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93372256 Consumer Behaviour in Equity Market

93372256 Consumer Behaviour in Equity Market

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Published by: Vivek Lagoo on Jun 12, 2012
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In partial fulfillment in award of PGDM two year full time programme.

Under the guidance of Faculty guide Mrs.Rubina Sajid Submitted by Sakshi Mittal CompanyGuide Mr.Prateek Bhardwaj

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"Gratitude is not a thing of expression; it is more than a matter of feeling." There is always a sense of gratitude which one express towards others for their help and supervision in achieving the goals. This formal piece of acknowledgement is an attempt to express the feeling of gratitude towards people who helpful me in successfully completing of my training.

I would like to express my deep gratitude to Mr. Prateek Bhardwaj my training coordinator for their constant co-operation. He was always there with his competent guidance and valuable suggestion throughout the pursuance of this research project.

I would also express my gratitude to Mrs. Rubina Sajid my faculty guide for her help and co-operation, she gave us guidance throughout the pursuance of research project.

Last but not least I would also like to place of appreciation to all the respondents whose responses were of utmost importance for the project.

Above all no words can express my feelings to my parents, friends all those persons who supported me during my project. I am also thankful to all the respondents whose cooperation & support has helped me a lot in collecting necessary information.

I would also like to thank almighty God for his blessings showered on me during the completion of project rep

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Certificate from the company

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This report contains no materials or information which has been previously submitted for any other academic diploma or degree. having Enrollment No. Avneet Kaur. d/o Jasveer Singh Chhabra. except where indicated otherwise.Certificate of Originality I. Date: Signature of the Student Avneet Kaur Page 4 . do hereby certify and declare that this research report titled “Analysis of Investors behaviour towards equity market” is the result of my own work. 3620 of Batch 20010-2012.

CERTIFICATE FROM THE FACULTY GUIDE This report. prepared and submitted by Avneet Kaur. Rubina Sajid Accepted as partial fulfillment of the requirement for the 2-Year Full-Time PGDM COURSE. entitled CONSUMER BEHAVIOUR IN EQUITY MARKET. Faculty guide Mrs. Page 5 . in partial fulfilment of the required for the degree of POST GRADUATION DIPLOMA IN MANAGEMENT is hereby accepted.

After analyzing the data it is found that this is the time to make customers aware of Equity and derivatives and also to convince them to invest in the equity market. This program is designed to familiarize participants with the structures of the important equity derivatives as well as the analytic tools and techniques used to evaluate and price them. future and forwards etc. These will be explored in greater detail as they are the building blocks of all the more complex derivative instruments. risk/return characteristics and trading/risk management applications. A crucial driver of the vast increase in the use of equity derivatives has been the pace of innovation. options. Sessions will address contract structure and terminology. but focus on valuation. The data analyzed is presented in the form of graphs and on the basis of that conclusion are made. Page 6 . with numerous diverse structures being developed to suit particular needs of many different types of users. The study is based on the information collected from respondent through questionnaire.EXECUTIVE SUMMARY Equity derivatives have been one of the hottest areas of growth in a market environment of rapid financial innovation. The program will then proceed with a similar approach applied to a range of derivative contracts to include: swaps. The program begins with a survey of the two basic types of derivative contracts: first futures/forward contracts and then options. It investigates ach of the widely used equity derivative products.


Karvy Consultants Limited was incorporated on 23rd July. Member of NCDEX and MCX ranks among the top 3 commodity brokers in the country. please click here. in the realty sector.000 active accounts. 5. This business was spun off to form a separate joint venture with Computershare of Australia. 1983. in 2005. Karvy began topping the IPO procurement league tables and it has consistently maintained its position among the top 5. in Karvy Stock Broking Limited. India. we have equity participation by ICICI Ventures Limited and Barings Asia Limited. With over 6. Karvy Realty Services. Karvy ranks among the top player in almost all the fields it operates.Introduction to the company The Karvy group was formed in 1983 at Hyderabad. Karvy Insurance Brokers is registered as a Broker with IRDA and ranks among the top 5 insurance agent in the country.000 crores under management. For a snapshot of our organization structure. Page 8 . has quickly established itself as a broker who adds value. it ranks among the top 5 Depositary Participant in India. Karvy was among the first few members of National Stock Exchange. The partners decided to offer. ranks among the top 5 stock brokers in India. Dematerialization of shares gathered pace in mid-90s and Karvy was in the forefront educating investors on the advantages of dematerializing their shares. Karvy Stock Brokers Limited. registered with NSDL and CDSL. value added services like corporate advisory services to their clients. it became the largest Registrar and Transfer Agent in India. In a very short period. Karvy’s foray into stock broking began with marketing IPOs. Karvy Comtrade. member of National Stock Exchange of India and the Bombay Stock Exchange. other than the audit services. The first firm in the group. in 1994 and became a member of The Stock Exchange. Mumbai in 2001. Karvy Global offers niche off shoring services to clients in the US. which started in 2006. managing over 2 crore accounts. Over 9. Today Karvy is among the top 5 Depositary Participant in India.00. Karvy is also among the top Mutual Fund mobilizer with over Rs. Organization: Karvy was started by a group of five chartered accountants in 1979. While the registry business is a 50:50 Joint Venture with Computershare of Australia. Within a few years.000 highly qualified people staff Karvy. Registered with AMFI as a corporate Agent. Karvy Computershare Limited is India’s largest Registrar and Transfer Agent with a client base of nearly 500 blue chip corporates. Karvy has 575 offices over 375 locations across India and overseas at Dubai and New York. in 1993.

On a typical working day Karvy: Has more than 25.Karvy has always believed in adding value to services it offers to clients.000 investors visiting our 575 offices Publishes / broadcasts at least 50 buy / sell calls Attends to 10. allotment / refund advises Executes 150. Karvy’s team of analysts help investors make the right calls. be it equities.000+ trades on NSE / BSE Executes 50. insurance. mf.000 debit / credit in the depositary accounts Advises 3. containing Annual Reports. With the information overload today. also for one – time Offices etc. Post  Pooling of group resources for peak –loads and . A top-notch research team based in Mumbai and Hyderabad supports its employees to advise clients on their investment needs.000 envelopes.000+ clients on the investments in mutual funds Investors servicing strengths  Controlled and low cost service culture  Large volume processing capability  Adherence to strict time schedules  Expertise in co-ordination multi-location responses  Expertise in managing independent intermediaries such as Banks. dividend cheques / advises. assignments Page 9 .000+ telephone calls Mails 25.

 Strong secretarial . accounting and audit systems  Unique work culture of working 7 days a week in 3 shifts Our Achievements          Largest Independent Distributor for Financial Products Amongst the Top 5 Stock Brokers Among the Top 3 Depository Participants Largest Network of Branches & Business Associates ISO 9002 certified operations by DNV Amongst Top 10 Investment Bankers Adjudged as one of the Top 50 IT Users in India by MIS South Asia Adjudged as one of the Top 50 IT Users in India by MIS South Asia India’s #1 Registrar & Securities Transfer Agent India’s #1 Registrar & Securities Transfer Agent Player with the full-range of products – Players like Karvy offer a complete range of products n line with their positioning as a ‘one-stop retail financial mall’        Mutual Fund Life Insurance Fixed deposits Non life insurance IPos Derivatives Equity Tradings Page 10 .Investor Servicing : Capabilities  Professionally managed by qualified and trained manpower  Uniquely structured in – house software and hardware department  Query handling within 48 hours.

BOARD OF DIRECTORS OUR CHAIRMAN Mr. Share Transfer and IPO Distribution businesses. He also holds directorship in Karvy Stock Broking Limited. a Fellow Member of the Institute of Chartered Accountants of India and a graduate in law. In the process Karvy shall strive to meet and exceed customer’s satisfaction & set Industry standards. As Chairman. Karvy Page 11 .” Mission Statement To be a leading and preferred service provider to our customers. and technology driven organization which will set the highest standards of service and business ethics. Karvy shall aim for complete Customer Satisfaction by combining its human and technological resources to provide world class Quality services.    Tax savers Debt Trading Commodities Real Estate Quality Policy of Karvy “To achieve and Sustain market leadership. a leader in the financial services industry in India is responsible for building Karvy as one of India's truly integrated Financial Services Provider. and we aim to achieve this leadership position by building an innovative. enterprising. he is a fellow member of the Institute of Company Secretaries of India. he oversees the group's operations and renders vision and business direction. His passion and vision for achieving leadership in the business made KARVY a leading financial intermediary ranking them as number one in the registrar. C Parthasarathy.

Page 12 . Karvy Computershare Private Limited. M Yugandhar. Karvy Comtrade Limited. He is a Fellow Member of the Institute of Chartered Accountants of India and was involved in the statutory and branch audit of banks for 26 years. founder member of Karvy Consultants Limited.Investor Services Limited. Karvy Insurance Broking Pvt Ltd. OUR MANAGING DIRECTOR Mr. has varied experience in the field of financial services spanning over 20 years. Managing Director.

Director. Karvy Insurance Broking Pvt Ltd. a leading business information research services organization.OUR DIRECTOR Mr. for $63. He has more than 20 years of experience in the financial services arena. He successfully merged the company with RCM for $32m in November 1998. Karvy Investor Services Limited. Karvy Comtrade Limited. he founded "Procon" building the organization into one of the fastest growing IT services players in the US with 225 employees and revenues of $22m in 27 months. founder member of Karvy Consultants Limited is orchestrator of technology initiatives such as the call center in the service of the customer. Albion International in Atlanta and Orion Consulting in Minneapolis. Mr. He has helped Karvy diversify into the field of medical transcription leveraging on the company's core competency of transaction processing. M S Ramakrishna. In June 1996.65m in December 2000. a roll up in IT services sector in the US. Subsequently. In 2000. Ramakrishna is a member of the Hyderabad Stock Exchange and is the director of Karvy Stock Broking Limited. Director. he founded ' Albion Orion Company'. He is the Chairman & Co-founder of Irevna Limited. Mr. He acquired and restructured two high-end solution providers. He possesses vast experience and expertise of building organizations globally with organic and inorganic grow Page 13 . is an entrepreneur of repute in the IT professional services arena. Prasad V Potluri. he led the merger of the consolidated entity to SSI Ltd. Karvy Computershare Private Limited.

This will help in improving methods by which the overall performance can be improved and key indicators of customer dissatisfaction shall be documented and supported by objective information. Mutual Funds. The small investors depend on brokers and brokerage house for his investments. Page 14 . The big players in the market. This clearly shows the importance of knowing how satisfied our present customers are. inside information. The speculator invests for a short period for instant gains & his investment are based on market sentiments. The level of competition is so high that retaining existing customers or getting new customers by good word of mouth from existing customers is very important. through grapevine. In recent years a large number of players have entered into his market.Introduction to the project topic Investment in Equity markets are based on analysis & reasoning which help to predict market to some extent. tips & intuition. Through the years a number of technicals & theories for analysis have evolved. etc. We are trying to find out how satisfied the existing customers are and also trying to find out what are the crucial factors that customers look for. these combined with modern technology guides the investor. It is with this backdrop that the study is being initiated. have the expertise for various analytical tools & make use of them. like Foreign Institutional Investors.

compared to other less liquid investments such as real estate The stock Exchanges:   India has: 24 Regional Stock Exchanges 2 Leading Exchanges : Bombay Stock Exchange (BSE) Page 15 .BACKGROUND OF STOCK EXCHANGE IN INDIA The emergence of stock market can be traced back to 1830. the oriental bank and the old bank of Bombay and shares of cotton presses. 5%. or raise additional capital for expansion. and derivatives. In Bombay. NSE. the chartered bank. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. and 6% loans of East India Company as well as the shares of the bank of Bengal in Stock Market Market of “Hope. In Calcutta. This is an attractive feature of investing in stocks. Discipline & Greed” The term 'the stock market' is a concept for the stocks are listed and traded on stock exchanges the mechanism that enables the trading of company stocks. This allows businesses to go public. The stock market in the India includes the trading of all securities listed on the BSE. other securities. business passed in the shares of banks like the commercial bank. Englishman reported the quotations of 4%. the chartered mercantile bank. The stock market is one of the most important sources for companies to raise money. as well as on the many regional exchanges.

Page 16 . In particular. The term may also encompass commodities when used in its most general sense. Others have to seek recognition on annual basis. EQUITY MARKET A stock market is a market for the trading of company stock. but more often then not the stock market and the commodities (or futures) market and distinguished. (NSE)  The Indices: – – BSE : BSE Sensex comprising 30 stocks NSE : S&P NSE 50 Index (Nifty) which consists of 50 stocks The two leading exchanges are recognition. The equity share in new issues has stable predictive power in both halves of the sample period and after controlling for other known predictors results. Instead. The share of equity issues in total new equity and debt issues strong predictor of U. The query “How did the market do today?” is usually answered by a reference to the Dow Jones industrial average. General terms referring to the organized trading of securities through the various physical and electronic exchange and the over the counter market. the fact that the equity share some times predicts significantly negative market returns suggests inefficiency and that firm’s time the market component of there returns when issuing securities.S. and derivatives of same. convertibles. The securities involved include common stock. stock market returns between 1928 and 1997.National Stock Exchange of India Ltd. comprised of stock listed on the New York stock exchange. preferred stock. firms issue relatively more equity than debt just before period of law market returns. bonds. options rights. and warrants. both of these are securities listed on a stock exchange as well as those only traded privately.

In the context of a futures trading account. 2.Ownership interest in a corporation in the form of common stock or preferred stock. Investors Preference Page 17 . Awareness of competitor’s products among Investors. Satisfaction level of Investors with respect to their existing broker.e. 3. in which case it is also referred to as shareholder's equity or net worth or book value. it is the difference between what a property is worth and what the owner owes against that property (i. the difference between the house value and the remaining mortgage or loan payments on a house). In real estate. i. Title of the study –“CONSUMER BEHAVIOUR IN EQUITY MARKET” Duration of the Project: - 45 Days OBJECTIVE OF STUDY To find out:- 1. it is the net value of the account. It also refers to total assets minus total liabilities. In the context of a brokerage account. assuming that the account is liquidated at the going price. it is the value of the securities in the account. the value of securities in the account less any margin requirements.e.

Scope and significance of study  This project report will help the organization in assessing the awareness of various occupational segments (Businessmen.  Marketing Manager being quite busy with his job.  The busy schedule of the customers also makes the collection of information a very difficult one.  The bias and hesitation in the judgments of the customer affect analysis of the survey in a significant manner. more time could not be devoted to individual respondents. Page 18 . which might have effected the conclusions. the respondents filled the questionnaire casually.  Due to time constraints. This awareness is estimated in form of percentage.  Due to unwillingness of providing any information.  In the most questionnaires the open ended questions were remained unfilled. He was not able to spend enough time for over proper guidance. Professionals. and Servicemen) about the stock market.

Research methodology Sample Size: .50 individual Method of selecting sample: . A questionnaire was prepared and distributed to Investors. Page 19 . The Sample consists of 100 investors from various broker’s premises. The investor’s profile is based on the results of a questionnaire that the Investors complete.Random Sampling Research Design The research design is analytical in nature.

 Limited Time for conducting the study.  Respondents were not interested to disclose details. to correlate perceptions of services in terms of customer satisfaction.  A more extended geographical sample may show greater difference in perceptions.  It would be interesting. or factor analysis on the various services expected by customers. in further research. The Sample size may be extended to include other services also. limited to field research for 100 Investors in the Stock market & conducted only in Jaipur. The responses are subjected to customer bias.LIMITATIONS  Limitations in regards with the Sample Selections:  The sample under study is relatively small. Page 20 .

Trading Preference Both 42% Investment 48% Speculation 10% Investment Speculation Both Page 21 .10% people have stopped now after suffering heavy losses.Data and data analysis Decision regarding investment in share market. 35% people are not investing either because they don’t have much knowledge about share market or they prefer mutual funds over trading.now stopped Series1 55% people are currently investing in share market with the expectation that market will show a record breaking performance. 60 50 40 30 20 10 0 yes no earlier.

APPROXIMATE TRANSACTION PER DAY: 8% 6% 4% Less Than 50. the returns expected from the past investments. 000 per day (57%) followed by 50.000 to 1 lakh per day (25%).000 50.1 Lakh 1 .000 . Speculation on the other hand refers to making quick profits by anticipating the changes in the prices of shares. etc. Approximate Transaction per Day The amount of investment in the stock market varies from investor to investor. A majority of the transaction done was found to be Rs. Buying and selling shares in selected companies to make a profit and is linked to a long time. Speculative transactions are carried out in the stock exchange day in & day out.5 Lakh More Than 5 Lakh Figure 5.Figure 4.5 Lakh 57% 25% 2.5 . Page 22 .2. viz. the amount availability.50. Investment refers to a longer time horizon. Trading Preference Trading preference can be classified into Investment and Speculation. The preference of trading was found to be 48% in Investment & 10% in speculation. There are a various reasons. the Dividends obtained.

01 1.Expectations of Annual Income & Expense over next 3 to 5 Years: A view of the present income & expense level to their projections determines the amount of investment. Income Expectations of Investors 50 Respondents % 40 30 20 11.33 Page 23 .03 1.  Percentage of his income to be invested in Equity market  Quality & Return Investments  Profitability  Growth of Capital & Earnings  ANNUAL INCOME:    Respondents % 100 87.13 28.01 90 80 70 60 Figure 1.94 11. The various aspects to be considered are.03 54.94 10 0 Increase Decrease Remain Same Annual Income: % Increase Decrease Remain Same Respondents % Average Change 87.

2 4.65 .65 4.19 7 86.6 Months 6 Months . Expense Expectations of Investors 9.2 Respondents % Respondents % Figure 2. ANNUAL EXPENSE:   100 90  80 70 60 50 40 30 20 10 An 0 86. AVERAGE INVESTMENT PERIOD: Less Than 3 Months 28% 3 .13 9.13 Increase Decrease Remain Same Respondents % nual Expense: Increase Decrease Remain Same Average Change % 34. Average Investment Period Page 24 .1 Year 34% More Than 1 Year 16% 22% Figure 6.

It relates to the investor behavior towards his expectations & reaction to the change in prices of the share. courteous behaviour while certain stop their loss to further increase by selling it at a lesser approach price than what it was bought. The investment period refers to the period within which the security/share is bought and sold. Investor’s Importance or Order of preference from Service Providers:  STOP LOSS: 15% 10% 25% Reliability promptness in delivery A certain characteristic of an InvestorSpeed of transaction out the cost of is to average 15% 20% 15% flexibility investment in Stock if the market goes down & price of the stock reduces. The Below chart gives the investor’s preference towards stop loss. It was found that 34% of the investor preferred a category of 3 to 6 months. thus incurring a loss. Sometimes 27% Yes 27% Yes No Sometimes No 46% Page 25 .

Appreciation Expected Loss: Investment in Share market involves risk of loss and the below chart gives the percentage of loss on investments made.25% 25% .APPRECIATION CAPITAL: Investors look forward towards increasing their return of investments either through the Dividends paid by the company or through the increase in the share value of the shares held. The below diagrams represents the loss anticipated by the investors and categorization of risk they are willing to take. Page 26 . The below chart gives the percentage of returns and investor expects over his/her investments.35% 27% 38% More Than 35% Figure8. 18% 17% Upto 15% 15% .

Loss 20% 46% 34% Less Than 5% 5% . Expected Loss Risk 17% High 57% 26% Low Moderate Figure no 10: willingness to take risk Page 27 .10% More Than 10% Figure 9.

 The investor depending upon his risk appetite and preferences should sub-classify the schemes on the basis of the characteristics of the schemes. A large corpus size firstly denotes investor’s confidence in the scheme and its fund manger abilities over the years and.  The fund size of the scheme is also of importance. which reduces the overall market risk. secondly it allows the fund manager to diversify the portfolio. By doing this the investor will know whether the returns generated by the scheme have been adequately compensated for the extra risk undertaken by the scheme.  Liquidity of the portfolio is also one of the critical parameters. which may be defensive or aggressive in nature.  Portfolio objective is also an important factor to be considered. which has a well-diversified portfolio rather than a concentrated portfolio.7. as it carries lesser risk.adjusted returns comparison. It is always advisable to choose a scheme. Page 28 . CONCLUSIONS  Making Risk.

of sub-brokers in the company should be increased. the customers can get information on time. Therefore customers have to face many problems because of lack of proper information. This department helps to customers to invest their money and after get the return. So more service centers should be opened. o In the stock market derivatives are less aware to the people. The service centers help to customers to get knowledge about plans on accurate time.Brokers are the main part of the company because by the sub-brokers. So make the brokerage plans according to the customer’s needs. So more awareness programmers should be making for derivatives. o There are very less service centers in the city.Suggestion o Sub. So no. o Trading department is the main department to earn money. Therefore.to.time and take fast decision. Thus trading department should be separate department. the less people invest their money in the derivatives. Page 29 . o Consumers are unaware of the brokerage plans.

Page 30 . More than 1 year.5 lakhs-Rs 5 lakhs  More than Rs 5 lakhs (5)What is your Average investment period?  A. Less than 3 months. now stopped (2) What is the current brokerage that you are paying?  1ps-2ps  2ps-3ps  above 3ps (3) What is your current trading preference?  Speculation  Investment  Both (4)What do your Approx Transaction Amount/Day?  Below Rs 50.  D.  B.5 lakhs  Rs 2.  C.ANNEXURE-SCHEDULE Name:-_____________________ Occupation:-________________ (1) Do you invest in Stock Market?  Yes  No  Earlier.000-Rs1lakh  Rs 1 lakh-Rs 2. 6months to 1 year.3 to 6 months.000  Rs 50.

Courteous Behavior (7) Have you put any Stop Loss on your Investments?  Yes  No  Sometimes (8) How much appreciation do you expect from your Investments?  Up to 15%  15%-25%  25%-35%  more than 35% (9) How much loss are you willing to take?  Less Than 5%  5-10%  more than 10% (10) How much risk are you willing to take?  High  Low  Moderate (11) How many Trading & Demat a/c do you have? Trading __________ Demat __________ Bibliography Page 31 . Flexibility ___ F. Approach ___ E.(6)Please give your Order of Importance ___ A. ___ C. Realiability ___ B. Speed of transaction ___ D. Promptness in Delivery.

Page 32 .WEBSITES:www.bseindia.R.moneycontrol.Kothari.com www.com www.nseindia.com MAGAZINES:Business Today Economic Times Business World Research methodology: .C.com www.karvy.

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