business.
Year 2012-13: This was one of the most important years in the history of Indiabulls. In
this year:

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.

Year 2013-14: 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

14

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.
Year 2014-15: In this year, Indiabulls Financial Services Ltd. was included in the
prestigious Morgan Stanley Capital International Index (MSCI). The company also
received an in principle approval from Government of India for development of multi
product SEZ in the state of Maharashtra.
Diversified Business Group of Indiabulls

Securities &
Derivatives
Broking

Secured
Financing

Mortgage &
Housing
Finance

Financial
Products
Distribution

Consumer
Financing

Fig 2.1: Diversified Business Groups of Indiabulls

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2.3 IndiaBulls Subsidiaries

Indiabulls securities limited: business comprises of Securities & Derivatives broking.
Indiabulls Credit services limited: business comprises of personal loans, secured and
unsecured loans, and housing and auto loans.
Financial products distribution: distribution of mutual funds and insurance products.
Indiabulls commodities Pvt ltd: deals with commodity brokerage business
Indiabulls Realities limited: is into development of Real estate and mining.
Indiabulls housing loans: is into mortgage of properties and housing loan business.

2.4 Organizational Structure of Indiabulls

The organizational structure of Indiabulls is Functional, which consist of several
departments.
Functioning Online: serving clients primarily through an Internet based relationship
targeted towards clients who value anytime, anywhere access and can be serviced at low
incremental costs.
Functioning Offline: serving clients primarily through an office based relationship
targeted towards clients who value physical interaction.
Online & offline business consist of following departments

Administration
Operations & Service quality
16

 Technology
Finance
Corporate affairs
Human resources
Marketing
Corporate communications
Legal

17

Department based Organizational Structure:

Director-Offline

Director-Online

Administration

Customer
Service

Operations
&
Service

Technology

Finance

Corporate
Affairs

Recruitment

Human
Resources

Marketing

Sr. Vice President

Regional Manager

Branch Manager

Relationship
Manager

18

Corporate
Communi
cation

Legal

Training

Figure 2.2 Department based organizational Structure of Indiabulls

Regional Hierarchy of Indiabulls

19

Senior Vice President

Regional Manager

Branch Manager
Senior Sales Manager

Support System

Back Office
Executive

Sales Function

RM/SRM

Local Compliance
Officer

ARM

Dealer

20

Figure 2.3 Regional hierarchies of Indiabulls

Key Positions

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Chairman

CFO & President

Securities

Executive Director

Consumer Finance

Chief Executive
Officer

Real Estate

Executive Director

Figure 2.4 Key Positions

2.5 Products and Services of Indiabulls

Indiabulls offer the following products and services in the financial markets:

22

Stocks
Options and Futures
Depository Services
Commodities
Insurance Products
Mutual Funds
Bonds and Debt Products

Services
Commercial Vehicle Loans:
In April 2006 Indiabulls started Commercial Vehicle Finance under the flagship of
Indiabulls Credit Services Ltd. in order to provide refinance to its commercial vehicle
clients. Their fundamentals, competent management and expertise in financing the
transporters are pretty sound. The companys unique market position enables it to excel in
client contentment, quick service and growthled profitability.
.Mortgage Loans:
Indiabulls Housing Finance Ltd. which is a flagship of Indiabulls has started lending of
Mortgage Loans to prospective customers. This company enables the home-seekers to
access finance to buy their homes. They provide different types of loans like plot loans,
Loan against Residential, Commercial and Rental Property, thereby enabling the
borrower to leverage the property owned to fund any genuine needs be it Business
Expansion, Child's Education, Child's Marriage or for Holiday Abroad.
Consumer Finance:
Indiabulls is a retail focused organization that fulfills the credit needs of a large
percentage of population in India. The key aspect of Indiabulls business model is to
provide an extremely unique customer experience.

3. OVERVIEW OF INDIABULLS SECURITIES LTD

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3.1 Introduction
Indiabulls Securities Ltd is engaged in the business of Internet based trading and is
registered with SEBI as a stockbroker, trading and clearing member of NSE, member of
BSE and as a depositary participant with National Securities Depository Limited
(NSDL) and Central Depository Services (India) Limited (CDSL). ISL is also a
member of the National Securities Clearing Corporation Limited.
History
Indiabulls Securities Limited (ISL) was incorporated as GPF Securities Private Limited
on June 9, 1995.
The name of the company was changed to Orbis Securities Private Limited on December
15, 1995 to change the profile of the company and subsequently due to the conversion of
the company into a public limited company; the name was further changed to Orbis
Securities Limited on January 5, 2004.
The name of the company was again changed to Indiabulls Securities Limited on
February 16, 2004 so as to capitalize on the brand image of the term Indiabulls in the
company name. ISL is a corporate member of capital market & derivative segment of The
National Stock Exchange of India Ltd.

3.2 Trading With Indiabulls

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This section will introduce us about the process and instruments used to help a customer
or a client to trade with Indiabulls securities. This process is almost similar to any other
trading firm but there will be some difference in the cost of brokerage commission.

Trading: It is a process by which a customer is given facility to buy and sell share this
buying and selling can only be done through some broker and this is where Indiabulls
help its customer.
A customer willing to trade with any brokerage house need to have a demat account,
trading account and saving account with a brokerage firm. Any one having following
document can open all the above mentioned account and can start trading.
Document Required

3 photographs ( signed across)

Photo Identification Proof - any of the following - Voter ID/Driving

License/Passport.

Address Proof any of the following - Voter ID/Driving License/ Passport/ Bank
statement or pass book sealed and attestation by bank official/ BSNL landline bill.

A crossed Cheque favoring India bulls Securities Ltd. of the required

amount. The amount for Demat as well as trading will be Rs. 900/-(free Demat
+900 Trading Account) the minimum amount being Rs. 900 a cheque can be
given for a larger amount.

Copy of PAN Card is mandatory.

Registration Kit

CDSL Demat Kit

Bank and address proof declaration. (Master undertaking)

PAN name discrepancy form

These documents may not be consumer friendly but it is to avoid illegal transaction
and to prevent black money this ensures that money invested is accounted.

3.3 Business Model & Operations of Indiabulls Securities Ltd

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The three distinct internal business segments are:

Online business

Offline business

Other Sales

Online business: serving clients primarily through an Internet based relationship targeted
towards clients who value anytime, anywhere access and can be serviced at low
incremental costs. The Online sales force sells all products and services and follows the
relationship manager model.
Offline business: serving clients primarily through an office based relationship targeted
towards clients who value physical interaction and are typically larger accounts. The
Offline Sales force sells all products and services and follows the relationship manager
model. The Institutional business serving clients such as mutual funds and pension funds
is considered part of the offline business due to largely similar client servicing and
channel needs as required for high net worth clients. Indiabulls Securities Limited has
established relationships with some large institutional players in India and is qualified
broker for Equities, F&O and Debt markets for 145 such institutional clients.
Other Sales: includes insurance, research services and other offerings

3.4 Basic Requirement for doing Trading

Trading requires Opening a Demat account. Demat refers to a dematerialized account.
You need to open a Demat account if you want to buy or sell stocks. So it is just like a
bank account where actual money is replaced by shares. We need to approach the
Depository Participants (DP, they are like bank branches), to open Demat account.

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A depository is a place where the stocks of investors are held in electronic form. The
depository has agents who are called depository participants (DPs).
Think of it like a bank. The head office where all the technology rests and details of all
accounts held is like the depository. And the DPs are the branches that cater to
individuals.
There are only two depositories in India

The National Securities Depository Ltd (NSDL) and the

Central Depository Services Ltd (CDSL).

3.5 Trading Products of Indiabulls Securities

Indiabulls Securities
Trading Products

Cash Account

Intraday Account

27

Margin Trading

Fig

Figure 3.1 Trading Products of Indiabulls securities

Indiabulls Securities provide three products for trading. They are

Cash account

Intraday account

Margin trading (Mantra)

Cash account provides the client to buy 4 times of cash balance in his trading account.
Intraday product provides the client to buy 8 times of his cash balance in the trading
account.
Mantra account called as margin trading, is a special account to buy on leverage for a
longer duration

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4. THE COMPETITORS
4.1 Major Competitors of Indiabulls Securities Ltd
Indiabulls Securities faces significant competition from companies seeking to attract
client financial assets, including traditional and online brokerage firms, mutual fund
companies and institutional players having wide presence and a strong brand name. They
are;

ICICI Securities Ltd.

Kotak Securities Ltd.

India Infoline
SSKI Ltd.

Motilal Oswal Securities

Karvy

Geojit Securities

HDFC Securities

4.2 India Infoline Ltd

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,

29

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 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
offers broking services in the Cash and Derivatives segments of the NSE as well as the
Cash segment of the BSE.
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%.
Features of 5 paisa.com:
Paisa sense - They offer a good value for money proposition. Their brokerage rates are
very competitive, charging only 5 paise for Rs100 of trade done, which is 0.05%
brokerage. They offer the most reasonable rates, independent of your net worth or
volumes. In case of trades that result in delivery, they charge an additional 0.20% for
back office and securities handling.
Personalized service - At 5paisa.com, they are committed to provide you with
unparalleled service, using e-mail, call centers and support staff. They have also invested
in physical infrastructure.
Protection All transactions of 5paisa.com are secure and confidential. The orders are
electronically routed via sophisticated trading systems for execution. They follow a world
class security system that enables them to protect from any fraud or hacking.

30

Pedigree - 5paisa.com is a brand renowned for quality of information and services, they
are professionally managed, with a skill set which is of high standard. Their top
management has years of experience in financial services with leading banks and
institutions.

4.3 Sharekhan Securities

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 brings and
provides a user-friendly online trading facility. 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.

4.4 Motilal Oswal

Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just
two people running the show. Motilal Oswal Securities Limited 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. 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.
Their sales & trading team, comprising top equity professionals, translates the research
findings into actionable advice for clients, based on their specific needs. Sophisticated
computerized tools are used to understand client investment profile and objectives, which
ensures proactive and timely service.

31

FEATURES
Integrity: A company honoring commitment with highest ethical and business practices.
Team Work: Attaining goals collectively and collaboratively.
Meritocracy: Performance gets differentiated, recognized and rewarded in an apolitical
environment.
Passion & Attitude: High energy and self motivated with a Do It attitude.
Excellence in Execution: Time bound results within the framework of the companys
value system.

4.5 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.
Karvy made inroads into a host of capital-market services, - corporate and retail - which
proved to be a sound business synergy. In January 1998, Karvy became the first
Depository Participant in Andhra Pradesh.

32

Karvy Securities Limited

Deals in distribution of various investment products, viz., equities, mutual funds, bonds
and debentures, fixed deposits, insurance policies for the investor.

4.6 Kotak Securities

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.

33

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.
Features of Kotak Securities

AKSESS Kotak securities Electronic Search Service: AKSESS offers you an

easy way to get to Kotak Securities' institutional research. On this online archive
you will be able to access estimates, company reports, sector reports, strategy
reports and a bunch of other products including the daily India Market Flash
produced by Kotak Securities.

High Quality of software (KEAT): K.E.A.T is special software that

Koataksecurities.com provides its customers using which they can view live
market rates of scrips on both the NSE and BSE.

Research Reports: Kotak Securities provide Different reports to investors which

include

Intraday calls

Daily Technical View

Daily Morning Brief

Weekly Technical Report

Sectoral Reports

Stock Ideas

Derivative Reports

34

SMS Alerts: Kotak Securities also provides SMS alerts to customers providing
useful tips about stocks & shares.

4.7 ICICI SECURITIES

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.

Features of ICICI securities ICICI provides multiple channels in banking like, which is
unique feature.

Internet Banking

Mobile Banking

ATM banking

Phone Banking

ICICI Securities is amongst the largest arranger of funds in Debt and Equity
segments and also amongst the leading advisors in Mergers and Acquisitions.

35

Research Methodology

5. RESEARCH METHODOLOGY
Research in common paralance refers to a search for knowledge. One can also
define research as a scientific and systematic search for pertinent information on a
specific topic. Research is an art of investigation. The Advance Learners Dictionary of
Current English lays down the meaning of research as a careful investigation or inquiry
36

especially through search for new facts in any branch of knowledge . Some people
consider research as a movement, a movement from known to unknown .it is actually a
voyage of discovery
Research methodology mean what's method apply to do any type of research and.
how can you collect the data from the field'. Before conducting any type of research and
analysis and inference based on it, the first and the foremost thing is to collected the date
and after the proceeding in a systematic manner to finally reach at result. There are the
various steps to be followed such as:
What should be the sample size?
From where it can be taken?
Compilation of data
Presentation of data
Analysis and presentation of data
Making inference
Research can be conducted by researcher by:1. UNDERSTANDING THE ORGANIZATION:
An in depth study of the Organization's working was done. The motive was to know the
working of the Organization and why INDIA BULLS is considered as number one.
Current status of the competitors is considered as to analyse their competitive situation.
2. DEVELOP A QUESTIONNAIRE:
A questionnaire was developed to understand the comfort and investment level of
customer in any Security and stock Market and his preference with the Organization. To
know the areas where INDIA BULLS lack so that the Organization can improve upon its
weak areas and be able to extract best business.
3. ANALYSIS AND INTERPRETATION OF INFORMATION
The collected data should be properly analysed ,so that some fruitful information can be
yield out of it. The data must then be interpreted in a manner that the analysis may be
easily presented before anyone and easy to understand.
37

TYPES OF RESEARCH:1. Descriptive and Analytical Research:Descriptive research include survey and fact finding enquiries of different kinds.
In analytical research, the research has to use facts or information already available, and
analyze these to make a critical evaluation of the material.
2. Applied and fundamental Research:Applied research aim at finding a solution for an immediate problem facing a society or
an industrial /business organization. Fundamental research is mainly concerned with
generalizations and with the formulation of a theory.
3. Quantitative and Qualitative Research:Quantitative research is based on the measurement of quantity or amount.
Qualitative research is concerned with qualitative phenomenon, i.e., phenomena relating
to or involving quality or kind.

4. Conceptual and Empirical Research:Conceptual research is used by the philosophers and thinkers to develop new concepts or
to reinterpret existing ones. Empirical research relies on experience or observation alone,
often without due regards for system and theory.
The type of research adopted to perform the project work is Descriptive Research
as the information is collected through survey by questionnaire, without giving regards to
any theory and concepts. The need of primary information required for the project topic
can be done through Descriptive Research. The facts and information was surveyed and
various fact finding enquiries of different kinds. The description of current state of affairs
in the current situation of the stock market may be analyzed.

38

The comparison of INDIA BULLS and other stock market companies depends on
the customers investment criteria and not in the hands of the company itself. The
performance of share market do not depends on the companies wish to earn profit, but the
investors wish to invest in share market and to earn profits.
The secondary information required to support the project topic findings is being
colleted through Analytical Research, in which the researcher has to use facts and
information already available, and analyse these to make a critical evaluation of the
material. In analytical research, the research has to use facts or information already
available, and analyze these to make a critical evaluation of the material.
The data colleted to conduct this type of research has been prepared from
Magazines , newspaper annual and weekly issues, books on stock exchanges.

5.1 METHOD AND PRINCIPLE USED:

INFORMATION REQUIRED IN DETAIL
PRIMARY INFORMATION:

39

To know why INDIA BULLS is standing at a reputative position among stock exchanges
and its competitive advantage. The competitor companies were also analysed to find out
their current status and how close competition exists.
SECONDARY INFORMATION:
To present the specialties of INDIA BULLS which are shown through secondary data
analysis.

METHOD OF DATA COLLECTION

The task of data collection begins after research problem has been defined and
research design /plan checked out. While deciding about the method of data collection to
be used for the study, the researcher should keep in mind the two types of data viz.
primary and secondary.
Primary Data
They are those which are collected a fresh and for the first time, and thus happened to be
in original in character. Data is collected by:-Survey
-Observation method
-Interview Methodpersonal interview, telephonic interview.
Secondary Data
Are those which has already been collected by someone else and which have already
been past through the statisal process. Data is collected by:-Publications of central state and local govt.
-Publication of foreign.
-Journal
-Books, magazines and newspaper
-Reports and publication of business house
-Reports and publication of scholars and universities.
-Public records
RESEARCH INSTRUMENT USED IN DETAIL:
40

PRIMARY
Questionnaires: A formal list of the questions answered by the people who are
thought to have the desired information and later analyzing the responses is the
questionnaire method. It can be used to get some data relative to most problems.
We have used structured questionnaires as a formal list of questions produces
more reliable results.
For collecting the data we used questionnaire method. The questionnaire was design
mainly of objective nature and partially of descriptive nature to get suggestion regarding
housing finance compares. We visited various government department and business
organization and also to individuals for required information according to our
Performance knowing the views of the people and get their suggestions.
Personal Interviews: Personal interview is the most versatile and flexible kind of
technique. Direct face-to-face conversation helps in getting accurate data.
Personal interview were done with the people in order to get the required
information.
SECONDARY
Websites.
Brochures
Company Magazines.

CANOPY PROGRAM
The conducted a five days canopy program in which we were asked get questionnaire
filled by the individuals. The activity was conducted in groups. Each group was allotted a
definite area for its work .Every evening the response of the day was given to the

41

reporting officer in INDIA BULLS. The reporting officer was Mr. Maya Sarin
(Relationship Manager).
The data collected from it was of 50 persons (in round figures). The area allotted to us
was at Noida, Greater noida, and in delhi at Lakshmi nagar.The response was good. This
program enabled them as a feedback program which would help them in further
innovation and make nessary changes
RESEARCH DESIGN
The formidable problem that follows the task of defining the research is preparation of
the design of the research project, popularly known as research design. Decisions
regarding what, where, when, how much by what means considering an inquiry or
research study constitute a research design.
Types: Research Design in case of exploratory research study .
Research Design in case of descriptive and diagnostic research study.
Research Design in case of hypothesis-testing research study.
RESEARCH STUDIES CONSIDERED : EXPLORATORY RESEARCH
Exploratory research is based on secondary data and survey of knowledgeable persons.,
This research is usually designed to obtain the investigations of the investors prospective
of comparing the stock exchanges for his investment decision.Wide-ranging and versatile
approaches are employed. Exploratory research is appropriate for situations where
Management is searching for solutions and seeks new insights regarding the situation or
desires a more precise formulation of the problem. We have made use of exploratory
research in our project because it served our purpose to the maximum information. A new
knowledge is being discovered ,although it exists in the environment.
DESCRIPTIVE RESEARCH

42

Descriptive research studies are those studies which are concerned with describing the
characteristics if a particular individual ,or of a group.this type of study is concerned with
specific predicitions, with narration of facts and characteristics considering individual
and groups. The decision regarding what to measure and find adequate method of
measuring along with the clear cut definition of population. As data collected, they
should be examined for completeness, comprehensibility, consistency and reliability.
This type of research design is adopted since it takes into account all the steps involved in
a survey concerning a phenomenon to be studied. This type of study makes enough
provision for protection against bias and must maximize reliability.

5.2 SAMPLING PLAN

Research is basically depend up on the data and that data depend upon the size of
sample we want. So deciding of sample size is mainly based on the nature of objective of
the research. Sample size has to confirm the objective on each and every respect. Suppose
we are going to decide any effective decision on the base of this report or set up any new
facts. On that position we have require large size of sample on comparison to find out a
trend.
Here our objective is simply go to "comparative analysis and make an overview of Indian
Stock Market "So we preferred to go with a sample size of only 250 data.
SAMPLING TECHNIQUES USED
Systematic Sampling
In some instances , the most practical way of sampling is to select every next item
on the list. Sampling of this type is known as systematic sampling. An element of
randomness is introduced into this kind of sampling by using random numbers to pick up
the unit with which to start.
In the project the samples are drawn from different zone including 50 persons in
each zone constituting 250 persons all together.

43

 Stratified Sampling
If a population from which as ample is to be drawn does not constitute a
homogenous group stratified sampling technique is generally applied in order to obtain a
representative sampling. Under stratified sampling the poplation is divided into several
sub population that are individually more homogenous than the total population (the
different sub population are called STRATA and then we select item from each stratum
to constitute a sample.
In the project ,the population was selected randomly from each zone having equal
chances to be selected as a sample. The population in each zone is called strata which
includes 25 persons from each zone.
Sequential Sampling
This sampling design is somewhat complex sample design the number of sample one
more than two but it is neither certain nor decided in advance this type of system is often
referred to as sequential sampling. thus in brief we can say that in sequential sampling
one can go on taking samples one after another as long as one desire to do so.
In the project, the samples are being surveyed in a sequential manner from every zone.
SAMPLE DESIGN
The selected respondents constitute what is technically called a sample and the selection
process is called sampling technique. the survey so conducted is known as sample survey.
Researcher must prepare a sample design for his study i.e., he must plan how a sample
should be selected and of what size such a sample would be.
1. Types of universe: - The sample design is clearly define the set of objects, technically
called the universe. The total population of India is universe for INDIA BULLS. The
population of the whole country may be considered as the sampling population.
2. Sampling unit: - Sapling unit may be a geographically one such as state, district,
village, etc. The sampling unit is decided by dividing into central, eastern, western,
northern and southern zones

44

3. Source list: - It is also known as sampling frame from with sample is to be drawn. It is
decided by considering the people who know about SHARE MARKET.
4 Size of sample: - This refers to the number of items to be selected from the universe to
constitute a sample size. The sample size chosen by me is 125 persons, 25 persons in
every zone.
5. Sampling procedure:-It decides about the technique to be used in selecting the items
for the sample. The procedure of deciding the sample is done zone wise.
Measurement and Scaling Techniques
Measurement is relatively complex and demanding task, specially so when it concerned
qualitative and abstract phenomena. By measurement we mean the process of assigning
numbers to objects or observation, the level of measurement been a function of the rules
under which the numbers are assigned. Measurement is a process of mapping aspects of
the domain onto other aspects of a range according to some rules of correspondence.
The method used to represent the collected data is tables, graphs, charts, pie
charts, bar graphs, supported by written statement.
Measurement technique are deliberately selected by the researcher during the
research the researcher has to be quite alert about this aspect while measuring properties
of objects or of abstract concept.

45

Analysis

6. FINANCIAL ANALYSIS OF INDIABULLS SECURITIES

6.1 Income: Indiabulls Securities Ltd income unit has the following components
Income from Online business : The contribution of revenue from Online business have
grown from Rs. 31.85 million in FY 2002 to Rs. 242.26 million in FY 2004 and from
24.05% of total business in FY 2002 to 34.85% of business in FY 2004. The rapid growth

46

of the online business is driven by growth in total clients, increasing product flexibility
and quality, enhanced online-only features such as portfolio analysis and updates,
streaming tickers, enhanced product offering of Power Indiabulls.

Brokerage

Equities

F&O

Income from Offline Business: The offline business unit has one of the widest branch
networks in India with a pan India presence with large market share. The revenues have
grown from Rs. 96.02 million in FY 2002 to Rs. 447.25 million in FY 2004 and have
changed from 72.52% of total business in FY 2001 to 64.34% of business in FY 2004.
The rapid growth of the Offline business is driven by growth in total clients, increased
geographical presence.

Brokerage

Equities

F&O

Wholesale Debt Markets

Brokerage Income
Brokerage Income comprises revenues earned from Equities, F&O and Wholesale debt
markets on all stock exchanges.

The income from brokerage services is driven primarily by the number of active
clients.

The rapid growth in total clients is driven primarily by increased geographical

presence.

Equities constitute the largest portion of brokerage business.

47

F&O brokerage is becoming an increasingly important component of its revenues

as Futures & Options trading gains more acceptance.

Wholesale Debt market is focused on institutional clients.

Income from transaction and service charges and interest income

Related income comprises revenues earned from market related activities such as
transaction charges, service charges and interest levied on customer transactions. These
charges are dependent on trading volume, number of transactions completed and any
ledger debit amount in the client account.
Income from other Sales including Insurance, Mutual Fund Sales and Other
Products
Other income comprises revenues earned from sale of third party products such as
Insurance, Mutual Funds and new services such as Research Services. Revenues are a
function of volume of mutual funds sold, the type of fund sold (active managed equity,
passive fixed income etc.) and the commissions paid on the funds sold.

48

Brokerage Income of Indiabulls Securities

Bar Chart 6.1 Brokerage Income of Indiabulls Securities (in Crore)

Segment wise Sales of Indiabulls securities for March 2005(in Crore)

Pie Chart 6.2 Segment wise Sales of IndiaBulls Securities for year 2005

49

Segment wise Sales of Indiabulls securities for March 2006(in Crore)

Pie Chart 6.2 Segment wise Sales of IndiaBulls Securities for year 2006

50

6.2 Financial Ratio Analysis of Indiabulls Securities Ltd

Profitability ratios:
Indiabulls Securities Ltd.

Mar 2004

Mar 2005

Mar 2006

Per cent (Non-Annualized)

12 months

12
months

12 months

43.05
41.45
25.92
43.01
41.41
25.88

44.75
42.87
27.25
44.52
42.63
27.02

58.76
56.7
37.49
58.72
56.66
37.45

35.83

33.69

32.47

18.95
18.15
11.54
11.44
77.78

31.35
30.25
20
19.98
65.19

53.48
51.23
32.57
32.29
219.53

128.77
124.25
82.16
82.07
267.75

47.39
45.39
28.86
28.61
194.53

58.11
56.06
37.07
37.03
120.82

Margins ratios (%)

As % of operating income
PBDT
PBT
PAT
PBDT (NNRT)
PBT (NNRT)
PAT (NNRT)
Corporate tax as per cent of PBT
Returns ratios (%)
As % of total assets
PBDT
PBT
PAT
PAT (NNRT)
Operating cash flow
As % of net worth
PBDT
PBT
PAT
PAT (NNRT)
Operating cash flow
As % of capital employed
PBDT
PBT
PAT
PAT (NNRT)
Operating cash flow
-

51

Appropriation of profits (as % of PAT)

Dividends
Equity dividends
Preference dividends
Retained profits
Dividends / net worth
Equity dividends / equity capital
Equity dividends / equity cap. & sh. prem.

3.89
0.44
3.44
96.11

19.66
2.27
17.39
80.34

0.52
0.07
0.45
99.48

6.4
3.98
3.98

0.43
0.45
0.45

Liquidity ratios:
Indiabulls Securities Ltd.

Mar 2004

Mar 2005

Mar 2006

Times (Non-Annualized)
Short term liquidity
Cash / current liabilities & provisions
Quick ratio
Medium to long term liquidity
Current ratio
Solvency ratio
Debt equity ratio
Interest incidence (%)
Interest cover
PBIT / interest
PBIT (NNRT) / interest
Operating cash flow / interest
(Rs. Crore)
Current assets
Current liabilities
Working capital
Net worth
Reserves & surplus

12 months

12 months

12 months

0.67
1.6

0.86
0.86

1.7
1.89

1.776
1.567
1.237

1.141
1.561
0.848

2.137
1.269
2.056

11.42

19.13

11.67

3.63
3.63
-2.99

4.01
4
11.97

5.2
5.2
8.91

231.47
130.34
101.13
83.34
20.24

261.19
228.86
32.33
108.43
45.33

914.49
427.87
486.62
181.77
163.94

52

Asset utilization ratios

Indiabulls Securities Ltd.
Times (Non-Annualized)
Efficiency ratios
Operating cash flow / total assets
Operating cash flow / gross fixed assets
Operating cash flow / capital employed
Operating income / total assets
Operating income / GFA / leased assets
Operating income / capital employed
PBDT (NNRT) / total assets
PBDT (NNRT) / gross fixed assets
PBDT (NNRT) / capital employed
PBT / total assets
PBT / gross fixed assets
PBT / capital employed
PAT / total assets
PAT / gross fixed assets
PAT / capital employed

Mar 2004

Mar 2005

Mar 2006

12
months

12 months

12 months

0
0
0

0.78
17.46
1.95

0.65
14.15
1.21

0.42
9.51
1.06

0.53
11.58
0.99

0.19
4.23
0.47

0.31
6.8
0.58

0.18
4.05
0.45

0.3
6.56
0.56

0.11
2.57
0.29

0.2
4.34
0.37

53

6.3 Interpretation:

Profitability Ratios: Profitability is the net result of a number of policies and decisions.
The ratios examined thus far provide useful clues to the effectiveness of firms operations.
Liquidity Ratios: liquidity ratios deal with firms ability to pay off its debts. It includes

Current ratio: The current ratio is calculated by dividing current assets by current
liabilities. The current ratio of Indiabulls securities is 1.776, 1.441, & 2.137 for
year 2004, 2005 & 2006 respectively.
Current ratio =

Current assets
Current Liabilities

Quick ratio (acid test ratio): The quick ratio is calculated by deducting inventories
from current assets and then dividing the remainder by current liabilities. The
quick ratio is a measure of the firms ability to pay-off the short-term liabilities. A
large part of the firms current assets are tied up in slow paying debts. The
industry average for Acid test ratio is 2.1, but for Indiabulls securities quick ratio
is 1.6, 0.86 & 1.89 for year 2004, 2005 & 2006 respectively, which is less than
Industry average. The quick ratio should be high which indicates the companys
ability to pay-off short-term obligations.

Debt equity Ratio:

Debt equity ratio is the related contribution of creditors and owners of the business in its
financing.

54

6.4 Financial performance Year on Year

Increasing Market Share of Indiabulls on NSE Trading Volumes (1)

35
%

30.7
%

30
%
25
%
20
%
15
%

22.3
%

21.9
%

18.8
%

17.5
%

10
%
5
%
0
%

1.1
%
FY200
2

3.4
%

2.2
%

1.9
%
FY200
3

FY200
4
Share in Online
Trading

FY200
5

5.5
%

FY200
6

Share in Total
Trading

(1) Source: NSE data from NSE website (Equity Segment)

Graph 6.3 Market shares of Indiabulls on NSE trading Volumes

Market Shares of Top Brokers on NSE

55

(2)

(1)

7. COMPETITIVE ANALYSIS FOR INDIABULLS

SECURITIES
7.1 Indian Retail Brokerage Market
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.

Indian Retail Brokerage Market

Interdepende
nt
Segments

Primary Market

Secondary Market

Figure 8.1 Interdependent Segments of Brokerage 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

56

7.2 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
7.3 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

Unique Value proposition.

Competitive analysis

Product

Price

Service

57

Value Proposition

7.4 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.
Quote Software: This is used mainly for technical study and for live quotes. Many
people dont evaluate quote software. Some Investors 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 us
to see historic data? For, what period is intra day data available? They might need all this
information. They should be clear on what they need and ensure 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

58

protection against human errors.

Demat Account:

Demat account should only be opened with a well known and

established brokerage firm in the market.

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.
7.5 Brokerage Charges
Intraday Brokerage charges of the Competitors of Indiabulls Securities Ltd

Graph 7.2 Intraday Brokerage Charges

59

Delivery Brokerage charges of the Competitors of Indiabulls Securities Ltd

Graph 7.3 Delivery Brokerage Charges

7.6 Analyzing the Blogs from Web Site Traderji.com (online community for Indian
Investors & Traders)
We were interpreting the blogs written by customers, their experiences and their review
on brokerage firms.
In this web site they have conducted opinion poll on broker preferences of customers &
reasons for choosing the particular brokerage firm. In this poll opinion, customers have
shared their viewpoint about pros & cons of different brokerage firms.

Experiences of Customers
Poll Options
Which online broker u prefer and why - chose one
5paise
ShareKhan
Motilal Oswal
ICICI Direct
HDFC

60

India Bulls
Kotak
Any other (mention name)
View Poll Results

Vote Now

Poll Results of Blogs: Total Number of Voters =457

Pie chart 7.4 showing Poll results

7.7 Competitive Strength of Indiabulls Securities

61

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.

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.

62

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.

Lack of Banking arm

Rural market is yet to be tapped.

More importance should be given to promotions & advertisements.

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

63

more. Depending on what kind of investor you are, they bring you fundamental or
basic research and technical research.

7.8 Number of Branches of Competitors compared with Indiabulls securities

Number of Customers of competitors compared with Indiabulls

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7.9 Merits & De-merits of Competitors

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 0.3% 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)

While opening Demat account, three accounts are opened ,the saving bank
account, trading account and Demat account and you have to maintain minimum
of rs5000 in case if it is not a salaried account. (That Rs5000 sleeps without
earning any money)
65

Other banks account cannot be linked with the ICICI trading account.

They charge an annual maintenance charges are Rs540.

Value Proposition of ICICI Securities

E-Instructions: You can transfer securities 24 hours a day, 7 days a week through
Internet & Interactive Voice Response (IVR) at a lower cost. Now with "Speak to
transfer", you can also transfer or pledge instructions through our customer care
officer.

Mobile Request: Access your Demat account by sending SMS to enquire about
Holdings, Transactions, Bill & ISIN details.

The equities research team tracks over 15 key sectors of the Indian economy and
publishes in-depth research reports every year.

The equities team at ICICI Securities comprises of research desk, sales desk and
the trading desks.

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.

66

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

Comparing ShareKhan & ICICI Direct

Sharekhan

ICICI Securities

Live Streaming quotes

No live streaming quotes

but streaming quotes require JVM

No BTST facility

BTST facility is available

(Buy today sell tomorrow)

Annual Maintenance charge Rs 330

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Annual Maintenance charge Rs 540

You have to open a bank account

Other banks account cannot be

With the banks mentioned in ShareKhan site

Linked with ICICI trading account

Can apply IPO online

Can apply IPO online

Not necessary

While opening a Demat account you

Need to maintain a minimum of Rs
5000

Can trade in BSE & NSE

Can Trade in BSE & NSE

No Monthly Charges

No Monthly Charges

Cannot apply

can apply mutual funds online

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.

De- Merits of India Infoline (5 Paisa.com) Securities

Registration Fees (one time) Rs.500/ and is non-refundable.

Software License Fee Rs.799/- per month or 7999/- per annum and is nonrefundable.

There is lot of Hidden costs.

68

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

They provide streaming quote software free.

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. (Report: dated 2002, Ref: www.domain-b.com).

Some investors have bad experience with accounts opening & they complain that
it takes a long time for opening accounts.

Some customers are not happy with customer care of Kotak securities.

Value Proposition of Kotak Securities

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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.

8. SWOT ANALYSIS OF INDIABULLS SECURITIES

This is a strategic planning method to evaluate the Strength, Weaknesses (limitations),
Opportunities and Threats involved in a project or business venture. It involves
specifying the objectives of the business venture or project and identifying internal and
external factors that are favorable or unfavorable to achieve it. This technique is credited
to Albert Humphrey of Stanford University.

70

71

Fig: 8.1

72

Findings and Suggestions

FINDINGS & SUGGESTIONS

73

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.

74

Conclusion

75

CONCLUSION
Indiabulls faces significant competition from companies seeking to attract clients
financial assets including traditional and online brokerage firms, mutual fund companies
and institutional players, having wide presence and a strong brand name. As Indiabulls
enter newer markets, they are likely to face additional competition from those who may
be better capitalized, have longer operating history, have greater retail and brand
presence, and better management than Indiabulls. As new players like Reliance Money
enters the market the competition will only get more intense. If they are unable to manage
their business it might impede their competitive position and profitability.
Hence they should continue to compete vigorously to capture more market share and
should add more management personnel to manage their growth in an optimal way.
Post economic liberalization in 1991 the Indian financial services industry has
experienced significant growth. Exposure to global practices has made the Indian
customer more demanding. 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 Retail Security Market and are
looking for newer financial products.
As the Indian Retail Security Market is still in a nascent stage and as a lot of potential for
growth, its a very good opportunity for companies like Indiabulls to increase their
market presence. They will have to concentrate more on the Research and Development
and come up with strategies which are beneficial for the company. Thus for the purpose
of Applied Research Projects in the company, they can do more research on the market
and identify the major factors which will drive the market in the future.

76

Bibliography

BIBLIOGRAPHY
77

Websites :
Bombay Stock Exchange" Bseindia. <http://www.bseindia.com>.
" Indiabulls Securities Indiabulls.Com. <http://www.Indiabulls.com>.
"National Stock Exchange nseindia. <http://www.nseindia.com>.
"Share khan Securities Sharekhan.Com. <http://www.sharekhan.com>.
India Infoline Securities India-Infoline.Com. <http://trade.indiainfoline.com>.
" India Infoline Securities 5paisa.Com. <http://www.5paisa.com>.
" Kotak Securities kotak securities.Com. <http://www.kotaksecurities.com>.
"ICICI Securities ICICI securities.Com. <http://www.ICICIsecurities.com>.
" Karvy Karvy.Com. <http://www.karvy.com>.
Online Investors & Traders <http://www.traderji.com>.
" Motilal Oswal Securities <http://www.motilaloswal.com>.

Books :

78

Annexure

ANNEXURE
79

1.Are you aware of the stock market?

O YES
O NO
2.Do you know about investment options available?
O YES
O NO
3.Are you aware of Demat account ?
O YES
O NO
4.Most preferable investment scenario
O Investment scenario
O Banks
O Insurance

O Bonds

O Derivatives & securities market

O Real estate

O.Others

5.What is the basic purpose of your investment ?

O liquidity
O Risk covering

O returns
O.others

O Capital appreciation

O Tax benefits

6. Most important things you take into your mind while making investments?
O Risk

O Return

O Both

7.Do you have Demat & trading account?

O.YES

O No

8 Specify the reason of satisfaction with the current broking house?

O Operating expenses

O Services

O Brokerage

9.In which company you have Demat and trading account?

O INDIABULLS
O INDIAINFOLINE
O ICICI direct
O SHAREKHAN
O RELIGARE
O OTHERS

10. If you do invest in shares then in which other mode of investments do you invest your
savings? ( you can tick more than one )

80

O Saving account
O REAL ESTATE

O Fixed deposits
O Mutual Funds

O insurance

11. If a professional guides you to invest in equity, are you ready to make investments?
O YES
O NO
12. On what basis do you buy a scrip?
O On the recommendation of the broker
O fundamental analysis
O on the recommendation of your friend
O with your own research
O On the basis of news
13.What is the basic purpose of your investment?
O capital appreciation
O high returns
O Liquidity
O diversification
14. How do you like to trade?
O As a spectacular/trader

O As an investor

15.Do you invest in futures and options?

O Yes
O No

81