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A Report submitted in partial fulfillment of the requirements for the award of the degree of BACHELO OF BUSINESS ADMINISTRATION FROM

Submitted By: MANA RAM B.B.A. (SEM-V) Submitted To: THE CO-ORDINATOR



I take this opportunity to express my profound gratitude and deep regards to my guide Professor Mrs. Mridula Chanda for his exemplary guidance, monitoring and constant encouragement throughout the course of this thesis. The blessing, help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark.

I also take this opportunity to express a deep sense of gratitude to MALAY JOSHI, General Manager, SURESH RATHI SECURITIES, for his cordial support, valuable information and guidance, which helped me in completing this task through various stages.

I am obliged to staff members of SURESH RATHI SECURITIES, for the valuable information provided by them in their respective fields. I am grateful for their cooperation during the period of my assignment.

Lastly, I thank almighty, my parents, brother, sisters and friends for their constant encouragement without which this assignment would not be possible.

MANARAM Enrolment no.10/7619


Education becomes more meaningful when its theoretical aspects are combined with practical experience. These provide an opportunity to the students to improve their understanding of the studies. Project report is an integrated part of BBA course. The emphasis in the course is providing the student an insight into Indian share market Scenario. The project is designed to enhance the knowledge. The education of future manager would be incomplete without exposure to working in an organization. Therefore a Project Report is essential academic requirement for all the students.














Share Brokers are persons or firms who execute buy/sell order on behalf of the investors and charge a commission for rendering the service. They are one of the most important constituent of the whole share dealing process. Any investor has to place an order through a recognized share broker of a stock exchange. Share Brokers are registered agents of stock exchange who act as Intermediary between buyers and sellers of shares and in return charge a commission for doing the same. They buy or sell share on behalf of their clients. In a stock exchange it is not permissible for a general customer to trade shares directly with another customer. Here the contracts are standardized ones and the customers are required to register themselves with the stock exchange through The share broker 5

members. The actual transaction is done not between the customers but between the registered members of the exchange. The transaction between the share broker members of a stock exchange takes place on a net basis where the stock exchange itself acts as the counter-party to every transactions. The Share Brokers also provide many value added service to its customers such as :-

They give advice to their clients about which shares to buy, the price around which to buy, and the target price around which the share can be sold time frame of holding of the share Portfolio Management Service The share brokers take a lump sum amount from their customers and trade with that money in their own account by the help of a knowledgeable and experienced fund manager. The return rate in this case is generally much higher because the fund is being managed by an experienced fund manager. Thus, the commission charged by the broker is generally higher because here the whole headache of investing, making 6

profit, and employing broker only.

a fund manager is borne by the share






(a) Offline Share Trading
In this form of trading the customer either goes to the share broker's place and sits before the share trading terminal and asks the dealer to place orders in his account or rings the share broker, asks the share quotes and other relevant information , and accordingly places orders over the phone.

(b) Online Share Trading
The client could avail the share market and could place his order on his own from any place he wants, provided he has a computer with an Internet connection. Share Brokers are of various types such as :-

1. Floor Brokers
These share brokers place and execute orders on behalf of their clients are not allowed to the trading area) on the floor of the exchange.

2. Upstairs Brokers
These brokers locate counterparties (out of their known traders) and negotiate trade terms with them on behalf of their clients They then execute the transaction at a rate better than the market rate and also at a less time

3. Discount Brokers


These share brokers charge less commission than the full service brokers but at the same time doesn’t give any investment advice to their clients.

4. Value Brokers
These are a type of discount brokers who charge commissions at a Percentage rate of the currency value of each transaction. This is typically helpful for the small traders who generally trade in small quantities and generally invest in low-priced shares because the brokerage costing is relatively less. Thus the share brokers are the essential and inevita


ICRA rated entities engaged in broking related business operations as on July 20, 2011 S.No. company Rating 1 Anand Rathi Shares and Stock Brokers Ltd LA-A2+ 2 Anand Rathi Commodities Limited A2+(SO)

3 Angel Global Capital Pvt Ltd (formerly known as Angel Infinn Pvt Ltd) A1 4 Bonanza Commodity Brokers Pvt Ltd A2 5 6 7 8 9 Bonanza Portfolio Limited CD Integrated Services Ltd Crosseas Capital Services Pvt. Ltd Dalmia Securities Private Limited Dimensional Seurities Private Limited A2 A3+ A4+ A1 A3 A2 A2 A2+

10 East India Securities Limited 11 Edelweiss Capital Limited 12 Emkay Global Financial Services Ltd

13 Gandhi Securities and Investment Private Limited A3 14 Gupta Equities Private Limited 15 HDFC Securities Limited 16 17 18 19 20 IDBI Capital Market Services Ltd IDFC-SSKI Securities Private Limited IL&FS Securities Services Ltd India Infoline Limited Infinity.Com Financial Securities Limited 9 A4+ A1+ A1+ A1+ A1+ A1+ A2

21 22 23

Intime Spectrum Securities Limited Inventure Growth & Securities Limited Investsmart Financial Services Ltd

A3 A3+ A3+ A4+ A3+ A1+ A1+ A2+ A1+ A3+ A4 A2+ A3 A2 A2 A4+ A4+ A1+ A1 A1+ A1

24 Jhaveri Securities Ltd 25 26 27 28 29 30 31 Joindre Capital Services Pvt. Ltd Kantilal Chhaganlal Securities Pvt Ltd Karvy Stock Broking Limited KIFS Securities Limited Kotak Commodities Services Limited Master Capital Services Limited MCS Trading Company Private Limited

32 Nirmal Bang Securities Pvt Ltd 33 34 Pashupati Capital Services Private Limited Pioneer Investcorp Limited

35 Prabhudas Lilladher Financial Services Pvt Ltd 36 Pragya Securities Services Ltd 37 Progressive Share Brokers Pvt. Ltd

38 Quant Commodities Private Limited 39 40 41 Real Growth Securities Pvt Ltd Reliance Securities Ltd Religare Securities Limited




To be India's first Multinational services solution across the globe providing complete financial


Providing integrated financial care driven by the relationship of trust and confidence

Contact Person : Mr. Praveen Chitlangia Mahesh Hostel Complex, Chopasani Road,


Opp. Bombay Motors, Jodhpur

Group has track record of over 30 years in service to the investors.

Suresh Rathi Securities Pvt. Ltd Suresh Rathi Commodities Pvt. Ltd Suresh Rathi Finance Pvt. Ltd Suresh Rathi & Co.
Suresh Rathi Securities one of leading broking firm in the country offers wide rang of financial service wealth management solutions or retail as well as high net individuals. We are also into institutional broking Suresh Rathi group has membership of BSE, NSE,USE, MCX.NCDCEX, NSEL, NSE Currency Derivative’s We are Depository Participant of CDSL. We have our network spread over 50 cities with 140 Business associates covering states Rajasthan, Maharastra, Gujarat, Assam and Chhattidgarh

BSE Disclaimer
SEBI Registration No: BSE : INB 010976334 NSE :INB 230976335 F&O : INB 230976335 DERV : 010976334 CDSL : IN-DP-CDSL-22-99 Currency Future : INB230976335 MF ARN : 20569 FMC - MCX – MCX | TCM | CORP | 01541 NCDEX – NCDEX | TCM | CORP | 0867.


 Demat Accounts  Mutual Funds  Derivatives  Commodities  Bonds  Trading Account  Insurance


The Indian stock market has finally come of age. Riding each successive wave and trough is Suresh Rathi Securities, one of the fastest growing domestic brokerage houses in the country today. SRSPL has already managed to carve a niche for itself, and it’s easy to see why. With over 125 Locations in more than 40 cities, we offer you ease and convenience in opening Equities account with us. State-of-the-art dealing infrastructure geared to rigorous compliance and audit checks, integrity aligned with professionalism, a complete understanding of each client’s psyche to ensure the most suitable advice, insightful and in-depth Depository… these are only some of the key drivers that have fuelled our fast-paced growth. We have provided facility of Online Back Office for your access. You can view your ledgers, contract notes and other financial information through our website. Known for its Ethical Business Practices.

Suresh Rathi Securities Private Limited covers wide & in-depth research of various sectors & scraps of the Indian Capital Market and manages PMS with a team of experience fund managers. Depending on individual needs and risk taking abilities, our PMS builds a portfolio which consists of a blend of quality bluechip and growth stocks ensuring a balanced portfolio with different risk profile. The portfolios will have quality stocks from sectors & themes with a medium to long term growth potential.

Registered with Central Depository Service Ltd the depository arm of Suresh Rathi offers various Depository Services to its clients. State of the art technology ensures that our Depository is always convenient, dependable, and secure for any entity involved with the depository. Our customer-centric account schemes have been designed keeping in mind the investment psyche of our clients. Your DP account with us takes care of your Depository needs like dematerialization, dematerialization and pledging of shares. 14

Clients are also offered with ‘easi’ which allows them to access the demat account through internet. Information regarding recent transactions, holdings are also available through ‘easi’. SMS alert facility ‘SMART’ is also available where in that client can received the SMS for IPO shares credit and other debit entries in his demat account IP

An IPO has the potential to make you a good return in a short period of time. It is standard practice for IPOs to be priced below “fair market value”, so the stock rises in value immediately upon issue, clearing a healthy profit for initial shareholders. IPO’s at SRSPL? Easy access to our Business locations with over 120 Business locations spread across over the India. Research and advice on new issues.. Regular updates on ongoing and forthcoming issues to investors.

Suresh Rathi offers personalized mutual fund investment advice tailored to your investment needs through a disciplined investment process. We provide in-depth research to help you meet your financial goals. We take care of the most important task of selecting the best options out of whole bunch of mutual fund schemes for the safety and growth of your hard earned money. You not only get unbiased investment advice, we also make sure that you receive your dividends and account statements on time, give an update on your portfolio and advise you if your portfolio needs reshuffling. We have a dedicated team looking into the Mutual Fund product analysis and we use sophisticated tools to provide reports to clients. Mutual Fund Desk offers following services to the clients. NFO Reports and Recommendation Investment Planning Existing Portfolio Restructuring Investment Monitoring Weekly Statement on Portfolio Performance

The finance minister gave a tax bonanza to individuals in budget of February 2010. A new section 80CCF was introduced to Income Tax Act, 1961. Under this section notified infrastructure bonds will give 15

tax exemption up to Rs 20,000. Investors who have not taken benefit of section 80CCF can invest in such bonds and save taxes approx. up to Rs 6000 in taxes. The Bond can be bought both in Physical & DMAT form. Buying the in DMAT form is a better option as it’s hassle free. Interest Frequency: Annual or Cumulative. Features of Bond: Minimum Investment Two Bonds in multiple of one bond thereafter, maximum no limit. Deduction U/S 80CCF of Rs 20000.00 addition to Rs 100000.00 in 80C Interest rate 8.00 – 9.00% Buy back facility available after 5 years.

Each one of us is unique. Yet many of us share the same concerns over the course of our lives. Life insurance can be an important part of your personal safety net, especially if you have financial dependents. Life insurance helps Provide financial assurance & security for your dependents & loved ones. It is an important part of the financial planning bouquet for all individuals & families. Life insurance products offer comprehensive financial solutions which besides offering financial security also provide opportunity for saving, investment & tax planning. Life with its various challenges gives you opportunities to tackle them too. One of them is getting insurance. Insurance products help in

At Suresh Rathi Securities Pvt Ltd, we have a dedicated team of experienced and professionals on the desk to cater services to our esteemed institutions. Our experts for institutional desk are also strongly backed by our research analyst covering multiple sectors and come out with new ideas across different segment of companies. We frequently come out with reports on industry research and company research in large cap as well mid cap segment. This strong backing by our research department helps to cater services to our institutions by way of giving them detailed view on various sectors, companies and markets.


The past twenty five years have witnessed a process of accelerating change in the world’s financial markets. Driven by an interacting process of liberalization and innovation, regulations have been removed, New product have emerged and old boundaries between financial intermediaries have been blurred. At the same time, growth of capital markets has posed new challenges to economic and financial stability. The role of Indian capital market which is to provide long term resources required by industries for investment has observed buoyancy in share market with the liberalization of industries and fiscal policies of the government. Finance, the lie blood of industry is mobilized especially through New Issue Market or Primary Market. The primary market, also called the new issue market, is the market for issuing new securities. Many companies, especially small and medium scale, enter the primary market to raise money from the public to expand their businesses. They sell their securities to the public through an initial public offering. The securities can be directly bought from the shareholders, which is not the case for the secondary market. The primary market is a market for new capitals that will be traded over a longer period. In the primary market, securities are issued on an exchange basis. The under writers, that is, the investment banks, play an important role in this market: they set the initial price range for a particular share and then supervise the selling of that share. Investors can obtain news of upcoming shares only on the primary market. The issuing firm collects money, which is then used to finance its operations or expand business, by selling its shares. Before selling a security on the primary market, the firm must fulfill all the requirements


regarding the exchange .After trading in the primary market the security will then enter the secondary market, where numerous trades happen every day. The primary market accelerates the process of capital formation in a country's economy. The primary market categorically excludes several other new long-term finance sources, such as loans from financial institutions. Many companies have entered the primary market to earn profit by converting its capital, which is basically a private capital, into a public one, releasing securities to the public.

This phenol Mena is known as" public issue" or "going public."There are three methods though which securities can be issued on the primary market: rights issue, Initial Public Offer (IPO), and preferential issue. A company's new offering is placed on the primary market through an initial public offer.






The role of Indian capital market which is to provide long term resources required by industries for investment has observed buoyancy in share market with the liberalization of industries and fiscal policies of the government. Finance, the lie blood of industry is mobilized especially through New Issue Market or Primary Market.

PRIMARY MARKET MEANING:New Issues Market is that part of capital market where dealing exchanges takes the boundaries de-marketing the financial services are fast eroding. Thanks to the innovations in the financial services, the movement towards made by existing companies are known as further issues. The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called under writing. In the case of a new stock issue, this sale is an initial public offering (IPO ) .Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus .Mutual funds are seemingly the easiest and the least stressful way to invest in the stock market. Quiet a large amount of money has been invested in mutual funds during the past few years. Any investor would like to invest in a reputed Mutual Fund organization. UTI is one such organization that provides a better overview of the Mutual Fund industry. Understanding the attitude of investors on their investment would help the company to increase their profits. 19

In UTI they believe that the investor’s attitude would result in profits.

• This is the market for new long term equity capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called the new issue market (NIM). In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issues new security certificates to the investors. Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business. The primary market performs the crucial facilitating capital formation in the economy. function of

• •

• •

The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as "going public." The financial assets sold can only be redeemed by the original holder.


PRIMARY MARKET:1.Market in which buyers and sellers negotiate and transact business directly, without any intermediary such as resellers.2.Financial market in which newly issued securities are offered to the public.

Actual or conceptual place in commercial world where forces of demand and supply operate, and where buyers and sellers interact to trade goods, services, or contracts or instruments, for money or barter. Markets include mechanisms or means for. (1) Determining price of the traded item, (2) Communicating the price information, (3) Facilitating deals and transactions, and (4) Effecting distribution. Market for a particular item is made up of existing and potential customers who need it and have the ability and willingness to pay for it. All markets, ultimately, consist of people also called marketplace.


1. Party which acquires, or agrees to acquire, ownership or benefit or usage in exchange for money or other consideration under a contract of sale also called purchaser. 2. Professional purchaser specializing in a specific group of materials, goods, or services, and experienced in market analysis, purchase negotiations, bulk buying, and delivery coordination.

Entity that makes, or offers or contracts to make, a sale to an actual or potential buyer. Also called vendor, particularly the one selling a real property.

1. General:
Bargaining (give and take) process between two or more parties (each with its own aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict.

2. Banking:
Accepting or trading a negotiable instrument.

3. Contracting:
Use of any method to award a contract other than sealed bidding.

4. Trading:
Process by which a negotiable instrument is transferred from one party (transferor) to another (transferee) by endorsement or delivery. The transferee takes the instrument in good faith, for value, and without notice of any defect in the title of the transferor, and obtains an indefeasible title. Business Economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth. Every business requires some form of investment 22

and a sufficient number of customers to whom its output can be sold at profit on a consistent basis

The interplay of the Asian crisis and other factors affecting commodity markets in recent months comes more into focus in a review of developments in specific primary commodity markets. Price decreases in excess of 10 percent over the period June 1997 through January 1998 that were in some way associated with the effects of weaker demand from Asian countries were recorded for nearly one-third of the commodities included in the IMF's commodity price index. The price declines for five commodities copper, nickel, natural rubber, wool, and hides -appear to be associated mainly with the Asian crisis. The Asian crisis also played an important role, but probably not the predominant role, in the price declines of four other commodities - crude petroleum, timber, zinc, and lead. For certain other commodities, such as aluminum, iron ore, meat, maize, and soybean meal, ...

There are several problems of the Indian primary market. But these problems can be overcome too by mere application of simple rules of these remedies have been suggested by experts. Economists attribute these problems to various factors so me of which are highlighted below. The function of the primary market with respect to the market for IPO or initial public offering is to see that various companies are provided with opportunities for the acquisition of growth capital. The primary market has withstood the tests of time in appropriate allotment of shares: There are many existing problems of the Indian primary market. Some of the instances include the inappropriate assignment of shares to the public as was the case of the ONGC public issues. Due to this there was a lot of confusion among the investors.


Another problem lies in the fact that these days, IPOs are increasingly being with drawn. An expert has rightly said that there is no point expressing disappointment in the withdrawal of the IPOs because it may be taken not as an indication of failure of the company and hence the primary market but it may be considered as a disagreement of price between the seller and the buyer. The primary markets are undulating the world over. The incidents occurring in the primary markets are reflections of what is actually happening in the secondary markets. It was fathomed that the IPOs, which were lately taken back had very "aggressive" price bands. The price bands could have been aligned as per existing conditions of the market. The lead managers responsible for the IPOs may also be blamed for the catastrophe. Few are of the opinion that lack of judgment may have led to the withdrawal. "Investors fatigue" is being accounted for in the withdrawals."Cornering" of shares: Recently, there was an instance when investors "cornered" shares, which were to be alloted to the public. The investor was actually a big investor who camouflaged as a small investor cornered many shares. The most important factor shaping in today's global economy is the process of globalization. Indian companies are moving in search of low-cast markets, technology is driving growth in production and competition is becoming more intense. A second factor is the fastest growth in private capital flows, mainly short-term flows by banks and financial institutions, portfolio flows by mutual funds and pension funds and foreign direct investment into India. A third factor is the increasing share of India and other emerging market economies in world trade. The outburst in communication technology has led to greater integration of Indian financial markets across the world. The impact of these changes could be felt from the extremely buoyant activity in Indian stock markets. A number of foreign financial service providers have entered into the Indian financial market like Morgan Stanley, Templeton, and Goldman Sachs. Currently FII investment is at $ 6.5 Billion compared to $ 2 Billion in 2001. The stock market is booming with Sensex hovering around 16000-17000. SEBI has put in place appropriate guidelines and controls to regulate the markets in tune with the changing environment and attendant risks. All this is happening because of largea mounts of investment in the country.


People often invest in various asset classes to:* To beat Inflation* To fund future needs* To meet contingencies* To maintain same standard of living after retirement All these factors matters a lot to the investors and the mutual fund route is one way through which people can meet these needs. Free economies are generally characterized to have financial markets to serve as channels through which the savings of the society are made available to business enter prises. Such financial markets may be classified as (1) Capital market, and (2)Money market where the former refers to the market mechanism which envisages institutional arrangements for marketing of long term and equity claims such as equity shares, preference shares, debentures, bonds, etc. while the latter refers to the market mechanism which concerns with floating of liquid funds and their short term uses in trade and industry through the banking system The capital market which concerns with demand and supply of long term funds is again dichotomized as primary or new issue market and secondary or stock market where the former deals with new securities offered to the investing pubic, while the latter deals with the existing securities. The joint stock companies raise funds from new issue markets but such new issue are also listed with stock markets which provide them a regular market, ensure regular valuation of and stability in prices of such securities, assure safety in dealings of the securities, channelize funds in the desired direction and ensure wider ownership of the securities. The stock exchanges are, thus, primarily concerned with providing marketability to the existing securities but these also activate the new issue markets which serve as primary source of funds to the industrial enterprises for their new projects or for expansion, diversification or modernization of existing ones. Both the primary and the secondary markets are integral parts of the capital market and are susceptible to common influences. Public responses are generally encouraging in the new issue market when there is boom in the stock market and vice versa. Similarly, the secondary market is very sensitive to the impact of development in the country and the same is transmitted to the new issue market. New issues include ‘initial issues’ as well as ‘further issue’ where the former refers to 25

the securities issued buy the companies for the first time either on in corporation or on conversion from private to public company while the latter refers to the new issues floated by existing companies which needed funds for expansion/ diversification/modernization. The initial and further issues may be combined under new money issue which refer to the issues for mobilization of new money for the corporate enterprises and there can be no new money issue which include bonus/capitalization issues and exchange issues where the former results from the capitalization to retained earnings enabling existing shareholders get new shares without paying and the latter results from conversion of private company into public, amalgamation, merger and equity dilution by FERA companies

A corporate may raise capital in the primary market by way of an initial public offer, rights issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is the largest source of funds with long or indefinite maturity for the company.

IPO Stocks:
When the company wants to release their shares into the market for the first time, they will invite the public to participate in an exercise called the IPO this is when you see people filling in application forms and buying bank drafts to purchase the company's shares countries do. Some call it" applying for new shares". Prices when applying for new shares are always much cheaper than what it should be listed in the market later. However, if it is a very attractive company, there will be more people who will participate in the IPO exercise and the draw-lots method will be used to determine who will be allocated the shares. Then, after the first stage, the company's shares will be listed in the stock market. That is when if you have managed to purchase the shares during the IPO offering, you Will be able to sell them into the market to buyers who want a part of these shares. Buying stocks through applying for IPO shares in general is always a safer 26

The registrars sometimes, also called the ‘issue house’ are responsible normally for receiving the share applications from the various collection centers through controlling branches of bankers to the issue, analyzing them, recommending the basis of allotment in consultation with the managers to the regional stock exchange for approval arranging for dispatch of allotment letters and preparing the register of members, etc. their job normally starts with the opening of the subscription list, and continues till the share certificates are dispatched, and register of members along with other related registers/details are handed over to the company. Sometimes, the registrars to issue continue their association with the company in the role of share transfer agents, even after the issue is completed.

The underwriters are the people who actually ensure that the company is able to raise the capital issued by it for a commission charged by them. They make a commitment to get the issue subscribed either by others or themselves. Usually the underwriters can be divided into two categories, namely, financial institutions and banks, on the one hand, and broker underwriters and approved investment companies/trust, on the other.

These are the people who actually bring the prospective investors and the company together. It may not be an exaggeration to state that the success or failure of a public issue depends to large extent on the reaction of the brokers. Generally, they are the members of recognized stock exchanges, with a view to providing better and professional services to investing public and to promote development of capital market on healthy lines, the government has since allowed multiple membership to members of stock exchanges and accorded recognition to corporate entities and the financial institution sincluding subsidiaries of the banks.



These are the commercial banks, which will receive the application money along with the share application forms from the prospective investors. Depending upon the size of the issue, at least 4 or 5 banks are designated as bankers to the issue. Different branches of these banks are named at various locations where such application money is accepted. These collecting branches send the application forms and the money received by them to specified branch, where the details of the application are consolidated. Such specified branch of the banker to the issue is called ‘controlling branch’/ the controlling branch is usually selected in the city where the managers to the issue/ registrars to the issue /registered office of the company is situated. However, it is not necessary that controlling branch should be at a place where the managers to the issue/ registrars to the issue/registered office of the company is situated. Publicity and advertising agents Public issue is an effort to motivate and persuade members of the public to invest in the shares of the company. It is, therefore, essential that the general public is made aware of the company, its activities, its plans for future, etc. it is of vital importance that publicity is given before the public issue by giving newspaper and TV advertisements. Press releases, press conference, leaflets and brochures, hoardings and posters and even audio visual shows are the usual media of publicity used for public issue. There are some advertising agencies, which specialize in financial advertising and publicity campaign for public issues.

Financial institutions
Term lending financial institutions at the time of sanctioning underwriting support loans to the company, usually stipulate that the draft of the prospectus and also the proposed program for public issue is approved by them. The three principal all India financial institutions are the IDBI, IFCI and ICICI. Even when all the three institutions jointly finance a project under their participating finance scheme, one of them is generally chosen as the lead financials institution which acts on behalf of the other two. Hence, it is generally adequate if the company obtains the necessary approval from the regional office of the lead institution only. In 28

some cases where other institutions like the LIC, GIC, UTI, etc. have also given financial assistance, it might be necessary to seek separate approvals from them, if insisted for. But generally an advance copy of the draft prospectus is sent to them with a request forward their comments, if any, direct to lead institution.

Other Agencies
In addition, the company will also have a interaction with other agencies like auditors, legal advisors, taxation or technical experts whose names or statements are mentioned or quoted in the prospectus.

Government/Statutory Agencies
Besides the various agencies which are directly connected with a public issue whose efforts will have to be coordinated by the company, there are some statutory/government agencies that are connected with public issue. These are: (1) .SEBI which provides guidelines for public issue, (2). Registrar of the companies with whom the prospectus has to the filed and registered before the public issue under section 60 of the companies act, 1956, (3) .Reserve bank of India from whom necessary permission has to be obtained for non resident investment, of any in the company, (4). The stock exchanges where the company’s share are to be listed (5). Industrial licensing authorities for necessary industrial license to be obtained for the project or other statutory bodies like DGTD etc. with whom the capacity of the project has to be registered, and (6) Pollution control authorities and other local authorities from whom the clearance may have to be obtained and such clearance is referred to in the prospectus

SEBI guidelines defines Book Building as "a process undertaken by which a demand for the securities proposed to be issued by a body 29

corporate is elicited and built-up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document" .Book Building is basically a process used in Initial Public Offer for efficient price discovery. It is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The offer price is determined after the bid closing date As per SEBI guidelines, an issuer company can issue securities to the public though prospectus in the following manner:1. 100% of the net offer to the public through book building process2.75% of the net offer to the public through book building process and 25% at the price determined through book building. The Fixed Price portion is conducted like a normal public issue after the Book Built portion, during which the issue price is determined. The concept of Book Building is relatively new in India. However it is a common practice in most developed countries.

In Book Building securities are offered at prices above or equal to the floor prices, whereas securities are offered at a fixed price in case of a public issue. In case of Book Building, the demand can be known everyday as the book is built. But in case of the public issue the demand is known at the close of the issue.

The book building process:• • • The company approaches lead manager for IPO The company and lead manager suggest a price band at which shares are to be offered Application are invited 30

• • •

Based on demand for the shares a certain price is established by promoters and the lead manger The allotment is made on the basis of the market clearance price Post issue the price stabilization is undertaken by the lead manag






SEBI has announced a series of measures to encourage retail participation in the primary market. This is perhaps the first instance where the market regulator has got the timing of reform measures spot on. Coming close on the heels of the hugely successful Maruti IPO, these measures should arouse retail interest in some of the big public offers expected in the near future — BPCL, Idea Cellular, TCS and Nalco. The principle of these changes seems to be that greater participation of retail investors in the primary market is possible only when they have a reasonable chance of making gains, certainly not the case earlier. To enable such participation, Sebi has adopted a two-fold approach. First, the market watchdog has made sure that retail investors actually get an allotment in book-built IPOs. Hence, the 10%increase in the allocation for retail investors. But more significant is the change in the

People who run the business. Hence, it’s important to focus on the credentials of the promoter and key management figures. Invest in companies with a proven management track record, since it’s the management philosophy and ability that determines attitude towards minority shareholders and the likely success of a venture. For instance, the promoters of Indraprastha gas and Maruti have proven management credentials. On the other hand, there’s a Tips industry, where there were allegations against one to the promoters in the Gulshan Kumar murder case such issues are best avoided. 31

During an IPO, the underwriter makes the company’s key shareholders sign a lock-in agreement. The agreement is legally binding on the promoters and other key shareholders, prohibiting them from selling their shares for a specified period of time. The inevitable supply overhang when these previously restricted investors are permitted to sell shares can put downward pressure on the stock price. For example, in Patnicomputers, the lock in period for key promoters is three years, but for general Atlantic, a foreign venture capital investor holding 28.3 percent of outstanding shares, the lock in period is 180 days from listing.

A good management and a sound business model count, but what matters most is performance. Check for consistency in revenue and profit growth and margins for at least three years before the IPO. Also, check if the company has an overly high debt equity ratio, or carries contingent liabilities, or has disputed tax claims, or faces litigation in short, factors bearing on the company’s operations and results.

This is the most relevant part of the offer document. Although the offer documents tailor made to sell the issue, the risk factors help you get a fair idea of the impact of such risks on the company’s operations. For example, in the case of Bhatia Tele venture the biggest risk came from regulations governing Indian telecom. Increased competition in cellular services, unrestricted competition in fixed line services and the decision to Allow fixed line operators to provide limited mobility using WLL were some of the risksat the time of the IPO.

In bull markets, price increases defy fundamentals, and companies are prone to capitalize on this sentiment to raise money. If you study the objects of the issue, you will be able to weed out the chaff. For example, if the money is being raised to repay loans or to 32

provide and exit option to existing investors investigate. If the business is doing well, the company should not need to raise fresh capital to repay its debt. How ever, proceeds of the issue going towards research, marketing, or capacity expansion paints a better picture. Companies like Bharti and Diva’s have used the funds raised to create infrastructure, which will drive growth for these companies in future. On the other hand, BAG films had earmarked 60 percent of he issue proceeds towards production to feature films, which exposes it to significant risks considering that film production is not a safe business, especially when the company does not have prior experience in it.

Often, the most critical bits of information on a company’s financial health are buried in the prospectus. Expect the red flags, in particular, to be lost in acres of fine print. For example, BAG films converted its 14 percent fully convertible debentures and accumulated interest into equity shares and issued them to UTI and IDBI at a 10 percent discount to the issue price at Rs. 9 per share. Rarely, some good news also gets buried and goes unnoticed. The discounts and royalty waivers by Suzuki to Maruti, for instance, will result in savings of over Rs.80crore, which will directly flow to the bottom line. This means Maruti’s Rs.146 crore net profits in 2003 will get a boost of 40 percent by just this little clause.

The pricing of the issue determines the demand for the stock. Although issues are usually attractively priced to attract investors, benchmarking it with valuations of comparable listed companies is a good idea. This will give you a sense o f the relative attractiveness of the issue and scope for appreciation. For valuation purposes, compare the company’s profit margins, capital efficiency, price earning ratio and other financial parameters with that of similar payers. For example, Patti scores high on the valuation front but low on performances parameters like operating margins.


Given that there is only one IPO for a company, they are often presented as not to be missed opportunity and much hype is created by lead managers and brokers to get as much attention as possible. Remember that it is their business to make clients buy and sell stocks. Our advice: don’t buy stocks just because they are making a debut in the market.

The lead manager’s track record is as important as that of the company’s. History suggests that the best merchant bankers usually undertake some due diligence before associating themselves with an issue. Since business fortunes of merchant bankers depend on their track record, there is more reason for them to handle only quality issues. Look for known lead managers like Kotak investment, SBI capital markets, DSP Merilllynch, Enam, JM Morgan. Be wary of smaller investment banks that may be willing to make any company public.


The research methodology for the project completed in two phases:

First Phase is the collection of Secondary Data:
This involves the collection of Secondary data using internet and internal sources for comparison of Online trading account of other Broking houses in the market like SBI Capital Securities, MOTILAL Oswal, Relegate and Reliance Money etc. This alsoinvolves talking to their executives regarding various features provided to the customer along with their Brokerage structure.

Second Phase is Collection of Primary Data and Analysis:
After collecting the Secondary data the next phase will be collection of primary data using Questionnaires. The questionnaire will be filled by around 100 people who will be mainly from Jodhpur. The sample will consist of people who are employed or work as free lancers dealing in investment options to know their financial requirements. Based on these requirements different investments will be informed to them for further perusal. The data collected will be then entered into MS-excel for analysis of the data collected

Non probability The non probability respondents have been researched by selecting the persons who do the stock trading. Those persons who do not trade in stocks have not been interviewed .


The research is primarily both exploratory and descriptive in nature. The sources of information are both primary and secondary. The secondary data has been taken by referring to various magazines, newspapers, internal sources and internet to get the figures required for the research purposes. The objective of the exploratory research is to gain insights and ideas. The objective of the descriptive research study is typically concerned with determining the frequency with which something occurs. A well structured questionnaire was prepared for the primary research and personal interviews were conducted to collect the responses of the target population

Sampling Technique
Initially, a rough draft was prepared a pilot study was done to check the accuracy of the Questionnaire and certain changes were done to prepare the final questionnaire to make it more judgmental.

Sampling Unit:The respondents who were asked to fill out the questionnaire in the National Capital Region are the sampling units. These respondents comprise of the persons dealing in stock trading. The people have been interviewed in the open market, in front of the companies, telephonic interviews and through other sources also.

Sample Size:40The sample size was restricted to only 180 respondents.

Sampling Area;The area of the research was Jodhpur 36

 The following are the other ancillary objectives:  To know about the perception of primary market.  To know about the risk of primary market.  To study about the regular return.  To study how to earn more liquidity.  To study the safety of investment.  To find out the important factor which do mostly affect to the customer  To develop a good strategy and process that improves the business of the organization  To be able to compare and analyze the various Financial Products  Business development and revenue generation


 The various limitations of the study are:  People were not willing to fill the entire questionnaire due to the less time available to them.  Some respondents might be hesitant to divulge personal and financial information which can affect the validity of all responses.  There is lack of awareness among people about investing in stock market. So the people who are aware of such things were found in specific areas for survey purposes.  Most people are comfortable with traditional system in small towns and like to trade from their respective brokers, hence not providing a true opinion of theirs.  Some of the respondents who did not do online trading were able to respond to only few questions.  The survey was done in the jodhpur region and may not truly express the opinion of whole country


DATA ANALYSIS For analyzing data, bar diagrams and pie charts have been used. Tables showing data over past years have also been included. ANALYSIS AND INTERPRETATION
Q.1 Which age group does you belong? Age group 18-30 30-45 Above 55 No. of Respondents 14 89 9


9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0

18-3 0 30-4 5 above-55

no of res podent

The above diagram shows that 14 respondents were from 18 to 30 age group, 89respondents were from 30 to 45 age group, 58 respondents were 45 to 55 age group and19 respondents were from above 55 age group.

2) Have you ever invested in stock market?

data yes no

no of respondents 150 30


yes no

The above diagram shows that 150 respondents said that they are invested in the stock market and 30 respondents said that they did not invest in the stock market

Q3) If yes, in which type of market? Types of market Primary no of respondent 100 41

Secondary both

30 20

1 0 0 8 0 6 0 4 0 2 0 0 prim a ry secondry both m a rk et

m a rk et


The above diagram depicts that 100 respondents said that they invest in primary market, 30 respondents said that they invest in secondary market and 20 respondents said that they invest in both markets i.e. primary as well as secondary.

Q4) What is the source of information regarding primary market? Source of Information News Broker TV Internet No. of Respondents 20 40 6 55 42

Any Other


60 50 40 30 20 10 0 news broker tv internet any other s ource of inform ation

Analysis: The above diagram shows that 55 respondents i.e. maximum from total 131respondents said that they got the knowledge from their brokers, 40respondents said that they got knowledge about primary market from News/newspaper, 20 respondents got information through TV6 from Internet and 55respondents said any other sources for information.

Q5) In which of the following you would like to invest your money? Like to Invest Private Co. Govt. Co. Semi Govt. Any Other No. of Respondents 43 18 37 22


60 40 20 0 43 18 privat co. g ovt co. 37 s em i co. 22 any other

like to invester

Analysis: The above diagram depicts that 43 respondents said that they like to invest in Private companies, 18 respondents said Govt. companies, 37 respondents said they like to invest in Semi-Govt. companies and 22 respondents said they like to invest in any other companies

Q6) In which sector you like the invest the money? Investment Sector Insurance Infrastructure Telecom No. of Respondents 16 48 33 44

IT Sector Any Other

23 10

50 40 30 20 10 0

4 8 16 insurance

3 3 telecom


1 0 any other

investm ent sector

Analysis: The above diagram shows that 16 respondents said that they invest in insurance sector, 48 respondents said they invest in Infrastructure sector, 33 respondents said that they invest in Telecom sector, 23 respondents said that they invest in IT sector and 10respondents said that they invest in any other sectors

Q7) How much is your portfolio? Portfolio Rs.10000 to 50000 Rs.50000 to 1 No. of Respondents 41 58 45

Lac Above Rs.1 Lac


Above Rs.1Lac, 21

Slice 4,

Rs.1000050000, 41

Rs.500001Lac, 58

Analysis: The above diagram shows that 41 respondents said that their yearly portfolio has been between Rs.10000 to 50000, 58 respondents said that their yearly portfolio has been between Rs.50000 to 1 Lac and 21 respondents said that their yearly portfolio has been above Rs. 1 Lac

Q8) For how much period you would prefer to invest? Investment Time No. of Respondents 46

Short Term Long Term

96 24

longterm , 24

s hort term , 96

s hort term


Analysis: The above diagram shows that 96 respondents said that they invest for short time and 24 respondents said that they invest for long term.

Q9) If yes, then how much risky in this? Risk No. of 47

Highly Moderately Lower

Respondents 6 2 8 lowers ,8

8 7 6 5 4 3 2 1 0 hig hly m oderately m oderately, 2 hig hly, 6


Analysis: The above diagram shows that 6 respondents said that primary market is highly risky,2 respondents said moderately risky and 18 respondents said primary market is risky but not highly or moderately.

Q.10) From where you get to know about these criteria?


about No. 48


Criteria Share Broker Newspaper Magazine Internet

Respondents 40 25 8 47

5 0 4 0 3 0 2 0 1 0 0 sharebroker new paper m ag azie 8 4 0 2 5

4 7


Analysis: The above diagram shows that 47 respondents said that know about their criteria from their internet, Share brokers 40 respondents said they got knowledge from Newspapers 25 and 8 respondents said they got knowledge from Magazines


 Most of respondents said that they are invested in the stock market and few of them said that they did not invest in the stock market.  Maximum respondents said that they got the knowledge from their brokers, &some of them said that they got knowledge about primary market /newspaper & very few respondents got information through TV from Internet and any other sources for information.  Retail investor divert their fund from the banking system to the primary market. As the interest rate of saving account deposit decreased very much.  Most of respondents said that they invest less portion of their income in primary market. Very few investors like to invest major portion of their income in primary market.  Respondents view is that primary market investment is risky. So there is a fear in the mind of respondents about to invest in primary market.  The study shows that maximum respondents among the sample respondents are getting information related to the different services from the agents. It implies that most powerful source of information about services is an agent.

 There is a need to bring awareness among the general public about primary market


On the basis of the Market survey conducted has put very interesting findings in the Market. The very first suggestion to the investor is that the best thing for the investors to do to ensure that they are not cheated in this IPO boom, is to study the prospectus them selves, read various comments and take their own decision. Investors have to be wareas all those who are keen to grab a piece of the cake of the impending IPO boom, are doing so at their cost. Keep in mind three P’s before investing in any IPO & Three P’s are • Performance • Price • The next best suggestion to the investor is that they should be steer clear of IPO’s from lesser known industry and focus on offerings by well known industry leader with quality management and strong financials. • The investor should not follow the IPO boom blindly as they can get cheated as they during nineties IPO fiasco. • The companies should make regular contact with his customer through his marketing executives. This would not only help in strengthening the business relation but would also help in taking proper feedback of their products. • The majority of customers are price conscious so they should improve or decrease their price/commission rate. • The companies should concentrate more on the sale promotion activities through different media. • The market is not well aware of the product line of the companies, so companies should give full information of there product line to the investors. • In corporate and institutions, people are looking for better service. So by providing this it can gain the big reach its break even as soon as possible and can earn profit from there.


This project is based on the study of “Investors attitude towards primary market”. In the today scenario it’s very important to study the customer’s psychological behavior regarding the various services provided by them. In the end, I conclude that investor should not invest their hard earned money blindly in the IPO’s but they should invest their money by taking different safeguards like understand the company business, who its promoter are, how is its management, its risk factor and pricing of the issue etc. Although there is SEBI to protect the investor but He Company which follow the legal binding of the SEBI is not fool proof that the company is a good one .It has been concluded that on the one hand the customers are somewhat satisfied but on the other hand, still some improvements are required. So, the broking companies segment is flooded with the new schemes from new & existing players and moreover, lot many schemes are waiting to hit the ramp in the coming years.  The main reason behind people not wanting to have investing of a particular company is the lack of proper information. Moreover, people don’t want to come out of coco on of their seemingly uncomplicated life. They seem satisfied with their old ways and are wary of modern, new age products.  The most important factor that attracts the people towards investment in primary market is the communication factor. This is the most important reason and for this, people feel persuaded to buy it.


BIBLIOGRAPHY:1) M.Y Khan., “Financial Services”, Himalaya publishing house Pvt. Ltd. New Delhi, 2001, p-10-20

2) Wilkinson & Bhandarkar, “Business Research Methodology”, 6 The diction, Tata McGraw Hill Publications, Delhi, 2005, PP 237-243 .3) Dr. Bansal K Lalit, “Merchant Banking & Financial Services” Vikas Publications, 2009, (Page 152- 155) (Page 175-185) JOURNALS and MAGAZINES:1) Applied Finance, page no 261-268, volume 5 / Dec.2007.2) Financial review, edition January 2007, pages no 34-40.3) Management Accountant, May 2006 P. No.- 359-412. Websites 2. 3. 4.



Q1) General Information  Name ____________________________  Age______________  Occupational ) Businessman b) Serviceman) Professional d) Any other  Annual Income) Rs.50000 to 1 Lac b) Rs.1 Lac to 3 Lacsc) Above Rs.Lacs Q2) Which age group do you belong? 18 - 30 30 - 45 45 - 55 above 55Q3) Q3) Have you ever invested in stock market? Yes No Q4) If yes, in which type of market? Primary Market Secondary Market Q5) What is the source of information regarding primary market? News Broker TV Internet Another Q6) In which of the following you would like to invest your money? Private Co. Govt. Co. Semi Govt. Any other Q7) How much % of your income you invest yearly? 0-20% 20-35%35-50% 50% & above Q8) in which sector you like the invest the money? Insurance Infrastructure Telecom IT Sector Any Other Q9) How much is your portfolio? Rs.10000 – 50000 Rs.50000 – 1 Lac above 1 Lac Q10) For how much period you would prefer to invest? 55

Short term Long term (5 & above) Q11) Investing in primary market is risky or not? Yes No Q12) If yes, then how much risky in this? 62Highly Moderately Lower Q13) How much return has been earned from primary market? 10% 50% 50%-100% 100%-150% 150% - 200% Q.14) What criteria you used to invest in any IPO? Past Experience Company Result Any Other Q.15) From where you get to know about these criteria? Share Newspaper; Magazine Newspaper; Magazine