DECLARATION

I hereby declare that the project titled Expansion of Kotak Securities Sub-Brokers in Kolkata in KOTAK SECURITIES is a record of independent research work carried out by me in partial fulfillment of the requirement for the award of PGDM offered by NSHM Business School, Kolkata. I further declare that this project report has not been submitted to any other institution for the award of any degree or other similar title.

Name: AMARNATH VERMA

NSHM Business School, Kolkata

ACKNOWLEDGEMENT
At the outset, I would like to recall all my teachers and my parents for shaping me into what I am today. On successful completion of my project, I am thankful to my Primary Division Relationship Manager and project in-charge Mr. Santanu Banerjee of Kotak Securities under whose guidance and supervision this report has been prepared. I express my deepest sense of gratitude to my mentor Professor Rajkumar Das Gupta for extending valuable comments and suggestions to me for preparing this report. I owe special thanks to all the employees of Kotak Securities for helping me make the project successful. I thank all the respondents who spared their valuable time to Co-operate with me. Their co-operation enabled me to carry through the project. I also take the opportunity to thank my loving family, my mother and all my well wishers for being a constant source of inspiration to me throughout the project. I shall forever remain indebted to them. This project could never be a successful one without mentioning my father. Finally, I thank all concerned without whose encouragement and inspiration this exercise would ever have been possible.

Amarnath Verma
NSHM Business School, Kolkata

EXECUTIVE SUMMARY
The project work titled Expansion of Kotak Securities Sub-Brokers in Kolkata reveals an idea about the scenario of Security sector in Kolkata, WB. The study is all about the interested people who are likely to join as the brand ambassador of Kotak Security. The study has also focused on satisfaction level of the people regarding their current job. It was more of a personal survey conducted at different places in West Bengal and meant for eliciting the peoples interest towards the sub broker business. This project is based especially on primary data collected through structured questionnaire. Respondents were selected on a basic who were engaged with finance business (like the AMFI certified people). Moreover, emphasis was given on having the fairly representative group of target population. For the convenience the respondents have been classified into four groups namely- Service, Profession, Business and others. The type of research study undertaken was descriptive in nature. The reason why descriptive research design has been chosen is to know the characteristics of certain groups such as age, educational level, occupation or income. Sub broker ship business is considered to be popular source of income because increasing the investment on share market through sub broker. For that reason many companies now entered into this business like Share Khan, Religare (Ranbaxy), India Bulls etc. Basically we choose people from AMFI data and called them and asked them that they are interested about the share market or not. If he is interested then we farther precede about our sub broker ship requirements In this way I got success in many cases, it is a great experience in my life as a summer trainee of Kotak Security. When I converted my first lead as a sub broker of my company, it was one of the happy moments of my life On the basis of this study some suggestions concerning different aspects are put forward. I shall be fully satisfied if the study and recommendation given prove to be beneficial.

CERTIFICATE FROM INTERNAL GUIDE

This is to certify that the work embodied in the project report titled EXPANSION OF KOTAK SECURITIES SUB-BROKERS IN WEST BENGALA done by Amarnath Verma was conducted under my supervision.

Signature of Faculty . Name of Faculty.

INTRODUCTION

Aim of the project:

Expansion of Kotak securities SUB-BROKERS in KOLKATA

Objectives:
To study the secondary market To study the sub-broker franchisee market Scan different regions of KOLKATA Identify & negotiate with interested people Understand the documentation process

Rationale for the Project:

The basic idea behind engaging in this project is: To have an firsthand experience of how trading is done Understand the terms & conditions of obtaining a sub-broker franchisee To learn the art of negotiation To increase the footprints of Kotak Securities in rural and semi-urban regions of West Bengal.

Why is Kotak Securities Limited interested in expanding its subbroker franchisee footprints in semi urban and rural regions of west Bengal?
In the year 2007 when the Indian secondary market was at its peak, Kotak Securities Limited was concerned only in expanding its footprints through branch expansion. Only few people could afford to take up the franchisee of Kotak Securities because its terms and conditions were rigid and inflexible. For example, any person, interested in this business proposition will have to pay three lakhs rupees upfront as security deposit before he could set up his business. So, in a way the terms and conditions were not very market friendly. But still Kotak Securities Limited followed this policy because it was very conscious of its brand image and it was still not yet ready to share 50% of its brokerage with any other person/entity. All of its branches were under the direct control its respective city offices. During the boom phase, many broking houses emerged, taking the advantage of the high growth phase. Making correct decisions during this favorable phase was not a very difficult task. Since they did not have high capital to open branches they went for sub-broker franchisee. The terms and conditions set by them was market friendly. Then the dangerous bearish phase arrived. The broking firms which survived the onslaught of the bearish market posed a threat to Kotak Securities Limited. Other broking firms started expanding in the semiurban and rural regions. These regions have witnessed the growth of cash rich people without the availability of proper investment opportunities. So, here we see how small emerging companies were threatening a market leader. In fact, setting up of a branch became a costly affair for Kotak Securities Limited for the following reasons: After setting up of a new branch, Kotak Securities has to post an employee there. The employee, who is new to the area do not know the people properly and hence the trust factor is missing. The employee takes some time to acquaint himself with the people and the area. It has to be ensured that the people posted at rural and semi-urban branches are from nearby regions because conveyance (both time and money) becomes a factor. If the employee resigns, the same story needs to be repeated.

SWOT Analysis of Kotak Securities

The SWOT analysis of the company was done on the basis of my experience of training for two months, word of mouth and views derived from the questionnaire. A SWOT analysis helps the organization to comprehend the situation in which it is in. With a SWOT analysis the organization can identify its strengths as well as its weaknesses and can compare where it stands in respect to its competitors.

Strength:
In broking business the value of the kotak brand is high. National and International markets trading facility. Kotak provides standard service to both vendor and customer. Using high technology. Good research wing. Variety of schemes and investment opportunities

Weakness:
File works are not first. After sales services are poor. Payment of commission is not clear. Lack of advertisement to invite agents. Agents are not properly trained and educated.

Opportunities:
Huge market potential Introduction of revised compensation schemes for agents

With the booming capital market it can successfully launch new services and raise its clients base

Threats:
Aggressive promotional strategies by close competitors may hamper Kotaks acceptance by new clients. Kotak provide 5 times exposure to their clients were as his competitors provide 10 to 20 times Change in customer preferences Current rate of inflation and position of stock market

SWOT IN CHART

STRENGTH
1. 2. 3. 4. Brand Value International trading Standard service Research Wing

WEAKNESS
1. Delayed file work 2. Lack of proper advertisement 3. Lack of trend agents

OPPORTUNITIES
1. Market potential 2. Revised compensation scheme 3. Booming capital market 1. 2. 3. 4.

THREATS

Close competition Less exposure than other Change in preference Inflation rate

CONTENTS CHAPTER 1 PROFILE OF THE COMPANY

1.1 About Kotak Mahindra 1.2 Company Profile-Kotak Securities Limited 1.3 Group Company 1.4 The companys mission and vision 1.5 kotak competitors 15 16 16 13 14

Page No

1.6 Benefits or why Kotak is different from its competitor 17 1.7 Competitor analysis 23-24

RESEARCH METHODOLOGY
1.7 Stage1 1.8 Stage2 1.9 Stage3 1.10 Stage 4 2.0 Stage5 2.1Stage6 2.2 Stage7 25 27 27 28 29 29 29

CHAPTER 2

METHODOLOGY
2.1 Research design

Page No
30 30 30 31 31 31 31

2.2 Data collection methods 2.3 Research approach

2.4 Research instruments 2.5 Sampling plan 2.6 Sampling units 2.7 Sampling size

CHAPTER 3

ANALYSIS OF DATA 1. Preference of investment 2. Awareness of Online Share trading 3. Awareness of Kotak as a Brand 4. Awareness of kotak securitys facility 5. Satisfaction level among customer with their Current broker 5. Frequency of trading CHAPTER 4 Findings CHAPTER 5 Recommendation

Page No
32 33 34 35 36 38

39-43

44

CHAPTER 6 Conclusion CHAPTER 7 Bibliography

46 45

CHAPTER-1 PROFILE OF THE COMPANY 1.1 About Kotak Mahindra

Kotak Mahindra one of Indias leading financial institutions was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Mr. Uday Kotak, Mr. Sidney A. A. Pinto and Kotak and Company. Industrialists Mr. Harish Mahindra and Mr. Anand Mahindra took a stake in 1986, and thats when the company changed its name to Kotak Mahindra Finance Limited.

Company Profile-Kotak Securities Limited

Kotak Securities Ltd. is one of the oldest and leading stock broking houses in India. Kotak Securities Ltd. has also been the largest in IPO distribution. The accolades that Kotak Securities has been graced with include: 'Best Performing Equity Broker in India - CNBC TV 18' Optimix Financial Advisory Awards, 2008 'Best Brokerage Firm in India' by Asia money in 2007 The Leading Equity House in India in Thomson Extel Surveys Awards for the year 2007 Euro money Award (2006 & 2007) - Best Provider of Portfolio Management: Equities Avaya Customer Responsiveness Awards (2006) in Financial Institution Sector Asia money Award (2006)- Best Broker In India Euro money Award (2005)-Best Equities House in India Finance Asia Award (2005)-Best Broker in India Finance Asia Award (2004) - India's best Equity House Prime Ranking Award (2003-04)- Largest Distributor of IPO's The company has a full-fledged research division involved in Macro Economic studies, Sect oral research and Company Specific Equity Research combined with a strong and well networked sales force which helps deliver current and up to date market information and news. Kotak Securities Ltd is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), providing dual benefit services wherein the investors can use the brokerage services of the company for executing the transactions and the depository services for settling them. Kotak Securities has 877 outlets servicing over 4, 30,000 customers and a coverage of 321 cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments. Kotak Securities Limited has over Rs. 2300 core of Assets Under Management (AUM) as of 31th March, 2009. The portfolio Management Services provide top class service, catering to the high end of the market. Portfolio Management from Kotak Securities comes as an answer to those who would like to grow exponentially on the crest of the stock market, with the backing of an expert.

Group Companies
Kotak Mahindra Bank Kotak Mahindra Prime-car finance & other lending Kotak Securities-stock broking

Kotak Mahindra Capital Company-investment banking Kotak Investment Advisors Limited- alternate assets management/advisory Kotak Mahindra Asset Management Company and Trustee Company asset management Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank. The company was set up in 1994. 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: (1) Institutional Equities, (2) Retail (equities and other financial products), (3) Portfolio Management and (4) Depository Services.

Institutional Business
This division primarily covers secondary market broking. It caters to the needs of foreign and Indian institutional investors in Indian equities (both local shares and GDRs). The division also incorporates a comprehensive research cell with sectoral analysts who cover all the major areas of the Indian economy.

Client Money Management

This division provides professional portfolio management services to high net-worth individuals and corporate. Its expertise in research and stock broking gives the company the right perspective from which to provide its clients with investment advisory services.

Retail Distribution of Financial Products

Kotak Securities has a comprehensive retail distribution network, comprising 870 offices (own and franchisees) across 309 cities and towns, servicing 590,000 customers. This network is used for the distribution and placement of a range of financial products that includes company fixed deposits, mutual funds, Initial Public Offerings, secondary debt and equity and small savings schemes.

Depository Services
Kotak Securities is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. Since it is also in the broking business, investors who use its depository services get a dual benefit. They are able to use its brokerage services to execute transactions and its depository services to settle these.

Kotak Institutional Equities

Kotak Institutional Equities, among the top institutional brokers in India. It mainly covers secondary market broking and the marketing of equity offerings, including IPOs, to domestic and foreign institutional investors. Its full-fledged research division comprises 26 analysts engaged in macro-economic studies, industry-and companyspecific equity research. Kotak Institutional Equities has full financial service capability, which includes derivatives, facilitating market access through affiliates and the distinctive offering of corporate access to investors. The division services over 250 clients including FIIs, domestic institutions and mutual funds. The division has sales desks in Mumbai, London and New York, with the India desk also servicing clients in Hong Kong, Singapore, Japan and Australia. Trading in dematerialized securities is done through your broker just like trading in physical securities.

Kotak works with the Mission and Vision of being:

The Global Indian financial services brand. The most Preferred Employer in financial services. The most trusted financial services company. A Value Creator.

Market Competitors

Benefits of associating with Kotak Securities as a sub-broker Or why Kotak is different from its competitor?
Different investors have different needs. Kotak Securities cater to the different of all the customers the sub-broker will be acquiring. They can benefit from Kotak Securities spectrum

of services from Shares, Derivatives, Mutual fund, IPOs, Primary debt, Margin trading facility to depository services. Kotak Securities is a corporate member of NSE & BSE and depository participant with NSDL & CDSL. Even a non trading member can also open a Demat account with Kotak Securities. Following the benefits which a sub-broker and his/her client can avail from Kotak Securities: The Brand The Kotak Mahindra Brand Identity serves not only to differentiate itself from other brands but also communicates its attitude, character and values. It believes that the Brand Identity is an important strategic asset and all are responsible for it. The brand helps Kotak Securities to communicate coherently and clearly with its customers, employees, business associates and all other stakeholders a critical requisite in an increasingly cluttered business world.

Kotak works with a vision of being:

The Global Indian financial services brand The most Preferred Employer in financial services The most trusted financial services company The most trusted financial services company Kotak Mahindra Group offers 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 a the financial needs of individuals and corporate. Association with a renowned brand like Kotak would add value and recognition to a subbrokers establishment and increase their Brand Equity. The Leadership Edge Kotak Securities is one of the best stock broking houses in the country. We have been the pioneers in introducing the sub-broker model in the Stock Broking business.

Some of the facts about Kotak Securities are mentioned below:

AUM over Rs.2300 cores Over 15 years of experience Kotak Securities is one of Indias oldest and largest Portfolio Management service provider Introduced the flat brokerage fee structure model in India Pioneer to launch Portfolio Management Services for retail customers Pioneer to introduce margin trading option for broking customers Pioneer to introduce Systematic Investment Plan (SIP) in direct equity through our product AUTOINVEST Pioneer to enable investing in IPO/Mutual Funds over the phone The awards and accolades include: "Best Brokerage Firm in India" - Asia money, 2008 "Best Performing Equity Broker in India - CNBC TV 18" Optimix Financial Advisory Awards, 2008 "Best Brokerage Firm in India" - Asia money, 2007 "The Leading Equity House in India" - Thomson Extel Surveys Awards, 2007 "Best Provider of Portfolio Management: Equities" - Euro money Awards, 2007 Avaya Global Connect Customer Responsiveness Awards in Financial Service Sector, 2007 Figures given above are as of 31st March, 2009

Strong Financial Group

Established in 1985, the Kotak Mahindra Group is one of Indias most reputed financial conglomerates. In February 2003, Kotak Mahindra Finance Limited, the groups flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). The group has a net worth of over Rs. 6327 cores, employs over 20,000 people in its various businesses and has a distribution network of 1300 branches, franchisees, representative offices and satellite offices across cities and towns in India and offices in New York, London, San Francisco, Dubai, Mauritius and Singapore. The Group services around 5.9 million customer accounts. Figures given above are as of 31st March, 2009

Ethics
Kotak believes that ethics of a company helps to deliver value to all the stake holders and lead to success. Kotak Securities adheres to strict ethical practices and compliance that comprise of commitments towards customers, associates, stakes holders and employees. Strong Internal Control team ensures that every individual delivers based on policies set by the company and there is no compromise on the quality. Centralized Risk Management division regularly monitors the position of customers' portfolios to reduce the loss at the time of market volatility.

Network
Kotak Securities has pan India presence with its network of Branches, Sub-brokers and Primary market sub brokers. Presence of Kotak Securities with over 20,000 primary market sub brokers, 783 outlets in 316 cities makes it one of the broking houses with the largest network. Kotak Securities always looks forward to increasing its network to reach Investors and provide investment services to help them make right investment decisions. Investment Solutions Investment Solutions to suit the varied investment goals of your clients Kotak Securities product includes: Equities: For those who are interested in investing in stocks directly, Kotak Securities provides Equity Services. Investors have the choice to select the type of account from its vast range of offerings. Its research analysts and advisors guide the investors so that it can help the clients in making prudent investment decisions. Derivatives: Derivatives are good investment option for aggressive investors. Trading of these investment products requires a high degree of discipline. Kotak Securities strives to make investing in derivatives simple. Its Derivatives seminars educate new entrants as well as existing traders in the derivatives market to be more equipped with the required knowledge and techniques. Mutual Fund: Investing in over 3000 different Mutual Fund schemes through Kotak is very simple. And to choose between the various schemes for investment, Kotak offers its clients its exclusive research. The customers can invest in Mutual Funds via internet, phone or by simply filling up a form. Structured Products: Structured products are an ideal investment tool to meet specific investment needs that cannot be met by standardized financial instruments.

Kotak Securities offers its clients a variety of Structured Products that might help in reducing their exposure to risk considerably. IPOs: Investing in IPOs is not complex process anymore. Kotak Securities has made investing in IPOs very simple. The clients can now invest by simply making a phone call to Kotak. It also provide them with news on IPOs, updates on forthcoming IPOs and lots more that a sub-broker can share with his/her clients. Third Party Distribution Products: Apart from the above products, Kotak Securities offers its clients a range of credible financial products that would cater to various investment needs of the clients.

Services
Centralized Risk Management At Kotak Securities Risk Management means state of art quality management that seeks to generate, not constrain. The Risk Management team consists of 30 members who have implemented systems in different areas and structured Risk Management Cell primarily managing online risk, Market risk and Operational risk. Kotak Securities has dedicated research personnel for the following sectors: Sectors covered under research Chemicals Technology Banking & Financial Institutions Energy Media Economy Cement Utilities NBFC Sales & Trading Equity Telecom Healthcare Pharmaceuticals Industrials Construction Mid-Cap Sales & Trading Derivatives Automobiles Metals Real Estate Logistics Consumers Institutional Sales Transportation

Centralized Back Office

To handle large operations an efficient back office is essential. While most broking firms worked with de-centralized back offices, Kotak securities was responsible to set the trend of a centralized back office. There is a centralized back office at Mumbai, which has a workforce of over 500 committed people. BOSS-Back Office Support System helps a sub-broker to keep a track of the shares traded by the clients. The Sub-broker is provided with a login ID & password and he/she can view the shares traded on any day. This facility is also extended to the clients of the sub-broker.

Leading Edge Technology

Technology plays an indispensible role in increasing productivity. A robust technology platform is vital in acquiring and managing customers in the broking business. This belief supported by Kotaks scalable technology platform helps it address the ever growing investment needs.

Research
Kotak Securities has a strong research team that is involved in industry and company specific equity research and macro-economic studies. Its daily, weekly, monthly research reports help the sub-broker to guide their customers on investing and taking informed decisions. An associate gets direct access to our research team and products.

Research Coverage
Report Name Market Morning (Technical Analysis) Weekly Technical Analysis (Technical Analysis) Trading Tools (Technical Analysis) Derivative Reports (Derivatives Analysis) Morning Star (Fundamental Analysis) Stock Ideas (Fundamental Analysis) Monthly Research Reports (Fundamental Analysis) Stock Recommendation (Fundamental Report) Description A daily report of vital market information with concise technical review of the index along with technical support and resistance of the selected stock. A definitive tool that, besides summarizing the calls of the week on a chart, predicts trends and tracks market movements of the forthcoming week. This report gives you the range derived after technical analysis for trading on the stocks for next trading day. This report gives Put and Call ratio, the most active derivative contracts and the top change in open interest. You can also get FII statistics, the top gainers and losers and the cost of carrying out various derivative contracts. A report that features economic and corporate news enabling buy/sell calls based on the company's fundamentals. This is a report which is completely based on fundamentals. The research team analyses several companies and identifies a select few, which are fundamentally strong and offer high returns. A consolidated report of all the research calls given during the month with an insight that enables wise financial decisions in a time bound manner. It lets you know the potential of stocks in the coming period, reports tell you the percentage of growth or decline a stock may see in future.

Research Seminars: Kotak Securities organizes Research Seminars in various town/city

where a sub-brokers select customers can directly interact with our research team.

SMS Alerts: Critical information on the move. Free SMS alerts delivered to sub-brokers as
well as the clients mobile phone so that they can stay in touch with the market wherever they are.

Marketing Support
Kotak Securities has a centralized marketing team based at Mumbai, dedicated to support the franchisees in their marketing activities. Marketing support that a sub-broker will receive from Kotak Securities is as follows: Marketing Collaterals: Kotak Securities provide various types of marketing collaterals like Brochures, Pamphlets, Canopies, Banners, Posters, and Danglers etc. All of these materials are co-branded. Seminars & Events: Kotak Securities organizes research seminars and other events on behalf of Sub-brokers. These seminars & events help the sub-brokers to acquire and retain clients. Support is extended completely in terms of planning and execution. Planning of the entire event, designing & printing of invites and collaterals, branding at venue is done by Kotak. Designing & Execution Support: If the sub-broker wants to create any collateral, material or advertisements exclusively, Kotaks marketing team will help him/her completely in designing of the same. Outdoor Signage: To generate more business it is very important to make the sub-brokers presence felt in the location where they conduct their business. Kotak Securities helps them by providing high standard backlit co branded signages to make their presence more prominent. Newsletters: Hello is a quarterly newsletter published by Kotak Securities especially for its sub-brokers. This gives them information about latest happenings at Kotak Securities and a view of Kotak Securities published in the media. Customer Analysis & Communication: Kotak Securities has a team that regularly tracks the performance of the sub-brokers clients. Based on the performance of clients Kotak help they design communication that will help them generate more business from their clients. Various kind of special offers are circulated to induce regularity in trading and investments. Biz-Quiz: It is an ongoing quiz contest organized especially for sub-brokers. Stock markets, finance, entertainment & sports are some of the topics covered in this quiz. This quiz helps a sub-broker showcase your knowledge and gives you a chance to win lots of gifts.

Training Support
Given below are lists of training programs that we provide to Kotaks Business Associates. Product Training: Module that offers in-depth understanding of the products offered by Kotak. It equally focuses on effective application of product knowledge. Systems Training: An essential guide on Trading and Data Repository Systems. Operations Training: Daily Operations Process Training. Sales Training: Focuses on the skills required to increase sales and profitability. Compliance : It will cover important rules and regulations as well as internal policies of Kotak Securities to be noted and adhered to by branches/sub-brokers

Business Associate Support System (BASS)

A sub-broker is given a unique Login Id and Password to access the Business Associates Support System which provides a holistic view of your Business, Customer Information, Functionalities, and Research etc. for smooth business processes. Given below is a snapshot of what Kotak offers on the Business Associates Support System: Client Related Reports Material Management Trade Calls Business Reports Product Promotions Administration & Financial report

Facilities of International Equities Markets

Kotak Securities is the official introducing broker for Saxo Capital Markets private Ltd. Singapore. This exclusive relationship gives you the power to trade in 24 International Exchanges through a single trading platform, Kotak Trader - powered by Saxo Capital Markets. Kotak Trader offered by Saxo Capital Markets is an easy-to-use, fully customizable platform that integrates all of the trading, analysis, price monitoring and updates all in one interface. Kotak Trader offers many important features that help to trade more effectively Direct trading on live tradable prices on agreement with specific exchanges Trades in Stocks, ETFs, ADRs & GDRs Trading in 24 different exchanges across the globe Market analysis from Saxo Capital Markets News from AFX, Dow Jones Newswire, Market News International 2-way dealer chat - direct access to dealers at Saxo Capital Markets

Competitor analysis

ICICI KOTAK DIRECT SEC. Account opening Rs 750 charges Brokerage 0.55% service tax 10.20% Rs 700 0.30% 10.20%

INDIA HDFC 5PAISE FORTIS UTI BULLS SEC. Rs 700 Rs 750 Rs 425 0.50% 0.50% 0.50% 10.20% 10.20% 10.20% Rs 200 0.50% 10.20%

SHAREKHAN

Rs 600 Rs 750 0.50% 0.50% 10.20% 10.20%

STT 0.01% CASH SEGMENT delivery trade 0.08% non.delivery trade 0.15% min. order Rs.500 min. brokerage Rs.25 Brokerage 1% Jobbing N.A SPOT SEGMENT min. trade max. amount Brokerage MARGIN SEGMENT min. trade min. brokerage Brokerage DERIVATIVE SEGMENT service tax STT min. balance BANK FEE min. balance Penalty accounting charges custody charges transaction- buy - sell stamp charges

0.01% N.A N.A Rs.500 N.A N.A 3.30 p.m

0.01% 0.08% 0.15% Rs.500 N.A N.A 3.15 p.m

0.01% N.A N.A Rs.500 N.A 0.05% N.A

0.01% 0.50% 0.10% N.A N.A 0.05% 2.40 p.m

0.01% N.A N.A N.A N.A N.A N.A

0.01% N.A N.A Rs.500 N.A N.A N.A

0.01% N.A N.A N.A 10 paisa N.A 3.15 p.m

Rs 500 Rs 500 RS. 10 no limit lakh 0.10% 0.05% Rs 500 RS 15 0.04% 10.20% 0.01% Rs 5000 Rs 5000 Rs 750 NIL Rs 2.25 0.02% 0.04% 0.02% Rs 500 N.A N.A 10.20% 0.01% N.A N.A N.A N.A

Rs 500 Rs 500 N.A no limit No limit N.A N.A 0.05% 0.25%

Rs 500 N.A N.A N.A N.A N.A

N.A N.A N.A N.A N.A N.A

N.A N.A 0.05% N.A N.A 0.05%

Rs 500 Rs 500 N.A N.A Rs 15 N.A N.A 0.05% N.A

10.20% 10.20% 10.20% 10.20% 0.01% 0.01% 0.01% 0.01% N.A Rs 5000 Rs 2000 N.A N.A N.A N.A Rs 5000 N.A NIL N.A NIL N.A N.A NIL 0.04% N.A N.A 2.50% 2.50% N.A N.A N.A Free Free Rs 20

10.20% 10.20% 0.01% 0.01% N.A N.A N.A NIL N.A NIL NIL 0.04% N.A NIL NIL N.A free free 0.01%

N.A N.A N.A N.A Rs 20 per N.A form N.A N.A

Rs 420 p. Rs 60 p. N.A form a/c

DEMAT ACCOUNT rejections or fails Rs 20 remat charges Pledge demat charges Rs 20 0.20% N.A

N.A

Rs 20 per Rs 30 Rs 15 p. N.A entry p.rej cer N.A Rs 15 N.A Rs 15 SDL+ Rs min. Rs N.A p.cer 25p.cer 50 NO 0.02% Rs 10 Rs 0.02% 0.02% 0.02% p.cer 30p.ins Rs 360 p.a N.A Rs 3 Rs 5 Rs 1 p.cer min. Rs N.A p.cer p.cer 50

Rs 20

NIL

DEPOSITORY RELATIONSHIP

advance amount

Rs 2500

thresh hold Rs 1000 amount Funding Yes IPO Yes Research Report N.A Exposure 4 times Other Relationship International Advisory Services Banking

Rs 3500- N.A 5000 Rs 1000 N.A yes yes 90% 6 times 21% p.a yes 80% 6 times

Rs 2500 Rs 2000 Rs 20- Rs 500 N.A 50000 Rs 1000 N.A N.A N.A N.A yes yes N.A 5-7 times N.A N.A no N.A 6-8 times N.A No N.A N.A N.A no N.A 7 times yes yes 86% 4 times

N.A N.A

Yes Yes

N.A

N.A N.A

N.A N.A

N.A N.A

N.A N.A

Investment Broking

N.A

Yes

Applie N.A d to RBI for approv al N.A N.A

N.A

N.A

N.A

N.A

CHAPTER-1 RESEARCH METHODOLOGY

The project is based on contacting people who are already in some financial business or any other business dealing with clients/customers. Following were the methodologies followed: Stage 1 First stage deals with the understanding of the fundamentals of Securities market.

In Detail What and Why of Securities Market In every economic System, some units, which may be individual or Institution are surplus generating while others are deficit generating. Surplus-Generating Units are called Savers while Deficit-generating units are called spenders. Households are surplus generating and Corporate and Government are deficit generators. By placing the surplus funds in Financial claims or Financial securities the Spending community gets funds at a cost and saving community gets various benefits like interest, dividend, capital appreciation, Bonus etc. The Surplus generating units (Savers) are investors and Deficit generating units (spenders) are issuers. These investors and issuers of financial securities constitute two important elements of the securities markets. The third critical element of markets is the intermediaries who act as conduits between the investors and issuers. Regulatory bodies, which regulate the functioning of the securities markets, constitute the last but very significant element of securities markets. Thus the four important elements of securities markets are: Investors Issuers Intermediaries Regulators Securities can be Government or Industry Long-term or short-term Primary Market or Secondary Market Primary Market is the segment in which new issues are made whereas secondary market is the segment in which outstanding issues are traded. It is for this reason that the Primary Market is called the New issues Market and the secondary market is called Stock Market.

History of Indian Stock Market

From Scattered and small beginning in the 19th Century, Indias stock market has risen to great heights. By 1990, we had 19 stock exchanges in the country. There were around 6,000 listed companies and the investor population stood around 15 Million.

Functions of SEBI

Section 11 of the SEBI Act Organization Structure of SEBI A Chairman (to be appointed by Central Govt.) Two members from amongst the officials of the Ministries of the Central Government dealing with Finance and Law. One Member from RBI Two members to be appointed by Central Govt.

Activities of SEBI
Rules regarding registration of intermediaries Guidelines and Code of Conduct for Merchant Bankers Categorization of Merchant Bankers Guidelines for Portfolio Management Services Circulars on various issues (Periodical) Guidelines for Lead managers Regulation for Registrars and Share-Transfer agents Guidelines for IPOs, Debt. Instruments Regulation on Insider trading Guidelines for Mutual funds Regulation on takeovers Code for Corporate Governance Consultative Paper on free market pricing of Capital Issues. Advisory committees for Primary and Secondary Market reviews Investor Protection guidelines Guidelines on SROs for Merchant Bankers Regulation of Futures and Options, Index Market Informal Guidance Stage2 Second Stage deals with knowing about the brand Kotak Securities

In Detail Kotak Mahindra Group Kotak Securities

Stage3

In stage 3 we learnt about the terms and conditions of obtaining the sub-broker franchisee

In Detail Infrastructure & Financial Requirement

Office space at prime location 2 Personal Computers 1 Printer 2 Telephone Lines Voice Recorder Machine (Chargeable and to be provided by Kotak Securities) ODIN Software (Chargeable and to be provided by Kotak Securities) VSAT Connection (Chargeable and to be provided by Kotak Securities) or Broadband/ ISDN connection NCFM Passed Dealer Base Deposit (Rs Three Lac, can be paid up in installments) Demand Draft of Rs 12,247/- for NSE Registration in the name of Kotak Securities Limited payable at Mumbai. For both NSE and BSE the registration amount will be Rs. 24,294/The SEBI registration for NSE and/or BSE generally takes three months time. But by one month of completion of all the formalities of the documentation process, Kotak Securities issues a location code and the sub-broker can start trading as an employee of Kotak Securities Limited.

Documents required for Sub-broker registration in Individual name

Last 2 or 3 year ITR (Income Tax Return) or else Net-Worth certificate from a Chartered Accountant PAN (Personal Account Number) photocopy

Reference Letter from Chartered Accountant (Format to be provided by Kotak Securities Limited) Third Party Letter (Format to be provided by Kotak Securities Limited) Bank Reference Letter (Format to be provided by Kotak Securities Limited) Original bank statement or bank passbook photocopy with original bank seal and signature

 Qualification proof: graduation or higher secondary mark sheet or certificate or else secondary mark sheet or certificate with experience, certificate from broker in specified format Passport size photograph For both NSE and BSE registration two set of all documentation are required

Stage4 Stage 4 dealt with the collection of area specific data of the people who are eligible for this business.

In Detail
The Mutual Fund advisors who are AMFI certified are eligible for this sub-broker franchisee as they already have a client base. My mentor at Kotak Securities provided the list of ARN holders across West Bengal. The lists for the following regions covered by the database:

Kolkata Cochbihar Darjeeling Dinajpur Malda Jalpaiguri Bankura Bardhaman

Murshidabad Nadia North 24 Parganas West Midnapur South 24 Parganas Howrah Hoogly Birbhum

Stage5 Stage 5 dealt with tele-calling informing the people of the business proposition and asking them to come over to Kotaks office. The main motto of tele-calling is to present a proposal from Kotak Securities and make the person aware of the fact that there exists a business opportunity for him/her .Efforts were made to abstain from providing technical details or terms and conditions over the phone. Appointments were fixed up with the interested persons either at office or at their place of convenience. Following table shows percentage of people converted. % of people shown interest % of people who responded to the appointment % of people who finally agreed to work with Kotak Securities 45% 20% 2%

Stage 6 This is the most important stage. This involved negotiating with the client telling him that this is a profitable business. The pre-requisites of a good negotiation includes good knowledge about the business proposition as well as background and past activities of the person with

whom the interaction is taking place. Not much prior information was available so, during the first phase of the negotiation, the capability of the person was judged based on his past activities. Majority of the people were mutual fund advisors, others were insurance agents, petrol pump owners, metal and hardware dealers, internet caf owners, selling agents of different financial organizations.

Stage 7 This marks the beginning of the documentation process. Kotak Securities is very strict as far as the documentation process is concerned so as to ensure no false document is submitted. Following are the documents required for the documentation process: Last 2 or 3 year ITR (Income Tax Return) or else Net-Worth certificate from a Chartered Accountant PAN (Personal Account Number) photocopy Reference Letter from Chartered Accountant (Format to be provided by Kotak Securities Limited) Third Party Letter (Format to be provided by Kotak Securities Limited) Bank Reference Letter (Format to be provided by Kotak Securities Limited) Original bank statement or bank passbook photocopy with original bank seal and signature Qualification proof: graduation or higher secondary mark sheet or certificate or else secondary mark sheet or certificate with experience, certificate from broker in specified format Passport size

CHAPTER-2

METHODOLOGY

In order to know about the peoples preferences and attitudes towards franchisee business, a survey was carried out among the people of different groups having experience of a job to collect other information.

1. Research Design:
The type of research undertaken was descriptive in nature .For the purpose of this research, a good deal of care had to be employed for framing the research questions to fulfill the research objective(s) deciding on the type of data to be gathered and procedure to be used for this purpose. A market survey aiming at the interested people in West Bengal was conducted.

2. Data Collection Methods: Data Sources

The method that has been used is primary sources. As this study was not conducted and published by anyone else, so the scope of secondary sources was not there.

(a) Research Approach

The selection of survey method has been preferred to other methods as the objectives of the study warranted the need to adequately cover the target population and elicit their responses which would be fairly representative of the target population.

(b) Research Instruments

The questionnaire method of survey was undertaken due to its main advantage of speed and cost. The questionnaire was by and large structured.

(c) Sampling Plan

For the study of the project a survey was the one to use structured questionnaire. For this respondents were selected on a random basis.

(d) Sampling Unit

The sampling unit is:Basically we did tele calling

(e)Sampling size
Number of respondents was 100. In that 60 were AMFI certified financial business man and rest were other business man. The sampling was determined not based on any statistical analysis, but based on study object, time constraint and analysis plan.

CHAPTER-3
DATA ANALYSIS Market Research Analysis

The data of the foregoing table can be diagrammically represented as follows: Interpretation: This shows that although the mutual funds market is on the
rise yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased.

Preference of Investment
Only Shares-75 % Mutual Funds-16% Bonds-7% Derivative s--2%

Awareness of online share trading

Yes -- 91%

No-- 9%

Interpretation: With the increase in cyber education, the awareness towards online share trading has increased by leaps and bounds. This awareness is expected to increase further with the increase in Internet education. This online share trading is now a day very much popular, so our company try to increase the facilities of online trading.

Awareness of Kotak Securities as a Brand

Yes-75%

No-- 25%

Interpretation: This pie chart shows that kotak security has a reasonable amount of Brand
awareness in terms of a premier Retail stock broking company. The company to increase its market share over its competitors should further leverage this brand image through various promotional strategies and there after sales services.

Awareness of kotak securitiae's facilities

Yes--14%

No-- 86%

Interpretation: Although there is sufficiently high brand equity among the target audience
yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that, the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness.

Satisfaction level among Customers with there current brokers

Yes 92%

No- 8%

Interpretation: This pie chart accentuates the fact that Strategic marketing, today, has gone
beyond only meeting Sales targets and generating profit volumes. It shows that all the competitors are striving hard not only to woo the customers but also to make them Brand loyal by generating customer satisfaction.

Frequency of Trading

Daily- 9% Weekly27% Monthly53% Yearly-11%

Interpretation: In spite of the huge returns that the share market promises, we see that there
is still a dearth of active traders and investors. This is because of the non transparent structure of the Indian share market and the skepticism of the target audience that is generated by the volatility of the stock market. It requires efficient bureaucratic intervention on the part of the Government.

CHAPTER-4 FINDINGS Industry insight of the broking firms especially in the eastern India
The Indian broking industry is one of the oldest trading industries that have been round even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth.

Terminals*

Almost 52% of the terminals are based in the Western region of India, followed by 25% in the North, 13% in the South and 10% in the East. Mumbai has got the maximum representation from the West, Chennai from the South, New Delhi from the North and Kolkata from the East.

Mumbai also has got the maximum representation in having the highest number of terminals. 40% terminals are located in Mumbai while 12% are from Delhi, 8% from Ahmadabad, 7% from Kolkata, 4% from Chennai and 29% are others from other cities in India.

Branches & Sub-Brokers .

The maximum concentration of branches is in the North, with as many as 40% of all branches located there, followed by the Western region, with 31% branches. Around 24% branches are located in the South and East constitutes for 5% of the total branches.

In case of sub-brokers, almost 55% of them are based in the South. West and North follow, with 30% and 11% sub-brokers respectively, whereas East has around 4% of total subbrokers.

Market penetration status of Kotak Securities Limited Highlights

Total number of sub-broker franchisee in West Bengal: 42 Total number of branches in West Bengal:16 Market in Kolkata is saturated

 Kotak Securities is well established in Kolkata & Haldia Sub-broker franchisee at Haldia is the best performing sub-broker for Kotak Securities in India

While working on sub-broker franchisee acquisition the whole area of West Bengal was divided into regions. In each region potential places were indentified where Kotak Securities does not have a presence.

From the graph we can see that Kotak Securities does not have any presence at Bankura, Malda, and Cochbihar. There exists a huge potential at Bardhaman district especially Durgapur, Nadia, East Midnapur, Hoogly as is evident from the graph. It is worthy to mention here that 67.5 % of presence at Kolkata does not mean that 32.5% of Kolkata is uncovered. It only indicates that Kotak Securities is yet to set up a sub-broker franchisee at these locations which it thinks is potential places. For example, Kotak Securities is trying to setup its sub-broker franchisee at 13 more locations at Kolkata, but that does not necessarily mean it covers 100% of Kolkata. During my internship at Kotak Securities, while working in a team of five people, we have been able to initiate the opening of sub-broker franchisee at the following places:

Area- New Franchisee Chandannagar Bagnan Rajhati, near

No. of Franchis ee 2 1 1

Arambagh Kanchrapara Chapadanga Baguiati Malda Rishra Shyamnagar

1 1 1 1 1 1

The documentation process of six forms submitted for setting up the sub-broker franchisee is complete and they are under various stages of processing. The location code for these places is expected by the end of July. The SEBI license is expected in the month August or September The documentation process of two forms is 95% complete and only waiting for some proper documents to be submitted by the concerned to-be sub-broker.

Why a base capital of three lakhs is charged by Kotak Securities?

The base capital of three lakhs as security deposit is high compared to other players in the market. According to Kotak Securities this amount is justified as it helps to build a long term relationship. The security deposit helps a sub-broker to overcome some unforeseen situations. For example, the most common problem that is faced by a sub-broker it that a client fails to deposit the money he has traded in credit within the T+2 settlement days. The outstanding amount is deducted from the security deposit of the sub-broker while the outstanding shares are squared off. Suppose in an unforeseen situation, if five or more clients fail to pay up the money provided as margin, the sub-broker will be in deep trouble if the security money is low. Moreover, Kotak Securities is charging three lakhs upfront. Initially a sum of Rs 25,000/- or more needs to be deposited. The remaining money will be deducted from the sub-brokers payout at 20%. Or else if the sub-broker so wishes, he can provide a cheque every three months or six months to clear the remaining amount. The security deposit is generally is kept in liquid mutual fund which earns a annual interest of 5% to 7%. The interest is credited every year to the sub-brokers account. If the sub-broker wishes to terminate his/her association with Kotak Securities, the security deposit of three lakhs is refunded to his account. So, instead of keeping a small amount as base capital, Kotak Securities starts with asmall amount which increases as the business volume increases.

Financial Markets*

The financial markets have been classified as cash market, derivatives market, debt market and commodities market. Cash market, also known as spot market, is the most sought after amongst investors. Majority of the broking firms are dealing in the cash market, followed by derivative and commodities

27% firms are dealing only in the cash market, whereas 35% are into cash and derivatives. Almost 20% firms trade in cash, derivatives and commodities market. Firms that are into cash, derivatives and debt are 7%. On the other hand, firms into cash and commodities are 3%, cash & debt market and commodities alone are 2%. 4% firms trade in all the markets. In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both exchanges. In the equity derivative market, 48% of the sampled broking houses are members of NSE and 7% trade at BSE, while 45% of the sample operates in both stock exchanges. Around 43% of the broking houses operating in the debt market, trade at both exchanges with 31% and 26% firms uniquely at NSE and BSE

CHAPTER-5

RECOMMENDATION:
In our view, this can be done through simultaneous adaptation of the following eight measures: The company is required to spend more money on publicity and advertisement. Kotak should try to decrease the base capital(3lacks) like the other companies which exist in the market The company should resort to the advertisement which has to be different from

its competitors due to severe competition in order to get identified by the people.
The companys focus should be on the online training to every new business

associate but not through the vendor. They must improve online training system with a view to produce an effective pool of business associates.
The company must try to maintain a healthy relations with the sub brokers or the

franchisee holders for the smooth growth of the company

The company should be focusing more on people possessing wide network.

The company should try to spread more geographic location of West Bengal
The company try to avoid the charges of hidden cost from the customer

If these measures are undertaken with the positive mindset, there would be a great possibility for the concerned company to enhance its business and maintain the leading position in the stock market of India.

CHAPTER-6 CONCLUSION:
The Indian stock market witnesses both the good as well as the bad time. Most of the people keep them away from bad times that lead to low liquidity in the markets. But for the rest who want to remain in the markets without losing much of their capital. On the basis of the study it is found that Kotak security Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. Kotak security Ltd. provides the facility of Trade tiger as well as relationship manager facility for encouragement and protects the interest of the investors. It also provides the information through the internet and mobile alerts that what IPOs are coming in the market and it also provides its research on the future prospect of the IPO. Study also concludes that people are not much aware of commodity market and while its going to be biggest market in India. The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market. To improve customer base company has to apply strategies which can adjust with changing business environment. With global business facing recession the company has to maintain stronger relationship with the customer so that they can build a feeling of trust in the minds of the investors. This will help the economy to regain its momentum and also will build a better image of the company. In this context marketing plays an important role.

CHAPTER-7

BIBLIOGRAPHY

BERI G C, MARKETING RESEARCH, TATA McGraw-HILL PUBLISHING COMPANY LIMITED, NEW DELHI KOTHARI C.R, RESEARCH METHODOLOGY METHODS AND TECHNIQUES NEWDELI, NEW AGE INTERNATIONAL (P) LIMITED, PUBLISHER. PHILIP KOTLER, MARKETING MANAGEMENT ELEVENTH EDITION NEW DELHI, PRENTICE- HALL OF INDIA PRIVATE LIMITED

PARTICIPANT WORK BOOK 100 HOURS TRAINING

WWW. KOTAK LIFE INSURANCE. COM WWW. KOTAK. COM www.kotak securitt.com

www.religare.com
www.indiabulls.com www.share khan.com

QUESTIONNAIRE

MARKET RESEARCH SURVEY

I.

How long are you in the mutual fund business _________

II. Is your current job / profession / business satisfying to you Y__ N__

both financially and personally?

III. Do you want to expand your business in any other financial sector Y__ N__

IV. V. VI. VII. VIII. IX.

Are you looking to expand your business in stock market as a sub broker Y__ N__ Do you have DMAT a/c? Are you satisfied with your current broker? In which sector do you want to invest 1.Mutual fund [ ]4.Only share[ ].(Tick only which you prefer) Do u aware about the brand Kotak? Do you know the share trading facilities of Kotak securities? ]2.Bond [ Y__ N__ Y__ N__ ]3.Derivatives[ Y__N__ Y__N__

Kotak Securities represents a premiere corporate house in the financial sector. We are looking for people who are interested in working as a sub broker in his home town. The company will facilitate the process by complete training and infrastructure support. If you are interested to know further, kindly furnish the details below:

Name ____________________________________ Tel / Mobile No ___________________________

Best time to reach you ______________________

THANK YOU