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SECURITIES ANALYSIS AND INVESTMENT MANAGEMENT PROJECT REPORT AT

(Session: 2011-2013)

Submitted for the partial fulfillment of the requirement of Master of Business Administration (MBA)

SUBMITTED BY Ashish kesarwani
Roll no.2011mba260 Center code:450

SUBMITTED TO prof: Tanu

External Guide: Mr. Rajesh shah Internal Guide: Mrs. TANU SHRIVASTVA

ABES ENGINEERING COLLEGE, GZB.

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ACKNOWLEDGEMENT
It would be of great pleasure for me to take the opportunity of thanking nearly everybody who had been of great help in the completion of my project. My sincere gratitude goes to Mr. RAJESH SHAH (Branch manager) my organizational guide, without whose help this project would have seemed impossible. It has been of great learning to be on the job-training and doing the project simultaneously, which enriched my knowledge and developed my outlook for becoming a better professional. I feel great pleasure in submitting this project report to India Info line Securities Pvt. Ltd (Ghaziabad)

Place: GHAZIABAD

Ashish kesarwani

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TABLE OF CONTENT
1. Objective of the study 2. Findings 3. Summary 4. Introduction A. Stock Market Basics -Stock -Stock Market -Stock Exchanges -Market Timing -Clearing and Settlements -Margin and Risk Management -Frequently used Terms B.Capital Market -Primary Market -Secondary Market Capital Market Instruments Listing Requirements 1 2 5 15 19 19 20 21 24 30 31 32 33 33 37 41 45

C. Investment Basics. D. Relationship Manager E. Comparison of indiainfoline with other Players F. Market Analysis 3

55 60 78 96

Bibliography 113 115 117 118 120 4 . Questionnaire 7.4. Research Methodology Suggestion & Recommendation 5. Conclusion 6.

so instead. not to mention the fact that having a bunch of money is no fun if we don't have the leisure time to enjoy it You can't create a duplicate of yourself to increase your working time. most of us were taught that you can earn an income only by getting a job and working. and know the investor perception about investment in capital market which is most useful for me. there is a limit to how many hours a day we can work. There's one big problem with this: if you want more money. you need to 5 . Growing up.SUMMARY This summer project which is on how to create and manage portfolio. However. it's a different way to think about how to make money. This project Increase my knowledge and ability to understand external forces of environment. Have you ever wondered how the rich got their wealth and then kept it growing? Do you dream of retiring early (or of being able to retire at all)? Do you know that you should invest. you have to work more hours. It's actually pretty simple: investing means putting your money to work for you. Essentially. And that's exactly what most of us do. but don't know where to start? The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.

The world of finance can be extremely intimidating. Sometimes people refer to these options as "investment vehicles. sleeping.to work. which we'll discuss in a later section of this tutorial. or even mowing your lawn. decide to work overtime or look for a higher-paying job. Even though this is a simple idea. That way. mutual funds. bonds. This includes putting money into stocks. but we firmly believe that the stock market and greater financial world won't seem so complicated once you learn some of the language and major concepts. or real estate (among many other things). while you are putting in hours for your employer. Quite simply. or starting your own business. The point is that it doesn't matter which method you choose for investing your money. There are many different ways you can go about making an investment. the goal is always to put your money to work so it earns you an additional profit.send an extension of yourself ." Each of these vehicles has positives and negatives." which is just another way of saying "a way to invest. reading the paper or socializing with friends.your money . 6 . it's the most important concept for you to understand. you can also be earning money elsewhere. making your money work for you maximizes your earning potential whether or not you receive a raise.

economy and financial markets. mutual funds. The breadth and depth of our content is unmatched stock markets. Portfolio Management Services. Mumbai stock exchange (BSE) and the National Stock Exchange (NSE). A publication.com? The site has emerged as the most popular website on Indian business and finance. was born www. a seemingly distant past in the Internet age. Commodities trading. In early 1999. We discontinued delivery of reports in printed form and made available quality research at the click of a mouse. The quality of research was highly acclaimed and soon became the industry benchmark. Angel 7 . personal finance. www. Over the last few years.5paisa. no less than Forbes has chosen us in their ‘Best of the Web’ under the Asian Investing category.INTRODUCTION The India infoline was founded by a group of professionals in 1995. Angel Broking Ltd and its wholly owned subsidiaries offers the entire gamut of investment products ranging from Equities and derivatives trading. Life Insurance.indiainfoline. Our meticulous research was published and distributed in printed form to a client base comprising of Indian business including leading MNCs. our research coverage has grown to cover practically all companies. Thus. The India Info line group. GoI bonds and other small savings instruments. comprising the holding company.com. Angel Broking Ltd is a company listed on both the leading stock exchanges in India namely the Stock Exchange. when Internet penetration in India was at its infancy and the future unknown. taxation and economy. Mutual Funds.com and www.indiainfoline. we took the hard decision of killing our earlier business model and embracing the Internet. Fixed deposits. Angel Broking also owns and manages the websites. We saw an opportunity to expand our client base. investment banks and consulting firms. from a few hundreds to several millions and also to complete the value chain.

The group has memberships on BSE and NSE for equities trading and on MCX and NCDEX for commodities trading. Thomson First Call and Internet Securities where it is amongst the most read Indian brokers. All these offices are networked and are connected with the corporate office in Mumbai. India Info line’s research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL).  To be the premier provider of investment advisory and financial planning services in India  To be a leading investment intermediary for transactions through both online and offline medium. The 5paisa trading interface is one of the most advanced platforms available to retail investor in India. the results of which are there for everyone to see. It has a SEBI license for Portfolio Management under which. 8 . various schemes are offered which have been consistently beating the benchmark indices since inception. The group has invested significantly in technology and research. Angel Broking’s research is acknowledged by none other than Forbes as ‘Best of the Web’ and ‘…a must read for investors in Asia’. The Angel Broking group has a significant presence across the country owing to its 125 offices across 45 cities across India.Broking is a forerunner in the field of equity research.

9 . made very popular by Warren Buffet .the Oracle of Omaha. investors get facility to buy and sell Stocks in NSE and BSE and Futures and Options through NSE Investor Terminal  Investor Terminal is recommended for infrequent investors. who fall into the "Buy and Hold" school of investing.5PAISA PRODUCTS &CHARGES Main Products  Investor Terminal  Trader Terminal 2005  Diet ODIN Investor/Trader & Diet ODIN Terminal  On all the terminals.

sometimes several times a day. a facet well appreciated by the true-blue trader of today. Customer Category  Investor 10 . where a direct connection is difficult because of corporate IT security policies.  The Trader Terminal offers…   Lightning fast order execution Monitoring of marked to market positions on a minute-to-minute basis Diet ODIN  The Diet ODIN terminal provides the facility to trade not only in cash as well as derivatives but also in the commodities segment in the Multi-Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange (NCDEX).  Though it doesn’t provide charting features. Trader Terminal 2005  Trader Terminal is for the dedicated day traders. it provides a cleaner interface for faster order execution. It’s a trading interface which works behind proxy and firewalls as they access the Internet and the stock markets from their work place. who churn their portfolio on minor movements in the market.

 Trader 11 .

This charge cannot be waived of under any circumstances.  Account cannot be opened without the minimum initial margin of Rs. 5000. 12 .05% 5Paisa 5 Paisa Registration of Investor  Registration charge of Rs.555 is once payable and non refundable.05% 0.25% 0. 5000 and any point of time the ledger balance of the client should be minimum Rs.Investor Investor One-time registration fees Minimum Initial Margin Trading Brokerage (Cash) Delivery Brokerage F&O Brokerage Minimum Per Share(Trading) Minimum Per Share(Delivery) Rs.Brokerage.555 Rs.10000/0.

 If the client has a debit balance then stock value minus debit has to worth a minimum Rs. 13 .m. The account can be re-activated by payment of Rs. 5000.  Client can withdraw funds from the account but has to maintain a minimum ledger balance of Rs. 5000  If the minimum balance is not maintained then the account will be frozen and client cannot operate both trading and demat account. 50 p.

25% 0. 3000/Rs.Brokerage.05% 1paisa 5paisa Annual Rs.25% 0.05% 0.05% 1paisa 5paisa Terminals offered  An Investor and Trader can opt for any of the products we offer    Investor Terminal Trader Terminal 2005 Diet ODIN 14 . 8000/Rs. 10000/0.Trader Quarterly Registration fees Minimum Initial Margin Trading Brokerage (Cash) Delivery Brokerage F&O Brokerage Minimum Per Share (Trading) Minimum Per Share (Delivery) Rs. 10000/0.05% 0.

Nil . Our Audit team will keep a check on this and produce a monthly list of such customers  Under the Investor or Trader scheme a client can also choose offline trading.0.Nil . An Investor that has opted for TT5 can be de-activated if the brokerage earned is not sufficient. If the client opens only a demat account then the client will be Charged annual maintenance charge of Rs.Nil .05% of transaction value (Minimum Rs.15/ DP charges mentioned above are the same for Investor and Trader.100/-) .Nil . 250 15 . Depository Charges      Account opening charges Annual maintenance charges Custody / Holding charges Transaction Credit Transaction Debit Maximum Rs.

which studies the market and provides information. telephone and internet account.INTRODUCTION India info line securities pvt ltd is a technology oriented company offering integrated Equity analysis. India info line also provides its clients with valuable real-time information.  Up-to-date news.  Equity research department.  Technology transforming desktops into NEAT like terminal for Internet trading. access to breaking news and market happening along with in-depth and insightful analysis. Margin Trading facilities back by real time risk management system and fast trade execution.  Real time online fund transfer & Exposure updating facility with HDFC bank. 16 .  One screen for cash and derivatives trading.  Automated extended margin trading facility.com  Customized insurance services.  Customized products for lending against shares. Depository & Insurance services.  Facility to buy today & tomorrow itself. Stock trading. data and analysis via Indiainfoline.  Integrated trading and Depository Account. Some of the unique features are: Trading via branch network.

17 .  Margin trading of 6 times the cash deposited for intra-day based trade. Features of power India info line  Live streaming quotas  Fast order entry.  Margin trading of 3 times the cash deposited for delivery based trade.  Technical analysis. Benefits of trading with India info line  Personal relationship manager-24/7  Most competitive brokerage & DP charges  Only one time account opening charges and no annual maintenance charges. Equity analysis report to support your investment decisions.  Live news and alerts  Extensive reports for real time accounting.  Tic-by-tic live charts.  Margin trading of 2 times the approved category A based shares deposited for delivery based trade.

 Equity analysis @ Rs. 555/.5% for delivery based trading. –optional.one time payment for account opening for equity trading and DP-online trading.750/.  Get access to IPO via the book building rout as well as to all the fixed price issues.  Buy today sell tomorrow for all securities. 18 . 500/.  Management of portfolio and advises.pm or Rs.  Obtain market information.  RS.  0. Margin trading of 4 times the approved category A-based shares deposited for intra-day.additional one time charge for the installation of PIB-optional. 6000/-annual. Post registration services:  Deliver and receive chaques.  0.1% for intra-day trading. Charges:  Rs. securities & place orders.

We distributed unit linked insurance products of Birla Sun life and TATA AIG. 19 . Besides this India info line also offers insurance and mutual funds to .suits your varying needs. Further we also offer a bouquet of Mutual fund of all major assets management companies.Documents required for account opening are:  2 passport size photographs  Identity proof-photocopy of the following: a) Passport b) PAN card c) Voter ID d) Driving license e) Ration card  Address proof-photocopy of any one driving license/passport/ration card/voter card/telephone bill/electricity bill/bank statement  Initial chaques in favors of India info line securities Ltd.

By issuing stock. the stock is said to have gone "down. A business owned by one person (a proprietorship) or a few people (a partnership) cannot issue stock. its existence does not depend on the people who run it. it all means the same thing. It represents a claim on the company's assets and earnings  Whether you say shares. Stock market 20 . a company can raise money without going into debt." meaning up in price. People who buy the stock are giving the company the money it needs to grow. Not every company can issue stock. When the price falls. If a company wants to grow—maybe build more factories. and has special legal rights and responsibilities as well as its own unique name. A corporation has a special legal status. hire more people or develop new products—it needs money. Only a business corporation can issue stock. It could get a loan from a bank.STOCK MARKET BASICS Meaning of stock  Stock is a share in the ownership of a company. that stock is said to be "up. The terms "up" and "down" are also used to describe the rise and fall of the market as a whole. Like a school. Under the law it is separate from the people associated with it. equity or stock. When the price of a particular stock rises.

though some people use the term "Dalaal Street” Types of stocks  Equity  Preference 21 . the term 'the stock market' is a somewhat abstract concept for the mechanism that enables the trading of company stocks. In simple words:  Place where business of buying and selling stock takes place  The stock market is not a specific place. It is also used to describe the totality of all stocks. especially within one country. both those securities listed on a stock exchange as well as those only traded privately.The stock market is the market for the trading of company stock. Although common.

Sub-brokers and their clients through thousands of trading terminals spread throughout the nation  BSE and NSE provide trading facility on two segments which are . Efficiency and Depth to market. BSE and NSE provide Screen Based Trading on Trading Platforms called ‘BOLT’ and ‘NEAT’.  These platforms provide Trading Facility to Brokers.Market segments  Primary market -Channel for creation of new securities  Secondary market -The new securities issued in the primary market are traded the secondary market Stock exchange  The Bombay Stock Exchange (BSE)  National Stock Exchange of India Ltd (NSE) Trading on BSE and NSE  To provide Transparency.Cash Segment and .Derivative Segment 22 .

NEAT – CASH 23 .

BOLT BOLT 24 .

00 hours in NSE and 15.50 hours and 16.50 hours in BSE Index  Number which measures the change in a set of values over a period of time. The market timings of the equities segment are: Normal market open : 09:55 hours Normal market close : 15:30 hours The closing session is held between 15.40 hours and 15.Market timing Trading on the equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the exchange in advance).  Stock index represents the change in value of a set of stocks which constitute the index  A good stock market index is one which captures the behavior of the overall equity market  It has to be well diversified yet highly liquid 25 .

Important market index A market index is very important for its use as  A barometer for market behavior  As a benchmark portfolio performance  A passive fund management in index funds  An underlying for index futures and options Types of indexes  Price weighted index  Equally weighted index  Market capitalization weighted index 26 .

15% of the traded value of all stocks on the NSE Nifty stocks represent about 59. It is used for a variety of purposes such as benchmarking fund portfolios. (IISL). short form of the BSE-Sensitive Index. well-established and financially sound companies. SENSEX is considered to be the pulse of the Indian stock markets as it represents the underlying universe of listed stocks at The Stock Exchange. it provides time series data over a fairly long period of time (since 1978-79).Major Indices in India  S&P CNX Nifty  Sensex The SENSEX. Further. The index is widely used to measure the performance of the Indian stock markets. S&P CNX Nifty S&P CNX Nifty is a well diversified 50 stock index accounting for 21 sectors of the economy. as the oldest index of the Indian Stock market. S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. Impact cost of the S&P CNX Nifty for a portfolio size of Rs.2 crore is 0. Mumbai. who are world leaders in index services. It is the oldest index in India and has acquired a unique place in the collective consciousness of investors. • • • • The traded value for the last six months of all Nifty stocks is approximately 48.32% of the total market capitalization as on June 30. 2008. is a "Market CapitalizationWeighted" index of 30 stocks representing a sample of large. IISL is India's first specialised company focused upon the index as a core product. IISL has a Marketing and licensing agreement with Standard & Poor's (S&P). which is a joint venture between NSE and CRISIL.14% S&P CNX Nifty is professionally maintained and is ideal for derivatives trading List of S&P CNX Nifty stocks 27 . index based derivatives and index funds.

SOFTWARE HCL Technologies Ltd. COMPUTERS .SERVICES Bharti Airtel Ltd. OIL EXPLORATION/PRODUCTION PHARMACEUTICALS Cipla Ltd. FINANCE . CEMENT AND CEMENT PRODUCTS Ambuja Cements Ltd. TELECOMMUNICATION .2 AND 3 WHEELERS Hero Honda Motors Ltd. Cairn India Ltd.HOUSING Housing Development Finance Corporation Ltd. DIVERSIFIED Hindustan Unilever Ltd. ALUMINIUM Hindalco Industries Ltd. GAIL (India) GAS Ltd. Bharat Heavy ELECTRICAL EQUIPMENT Electricals Ltd. AUTOMOBILES . CIGARETTES I T C Ltd. PHARMACEUTICALS Dr. CONSTRUCTION DLF Ltd. ICICI Bank Ltd. REFINERIES Bharat Petroleum Corporation Ltd. CEMENT AND CEMENT PRODUCTS Grasim Industries Ltd. BANKS Symbol ABB ACC AMBUJACEM BHEL BPCL BHARTIARTL CAIRN CIPLA DLF DRREDDY GAIL GRASIM HCLTECH HDFCBANK HEROHONDA HINDALCO HINDUNILVR HDFC ITC ICICIBANK 28 . BANKS HDFC Bank Ltd.Constituents list of S&P CNX Nifty Company Name Industry ELECTRICAL EQUIPMENT ABB Ltd. Reddy's Laboratories Ltd. CEMENT AND CEMENT PRODUCTS ACC Ltd.

Ltd. ELECTRICAL EQUIPMENT Siemens Ltd. METALS Sterlite Industries IDEA INFOSYSTCH LT M&M MARUTI NTPC NATIONALUM ONGC POWERGRID PNB RANBAXY RCOM RELIANCE RELINFRA RPL SATYAMCOMP SIEMENS SBIN SAIL STER 29 . POWER Reliance Infrastructure Ltd.4 WHEELERS India Ltd. TELECOMMUNICATION . POWER Power Grid Corporation of India Ltd. REFINERIES Reliance Petroleum Ltd. Oil & Natural OIL EXPLORATION/PRODUCTION Gas Corporation Ltd.SERVICES Reliance Communications Ltd. ALUMINIUM National Aluminium Co.SOFTWARE Satyam Computer Services Ltd. ENGINEERING Larsen & Toubro Ltd.TELECOMMUNICATION .SOFTWARE Infosys Technologies Ltd. Maruti Suzuki AUTOMOBILES .4 WHEELERS Mahindra & Mahindra Ltd. State Bank of BANKS India Steel Authority STEEL AND STEEL PRODUCTS of India Ltd. AUTOMOBILES .SERVICES Idea Cellular Ltd. REFINERIES Reliance Industries Ltd. COMPUTERS . POWER NTPC Ltd. Punjab National BANKS Bank PHARMACEUTICALS Ranbaxy Laboratories Ltd. COMPUTERS .

COMPUTERS .1957  SEBI Act 1992  SEBI (Stock Broker and Sub-Brokers) Rules and Regulations.1872  Indian Companies Act. Tata Steel Ltd.SOFTWARE Tata Consultancy Services Ltd.1992  The Depositories Act. COMPUTERS .1956  Securities Contracts (Regulation) Rules.1996  Indian Contracts Act.SERVICES Tata Communications Ltd. SUNPHARMA SUZLON TATACOMM TCS TATAMOTORS TATAPOWER TATASTEEL UNITECH WIPRO ZEEL Legal Framework  Securities Contract (Regulation) Act. AUTOMOBILES . PHARMACEUTICALS Sun Pharmaceutical Industries Ltd. MEDIA & ENTERTAINMENT Zee Entertainment Enterprises Ltd. POWER Ltd. TELECOMMUNICATION .4 WHEELERS Tata Power Co. STEEL AND STEEL PRODUCTS CONSTRUCTION Unitech Ltd. Suzlon Energy ELECTRICAL EQUIPMENT Ltd.(India) Ltd. Tata Motors Ltd.SOFTWARE Wipro Ltd.1956 30 .

 Providing of securities or funds to Exchange / Clearing Corporation is called ‘Pay-In’. which means Transactions done on Monday are to be settled by Wednesday by way of giving securities or funds. trade is settled through auction of securities 31 .  In such cases.Market Segments  Rolling Settlement  Limited physical market  Institutional Segment  Trade for Trade Segment Clearing and Settlement  Stock Markets follow a system of settling trades on T+2 basis.  Receiving securities or funds from Exchange / Clearing Corporation is called “pay-out”  Sometimes trades don’t get settled because of short or bad delivery or company objection.

 Exchanges achieve this by putting in place a comprehensive ‘Risk Management’ system and margin requirements.  Additional Base Capital  Intra-Day Trading and Exposure limits  On-line Exposure monitoring  Settlement Guarantee Fund 32 .  If a trade remains unsettled even after auction.. then Exchange carries ‘Close Out’ Margins and Risk Management  It is of paramount importance that investors have faith smooth functioning of stock Markets.Mark to Market margin  Volatility Margin  Gross Exposure Margin  SPAN margin Risk Management  Capital Adequacy requirement. Margin Requirement  MTM.

Last traded price. opening price. Inspection of Books  Penalties Frequently used terms  Margin Money  Bull and Bear  Settlement Cycle  Squared transaction  Delivery Transaction  Positions . average price  Pay-in & pay-out  Bid and offer  Short selling  Long position  Auction  Settlement Number 33 .‘+’ (buy) & ‘ .’(sell)  Prices. closing price.

34 .CAPITAL MARKETS Segments of the Capital Market  Primary market -Channel for creation of new securities  Secondary market -The new securities issued in the primary market are traded the secondary market Primary Market This is part of the financial market where enterprises issue their new shares and bonds. In simple words:  The primary market provides the channel for creation of new securities. to raise resources to meet their requirements of investment. It is characterized by being the only moment when the enterprise receives money in exchange for selling its financial assets. Government as well as corporates.  Primary market provides opportunity to issuers of securities.

 Classification of Issues 35 .

This paves way for listing and trading of the issuer’s securities.Initial Public Offer  Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. 36 . Pricing of an Issue  Fixed Price  Price discovery through Book Building Process Book Building Process  Book Building is basically a process used in IPO’s for efficient price discovery. through an offer document.  A follow on public offering (Further Issue) is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public.

during the period for which the IPO is open. which are above or equal to the floor price. 37 .  Private placement can be done with a maximum of 50 investors.  This is a faster way for a company to raise equity capital. It is a mechanism where. Rights Issue  Rights Issue is when a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The offer price is determined after the bid closing date.  The rights are normally offered in a particular ratio to the number of securities held prior to the issue and generally issued at a price lower than the currently traded market price of the share Preferential Issue  A Preferential issue is an issue of shares or of convertible securities by listed companies to a select group of persons which is neither a rights issue nor a public issue. bids are collected from investors at various prices.

 For the management of the company.  Secondary market comprises of equity markets and the debt markets. In simple words:  Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Most trading is done in the secondary market. secondary equity markets serve as a monitoring and control conduit—by facilitating value-enhancing control activities 38 .Secondary Market The market where securities are traded after they are initially offered in the primary market. Majority of the trading is done in the secondary market. Role of Secondary Market  For the general investor. the secondary market provides an efficient platform for trading of his securities.

the Securities and  Exchange Board of India (SEBI).provide a trading  platform. Role of Stock Exchange  Facilitate Listing of Securities  Register members -Stock Brokers. sub brokers  Make and enforce bye-laws  Provide trading platform to investors  Manage risk in securities transactions  Provide indices Leading Stock Exchanges  National Stock Exchange (NSE) 39 . under the overall  supervision of the regulatory authority. where buyers and sellers can meet to transact in  Securities.Stock Exchange  The stock exchanges in India.

was incorporated in 1992 as a corporate entity.  It is the largest exchange in the country in terms of volume of trading. 40 .  It enjoys leadership position among exchanges in India.  Trading in Equities and Debt Market commenced in 1994.  It has evolved over the years into its present status as the premier Stock Exchange in the country. promoted by leading financial institutions. Mumbai (BSE) National Stock Exchange (NSE)  NSE. Mumbai (BSE)  The Stock Exchange. Mumbai. The Stock Exchange. popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association“  It is the oldest stock exchange in Asia. The Stock Exchange.

41 . of India under the Securities Contracts (Regulation) Act. 1956. It is the first Stock Exchange in the Country to get recognition from the Govt.

Investors who own equity shares in a company are entitled to ownership rights such as  Share in the profits of the company ( in the form of dividends )  Share in the residual funds after liquidation / winding up of the company  Voting rights 42 .Capital Market Instruments  Equity shares  Preference shares  Futures and Options  Debentures/Bonds  Government securities Equity Shares Equity shares represent proportionate ownership in a company.

Reasons for buying equities  Owning equity in a company means owning part of that company.  If a company has issued 100 shares of stock. Over time. and you bought one.  Stockholders hope the company will earn money as it grows. the stockholders share the profits. buying bonds. you own 1% of that company. Preference Shares  Preferential shareholders enjoy a preferential right over equity shareholders with regards to :  Receipt of dividend  Receipt of residual funds after liquidation Futures and Options 43 . people usually earn more from owning stock than from leaving money in the bank. Each part is known as a share. or making other investments. People who own stock are called stockholders. or shareholders. If a company earns money.

Debentures/ Bonds  Debt instruments issued by corporate and government  Debentures and bonds can have many variations depending upon redemption. convertibility etc. Forex. charge. commodity or any other asset. There are two main types of Government securities:  Dated Securities: These securities have a maturity period of more than 1 year  Treasury Bills: These have a maturity period of less than 1 year 44 . Future and Options are derivative products whose value is derived from the value of one or more basic variables  Underlying Asset can be Equity. Government Securities The Central Government and the State Governments issue securities periodically for the purpose of raising loans from the public.

1956  Securities Exchange Board of India Act.1996 Role of SEBI SEBI was set up to  develop and regulate capital market  protect interest of investors  register various participants  make rules for participants  regulate stock exchanges  prohibit fraudulent and unfair practices  promote investors’ education 45 . 1992  Depositories Act.1956  Companies Act.Regulatory Framework  Main legislations governing the capital market  Securities Contract (Regulations) Act.

2.) the following criteria will be applicable regarding there hold limit: i.5 Crores. media including advertisement.20 crores. which should be in the field of information technology. internet. In addition to this the issuer company should have a post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs.50 Crores. ii. 46 .10 crores. entertainment etc.e. The minimum post-issue paid-up equity capital should be Rs. telecommunication. should not be less than 75% of the total income during the two immediately preceding years as certified by the Auditors of the company. The minimum market capitalization should be Rs. if their issued & subscribed equity capital after the public issue is Rs. information technology. New companies can be listed on the Exchange. e-commerce.LISTING REQUIREMENTS [I] Minimum Listing Requirements for new companies (A) Minimum Capital: 1. telecommunication. media including advertisement. iii. (The capitalization will be calculated by multiplying the post issue subscribed number of equity shares with the Issue price). ecommerce. The total income/sales from the main activity. entertainment etc. For new companies in high technology ( i. internet.

securities of a company can be listed on a Stock Exchange only when at least 25% of each class or kind of securities is offered to the public for subscription.iv. however. the term "offered to the public" means only the portion offered to the public and does not include reservations of securities on firm or competitive basis. 1956. 47 . SEBI may. For this purpose. firm allotment and promoters contribution) • The size of the offer to the public is minimum 50 crores. 1957. Post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs.20 Crores. In case of IPO’s by unlisted companies in the IT& entertainment sector. (B) Minimum Public offers: As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules. relax this condition on the basis of recommendations of stock exchange(s). at least 10% of the securities issued by the company may be offered to the public subject to the following: • Minimum 20 lakhs securities are offered to the public (excluding reservation. only in respect of a Government company defined under Section 617 of the Companies Act.

7. The revenues/profits arising out of extra ordinary items or income from any source of nonrecurring nature should be excluded while calculating distributable profits. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. 2. Out of above Non Promoter holding no single shareholder should hold more than 0. 3 crores.[II] Minimum Listing Requirements for companies listed on other stock exchanges 1. 20 crores (networth includes Equity capital and free reserves excluding revaluation reserves). 3. 48 . Minimum market capitalization of the listed capital should be at least two times of the paid up capital.5% of the paid-up capital of the company individually or jointly with others except in case of Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians. Minimum networth of Rs. The Governing Board of the Exchange at its meeting held on 6th August. 5. 6. The company should sign an agreement with CDSL & NSDL for demat trading. 4. Minimum 25% of the company's issued capital should be with Non-Promoters shareholders as per Clause 35 of the Listing Agreement. The Company should have profit making track record for last three years. 2002 amended the direct listing norms for companies listed on others The Company should have minimum issued and paid up equity capital of Rs.

1956. project and several other factors before taking decision in this regard. The Exchange has since last three years formed a "Listing Committee" to analyse draft prospectus/offer documents of the companies in respect of their forthcoming public issues of securities and decide upon the matter of granting them permission to use the name of "Bombay Stock Exchange Limited" in their prospectus/offer documents. [V] Submission of Letter of Application As per Section 73 of the Companies Act. a company seeking listing of its securities on the Exchange is required to submit a Letter of Application to all the Stock Exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies. 49 .[III] Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange The companies delisted by this Exchange and seeking relisting are required to make a fresh public offer and comply with the prevailing SEBI's and BSE's guidelines regarding initial public offerings. [IV] Permission to use the name of the Exchange in an Issuer Company's prospectus The Exchange follows a procedure in terms of which companies desiring to list their securities offered through public issues are required to obtain its prior permission to use the name of the Exchange in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies. company. The committee evaluates the promoters.

In the event of listing permission to a company being denied by any Stock Exchange where it had applied for listing of its securities. This amount is liable to be forfeited in 50 . 1956. [VII] Trading Permission As per Securities and Exchange Board of India Guidelines. a company is required to complete allotment of securities offered to the public within 30 days of the date of closure of the subscription list and approach the Regional Stock Exchange. i. the issuer company should complete the formalities for trading at all the Stock Exchanges where the securities are to be listed within 7 working days of finalization of Basis of Allotment. it cannot proceed with the allotment of shares.[VI] Allotment of Securities As per Listing Agreement. A company should scrupulously adhere to the time limit for allotment of all securities and dispatch of Allotment Letters/Share Certificates and Refund Orders and for obtaining the listing permissions of all the Exchanges whose names are stated in its prospectus or offer documents. Stock Exchange nearest to its Registered Office for approval of the basis of allotment. Allotment shall be made not later than 15 days from the closure of the issue failing which interest at the rate of 15% shall be paid to the investors. However. the company may file an appeal before the Securities and Exchange Board of India under Section 22 of the Securities Contracts (Regulation) Act. In case of Book Building issue.e. [VIII] Requirement of 1% Security The companies making public/rights issues are required to deposit 1% of issue amount with the Regional Stock Exchange before the issue opens.

These norms are applicable with immediate effect. The schedule of listing fees for the year 2004-2005.the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates. [IX] Payment of Listing Fees All companies listed on the Exchange have to pay Annual Listing Fees by the 30th April of every financial year to the Exchange as per the Schedule of Listing Fees prescribed from time to time. non-payment of commission to underwriters. 51 . prescribed by the Governing Board of the Exchange and approved by the Securities and Exchange Board of India is given hereunder tock Exchange(s) and seeking listing at BSE. brokers. etc.

The Listing Department of the Exchange monitors the compliance of the companies with the provisions of the Listing Agreement. to file Distribution Schedule with the Exchange annually. especially with regard to timely payment of annual listing fees. a company undertakes. to provide facilities for prompt transfer. to forward copies of unabridged Annual Reports and Balance Sheets to the shareholders. 2001 52 . amongst other things. requirement of minimum number of shareholders. etc. [XI] "Z" Group The Exchange has introduced a new category called "Z Group" from July 1999 for companies who have not complied with and are in breach of provisions of the Listing Agreement. registration. to give proper notice of closure of transfer books and record dates. intimate promptly to the Exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices. to furnish financial results on a quarterly basis. submission of quarterly results. and takes penal action against the defaulting companies. Under the Listing Agreement. etc. the agreement is of great importance and is executed under the common seal of a company. subdivision and consolidation of securities.[X] Compliance with Listing Agreement The companies desirous of getting their securities listed are required to enter into an agreement with the Exchange called the Listing Agreement and they are required to make certain disclosures and perform certain acts. As such. to comply with the conditions of Corporate Governance. The number of companies placed under this group as at the end of May.

Minimum market capitalization of the listed capital should be at least two times of the paid up capital. 1. The company should have minimum issued and paid up equity capital of Rs. 53 . The Company should have profit making track record for last three years. 3 crores. Minimum 25% of the company's issued capital should be with Non-Promoters shareholders as per Clause 35 of the Listing Agreement. 6. 2002 amended the direct listing norms for companies listed on other Stock Exchange(s) and seeking listing at BSE. 3.5% of the paid-up capital of the company individually or jointly with others except in case of Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians. 2. 20 crores (networth includes Equity capital and free reserves excluding revaluation reserves). 4. The revenues/profits arising out of extra ordinary items or income from any source of nonrecurring nature should be excluded while calculating distributable profits.New Direct listing norms The Governing Board of the Exchange at its meeting held on 6th August. Out of above Non Promoter holding no single shareholder should hold more than 0. 5. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. Minimum networth of Rs. These norms are applicable with immediate effect.

13. 3 crores. The company should have at least two years listing record with any of the Regional Stock Exchange. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. Details of the HDFC Bank branches. are available on our website site www. from 141 locations.com The above facility is being provided free of cost to the Companies.bseindia. situated all over India. 20 crores (networth includes Equity capital and free reserves excluding revaluation reserves).com as well as on the HDFC Bank website www. Minimum market capitalization of the listed capital should be at least two times of the paid up capital. 8. 12. The Company should have profit making track record for last three years. the Exchange has entered into an arrangement with HDFC Bank for collection of listing fees. [XII] Cash Management Services (CMS) . 54 . The company should sign an agreement with CDSL & NSDL for demat trading.7. Minimum networth of Rs. The revenues/profits arising out of extra ordinary items or income from any source of nonrecurring nature should be excluded while calculating distributable profits. 11. 9.Collection of Listing Fees As a further step towards simplifying the system of payment of listing fees. 10.hdfcbank. The company should have minimum issued and paid up equity capital of Rs.

A share is issued by a company or can be purchased from the stock market. you also run a risk of making a capital loss if you have sold the share at a price below your buying price. By owning a share you can earn a portion and selling shares you get capital gain. which entitles its holder to be one of the owners of the company. 55 . However.TYPES OF SECURITIES TRADED IN COMPANY  Shares  Commodities  Mutual fund  Life insurance SHARES Meaning: . So. your return is the dividend plus the capital gain.A share or stock is a document issued by a company.

they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders. you have to approach a broker However. The general investors should identify a sub-broker for regular trading in shares and place his order for purchase and sale through the sub-broker. 56 . since most stock exchange brokers deal in very high volumes.Procedure for doing trading in shares: Every transaction in the stock exchange is carried out through licensed members called brokers. The sub/broker will transmit the order to his broker who will then execute it . To trade in shares.

The variables underlying could be prices of traded securities and stock. To start with. Derivatives have become increasingly important in the field of finance. option or any other hybrid contract of pre determined fixed duration. derivatives means forward. live stock or anything else. commodities. A derivative is a financial instrument whose value depends on other. swaps and different types of options are regularly traded outside exchanges by financial institutions. Forward contracts. futures and options. bullion. currency. In the international market. namely forward. underlying variables. banks and their corporate clients in what are termed as over-the-counter markets i.: it derives its value from the underlying asset. Options and futures are traded actively on many exchanges. linked for the purpose of contract fulfillment to the value of specified real or financial asset or to index of securities. various derivatives products are traded. futures. 57 .Derivatives Introduction A derivative is a contract/product that has no independent value i. we need to understand three products. more basic. prices of oranges to even the amount of snow that falls on a ski resort. there is no single market place or an organized exchange In other words. prices of gold or copper.e. Underlying asset can be securities.e.

58 . Types of Derivatives  Forwards  Futures  Options  SWAPS Forwards A forward contract is a customized contract between two entities. Forex. Forward contract is a one to one bipartite contract. which is to be performed in future at the terms decided today.Concept  Derivative is a product whose value is derived from the value of one or more basic variables.  Underlying Asset can be Equity. commodity or any other asset. where settlement takes place on a specific date in the future at today’s pre-agreed price.

 Future contracts can be on individual scrip’s or indices. delivery time and place. quantity. However. quality. forward contracts suffer from poor liquidity and default risk Futures Future contracts are the organized/standardized contracts in terms of quantity.Forward contracts are being used in India on large scale in the foreign exchange market to cover the currency risk. Based upon the anticipated price of the future. Futures trading entail liquid investments that allow investors to purchase or sell assets at specified prices or at later dates. In simple words:  A future is contracting to buy or sell an underlying asset at a specified future date. futures contracts can be drawn up for various markets. Reasons for buying Futures contracts 59 . Forward contracts being negotiated by the parties on one to one basis.  These contracts are traded and settled on exchanges. quality. at a specified price. offer the tremendous flexibility to them to articulate the contract in terms of price. delivery time and place for settlement on any date in future. These contracts are traded on exchanges.

Futures terminology 60 . Some standard conditions include guaranteeing the delivery month and location. Cash settlement. In order to end the futures contract. as well as the last day to trade. the quantity and quality of the commodities. allowing investors the right and obligation to buy and sell. and physical delivery are three ways to complete the transaction of a futures contract. the holder must either sell the long position or purchase back the short position. expiry. The contracts are regulated so the investors can turn their investments into money right away.Reasons contracts Hedgers for BUYING futures Reasons for SELLING futures contracts To lock in a price and thereby obtain protection against declining prices To profit from declining prices To lock in a price and thereby obtain protection against rising prices Speculators To profit from rising prices Procedure for work in future Futures trading occur on exchange.

 Spot Price  Futures Price  Expiry Date  Contract Cycle -One month -Two month -Three month Options An option is a contract. but not the obligation. to buy or sell specified quantity of the underlying assets. The person with the obligation is called the writer of the option. which gives the buyer (holder) the right. The underlying may be physical commodities like wheat/ rice/ cotton/ gold/ oil or financial instruments like equity stocks/ stock index/ bonds etc. In simple words:  Options are derivative instruments where one party has a right to buy/sell the underlying while the other party has an obligation to buy/sell  The person with the right is called the buyer of the option. at a specific (strike) price on or before a specified time (expiration date). 61 .

(In the case of a cash-settled option. a writer of an option that is uncovered and unhedged may have a significantly greater risk than a short seller of the underlying interest. Since the leverage inherent in an option can cause the impact of price changes in the underlying asset to be magnified in the price of the option. the loss will be the cash settlement amount reduced by the premium. The writer of a put option bears a risk of loss if the value of the underlying asset declines below the exercise price. and such loss could be substantial if the decline is significant. in the option. The writer of a put bears the risk of a decline in the price of the underlying interest-potentially to zero. The potential loss is unlimited for the writer of an uncovered call. the risk of writing put options is substantial.Risks in Options The risk/ loss of an option buyer is limited to the premium that he has paid. When a physical delivery uncovered call is assigned an exercise. The writer of an uncovered call is in an extremely risky position and may incur large losses if the value of the underlying asset increases above the exercise price. An option holder who neither sells his option in the secondary market nor exercises it prior to its expiration loses his entire investment (Premium). 62 .) As with writing uncovered calls. the writer will have to purchase the underlying asset to meet his call obligation and his loss will be the excess of the purchase price over the exercise price of the call reduced by the premium received for writing the call. The risk of an Options Writer however is unlimited where his gains are limited to the Premiums earned.

Types of Options  Based on the right: • Call option Put option Call Option: A call option gives the holder (buyer/ one who is long call). the right to buy specified quantity of the underlying asset at a specified price on or before a specified time. 63 . the right to sell specified quantity of the underlying asset at a specified price on or before a specified time. The seller (one who is short call ) however. has the obligation to sell the underlying asset if the buyer of the call option decides to exercise his option to buy. The seller (one who is short Put) however. The buyer of a call option acquires the right but not the obligation to purchase a particular futures contract at a stated price on or before a particular date. • Put Option: A Put option gives the holder (buyer/ one who is long Put). has the obligation to buy the underlying asset if the buyer of the put option decides to exercise his option to sell.

 Based on the exercise: American ( Individual Securities) European (S&P CNX Nifty) 64 .CALL OPTIONS Option buyer or option holder PUT OPTIONS Buys the right to buy the Buys the right to sell the underlying asset at the specified underlying asset at the specified price price Option seller or option writer Has the obligation to sell the Has the obligation to buy the underlying asset (to the option underlying asset (to the option holder) at the specified price holder) at the specified price.

for a specific duration of time can offer an attractive investment opportunity. 65 .  You can exercise the option on the expiration day in case of European Option or on or before the expiration day in case of an American option. Conversely. buying a put option will enable you to protect against downside risk without limiting profit potential. you can do one of the following:  You can sell an option of the same series as the one you had bought & close out your position in that option at any time. The decision as to what type of option to buy is dependent on whether your outlook for the respective security is positive (bullish) or negative (bearish). Once you have purchased an option contract. or. the right to buy or sell that stock at a predetermined price. buying a call option creates the opportunity to share in the upside potential of a stock without having to risk more than a fraction of its market value.Procedure for using Options If you anticipate a certain directional movement in the price of a stock. If your outlook is positive. Purchasing options offer you the ability to position yourself accordingly with your market expectations in a manner such that you can both profit and protect with limited risk. if you anticipate downward movement.

ITM/ATM/OTM: CALL OPTION In-the-money PUT OPTION Strike price < Spot price of Strike price > Spot price of underlying asset underlying asset At-the-money Strike price = Spot price of Strike price = Spot price of underlying asset underlying asset Out-of-the-money Strike price > Spot price of Strike price < Spot price of underlying asset underlying asset Futures V/s Options 66 .

The major differences in Futures and Options are as under: Futures Options Futures are agreements/contracts to buy or sell Unlike futures. the downside is unlimited while profits are limited to the premium he has originally received from the buyer. however. The buyer is obligated to buy/sell the underlying asset. Benefits of trading in F&O  Transfer of risk 67 . on or the underlying asset. affected by the prices of the underlying asset. the buyer in case of options specified quantity of the underlying assets at a enjoys the right & not obligation. to buy or sell price agreed upon by the buyer & seller. for a buyer (or holder of the with unlimited risk for both the buyer as well as option). The Futures contracts prices are affected only by The prices of options are however. prices of the underlying asset. (option price) he has paid while the profits may be unlimited. It costs nothing to enter into a futures contract. termed as Premium. before a specified time. Futures contracts are highly leveraged positions In case of options. time remaining for expiry of the contract & volatility of the underlying asset. the downside is limited to the premium the seller. For a seller or writer of an option. There is a cost of entering into an options contract.

 Incentive to make profit with minimal amount of risk capital  Lower transaction costs  Liquidity. 68 . price discovery  Eliminates security specific risks  Power to leverage Margin  SPAN Margin -Initial margin -Mark to market margin  Exchange requires customer to maintain margin with broker.

69 .

Meaning of commodities

Commodities are broadly defined as natural resources, chemicals and physical products you can touch, taste, smell, grow, mine, consume or deliver. In simple words:

 Commodity includes all kinds of goods.  FCRA defines "goods" as "every kind of movable property  Other than actionable claims, money and securities".  Goods with commercial value traded widely in bulk; usually a raw material or primary produce, for processing;  Agricultural commodities: food grains, fibers, oilseeds complex, sugar, plantation crops, horticulture crops;  Non-agro commodities: Base metals, precious metals; industrial products: crude;

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Concept of Derivatives

 Derivative is a product whose value is derived from the value of one or more basic variables.

 Underlying Asset can be Equity, Forex, commodity or any other asset.

Commodity & Financial derivatives

 In Financial derivatives all contracts are cash settled

 In Commodities derivatives the seller has the option to give physical delivery at an accredited warehouse

 In Financial derivatives the concept of varying quality of asset does not exist

 In Commodities derivatives the quality of the asset of the underlying can vary largely.

Indian Commodity Market
- An Overview

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History

The futures markets were developed initially to help agricultural producers and consumers manage the price risks they faced harvesting, marketing and processing food crops each year. The modern futures industry still serves those markets. In simple words:

 Organized

commodities

trading

started

in

1875

-

Bombay

Cotton

Trade Association  The government had banned futures trading in 1975, saying  Excessive speculation had driven prices up.  It allowed trading to resume three years later but restricted it  To a few commodities. Trading in some other commodities  Resumed only in 1997  In 2004, Government of India allowed the Multi Commodity  Exchange and the National Commodity and Derivatives  Exchange Ltd. to set up new bourses with a national reach and  Launch online trading in a range of commodities.

Facts - India
 Agriculture - 26% of GDP

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edible oils  Third largest producer of cotton  Leading coffee / tea / sugar producer 73 . Agro commodities thriving  Huge domestic consumption market  One of the World’s largest importer of gold.

Food & Public Distribution Forward Market Commission Online Exchanges Outcry Exchanges MCX Mumbai NCDEX Mumbai 74 NMCE Ahmedabad NBOT Indore .Marketstructure Ministry of Consumer Affairs.

Pepper. Jeera. Rice. Mustard Oil Soybean. Manufacturers 75 .Farmers.List of Commodities Energy Products • Crude Oil • Furnace Oil Bullion Metals Products • Gold • Silver • Copper • Tin • Nickel • Steel Agricultural Products Arabica & Robusta Coffee. Arbitrageurs. Guar Gum. Chana. Market participants  Traders . Crude Turmeric. Kapas. Maize. Mustard Seed. Guar Seed. Cocoon. Jute Sacking. Tur. Investors  Producers . Raw Jute. Sugar. Soymeal Cotton. Wheat. Cashew. Yellow Peas. Urad. Hedgers. Raw Silk. Refined Soy Oilgur. Palm Oil. Metha Oil. Cottonseed Oilcake.Speculators. Chilly. Sesame Seed. Castor Seed.

Bank of India. Union Bank of India.Jewelers.00pm  Agro Commodities: 10. NCDEX 76 . clearing and settlement operations for commodity futures markets across the country. Textile Mills.00am to 12. State Bank of India & associates. Consumers . Canara Bank.. Ltd. SBI Life Insurance Co. has permanent recognition from Government of India for facilitating online trading..00pm MCX  MCX an independent and de-mutulised multi commodity exchange inaugurated in the year November 2003. Fidelity International. National Bank for Agriculture and Rural Development.00am to 5. Bank of Baroda and Corporation Bank.  Key shareholders of MCX include Financial Technologies (I) Ltd. HDFC Bank. National Stock Exchange of India Ltd.. etc Market Timings  Bullion/ Metals Trading: 10.

at a specified price. 2003 NCDEX is a nationlevel. technology driven de-mutualized on-line commodity exchange with an independent Board of Directors and professionals not having any vested interest in commodity markets  Key promoted of NCDEX includes ICICI Bank Limited (ICICI Bank). Indian Farmers Fertilizer Cooperative Limited (IFFCO) and Canara Bank Procedure for Trading in Commodities Futures  A future is contracting to buy or sell an underlying asset at a specified future date. Products Offered 77 . Punjab National Bank (PNB).  Future contracts can be on individual scrip’s or indices. NCDEX is a public limited company incorporated on April 23. CRISIL Limited (formerly the Credit Rating Information Services of India Limited).  These contracts are traded and settled on exchanges. Life Insurance Corporation of India (LIC). National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSE).

50% Other Charges 78 . Online Trading  Diet Odin for customer  Offline Trading  Branch/Franchise/RM places order using Dealer Odin  Clients can trade on both on MCX and NCDEX Brokerage Structure ONLINE Registration fees Rs.500 OFFLINE Rs.500 Minimum Initial Margin Rs.10% Delivery Brokerage 0.25% 0.05% 0.25000 Trading Brokerage 0. 25000 Rs.

4 per lac  Stamp Duty:Rs.1 per lac  Service Tax: 10.2% Reasons for trade in commodities  Driven by demand and supply  True reflector of economic activity  Impervious to intangibles like management quality or sentiments  Not impacted by “statements”  Physical settlement  Internationally driven market Comparison of India Asset Market 79 . Exchange Charges: Rs.

80 .

commercial paper. SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. Thereafter. In early 1990s. certificates of deposit and dated government securities having unexpired maturity up to one year. They can invest in treasury bills. mutual funds sponsored by private sector entities were allowed to enter the capital market. In the year 1992. UTI has an extensive marketing network of over 40. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. As far as mutual funds are concerned. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI notified regulations for the mutual funds in 1993. There is no 81 . Government allowed public sector banks and institutions to set up mutual funds. commercial bills accepted/co-accepted by banks.000 agents all over the country. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. The objectives of SEBI are – to protect the interest of investors in securities and to promote the development of and to regulate the securities market.MUTUAL FUND History of Mutual Fund in India Unit Trust of India (UTI) was the first mutual fund set up in India in the year 1963. In 1995. call and notice money. Securities and exchange Board of India (SEBI) Act was passed. the RBI permitted private sector institutions to set up Money Market Mutual Funds (MMMFs).

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. The profits or losses are shared by the investors in proportion to their 82 . Also known as an openend investment company. such as stocks. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type. In Simple Words. Investors of mutual funds are known as unit holders. Most open-end mutual funds stand ready to buy back (redeem) its shares at their current net asset value. Mutual funds stand ready to sell and redeem their shares at any time at the fund's current net asset value: total fund assets divided by shares outstanding. Most open-end mutual funds continuously offer new shares to investors. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. to differentiate it from a closed-end investment company. MEANING Mutual fund is Investment Company that pools money from shareholders and invests in a variety of securities.distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. bonds and money market instruments. which depends on the total market value of the fund's investment portfolio at the time of redemption. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Mutual funds invest pooled cash of many investors to meet the fund's stated investment objective.

Whether or not a mutual fund is a good investment is a matter of much public debate. A mutual fund is a group of investors operating through a fund manager to purchase a diverse portfolio of stocks or bonds. with many claiming they are excellent for the average person. a mutual fund is a common pool of money in to which investors with common investment objective place their contributions that are to be invested in accordance with the stated investment objective of the scheme. In India. A number of environmentally-friendly mutual funds exist which only invest in companies that meet certain best-practices criteria. 83 . In Short. each with its own goals and methodologies. debentures. Many people may also want to consider mutual funds which have specific social agendas. in addition to making a profit. gilts etc . and religious inclinations also exist. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. Mutual Fund is a suitable investment for the common man as it offers an opportunity to invest in a diversified. political slants. For example. There are myriad kinds of mutual funds. professionally managed basket of securities at a relatively low cost. and others saying they are simply a poor way to invest. an equity fund would invest equity and equity related instruments and a debt fund would invest in bonds.investments. The investment manager would invest the money collected from the investor in to assets that are defined/ permitted by the stated objective of the scheme. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. Mutual funds based on other social views.

Many critics of mutual funds point out that scarcely over 20% of mutual funds outperform the Standard and Poor's 500 Index. An indexed fund simply takes one of the major indexes and buys according to that index. This means that nearly 80% of the time. Supporters point out that for most people the complications involved in traditional investment are simply not worth the effort. but in theory an active fund has more potential for profit.A mutual fund may be either an actively managed fund or an indexed mutual fund. say. It also eliminates the need to track the market oneself. Actively managed funds are changed on a regular basis by a fund manager in the attempt to maximize their profitability. while keeping funds somewhat fluid. They fund manager looks at the market and the sectors a fund invests in and redistributes the fund accordingly. an investor would have been more profitable by simply buying equal shares in all 500 of the companies currently on the S&P 500. interest earned at the bank. A mutual fund offers an easy way to invest in something with a higher return than. Indexed funds change much less frequently than actively managed funds. 84 .

tax status. The sector of investment for a mutual fund may also be something you want to look at. The flow chart below describes broadly the working of a mutual fund: 85 . The money thus collected is then invested in capital market instruments such as shares. professionally managed basket of securities at a relatively low cost. Many sector funds exist. The problem.There are more types of mutual fund available than there are publicly traded stocks. of course. making the process of choosing one a somewhat daunting prospect for most people. is guessing which sector will next see uniform growth. debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. The length of time you want to remain invested. associated costs.or open-ended may all prove important. it is good to look at a few types of mutual fund that catch your eye and investigate them to see if they fit your needs. and avoiding sectors that can be hard-hit by single eventsIn other words A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. and whether a fund is closed. In general. and they are most often the top-performing mutual funds in a given year. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified.

ORGANISATION OF A MUTUAL FUND There are many entities involved and the diagram below illustrates the organisational set up of a mutual fund. 86 .

some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. The fund is open for subscription only during a specified period at the time of launch of the scheme.Types of Mutual Fund • • Schemes According To Maturity period Schemes According To Investment Objective Schemes according to Maturity Period: A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period. 5-7 years. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i. The key feature of open-end schemes is liquidity. which are declared on a daily basis. In order to provide an exit route to the investors. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices. These mutual funds schemes disclose NAV generally on weekly basis. either repurchase facility or through listing on stock exchanges. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed.  Close-ended Fund: A close-ended Mutual fund has a stipulated maturity period e.g. 87 . These Funds do not have a fixed maturity period.e.  Open-ended Fund: An open-ended Mutual fund is one that is available for subscription and repurchase on a continuous basis.

The mutual funds also allow the investors to change the options at a later date. and the investors may choose an option depending on their preferences. Such schemes may be open-ended or close-ended schemes as described earlier. However. corporate debentures. Such schemes generally invest in fixed income securities such as bonds. These schemes provide different options to the investors like dividend option. If the interest rates fall.  Income / Debt Oriented Scheme The aim of income funds is to provide regular and steady income to investors. Such schemes normally invest a major part of their corpus in equities. opportunities of capital appreciation are also limited in such funds.Schemes according to Investment Objective : A scheme can also be classified as growth fund. The NAVs of such funds are affected because of change in interest rates in the country. These funds are not affected because of fluctuations in equity markets. NAVs of such funds 88 .term. income fund. Such schemes may be classified mainly as follows:  Growth / Equity Oriented Scheme : The aim of growth funds is to provide capital appreciation over the medium to long. or balanced fund considering its investment objective. Such funds have comparatively high risks. The investors must indicate the option in the application form. capital appreciation. Such funds are less risky compared to equity schemes. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. etc. Government securities and money market instruments.

among many other factors. However.are likely to increase in the short run and vice versa. based on your age. lifestyle. family commitments. Points should be kept in mind before investing in Mutual Funds Mutual Fund investment decisions require consistent effort on the part of the investor. financial independence. Before investing in Mutual Funds. Therefore. the following steps must be given due weightage to decide on the right type of scheme: (A) Identifying the Investment Objective (B) Selecting the right Scheme Category (C) Selecting the right Mutual Fund (D) Evaluating the Portfolio A) Identifying the Investment Objective your financial goals will vary. long term investors may not bother about these fluctuations. level of income and expenses. the first step is to assess you needs on the basis of following points:  Needs of an investor to invest • To a regular income To finance a wedding He need to educate my children or A combination of all the above • • • 89 .

you may have no need for cash. but you may want to create fixed assets for future the • • 90 . investors can be classified as: • Very conservative Conservative Moderate Aggressive Very Aggressive Cash flow requirements • • • • • For example. Based on their risk bearing capacity. you may require: • A regular Cash Flow A lump sum after a fixed period of time for some specific need in the future Or. Risk potential of an Investor willing to take The risk-taking capacities of investors vary depending on various factors.

The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. equity diversified funds or balanced funds. • C) Selecting the right Mutual fund Once you have a clear strategy in mind. Some important factors to evaluate before choosing a particular Mutual Fund are: • The track record of performance over that last few years in relation to the appropriate yardstick and similar funds in the same category. 91 . • The degree of transparency as reflected in frequency and quality of their communications. • How well the Mutual Fund is organized to provide efficient. floating rate funds. prompt and personalized service.B) Selecting the scheme category The next step is to select a scheme category that matches your investment objectives: • For Capital Appreciation go for equity sectoral funds. you now have to choose which Mutual fund and scheme you want to invest in. • For Regular Income and Stability you should opt for income funds/MIPS For Short-Term Parking of Funds go for liquid funds.

expense ratio. Also expense ratio should be within the prescribed limits. return's consistency. portfolio diversification. Good equity fund should provide consistent returns over a period of time. 92 . it’s rating profile. fund manager’s style of investment.50% as management fees. and it’s performance over a period of time. It is a way to ensure income for your family when you die. fund manager’s experience. Evaluation of bond funds involve it's assets allocation analysis. volatility. These days fund house charge around 2. maturity profile. This is due to the fact that most jobs offer this savings program where the money can be automatically deducted from your payroll check and you never realize it is missing Life Insurance Life Insurance policies are another kind of investment that is fairly popular. It allows you a sense of security and provides a valuable tax deduction. DIFFERENT TYPES OF INVESTMENT The following are brief descriptions for beginning investors to familiarize themselves with different kinds of investment options: 401K Plans the easiest and most popular kind of investment is a 401K plan. The bond fund with ideal mix of corporate debt and gilt fund should be selected.D) Evaluation of portfolio Evaluation of equity fund involve analysis of risk and return.

You agree to give them a set amount of money as a loan and they keep it for a set number of years with a predetermined amount of interest.Stocks Stocks are a unique kind of investment because they allow you to take partial ownership in a company. This is typically a safe bet and one that is a good investment for a first time investor because there is little risk of losing your money. With this kind of investment you can earn interest as an independent shareholder. 93 . Because of this. Basically one person manages the money of several or many investors and invests in a list of various stocks to lessen the effect of any losses that may occur. Bonds a bond is basically a promise note from the government or a private company. Money Market Funds a good short-term investment is a Money Market Fund. the returns are potentially bigger and they have a history of being a wise way to invest your money. Mutual Funds Mutual funds are a kind of investment that are based on the gains and losses of a shareholder.

It works to produce income for you and protect your earning potential. This is an agreement between you and the insurer. It includes your land and anything permanently attached to your piece of property. Brokered Certificates of Deposit (CDs) CDs are a kind of investment where you deposit money for a set amount of time. Real Estate Real Estate is a tangible kind of investment. We all know life isn't predictable.Annuities if you are interested in tax-deferred income. The good thing about CDs is that you can take the money out at any time without paying a penalty fee. so this is a nice feature to have in your option. then annuities may be the right kind of investment for you. your company or empty pieces of land. Real estate is typically a smart and can make you a lot of money over time 94 . rental properties. This may include your home.

you can route your orders DIRECTLY to hand-held devices in the trading pit.  The order is instantly received by the filling broker in the pit who immediately executes it Investment process 95 .ON LINE TRADING PLATEFORM When you place your orders electronically through our revolutionary on-line order entry system. your orders are executed like this:  You enter the order on-line over the Internet or place it with the professional trade desk. Your order is sent directly to the filling broker in the trading pit without any interruption of any kind. Compare this execution to that of other brokerage firms where your execution may involve up to six steps:  You call your broker and place the order  Your broker calls his central order desk  The central order desk calls the exchange order desk  The exchange order desk hands your order to a runner  The runner takes your order to a trader in the pit  Your order is finally executed At Farr Financial.

The investment process involves a service of activity leading to purchase of securities or there investments alternatives. The investment can be divided in to five stages. I. Framing of investment policy II. Investment analysis III. Valuation IV. Portfolio contributes V. Portfolio evolution

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Investment Process

Invt. Policy

Analysis

Valuation

Portfolio Construction

Portfolio Evaluation

- Investable Fund - Objectives -Knowledge

- Market - Industries - Company

- Intrinsic Value - Future Value -

-Diversification -Selection & Allocation

- Appraisal - Revision

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MARKET ANALYSIS
Market analysis may take two distinct forms. In the first, it is a method used by investors to look at the market and try to determine whether it is going up or down, in order to make investment decisions. In the second, it is a field used by marketers to analyze the target market of their clients and determine the best courses of action to take to improve sales and profitability. Market analysis as used by investors involves looking at numerical data and attempting to discern patterns or determine probable future movement based on that data. Investors using market analysis will look at how prices within their specific sector are moving, how the market as a whole is tending, and what individual events might affect the prices of stocks and commodities they are trading in. When performing a market analysis, an investor must also consider events such as announced mergers, profit predictions for a coming quarter, and new technological discoveries. Some investors take a primarily mathematical approach to market analysis, looking at reams of historical market data and crunching every number at their disposal through their own algorithms in an attempt to predict the market's future path. Other investors take a more 'gut' approach to market analysis, relying on news sources and rumors surrounding companies' activities to sketch a rough picture of possible market tendency. From a marketer's perspective, marketing analysis consists of looking at every angle of a market to determine policies that will help a company capture more of a market share and make the share they already control more profitable. The market analysis of customer desire and satisfaction is a large part of marketing. Logit analysis, for example, surveys consumers and looks at needs that have not yet been met to predict how an untried product may perform in a fresh market. For companies innovating a new market, this is a crucial part of market analysis,

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with the aim of determining how to acquire a larger share. and the overall competitive edge.because producing too many units of a product results in a massive loss. 99 . Most marketing firms also include market analysis as part of their core package. but rather to examine customer loyalty levels. and to come up with a strategy to draw market share away from competitors and increase one's own share. Unlike logit analysis. The goal of market share analysis is not to determine whether a customer would purchase a product. A number of software packages exist for many types of market analysis. is geared more towards entrenched product lines. while producing too few results in a loss of customer satisfaction and opens the door to competitors. Market analysis may also look at the share a company owns of a particular market. this type of market analysis. usually taking the form of spreadsheets with fields for a wide array of data which is then processed and used to give a general analysis. with different degrees of depth available determining on the size and needs of the company. brand perception. known as market share analysis.

1. marriages in the family. It is important to define these goals and priorities them first. yearning for an early retirement. Define your goals Goals differ from person to person. 100 . Their intention is not to make you ponder over the meaning of life. long deserved holidays in the Alps and the list goes on. While most of us do randomly save and invest in an array of financial instruments it is always a good idea to do the same in a planned and systematic way for best results. a financial implication and commitment. but to help you create the best plan to reach those goals along the way. giving children a great education. It is never too early or too late to start financial planning and saving. No matter how little you make or how high your expenses may seem.Steps towards Building a Strong Financial Future Financial planning assumes great importance in our lives as it helps in accumulating greater wealth as well as helps in gaining financial security. The next step is to calculate how much money you would need to realize most of them. Here are six simple steps to help you plan better and help you towards building a stronger financial future. Every personal wish and dream is a goal and we strive hard all our lives to achieve them. Each of these goals also has a cost to it. Buying a dream house. The key is to make a continuous effort to put away small amounts on a consistent basis. Financial professionals often counsel investors to write down their goals. it is nearly always possible to put away at least some money for the future.

101 . 3. And that tells you how much you can afford to contribute to your financial goals each month. If you are between 20-40 years: People in their twenties and early thirties are in the beginning of their careers.the income you have left over after paying all necessary expenses. Estimate your present financial position Having arrived at a ballpark kind of a figure of what is the likely requirement and the time frame for each of the goals it is now important to take stock of your present financial position. Choose your investments according to your life stage Ability and capacity to take risk varies and horizon for investments changes depending on the life stage one is in. People in their thirties and forties are established in their jobs and in the midst of raising a family. Your net worth. Your net income/expenses help you see your monthly disposable income .2. You need to estimate both your net worth and your net income/expenses. Apart from investing in tax-saving instruments. It's a snapshot of your financial condition at a specific time. compares your assets (what you own) with your liabilities (what you owe). Many are married and either thinking about having children or already have young ones around the home. The type of financial planning they do is often influenced by the work sector of their employment. what accountants call a balance sheet. They are concerned about their children's future while perhaps equally concerned about elderly parents. Twenty to forty years’ stage is one where responsibilities are relatively less and hence risk taking capacity is at its highest. The type of instrument best suited for an individual depends upon the life stage he or she is in.

The portfolio requires churning to reallocate risks and a considerable portion of your wealth will need to be park in lower-risk. etc.60 years: Retirement thoughts have now started and the larger expenditures such as child’s marriage are lined up. preservation of accumulated wealth should be your prime concern.investing a sizeable portion of your invest-able surplus in stocks-either directly or through a mutual fund makes imminent sense. You can consider 70-80% exposure in Equity & balance in Debt instruments If you are between 40-50 years: This is the age when one has to plan for expenses like kids’ higher education. bonds and other fixed income instruments. At this stage. In order to balance out the portfolio one should look at some conservative instruments like income funds. Liquidity is also a priority at this stage. One may consider reduction in exposure to equities to 40-60%. their marriage. A mix of 30-40% in equity and balance in debt & other instruments is recommended. 102 . This is the time to maximize the growth of your investments. A portion of your financial assets should be kept liquid and readily accessible for day-to-day needs and any kind of emergency. hence growth takes a back seat. In this stage. fixed income instruments. Aggressive investing in stocks is not the done thing. If you are between 50. capacity to take risks is lower than in the earlier stage.

mutual funds and real estate. It may be worthwhile to invest some time in learning about these markets and investment options. whether they are in stocks.g. "Don't put all your eggs in one basket. Invest Across Asset Classes to Diversify Risk Risk Management is the cornerstone of any financial planning effort. 4. However the risk of living too long or outliving your income is the biggest risk during this period. Decide How Active You want to be and Implement Your Plan Managing one's savings or investments. One of the basic principles of portfolio building is diversification. 6. Risk Management planning and asset allocation into different baskets helps in addressing many of the possible risks one encounters on the way to achieving financial goals. Budgets for your Investments 103 .Retirement: Planning and accumulation for retirement is generally the most important accumulation goal which one addresses in his or her personal financial planning. Within each category further diversification is also possible for e. 5. As the old saying goes. One has to ensure that all the planning and investing pays-off now and the dividends and/or interest earned on lifelong investments form a steady stream of income sufficient for a decent living. buying equities or stocks of companies that are involved in different businesses. In the absence of this. mutual funds or real estate requires a good understanding of the markets. bonds." One can reduce the risk of investing over the long term by spreading out the investments and diversifying into different classes of assets like equities or stocks. one could probably start out by investing in a Systematic Investment Plan of any good Mutual Fund. bonds and fixed deposits.

This way the expenses remain in control and you will be ensuring that you are moving towards your target. RELATIONSHIP MANAGEMENT 104 . It doesn’t matter even if it’s as small an amount as Rs.Once all the planning is done. start investing. The best way is to keep aside a fixed sum of money every month for your Investment Budget. Ideally the amount should reflect your goals and your planning. 1000 per month.

PMS.Insurance. Fear.Job Profile of an RM  To offer personalized service based on needs and requirements of each client  One point contact for the client  He is a Financial Advisor – will advise the client not only on equity but MF. prepared. “CUSTOMER FOR LIFE” Skills required P . perseverance E . patience.Polite. professional L ..Openness and honesty P .  Acquire and Retain clients The Goal……….Listen and learn E – Efficient 105 . Greed O ..Proactive.Emotions.Managing Hope.

Working of HNI desk  Induct and Train RMs  Activation List .Fill Client Profile Sheet and make meeting Report  Offline and Online client  Attend morning meeting and inform clients accordingly  Know your clients position  Monitor position of clients  Dealing errors  Special Conditions  Maintain MIS on weekly basis 106 .RMs  Meeting clients  Welcome note  Special Conditions to be kept confidential  CMR based on profile  References to build client list  Rules to be adhered from Checklist  Error free Check List  First Meeting with Client.

Acquire new customers acquired from  Natural social circle  Databases and telemarketing leads  References of existing customers Role of an RM Research Offers Investment Story RM Offers Information Relationship Execution Consistency Client Demands Cost Speed Convenience Confidentiality 107 .

Role of an RM RM Consistency Information Closing the deal Relationship 108 .

now he is emperor  A bad service experience rankles for long time in memory  A bad service experience can prompt a customer to switch loyalty The Challenge  How does Company provide top quality customer service? Basic Principles Of Customer Services Principle One  Do onto others what you want others to do  onto you  Place yourself in customers’ shoes  How do you feel when provided with poor  Customer service? Principle Two  Don’t make customer run from pillar to post 109 .Customer services in broking business  Commoditized business  Quality as differentiator Top Quality Customer services  Retaining a customer is relatively cheaper  Customer was king.

Principle Three  Under promise and over deliver Principle Four  Mere smile is not enough. Recall your experience in rationing office. you must deliver solutions.555 (Both trading & demat) Nil Yes Assigned to every client Yes Relationship manager Off – trading line 110 .10T Del-3T Rs.700 Shs:4T DelCash:3T (500 for Trading Nil Yes Assigned to every client Yes ID. COMPARISON CHART OF INDIA INFOLINE VISA-VIS OTHER PLAYERS Company name Brokerage exposure A/C opening charges AMC Tradingwith other Demat A/c India Info line ID:0.05 % one side ID-Cash: 6T Rs.05 % one side Del:0.5 %Total India bulls ID:0.  One single phone call from customer should  Solve his problem.

750 Rs.A N.6 %Total Icici direct ID:0.A ID-4T del-Nil Rs.550 Rs.A N.350 N.05 % one side Del:0.10 % one side Del:0.A Yes 111 .5 %Total Kotak ID:0.75 Total Share khan ID:0.260 N.5 %Total Shs:2T only) ID-4T del-4T Rs.A Yes ID-4T del-4T Rs.750 Rs300 N.Del:0.A N.A N.10 % one side Del:0.

But the best thing is that with our methods you only need to get 50-60% of your trades "right" to be successful and highly profitable. Not a lot. easy to learn and low risk. Yet if they want to take up golf. 112 .COMMON TRADING MISTAKES  Lack of Knowledge and No Plan It amazes us that some people expect to trade the stock market successfully without any effort. just yet! Other beginners think that trading can be 100% accurate all the time. there is no Holy Grail. The stock market can be a great way to replace your current income and for creating wealth but it does require time. Or they start to write out their resignation letter before they have even placed their first trade! Now. The opposite extreme of this is those traders who spend their life looking for the Holy Grail of trading! Been there. they will happily take some lessons or at least read a book before heading out onto the course. So doesn’t tell your boss where to put his job. for example. But the good news is that you don't need it. but some.  Unrealistic Expectations Many novice traders expect to make a gazillion dollars by next Thursday. But learning what you need is straightforward – you just need someone to show you the way. Our trading system is highly successful. don't get us wrong. done that! The truth is. The stock market is not the place for the ill informed. Of course this is unrealistic.

 Listening to Others
When traders first start out they often feel like they know nothing and that everyone else have the answers. So they listen to all the news reports and so called "experts" and get totally confused. And they take "tips" from their buddy, who got it from some cab driver… We will show you how you can get to know everything you need to know and so never have to listen to anyone else, ever again!

 Getting in the Way
By this we mean letting your ego or your emotions get in the way of doing what you know you need to do. When you first start to trade it is very difficult to control your emotions. Fear and greed can be overwhelming. Lack of discipline; lack of patience and over confidence are just some of the other problems that we all face. It is critical you understand how to control this side of trading. There is also one other key that almost no one seems to talk about. But more on this another time!

 Poor Money Management
It never ceases to amaze us how many traders don't understand the critical nature of money management and the related area of risk management. This is a critical aspect of trading. If you don't get this right you not only won't be successful, you won't survive!

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Fortunately, it is not complex to address and the simple steps we can show you will ensure that you don't "blow up" and that you get to keep your profits.

 Only Trading Market in One Direction
Most new traders only learn how to trade a rising market. And very few traders know really good strategies for trading in a falling market. If you don't learn to trade "both" sides of the market, you are drastically limiting the number of trades you can take. And this limits the amount of money you can make.

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RESEARCH METHODOLOGY

Research in Common parlance refers to the search for knowledge. One can also define research as a Scientific and Systematic search for pertinent information of a specific topic, it is the pursuit of truth with the help of study , observation , comparison and experiment.

RESEARCH DESIGN

Research design is actually the blue print of the research project and when implemented must bring out the information required for solving the identified problem. The research design indicates the method of research (i.e method of information gathering , the instruments of research, the method of sampling etc.). The Choice of research design depends upon the depth and extent of data required the cost benefits of research, the urgency of work and the time available for Completing it.

RESEARCH OBJECTIVE

The purpose of research is to acquire knowledge about the financial products of India Infoline.

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Secondary Data was collected by going through several websites of the companies on the Internet like www. Information about the companies and the industry was also collected by going through financial papers and magazines like Economic Times.Business World.Business Today.5paisa.etc.www.DATA COLLECTION The data used for the project can be divided into two major forms: 1) Primary Data 2) Secondary Data Primary Data was collected by getting the feedback forms filled by the people we met in the organizations visited. We also used to write our daily reports based on our experiences of that particular day and maintained a record of the company’s reaction on the product.com.com. 116 .indiainfoline. as well as the presentation.nseindia.www.com etc.

Door-to-door services . Take continuous feedback from customer to improve the quality of services. SUGGESTIONS 1.SUGGESTION & RECOMMANDATIONS After working out the strategy in the organization it was found out that many clients were demanding for: • • • • • • • Improved services. Increase the response time. 117 . Easy accessibility. 2. Differentiate your service from competitors by introducing some new features. Communication should be proper way. 3. All the complimentary services should available under one roof. Timely receivability of statement of holdings and financial transaction. Technical guidance .

As well as small clients also. 118 . Communication between departments and with outside clients should be done through electronic media like E-mail.4. so that they put their best. 7. 9. Employees should be behave in proper manner with the customer and should be accordingly dressed. 8. Every person in the organization must have the knowledge about the product and services so that he should be able to handle the customer’s all queries. 6. 5. Every employee must posses the required certification like NCFM. it will present an impressive environment to the clients. Focus on quality clients. Time-to-time proper incentives should be provided to the marketing executives.

119 .CONCLUSION: On the basis of analysis one could easily find that India Infoline Pvt Ltd is suited for big investors. The cost free demat scheme of India Infoline Pvt ltd could be said to be the scheme which any company has services provided by India InfoLine Pvt Ltd are unique which places it as a financial sure market.

QUESATIONNAIRE The format of Questionnaire given to people is as follows: Name of Person: Contact Number: E-mail Id Are you interested in Share Market? Yes No Do you invest in Share market? Yes No Are you aware of India infoline? Yes No Do you have a Demat Account? Yes No Do you invest in IPO online? Yes No Do you invest in Equities online? Yes 120 No .

Do you invest in Mutual Funds online? Are you aware of any Stock broking company? SHERKHAN MOTILAL OSWAL ICICI DIRECT HDFC INDIABULLS KOTAK ANY OTHER DON’T KNOW ANY ONE Yes No Presently in which security are you trading? Signature 121 .

sharekhan.com  www Indiainfoline.com  www.com  www.kotaksecurities.karvy.com  www.icicisecurities.motilaloswal.BIBLIOGRAPHY  Company manuals  Discussion with guide  www investopedia.com  www.com  www.traderji.com 122 .com  www 5paisa.com  www.