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SESSION 2007-2010


Indian stock market have been role during the past five years,genrating an annual
return of 28%(on the nifty index).Still general public prefers putting it money in
bank,rather than putting it in stock. Within Indian economy doing so well, return from
stock market have been far higher than return from any other investment.Avenue
rupees 1, 00,000 invested in the nifty in April would have been worth a little over
rupees 3, 00,000 by April, 2008.But the top value creatures have been delivered far
superior returns the same lakh invested in unitech would have been worth rupees
1.52cr if it had been invested in aban aban offshare.
Most of people are reluctant to put their money in shares,because of uncertainty of the
return.At times stock market is so volatile that it becomes very difficult for investors
to decide whether to purchase some more stocks or sell them,whether to enter the
market or book profit. with so much uncertainty prevailing, the case of investing in
stock market is totally different from the case of investing in some other places.
Lack of awareness is also holding people back to a great extent,until and unless one
understands the degree of risk involved in investing in shares,the kind of return one
can get from there and history of such returns and how to go about it,one will not go making aware the public about things happing in stock market is something
that should be done at war level.






Overview of Industry as a whole



Profile of the organization



Problems of the organization



Competition Information



S.W.O.T. Analysis of the Organization


2.1 Significance of the study


2.2 Managerial usefulness of the study


2.3 Objectives of the study


2.4 Scope of the study


2.5 Methodology








* Questionnaire


government securities. security receipt or any other instruments so declared by the central government. Market Participants in Securities Market Market Participants Securities Appellate Tribunal Regulators* Depositories Stock Exchanges With Equities Trading With Debt Market Segment With Derivative Trading Brokers Corporate Brokers Sub-brokers FIIs Portfolio Managers Custodians Share Transfer Agents Merchant Bankers Bankers to an Issue Debenture Trustees Underwriters Venture Capital Funds Foreign Venture Capital Investors Mutual Funds Collective Investment Schemes (Source: SEBI Bulletin. The definition of securities as per the SCRA.Mobilization of savings from surplus savers to deficit savers is most efficiently carried out by the securities market through a range of complex products called "securities". bonds.110 27. stocks or other marketable securities of like nature in or of any incorporate company or body corporate. derivatives of securities.541 996 158 15 82 152 47 30 45 90 78 40 0 19 1 2 9.074 1319 205 15 76 155 50 28 35 106 97 40 0 MARKET SEGMENT The securities market has two interdependent segments: the primary and the 4 .443 4. units of collective investment scheme. 1956 includes shares. interest and rights in securities. scrips.190 44. This process of mobilization of resources is carried out under the supervision and overview of the regulators.) 2007 1 4 2 2008 1 4 2 21 1 2 9.487 4.

All the trades taking place over a trading cycle (day=T) are settled together after a certain time (T+2 day). where securities are traded for future delivery and payment. These new securities issued in the primary market are traded in the secondary market. Nearly 100% of the trades in capital market segment are settled through demat delivery. including government securities. In the primary market the resources are mobilized either through the public issue or through private placement route. The primary market is the channel for creation of new securities. The secondary market enables participants who hold securities to adjust their holdings in response to changes in their assessment of risks and returns. Presently only two 5 . These securities are issued by public limited companies or by government agencies. OTC markets are informal markets where trades are negotiated. There are two major types of issuers of securities. There are 23 exchanges in India and all of them follow a systematic settlement period. The other option is to trade using the infrastructure provided by the stock exchanges.secondary market. the corporate entities who issue mainly debt and equity instruments and the government (central as well as state) who issue debt securities. The trades executed on the National Stock Exchange (NSE) are cleared and settled by a clearing corporation. A variant of the forward market is Futures and options market. namely. Most of the trades in the government securities are in the OTC market. the over-the-counter (OTC) market and the exchange-traded market. whereas if the issue is made available to a selected group of persons it is termed as private placement. A variant of the secondary market is the forward market. The secondary market operates through two mediums. NSE also provides a formal trading platform for trading of a wide range of debt securities. The clearing corporation acts as a counterparty and guarantees settlement. It is a public issue if anybody and everybody can subscribe for it. All the spot trades where securities are traded for immediate deliver y and payment take place in the OTC market.

58 31.9 17.8 15.7 9. A.5 4.0 5.63 23.4 77. A.3 4. 6.5 60.1 18.0 12.0 35.0 36. The following table shows their percentage share respectively.65 38. Dependence on Securities Market  Corporate Sector  Government  Households The above mentioned sectors are dependent on the Capital Market for their financial needs.2 19. INTERNATIONAL SCENARIO Following the implementation of reforms in the securities industry during the last decade.1 13.60 (17.5 16.8 Source: CMIE & RBI.9 20.38 53.99 21.7 18.9 26.6 17.2 54. Dependence on Securities Market Share (%) of Securities Market in External Finance of Fiscal Deficit of Corporate Central Govt.98 Financial Savings Number of Households 14.. Indian stock markets have graduated to a better position vis-à-vis the 6 .23 44.75 52.4 69.4 22.9 30.5 16. NSE and Stock Exchange.8 17.9 4.86 22.69 8.3 8.12 28.05 33.1 61.67 22.9 67.5 14.75 Fiscal Deficit of State Govt 13.2 48.78 17.exchanges viz.1 7.2 14. Mumbai (BSE) provides trading in the derivatives of securities.35 19.6 7.7 17.98) N .9 N .16 27.9 32.6 14.7 6.9 13.17 33.2 7. 24.5 7. 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004 -05 2005-06 2006-07 19.73 34.6 64.39 20.

8 159. These data. At the end of 2003.116 Market Capitalisation ($ Bn. Market Concentration in the World Index as on End 2007 Index Stocks Share of 10 largest Index (In Percent) Share Market Japan Singapore Total Mkt Cap 99. It is seen that the index stocks’ share of total market capitalization in India is 75.3 (%) Turnover ($ Mn. If whole market were taken into consideration.0 Singapore 475 145 168.) 15. while S&P considers only 5.311 China 3.4% in case of US.6 88.securities market in developed and emerging markets. of listed Companies 5.412 3. 16th in terms of total value traded in stock exchanges (17th in 2002) and 6th in terms of turnover ratio (7th in 2002). as S&P (even other international publications) does not cover the whole market. The ten largest index stocks share of total market capitalization is 36.1 HongkongIndia 1.8 100.273 Turnover Ratio (%) 122. 2007 A comparative study of concentration of market indices and indices stocks in different world markets is presented in the table below.295 2.5 Source: S&P Emerging Stock Market Factbook.4 55.5 332 477 508 56.147 130.2 109.296 6268 715 681 999 426.0% whereas US index accounted for 93.3 83.2 91.) 14.151 2.079 57.0 Germany 684 1.029 1. do not reflect the full Indian market. which is comparable to the other developed market. For example. India has a turnover ratio. though quite impressive. Standard and Poor’s (S&P) ranked India 17th in terms of market capitalization (19th in 2002).266 2.2 7 Share of Total Mk tCap 20. India has the number one ranking in terms of listed securities on the Exchanges followed by the USA. International Comparison: end December 2007 Particulars USA UK Japan No. and also one of the highest in the emerging markets.5 1.4 57. As may be seen from Table 1-2.3 162. India has more than 9000 listed companies at the end of March 2004.4 88 71. India’s position vis-à-vis other countries would be much better.7 70.041 Market Capitalisation Ratio139.9 .8%.644 companies.5% in India and 16.547 2.

It is significant to note that US alone accounted for about 47.0 42.3 93. The market capitalization of all listed companies taken together on all markets stood at US $ 34. it has witnessed a decline and stood at US $ 34.8 75.6 trillion in 2006 ($ 23 trillion in 2005).87% of total market capitalization in 2006.5 94.6 trillion in 2006. Despite having a large number of companies listed on its stock exchanges.4% of worldwide turnover in 2006. The turnover on all markets taken together has grown from US $ 5.5 The stock markets worldwide have grown in size as well as depth over last one decade. India accounted for a meager 2.6 55. while Indian listed companies accounted for 1.5 trillion in 1990 to $ 38 trillion in 2002 when it reached a peak.24% as at end-2005 to 44.6 16. 8 .66% in end-2006.4 36.5 83.2 44. The share of US in worldwide market capitalization decreased from 47.6 95. Thereafter.France Germany Italy United Kingdom United States India 89.9 43.96% in total world turnover in 2006.

006 29.023 544.376 20.080 2005 2006 2007 2008 28.79 9.96 World Total Source: S&P Emerging Stock Market Factbook.969 2.826.192 826.49 969.928 333.27 15.431 66 0 3.012 23.098.639.290.989 5 2.269 380.894 2.968 49.952 463.272.813 India 110.620 682.080.042 14.981 39.774 Korea 220.621 261.150.475 240.342 2.772 27.739 25.474 379.768 2.011 279.957.722 2.658 369.135 Philippines 41.56 0.499.87 0.573.118 284.144 China 523.656.103 2.802 Indonesia 23.204 448.01 36.864.59 0.639 329.040.523 39.2 29.91 647.667 294.403 9 2.547.947.439.706 Malaysia 120.01 865.321 2.808 631.Market Capitalization and Turnover for Major Markets (US $ million) Country/Region Market Capitalization Turnover (End of period) Developed Markets Australia Japan UK USA All Emerging Markets 2003 2004 25.659 9.989 20.73 29.075 2.080 681.251.743.40 0.896.324 1.753 4 14.298 197.040.046 249.931 592.369 476.814 2.052.721.623 50.230 1.635 Taiwan 292.396 131.43 1.46 .093 249.51 52.126.297 US as % of World 27.148 3.021 23.279 2.412.68 India as % of World 0.871.598.979 2.66 1.33 38.007 123.15 8 1 3 585.396.872 168.565 3.371.66 42.217.134 13.42 11.556. 2007 9 0.70 344.676.73 26.991 374.404.667 13.616 711.24 31.845 3.810.

Lack of investor education and resistance from stock brokers though has always posed some problems. the legal frame work is right in place and there are organizations like SEBI. resulting in one of the biggest shifts in the individual investor's relationship with their brokers. in the comfort of office or a home. Investors access a wealth of financial information on the same time as do market and financial professionals including breaking news. investor grievance handling and redressal system is fast and efficient. which provide investor guidelines to the investors for protection of their right. Net trading provides investors with seamless. investment in the stock market is just a click away.INTERNATIONAL AND INDIAN SCENARIO IN ONLINE BROKING In US markets. Net trading shall initially faced some problems relating to infrastructure and understanding of the concept. Presently. 82 per cent of the deals are done on line. RBI etc. 10 . developments and market data. It makes it easy for anyone to access net brokers and trade in stock. The European on line broking market is expected to be of $8 billions and has risen to about $50 billion today. real time online access to stock markets. Even the smallest retail investor can access information that was till now restricted to big traders. Also. With Internet trading. Online brokerage provides investors the tools to analyse the information such as research reports. online brokerage has significantly changed the dynamics of the market place. In the US.

Founded in 1990.2 PROFILE OF THE ORGANIZATION SMC Global is one of the largest and most reputed Investment Solutions Company that provides a wide range of services to its substantial and diversified client base. In 2006. and meeting the current international standards of securities market.e. In the same year. SMC expanded globally and acquired the Trading & Clearing Membership of Dubai Gold and Commodity Exchange (DGCX). Jaipur plus a growing network of more than 1250 offices across over 350 cities/towns in India and overseas office in Dubai. Chennai. the company acquired the Trading & Clearing Membership of NSE Derivatives and the memberships of leading commodity exchanges i. NCDEX and MCX in subsequent years. In 2000 the company became a member of BSE and a depository participant of CDSL India Ltd. Subhash Chand Aggarwal and Mr. Kolkata. IPO & Mutual Fund Distribution Division and its Merchant Banking division.1. Mahesh Chand Gupta. Ahemdabad. The company is having its corporate office in New Delhi with regional offices in Mumbai. In the same year. is a full financial services firm catering to all classes of investors.  Enabling shorter settlement cycles and book entry settlements systems. Cochin. the company also started its Insurance Broking division. HISTORY OF SMC SMC acquired membership of the Delhi Stock Exchange in 1990 and later in 1995 became a trading member of NSE. 11 . Hyderabad. SMC. by Mr.

advice. research.  Providing a fair. 12 .Mission  Establishing a nation-wide trading facility for equities. You can access a multitude of resources like live quotes.  Ensuring equal access to investors all over the country through an appropriate communication network. We provide ODIN Application. and online assistance helps you to take informed decisions. efficient and reliable execution of trades. Clearing Services Being a clearing member in NSE (derivative) segment we are clearing massive volumes of trades of our trading members in this segment. Vision  Their vision is to be the most respected company in the financial services space. You can also trade through our branch network by registering with us as our client. integrated trading application for fast. You can also trade through us on phone by calling our designated representatives in the branches where you are registered as a client. and meeting the current international standards of securities market. charts. debt instruments and hybrids.  Enabling shorter settlement cycles and book entry settlements systems. efficient and transparent securities market to investors using electronic trading systems. PRODUCT AND SERVICES OF SMC Equity & Derivative Trading SMC Trading Platform offers online equity & derivative trading facilities for investors who are looking for the ease and convenience and hassle free trading experience. You can now trade in the NSE and BSE simultaneously from any destination at your convenience. which is a high -end.

Franklyn Templeton etc. To ensure easy accessibility to back office accounting reports to our clients MC Depository They are ISO 9001:2000 certified DP for shares and commodities. secure and hassle free alternative to holding the securities and commodities in physical form. we have spread our wings globally by acquiring Membership of Dubai Gold and Commodities Exchange. all on a single screen. 13 . You can get Real-Time streaming quotes. place orders and watch the confirmation.e National Commodity and Derivative Exchange and Multi Commodity Exchange and offers you trading platform of NCDEX and MCX.Shortly we will be providing the facility of online investment in Mutual Funds and IPOs Online back office support To provide robust back office support backed by excellent accounting standards to our branches we have ensured connectivity through FTP and Dotnet based Application. We offer a quick. We have a distinction of being leading distributors of IPOs. We are registered with all major Fund Houses including Fidelity. i. We assure you a hassle free and pleasant transaction experience when you invest in mutual funds and IPOs through us.000 investors. We are registered with AMFI as an approved distributor of Mutual Funds. We are one of the leading DP and enjoy the trust of more than 40. We provide trading platform to trade in DGCX and also clear trades of trading members being a clearing member. In this segment. We use technology using ODIN application to provide you with live Trading Terminals. Distribution of Mutual Funds & IPOs SMC offers distribution and collection services of various schemes of all Major Fund houses and IPOs through its mammoth network of branches across India .Commodity Trading SMC is a member of two major national level commodity exchanges.

They are one of the few Depository Participants offering depository facilities for commodities. We are empanelled with both NCDEX & MCX. 14 .

hitech inhouse R&D wing with some of the best people. who are continuously in need of opportunities for striking rich rewards on their investment.SMC Research Based Advisory Services Their massive R&D facility caters to the need of Investors. process and technology resources providing complete research solutions on Equity. Commodities. SMC Investor Awareness Forum Their dedicated team of professionals is conducting investor meet/seminars across India. 15 . We believe that a well-informed investor is an empowered investor. We offer proactive and timely world class research based advice and guidance to our clients so that they can take informed decisions. Click on Research to unveil the treasure. We also seek your feedback on our services in these Investor meets. We have one of the most advanced. IPOs and Mutual Funds.

Also Internet penetration is poor in India.1. as they are quite annoyed with the phone call.Some respondents either do not have time or willing does not respond.  Lack of Career Opportunities  Limitations of online trading  Competition  Technical Problem 16 .  Some respondents are unwilling to talk: -.3 PROBLEMS OF THE ORGANIZATION  Lack of Techno Savvy people and poor Internet penetration: Since most of the people are quite experienced and also they are not techno savy.

(ONLY for intraday) 17 offers you various options while trading in shares. COMPETITION INFORMATION ICICIDIRECT. IWTL is an Affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited Product & Services: Trading in shares: ICICIdirect. which allows you to invest in Shares. Derivatives (Futures and Options) and other financial products. which is generally done with the intention of taking delivery of shares or is the most comprehensive Margin Trading: You can also do an intra-settlement trading up to 3 to 4 times your available funds.COM Products and Services A product for every need: ICICIdirect. wherein you take long buy/ short sell positions in stocks with the intention of squaring off the position within the same day settlement cycle. Mutual funds.1. Cash Trading: This is a delivery based trading system. ICICI Web Trade Limited (IWTL) maintains ICICIdirect. Simply put we offer you a product for every investment need of yours.

Commodity Trading. Moreover. F&O & Commodity). Financial Services. India bulls Financial Services is an integrated financial services powerhouse providing Consumer Finance. India bulls Financial Services in partnership with MMTC Limited. 18 . Multiplex and Power sectors. India bulls Group companies are listed in Indian and overseas markets and have a market capitalization of over USD 7 billion. India bulls Financial Services signed a joint venture agreement with Sogecap. the insurance arm of Societé Generale (SocGen) for its upcoming life insurance venture. is setting up India’s 4th Multi-Commodities Exchange. Stock Broking. India bulls Financial is also part of CLSA’s model portfolio of 30 Best Companies in Asia. India bulls has been conferred the status of a “Business Super brand” by The Brand Council. Retail. Commercial Loans. a subsidiary of Standard and Poor’s. the largest commodity trading company in India.INDIA BULLS India bulls Group is one of the top business houses in the country with business interests in Real Estate. We broadened our horizons and stepped into the field of Depository. Abhipra today commands the status of being one of the leading Depository Participants of Northern India in Private Sector. Online Trading (Equity. Super brands India. Life Insurance. e-Return Intermediary. The Net worth of the Group exceeds USD 2. Housing Finance. Infrastructure. Category I Registrar & Transfer Agent.Morgan Stanley India Index. India bulls Financial Services Ltd is amongst 68 companies constituting MSCI . we grew into Business House. Full-Fledged Money Changing Services. Asset Management and Advisory services.5 billion. ABHIPRA Beginning as a Broking House. India bulls Group companies enjoy highest ratings from CRISIL. Abhipra has Trading Terminal Outlets for NSE & BSE spread to almost every nook & corner of Northern India.

a subsidiary of Kotak Mahindra Bank. KOTAK SECURITIES:- Kotak Securities Limited. Not only do products and services need to be of high quality. National Commodities and Derivatives Exchange Limited (NCDEX). innovations. The company has four main areas of business:  Institutional Equities. From commercial banking. we offer our clients far more than merely a comprehensive range of financial services. the group caters to the financial needs of individuals and corporate. Kotak Securities is a corporate member of both The Bombay Stock Exchange and the National Stock Exchange of India Limited. to life insurance. We offer them ideas. This is evidenced from the fact that Abhipra is a ISO 9001 (Quality Assurance Systems) Registered Company. to investment banking. Kotak Securities was set up in 1994.  Portfolio Management and  Depository Services. is the stock broking and distribution arm of the Kotak Mahindra Group.  Retail (equities and other financial products). but potential customers also need to have assurance that the products will be of high quality. to mutual funds. to stock broking.Abhipra Capital Limited is also empanelled as a Depository Participant with one of the premier Commodity bourse. We feel that quality is an essential ingredient in building successful businesses. offering complete financial solutions that encompass every sphere of life. So a client now can open Commodity Demat Account with us At Abhipra. Kotak Mahindra is one of India's leading financial institutions. and solutions with extra-ordinary results. 19 .

Their Institutional Equity Division combines the efforts of the Research and Sales & Trading departments to best serve clients' needs. with just two people running the show. 20 . was founded in 1987 as a small sub-broking unit. It has established itself as the Best Local Brokerage House in India (Asia Money Brokers’ Poll 2005). sector trends and investment strategy has established them as a reliable research unit amongst leading Indian as well as international investors. Consistent delivery of high quality advice on individual stocks.MOTILAL OSWAL:- Motilal Oswal Securities Ltd.

W.05-0. all consolidate into a value-added product mix in tandem with evolving markets that are freer and fairer. 21 . driven competition.95 per cent for delivery-based trades. and pricing info that is accurate and real-time. and between 0.25-0. More and more investors now want to know how their trades are executed. hinges on efficient order routing. Paperwork diminishes significantly. Online brokerage ranges between 0.and with the economies of scale coming into play . The Net result: An inquisitive. as the cost of servicing often-outweighed transaction volumes. apart from quotes and unbiased investment analyses. resulting in reduced costs of trading. in turn. Critical components of execution quality include the prices at which orders were executed as well as the speed of execution. Technology and today's enabled investor have. Once major investments in online infrastructure are over and done with . transparency in dealings. and no more painful trips to your broker to check if everything's in order. Today's investor is more involved in managing his or her assets and analyzing a vast array of investment options. in turn. This was earlier very difficult. access and efficiency. and whether they have received the best possible price.1. We owe this to our investor fraternity.5 S.  Access to online trading and latest financial happenings. T ANALYSIS OF THE ORGANIZATION Strengths  The `do-it-yourself' framework of online share trading offers retail investors the three benefits of transparency. O. Online trading has made it possible to universalize access to retail investors.20 per cent of the value of transactions for non-delivery-based trades. informed and demanding is expected that brokerage rates would head further downwards. The quality of execution.

This is your main opportunity. There's also a degree of investor skepticism about online payment and settlement mechanisms in spite of all the encryption and fire walling brought into  Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them. Time and technology will soon assuage these concerns. 22 . “The three main technology obstacles which have prevented Internet broking from taking off are:  Lack of Internet penetration  Bandwidth infrastructure  Poor quality of ISP other don’t. Sharekhan. are some of the online broking sites in India. brokers have taken their trading rooms to the they allow you to buy and sell shares via Internet. HDFCsec. IndiaBulls.Transaction velocity is  There are 2 types of online trading service: discount brokers and full service online And more often than not. Kotakstreet. ICICIDirect. 5Paisa. Trading shares on BSE/NSE has always been your dream. When will you ever find the time? And besides.” Opportunities  You have some money to dabble with. Brokerage rates here are higher. These brokers allow their clients to place online orders with the option of talking/ chatting to brokers if advice is needed. Discount online brokers allow you to trade via Internet at reduced Some provide quality research.Weakness  Every thing in the world has a flip side to it . connections are lousy. Geojit the hassle of finding a broker is not easy. Known as online brokers. which hark back to the `physical' days. Full service online brokerage is linked to existing brokerages.

But nobody gives a damn about the resultant volatility.  And some. 23 . I believe. Some.75 per cent of the combined BSE and NSE daily turnover of about RS 11.Domestic funds. Prices of scripts can also be influenced to the advantage of vested interests. courtesy the Net. Unlike in the US. And. Threats  On to some threat perception . offer free investment advice over the Net to lure rookie investors with misleading information. hitch their fate with what the FIIs are up to.000 crore!!! The point is. there's tremendous scope for growth. where trading over the Net accounts for about 55 per cent of the total volumes. And all three include term investors as well as opportunists in their pecking order. non-vested stance. Especially when you consider the US. And daily trading turnover is estimated in the vicinity of 0. sans the neutral. in some Asian markets the figures as high as 70 per cent. All this spells spurting volumes. foreign institutional investors and operators comprise the three main market constituents. for instance. stockbrokers out here willingly (or under the force of circumstance) assume the role of `advisors'. not all.

innovative products offered by competitors.1 SIGNIFICANCE This project will accomplish to understand the problem faced by the new client with respect to online share trading and find ways to solve their queries at microscopic level. It will help in finding out the customer expectation about the product and also help to know the customer physiology. 3. 4. 5. 1. This study helps in finding the area in which SMC is strong and the area in which it lags behind others. The study gives information regarding the market competition. The study will help the management to understand the customer mind set and also estimating the present future market demand of the product. present demand of the product in the marketed. 2. 2. It also aims at finding out the brand image of the organization amongst the general investors and give information to the management about the new developments in the market adopted by the competitors and the areas where the company needs to improve. Helps in knowing the class in which max new SMC must concentrate. Help in finding the areas in which SMC will concentrate to increase its market share. Which class of customer mostly approaches SMC policies? 24 .2.OBJECTIVES AND METHODOLOGY 2. The project is to study the effectiveness of the stock exchange as this is one of the best way of investment. The study also aims to highlight the possible hurdles that a prospective client faces who are interested to investing insecurities but is unaware of the system of online share trading. It will help to estimate the level of awareness established in the market and in deciding the extent of promotion required. MANAGERIAL USEFULNESS OF THE STUDY A thorough research and a detailed study of market are very important for the management to take the right strategy suiting the market condition.

Research comprises defining and redefining problems. OBJECTIVES Before starting any project. 3. formulating hypothesis or suggested solutions. In short. the search for knowledge through Objective and Systematic method of finding solutions to a problem is Research. So. organizing and evaluating data. the objective of my project is to:  To analyze the market share & services of existing players to judge the future prospects of online trading for SMC INVESTMENT SOLUTIONS.2. and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. collecting. making deductions and reaching conclusions. 2. Stock market of India is now been one of the fascinating market worldwide. we should keep in mind the clear objectives of the project because in the absence of the objectives one cannot reach the conclusion or end result of the project. Indian is among the top ten destination of the world to which global player want to invest. In order to compete with the online trading market leader like ICICI the company has to work a lot on Online Trading in order to get the competency with other players.4 SCOPE OF THE STUDY Since better broadband connectivity across the country and wider awareness of equity as an asset class will push the online trade volumes to over 50% of total Trade therefore it is relevant to the future prospects emerging in the stock market. 25 .

“SMC” a software used by SMC Investment Solutions & SERVICES is an edge for gaining competitive advantage. address proof. NSDL and CDSL. To know more about Demat account Opening a Demat Account PROBLEM FORMULATION The research focuses on the future prospects of online trading along with SMC investment solutions. All you need to do is just open a Demat account and a trading account with a depository participant or DP. Online Trading Account and Demat Account After the introduction of the online trading systems it is very easy to do online trading with just a PC and an internet connection. so as to know how is the environment in Indian trading market? We will also analyze the competitive strategies of SMC investment solutions 26 . The research will basically present the current scenario of online trading in India. This project would also tell us about the working of the Indian Stock Market and the forces acting in the Online Trading. bank account etc. In India there are two depositories. Depository is the people who stores shares in electronics form. Most of the banks and brokerage houses provide trading account and Demat account. To open a Demat account you need many things like PAN card. therefore it is relevant to know the working of this software which would be enlightened in our company. The research will cover the Indian trading market and try to understand its various dimensions. DP is connecting Depository to investors. the importance of Online Trading has increased over the past decade therefore it is very important to consider the Online Trading as a future of the Indian Stock Market.Since the online trading is accepted by major players in the Indian Stock Market. the market players involved and the trading strategies followed in the market.

and analysis and reporting of Data and findings relevant to specific marketing situation facing the company.Descriptive research Descriptive research includes Surveys and fact-finding enquiries of different kinds.5 METHODOLOGY Marketing Research Is the systematic design collection. as it exists as the present. he can only report what has happened or what is happening. 2. The main characteristic of this method is that the researcher has no control over the variables. Research Design Types of Research: . 27 .Therefore this research will help in understanding Indian trading market and also try to find future prospects of online trading with SMC Investment Solutions. The major purpose of descriptive research is description of the state of affairs.

Collect the Information 4. Develop the Research Plan 3.Define the Problem and Research Objectives 2. Analyze the Information 5.Marketing Research Process 1. Present the Findings 28 .

research approaches. Define the Research Problem and Objective Objective  TO ANALYSE THE MARKET SHARE & SERVICES OF EXISTING PLAYERS  TO JUDGE THE FUTURE PROSPECTS OF ONLINE TRADING FOR SMC INVESTMENT SOLUTIONS. perception & awareness of offline trading customers. Develop the Research Plan The second stage of Research calls for developing the most efficient plan for gathering information. perception & awareness of online trading customers. Designing a research plan calls for decision on the data sources. Data Sources There are two types of data. 29 . 2.1. sampling plan & contact methods. research instruments. The respondents are stratified into offline share trading respondents and online share trading respondents.  To understand satisfaction. Hence the sub objective are:  To understand satisfaction.

Open Ended: .survey research is used to learn about need. perception and awareness level of the customers for online share trading. So in this research the data is collected from respondents through questionnaire. Close Ended: .Pre-specify all the possible answers & are easy to Interpret and Tabulate. Research Instruments Selected instrument for Data Collection for survey is Questionnaire.Primary data: The data that is collected first hand by someone specifically for the purpose of facilitating the study is known as primary data. 30 . websites of the company etc. The method used by me is Survey Method as the research done is Descriptive Research. Secondary data: For the company information I had used secondary data like brochures.A questionnaire consists of set of questions presented to respondent for their answers. It can be Closed Ended or Open Ended.Allows respondents to answer in their own words & are difficult to Interpret and Tabulate. Questionnaires: . Survey Approach Survey Research: .

The sample Unit taken by me.How many people should be surveyed? I have cover entire Delhi city for the survey.Types Of Question Included: Dichotomous Questions Which has only two answers “Yes” or “No”? Multiple Choice Questions Where the respondent is offered more than two choices. the marketing researcher must Design a Sampling Plan. Sampling Procedure: . Sampling Plan After deciding on the research approach and instrument.Who is to be surveyed? The marketing researcher must define the target population that will be sampled.How should the respondent be chosen? 31 . Rating Scale A scale that rates some attributes from “excellent” to “very poor” and “very inefficient” to “Very efficient”. My sample size is 200. This includes: Sampling Unit: . General individual customer those who trade in share market. Sample Size/ Population Size: .

Personal or On-line Interviews. For some questions I have to explain them about company. In my project I went for personal Interviewing. 32 . the marketing researcher must device how the subject should be contacted: Mail. Contact Methods Once the sampling plan had been determine. Telephone. as it’s necessary to go meet the individual respondents at their place so I can collect the right information. like different plans of the company etc. I used to talk with them and in that talk I asked them the relevant question of the questionnaire so I could get correct information from them for the objective purpose. Collect The Information The Data collection phase of marketing research is generally the most expensive and the most prone to error. Generally most of the respondents had filled questionnaire themselves but some avoid filling up so at that time myself filled according to their answer.In the Project. In which convenient sampling was done. sampling done is on basis of area sampling for the Delhi city. 3. I had visited all the respondents individually in the Delhi city and collected information via questionnaire.

tabulation and statistical inferences. the researcher turns to the task of analysis then.The sample of questionnaires 1 used is in Annexure. 5. then application of these categories to raw data though coding. The researcher can analyze the collected data with the help of various statistical measures. The unwieldy data should necessarily be condensed into a manageable groups and tables for further analysis. Interpretation of survey: Based on collected information the analysis is done. Analysis of the Information or Data Collected After the data have been collected. 4. 33 . After collecting the data I used hand tabulation method for analysis. The analysis of data requires a number of closely related operations such as establishment of categories.

SEBI in association with National Council of Applied Economic Research (NCAER)
conducted a Survey of Indian Investors in 1998-99 and then followed it up in 200001. The survey of 2000-01 was based on a sample of 288,081 geographically
dispersed rural and urban areas. The findings of this survey were released in
September 2003. The survey estimated that a total of 13.1 million or 7.4 per cent of
all Indian households totaling 21 million individuals directly invested in equity
shares or debentures or both during 2000-01. The other findings are as listed below:

The number of debenture owning households and individual debenture holders
far exceeds household and individual equity investors. Of the total 13.1 million
investor households, 9.6 million households owned bonds or debentures,
whereas only 6.5 million investor households owned equity shares.


The percentage of households investing in equity or debentures is more in urban
areas than in rural areas. This divergence is more in case of equities compared
to debentures. Of the 51 million urban households, 7.8 million households
representing more than 12 million urban individual investors owned equity
shares or debentures or both. Whereas, of the 125 million rural households, only
5.3 million households representing more than 8 million individual investors
shows a definite migration of investors from equity market to bond market
during the period between the two surveys.


The survey results also clearly reveal that number of non-investor
households have increased from about 156 million in 1998-99 to nearly 164
million in 2001-02 constituting nearly 92.6 per cent of all households.


It was also observed that the investor population and town size are directly
proportional. The largest city with more than 50 lakh population accounted for
about 17 per cent of investor households and the next higher segment, more
than 31 per cent investor households were in towns with population between
10 and 50 lakh.


Primary Market
An aggregate of Rs. 2,676,600 million were raised by the government and corporate
sector during 2005-06 as against Rs. 2,572,201 million during the preceding year.
Government raised about two third of the total resources, with central government
alone raising nearly Rs. 1,476,360 million.

Corporate Securities
The average annual capital mobilization from the primary market has grown manifold
since the last two-three decades. It received a further boost during the first half
of 1990s with the capital raised by non-government public companies rising sharply
from Rs. 43,120 million in 1990-91 to Rs. 264,170 million in 1994-95. Thereafter,
there has been a decline due to conditions prevailing in the secondary market.
However, the year 2005-06 took a turnaround in its performance as compared to the
previous year by mobilizing Rs. 32,100 million. The capital raised, which used to be
less than 1% of gross domestic saving (GDS) in the 1970s increased to about 13% in
1992-93 but thereafter witnessed declines. Though there has been a considerable
increase in the amount mobilized in 2005-06, when seen as a percentage of GDS, it is
1.20% (Table 1-8). Data in Table 1-9 shows that there is a high preference for
raising resources in the primary market through private placement route. Private
placements accounted for 89% of total resources mobilized through domestic issues
by corporate sector during 2005-06.
Indian market is getting integrated with the global market, though in a limited way
through Euro Issues. Since they were permitted access in 1992, Indian companies
have raised about Rs. 30,980 million through American Depository Receipts
(ADRs)/Global Depository Receipts (GDRs).
FIIs have invested heavily in Indian market in 2005-06. They had net cumulative
investments of US$ 38.75 billion as at end of March 2006. There were 745 FIIs
registered with SEBI as of end March 2006.
It appears that more and more people prefer mutual funds (MFs) as their investment
vehicle. This change in investor behavior is induced by the evolution of a regulatory
framework for MFs, tax concessions offered by Government and preference of

investors for passive investing. Starting with an asset base of Rs. 250 million in
1964, the total assets under management at the end of March 2006 have risen to Rs.
1,396,160 million. During the last one decade, the resources mobilized by the MFs are
increased from Rs. 112,440 million in 1993-94 to Rs. 476,840 million in 2005-06.

Secondary Market
Corporate Securities
There are 23 exchanges in the country, which offer screen based trading system. The
trading system is connected using the VSAT technology from over 357 cities. There
were 9,368 trading members registered with SEBI as at end March 2006 (Table 1-10).
The market capitalization has grown over the period indicating more companies using
the trading platform of the stock exchange. The all India market capitalization is
estimated at Rs. 13,187,953 million at the end of March 2006. The market
capitalization ratio defined as the value of listed stocks divided by GDP is used
as a measure of stock market size. It is of economic significance since market is
positively correlated with the ability to mobilize capital and diversify risk. It increased
sharply to 52.3% in 2005-06 against 28.5% in the previous year. The trading volumes
on exchanges have been witnessing phenomenal growth over the past decade. The
trading volume which peaked at Rs. 28,809,900 million in 2000-01, fell substantially
to Rs. 9,689,093 million in 2004-05. However, the year 2005-06 saw a turnaround in
the total trading volumes on the exchanges. It registered a volume of Rs. 16,204,977
million. The turnover ratio, which reflects the volume of trading in relation to the size
of the market, has been increasing by leaps and bounds after the advent of screen
based trading system by the NSE. The turnover ratio for the year 2005-06 accounted
at 122.9%.
The relative importance of various stock exchanges in the market has undergone
dramatic change during this decade. The increase in turnover took place mostly at the
big exchanges. The NSE yet again registered as the market leader with more 85% of
total turnover (volumes on all segments) in 2005-06. Top 5 stock exchanges
accounted for 99.88% of turnover, while the rest 18 exchange for less than 0.12%
during 2005-06 (Table 1-11). About ten exchanges reported nil trading volume during

840 Government Securities The primary issues of the Central Government have increased manifold during the decade of 1990s from Rs.59 7.70 40.530 49.14% for 2005-06.350 71.08 750.28 0.the year.37 15.65.490 56.89 10.476.750 104.930 198.750 –583.54 74. However. is presented in Chart 1-1.40 5.51 6.380 50.The index movement have been responding to changes in the government’s economic policies . the increase in FIIs inflows . The movement of the S&P CNX Nifty.120 61. 505. However. etc.530 130. 1. the most widely used indicator of the market.640 36.830 476. wherein it registered its all time high in January.690 million to Rs.210 112. the year 2005-06 witnessed a favorable movement in the Nifty. wherein it registered a high in January 2006 of 2014. Million) Year Resources raised by non-government % of GDS companies 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-04 2003-05 2004-06 % of disbursement Mobilisation By MF by Fis 43.11 1.20 33. etc.48 5.030 193.18 18.924 18.210 million. S&P CNX Nifty is the most widely used indicator of the market.100 31.59 24.360 million in 200506 (Table 1-9). 25.777 32.66 38.98 10.85 8. 89.532 111.84 1.85 78.100 3.34 3.27 1.110 199.30 –203. The Central Government 37 . the increase in FIIs inflows .74 1.08 85.32 4.69 41.38 12.17 0. Resources mobilized through public Issues (Amount in Rs. .300 264.890 million in 1990-91 to Rs. the year 2005-06 witnessed a favorable movement in the Nifty.370 45.01 1.800 112. The index movement have been responding to changes in the government’s economic policies .430 112.76 9. The issues by state governments have also increased over this period from Rs. The point-to-point return of Nifty was 80.130 51.170 160.

SEBI only approved trading in index futures contracts based on S&P CNX Nifty Index and BSE-30 (Sensex) Index.01% in 2004-05 to 74. After meeting repayment liabilities of Rs. increased by manifold over a period of time. As a result the weighted average maturity of dated securities increased to 14. 261.260 million.6% in 2005-06.000 million through issue of dated securities and Rs.760 million. Due to the soft interest rate policy pursued by the RBI. The State Governments collectively raised Rs. including treasury bills. and redemption of T-bills of Rs.94 years in 2005-06. 463. 1. 326. The maturity structure of government debt is also changing.71% in 2005-06. net market borrowing of Central Government amounted to Rs. To begin with.090 million. 308. The net borrowings of State Governments in 2005-06 amounted to Rs.mobilized Rs.360 million through issue of T-bills. Now. In addition to banks and insurance companies. there are futures 38 .930 million for dated securities. This was followed by approval for trading in options based on these two indices and options on individual securities and also futures on interest rates derivative instruments (91-day Notional T-Bills and 10-year Notional 6% coupon bearing as well as zero coupon bonds).89% in 2005-06.530 million in the preceding year. the investor base has also widened.210 million during 2005-06 as against Rs.215. During 2005-06 it reached a level of Rs. The trading in government securities exceeded the combined trading in equity segments of all the exchanges in the country during 2005-06. The aggregate trading in central and state government dated securities. However. The weighted average costs of its borrowing have declined to 5. Derivative Market The number of instruments available in derivatives has been expanded. 26. the share of WDM segment of NSE in the total of Non-repo government securities increased marginally from 74. 505. corporate and individual investors are also investing in government securities. The share of WDM segment of NSE in total turnover for government securities decreased marginally from 52% in 2004-05 to 47. Along with growth of the market. About 77% of primary issues were raised through securities with maturities above 5 years and up to 10 years. 888.160 million for the year 2005-06. the coupon rates offered on government borrowings have fallen sharply.792. 261.

So one has to be very careful & particular to the alerts provided time to time by RMS for containing the risks. Risk Management System The risk management system ensures the minimization of inherent known risks with appropriate tools and timely speedy flow of information. One should apply these tools and techniques according to the requirement of their Management and the Market conditions. An effective risk management system further ensures certain alerts by which unknown risks can be predicted & informed in due course of time. RMS can’t ensure a complete elimination of risks. Rationale behind Study As result of reforms in financial and real sector new investment alternatives have emerged.423. The total exchange traded derivatives witnessed a value of Rs. Further.5% of total turnover. So it is advised that one should follow set norms & put proper attentions on various alerts send by the RMS during the day /at the end of day for controlling the risks.333 million during the preceding year. It can reduce the risk & level of reduction of risk depends upon our own efforts. While NSE accounted for about 99.422. BSE accounted for less than 1% in 2005-06.690 million during 2005-06 as against Rs. There was a time when few individuals possessed majority of the wealth in 39 . 21. the risk is too high to imagine and one can find instant impact of every bit of information in terms of monetary gain or loss. To start with day to day processes which are implemented on daily basis to eliminate Risk as much as one can with the stipulated tools and techniques. NSE has created a niche for itself in terms of derivatives trading in the global market.and options based on benchmark index S&P CNX Nifty and CNX IT Index as well as options and futures on single stocks. 4. In stock market operation.

so as to find future prospects for \SMC GLOBAL AND SECURITY and answer questions like. which led to uniform distribution of income in society. As a result income of masses started rising and they started looking for suitable investment avenues. Also constant efforts have made auto industry to lower down the rates of automotives and private banks also lowered their interest rates on loans to help Indian investors to come forward and step in the market. From savings accounts. Government of India is making constant efforts to support the economy by decreasing interest rate on loans of all types. fixed deposits.the society. which forced investors to make changes in their portfolio. how to deal with recession evils? How to protect investors interest? How to sustain market position and market share? To understand it and deal with it one always has to go to the basics that is the investors and the reason investor invests is his motive. With the efforts of government our economy witnessed significant growth. Investors today are going in for saving their money instead of investing it in the market due to current market situation. this study helps in understanding current market volatility and solutions to deal with it. But after government efforts investors’ confidence is restored in equity markets. post office savings schemes. Indian economy is in such position because it is still in its developing stage and so there is so much more to explore and develop. After this period in today's market scenario we find Indian economy still struggling while the world is facing massive recession. 40 . several other investment alternatives have emerged such as capital markets. Harshad Mehta’s scam. which led to growth in financial services sector. This showed a positive growth in the market by investors turning back to the market. Thus. to achieve their financial goals. mutual funds. commodities market. insurance derivatives etc. SMC GLOBAL AND SECURITY plays a very important role along with other players in the market in current scenario by offering its financial services. There were also scams like US-64. There has been a major shift towards risky investments in order to earn higher returns. Recently market has faced downtrend but still holding on and offering new investment avenues to investors and still offers lucrative benefits to investors.

but there are some common desires. Everybody expects some return out of investment. Their key product offerings are as follows: o Equity Trading o Commodity Trading o Depositary Services o Portfolio Tracker o Life Insurance o General Insurance o Mutual Fund COMPANY FINANCIALS Revenue Month Sep ‘07 Oct ‘07 Nov ‘07 Dec ‘07 Jan’08 Feb’08 Mar’08 (in Lakhs) 29. Mutual Funds. General Insurance. 3.89 41 . as they understand the need of transactions to be executed with high speed and reduced time. Investors are also concerned about the safety of investment. Their personalized approach enables clients to achieve their Total Investment Objectives. Hence. And.61 107. They work with clients to meet their overall investment objectives and achieve their financial goals. At the same time they have the advantage of having all kind of Insurance & Investment Advisory Services for Life Insurance.94 104.27 79.37 140. SMC is a customer focused financial services organization providing a range of investment solutions to their customers.05 60. in case of an emergency. Their clients have the opportunity to get personalized services depending on their investment profiles. 2. and IPO’s also. quickly.43 128.Motives for investment may vary from person to person. people want their money back. there are three criteria’s to evaluate every investment avenue: 1. Safety Liquidity Returns Products & Services SMC customers have the advantage of trading in all the market segments together in the same window.

ONLINE Vs OFFLINE TRADING Internet trading is expected to:  Increase transparency in the markets. reduction of the systematic risks. 2007 to March’2008. by elimination of mismatches. Though.  Provide management information system (MIS).  Introduce flexibility in system.  Besides. we see a 343% growth in the revenues from 29.05 lakhs in Sept’07 to 128. these are: Investor protection. This graph shows an upward sloping trend line.  Reduce settlement risks due to open trades.The above shown graph depicts the revenue generated by SMC in 6 months starting from September.  Enhance market quality through improved liquidity. by increasing quote continuity and market depth. 42 . there have been a few slips in January and March but over all its presents financials of a growth company. creation of a fair and efficient market and. to handle growing volumes easily and to support nationwide expansion of market activity. If we look at the numbers.89 lakhs in March’08. through Internet trading three fundamental objectives of securities regulation can be easily achieved.

3. trading with advisory facility. only the broker knew the actually transacted price. The order routing system on which net trading will be done is compatible with screen-based trading terminals used today. In online trading OFFLINE mechanism the In offline the investor has no control. also provides live terminals to their clients. The investor needs to deposit and withdraw fund each time of trading. account. With on-line trading. It will also reduce transaction costs. Internet trading brings in total transparency between a broker and an investor in case of secondary market operations. The confirmation of the order would also be real time. When the open outcry system was prevalent. Investor in online trading can easily transfer it funds. customer has full control on his Demat and trading a/c. Online investor can directly invest into Offline trader needs to open separate IPO’s and Mutual funds also. investors can now see for themselves the price at which the deal takes place. 4. This practice diminished significantly when it was taken over by screen-based trading. It allows quick and easy access to valuable research and information to an investor and enables him execute transactions faster and more efficiently on a real time basis. Investor can place order even after the Investor cannot place After Market Order 43 . The volume of trade has also increased and has provided depth to the market. 2. 6. Broking houses providing online trading No live terminal is provided. increase liquidity in the market and ensure total transparency. while deciding to execute the order and also while the order is being executed. 5.The investors would be able to track the fluctuations in a particular stock and the market as a whole. The broker provides investor at online Offline investors are deprived of advices. in a nut shell. Thus. we can summarize the difference between online and offline trading as follows: ONLINE 1.

world DI slips are required for trading. 11. Brokers should have adequate system capacity for handling data transfer and arrange for alternate means of communication in case of Internet failure. Online trading is time effective It is time consuming process. For signatures.  Secured socket level security server for access through Internet. 50 lakhs. 7. The following security features are mandatory for all Internet-related trading systems:  User ID. The client can globally access the Trader cannot trade away for the place account and can trade anywhere in the where he/she has opened its account. participants should use authentication technologies and certification agencies as and when notified later. process SEBI Guidelines for online Trading According to SEBI guidelines on Internet trading. 8. reliability and confidentiality of data through use of the encryption technology. brokers providing e-trading must have a minimum net worth of Rs. Stock exchanges should ensure that the systems used by the broker provide for security. (AMO). The Demat account cannot be linked with closes. where Internet facility is available. No documents are required for trading.  All transaction logs with proper audit facilities to be maintained in the system. besides obtaining specific permission of the stock exchange concerned. 44 .  First level password. Stock exchanges should also ensure that brokers maintain adequate back-up systems and data storage capacity. No pool account is maintained at online In offline pool account are maintained. with any company’s trading account. Any Demat/DP account can be attached any trading account. 10.  Automatic expiry of password at the end of reasonable duration.

com) .59 2003-04 15360.81 7.nseindia.81 0.45 2005-06 81033. constituting 7. Year Enabled Members* Registered Clients* 2001-02 3 - 2002-03 61 123578 2003-04 82 231899 2004-05 80 346420 2005-06 70 463560 2006-07 78 849696 Year Trading Volume (Rs.696 clients for web based access as on March 31.www.11% of total trading volume.11 45 (Source: .034 crores.48 2004-05 37945. In the CM segment about 499 lakh trades for Rs. The members of the exchange in turn had registered 849. 2007.54 2002-03 8138.76 2. Internet Trading At the end of March 2007. Suitable firewalls between trading set up directly connected to an exchange trading system and the internet trading set up. were routed and executed through internet.08 3.81 1. 81. The following table gives the growth of internet trading. Crore) % of total trading volume 2000-01 - - 2001-02 7287. 78 trading members on the CM segment provided internet based trading facility to investors.

26% of total turnover in the CM segment in 2005-06. It is observed that the top ‘5’ and ‘100’ securities account for about 25.00 26-Apr-2007 2007076 565581 1353. top ‘5’ brokers accounted for only 13. has witnessed a steady increase and reached nearly 10. of Trades Turnover (Rs.02% of securities available for trading are being traded every month and 95.51 17-Apr-2007 N2007069 501438 922.54 20-Apr-2007 N2007072 585334 1143.6% of the securities were traded for at least 100 days during 2005-06.16 21-Apr-2007 N2007073 681553 1375.28 18-Apr-2007 N2007070 568237 1052.18 10-Apr-2007 N2007066 570339 1143. No.88% and 84. During 2005-06.20 12-Apr-2007 N2007067 681800 1284.68 46 .11 2-May-2007 2007079 669625 1216.40% of turnover Broker-wise distribution of turnover increasing diffusion of trades among a large number of trading members over the years.13% during March 2007. More than 98. as indicated below: Distribution of Turnover The concentration of trading among top ‘N’ securities/brokers. while top ‘100’ brokers accounted for 65.48 25-Apr-2007 2007075 613816 1263.By the end of Dec.89 24-Apr-2007 2007074 614635 1356.09% of total turnover.84 3-May-2007 2007080 680710 1260.21 4-May-2007 2007081 655428 1234. as measured by the turnover ratio. Liquidity The liquidity in the CM segment. which accounted for 78.46 19-Apr-2007 N2007071 607168 5-May-2007 2007082 649071 1182.94 7-Apr-2007 N2007065 758906 1655.26 27-Apr-2007 2007077 677594 1597. 2006 the number of clients doing the online trading has increased to 13lacs.51 13-Apr-2007 N2007068 686576 1315.79 28-Apr-2007 2007078 652819 1326. The following shows the turnover of the trade done through internet. The details of ‘50’ most active securities during 2005-06.86 29-Apr-2007 2007300 308508 735.52% of turnover. Trade Date Settlement No.

which used to dominate in terms of market capitalization in the year 1999-00 witnessed a dip in 2002-03. which was more than 23% in 1998-99. had witnessed a decline in the years 2001-02 and 2002-03. 363. As compared to this. classified according to different sectors. SECTORAL DISTRIBUTION The share of top '50' companies. The share of manufacturing companies in trading volume of top '50' companies.35% in 2005-06 and 2006-07 respectively. Sectors like manufacturing. The IT sector has also shown a turnaround this year with 22.21% of total market capitalization as at end March 2007.350 crore as at end March 1995 to Rs. the share of information technology (IT) companies in trading volume. in terms of trading volume and market capitalization.54% in the top ‘50’-market capitalization in 2006-07.5-Apr-2007 N2007064 633591 1306.13% and 23. A drastic change in the importance of different sectors is observed since NSE commenced trading.81%. ONLINE TRADING WITH SMC 47 . but a turnaround was noticed in the year 2003-04 (it accounted for 37. however this sector has witnessed a rebound and accounted for 31. which had been quite high in the year 2000-01. A mixed trend has been noticed in these sectors in terms of market capitalization.56% in 2005-06.585.585 crore as at end March 2007. Top 50 companies account for 69. 1.40 3-Apr-2007 N2007062 591383 1180.66%) which was also maintained till 2006-07 with the share of manufacturing companies rising to 41.19 4-Apr-2007 N2007063 635877 1238. witnessed a considerable decline and stood at only 19.07 MARKET CAPITALIZATION The total market capitalization of securities available for trading on the CM segment increased from Rs.

being up in the line of competition. Larger the client base. the company decided to launch its online trading portal in June. which is quite high. This is screenshot of SMC. SMC is doing a good job in the offline industry as it has established a good brand name for itself in a short span of time. Online trading also helps the company to cut recurring costs as it happens in offline trading. Features of SMC A browser based trading software that enables clients to access their accounts from anywhere using internet by a unique ID and password. which is the online trading software of SMC. 2) It provides a Common window for display of market watch and order execution where the client can click + (plus) for Buy and – (minus ) for Sell or Click on the 48 . bandwidth charges. Besides. But the benefits are recurring as the online trading is about volumes. 2006.SMC launched online trading in June. But looking at the competition. Though. higher the revenues. 2006 in addition to the traditional offline mode of trading on NEATXSV4. setting up online trading infrastructure requires one time set up cost like the cost of software. skilled manpower etc. This facility is available to all the online clients the moment they get registered with SMC INVESTMENT SOLUTIONS & SERVICES The product has a lot of features which provides various benefits to clients: 1) The screen gives live streaming quotes from respective exchanges. The client has an option of having “live” Multiple Windows for different exchanges and his personal window where he can add the scrips of his choice and save it. Since then SMC has managed to a fair share of client base which is very much visible from the company financials.

8) Greater exposure for trading on the available margin & DP MARGIN STOCK with very competitive commission. They also have the authority to square of the positions of the clients who don’t pay their margin money. quantity. How to do trading with our SMC Swift Model:Step 1 Install the Software provided by us and register urself on the software 49 . It also provides an Offline order placement facility. the client can watch the Market Depth. which lets the client set an “Alert” for itself to indicate a certain price of the scrip. Beside the rate. TRIGGER. 5) It enables clients to transfer funds online from their bank account to SMC trading account.AXIS Bank. 9) It also provides Real time updating of exposure and portfolio while trading & Online Integration of trading a/c with two common depositories to help move clients shares to and fro with ease. time of transaction & can also get the details of entire fortnight. type of account etc. 3) Before Buying or Selling. the client can also view the order number. 6) It also enables the clients to view the transactions (Buy or Sell) done during the day. which tells about Best Buy/Sell rates and Quantities etc of that security & also enables the clients to use the Stop-loss Feature to minimize their losses. IT shares the responsibility of supporting the entire system so that it runs smoothly. 4) A very useful feature of the product is FIRE THE TRIGGER. The user can set a different color or an audio alarm. HDFC.scrip and Press F1 to Buy and F2 to sell which provides an easy trading facility to the client. 7) The client can see the Bids/Offers that are not yet executed by the Exchange and has the options to “Modify” and “Cancel” the Order. SMC has banking integration with PNB.

Step 2: Check the Current Status of the account Step 3: Check the limit assigned 50 .

Step 4 Account Valuation Step 5 To Buy To Sell 51 .


default limits will be opened in Intraday five times and Delivery Three times (Only on a Cat) on Cash market and one time on FNO market of Net Margin .Default Limit and Exposure to the Clients:1. Square Up: It is a margin status when percentage of coverage is less then 25% when comparing funding stock (A cat stock) with gross margin. For Liquidated Value greater than or equal to 2 LAC.It is a point where the position of the client is squared up. default limits will be opened in Intraday ten times and Delivery Three times (Only on a Cat) on Cash market and one time on FNO market of Net Margin. NORMAL SQUARE OFF (LESS THEN 25%) – This activity has been done on daily basis with the help of software driven Batch file (provided by the IT department). It is a last alert that something must be done either by reducing the position or enhancing the margin . It is a last alert that the position of client may be squared up at any time if the Percentage of coverage goes below 25%. For Liquidated Value less than 2 LAC. Codes which have 53 . 2.

3. 5. Making note of commitments from Branch and Regional Heads against square off codes and make follow up accordingly. in case no proper reply received from the concerned RM/Branch. Consolidation of square off replies of margins from Branch end and make it considered. 6. in case the same is not done to the extent of bringing the clients margin above the required 50% margin levels .been not uploaded in the Batch file due to any exceptions are any commitment from Branch end are done manually if commitment fails. .m.M. Sauda of a client BELOW 25% will be compulsory squared off next morning.30 a.Amount is being transferred to top up the margins only through a transfer Cheque or Demand draft subject to the condition that the transfer Cheque or Demand draft is reflected in the bank as having been deposited before 2:00 P. Preparation of Exceptions client List. 54 . 4. 2. . Proper Reply here shall mean: . Preparation of Batch File for Automated Square off. Margin Call square off process:1. 7.The reply should Specify what positions shall be squared off before that 10. Reconciliation of Batch File after and before it has been executed. Preparation clients Cheque deposit details. the RMS shall block the client and square off the balance position so as to bring the client above the required margin levels. Preparation of square off cases report.

After: . To square off we have to prepare NON LAS LEDGER DEBIT REPORT.After execution of the batch file we have to check that every order of the file is properly executed or not and if there is any rejection then immediate action to be taken (Rejection to be squared manually) SQUARE OFF 5TH DAY LEDGER DEBIT CLIENTS (NON LAS):This activity is done on the Manual basis only. All exceptions and necessary details has been taken into consideration or not. 55 . The process of square off 5th day ledger debit is same as Normal Square off. only difference is that it is done manually.We have to make sure that the batch file has been created according to square off policy of RMS.Before: .

Because of remaining 20% take his/her residential property as an investment. Do you know about investment options available? KNOWLEDGE Yes No TOTAL %AGE 80% 20% 100 Interpretation Only 80% people knows the exact meaning of investment.DATA ANALYSIS Q 1. 56 . According to law purpose this is not an investment because of it is not create any profit for the owner.

57 .Q 2. only 25% considered the risk or returns factor. Most important things you take into your mind while making investments? FACTOR %AGE Risk Returns 8% 17% Both TOTAL 75% 100 Interpretation 75% people are considered the both factors risk as well as returns but.

58 . we conclude that 17% people know nothing about the securities investments and 75% people have partial knowledge about it. so. Awareness related to security markets KNOWLEDGE Complete Partial Nil TOTAL PERCENTAGE 8% 75% 17% 100 Interpretation On that basis. some promotional activities are required for increasing the awareness about security market.Q 3.

returns and tax benefits. risk covering.Q 4. 59 . and others. And remaining 25% are interested in capital appreciations. What is the basic purpose of your investment? INVESTMENT PURPOSE Liquidity PERCENTAGE 30% Returns 25% Capital appreciation 10% Tax benefits 20% Risk covering Others TOTAL 5% 10% 100 Interpretation 75% people are interested in liquidity.

there are more stringent norms by SEBI and exchanges. We know that the capital markets have picked up in past 4-5 years.Q 5: Since how long have you been investing in capital market? Time Period Frequency Less than 3 yrs 3-5 yrs More than 5 yrs Total 80 73 47 200 %age 39 37 24 100 Interpretation Looking at the figures. we can observe that 39 % of people have been investing for less than 3 years and so on. Also. 60 . That is the reason why people have started to pose more trust in capital markets now.

5 100 Interpretation Out of the people surveyed. 70 % people trade online.5 29. This shows a good prospect for online trading in future. 61 .Q 6 : Do you trade Online? Yes No Total Frequency 141 59 200 Percentage 70.

Q. COMPLICATED PROCESS Yes No No reply Total Frequency 60 46 94 200 Percentage 30 23 47 100 Interpretation This table shows the consolidated table of number of people voting for different factors as to why don’t they prefer to trade online. 7. 62 .

Why not online? Factors Yes LACK OF MARKET KNOWLEDGE NO COMPUTER INVESTMENT RISK POOR SERVICES COMPLICATED PROCESS No. some of them have experienced poor services from their online brokers. Hence.Q. The companies should also try to find and analyze the reasons as to why these customers are not trading online in spite of so many benefits the online trading offers. given. 8 . Also. At the same time the companies need to trap those 30% people who are still not aware of the benefits of online trading and try to shift them towards online trading. 63 . Out of the reasons. of People No 36 20 100 75 60 21 110 75 72 46 Interpretation We asked the people as to why they don’t trade online. they avoid doing online trading. we observe that maximum people avoid doing online trading as they perceive it to be more risky.

5 30 15 7.5% share at present but is growing 64 . SMC has only 7.IF YES Name of the company you trade with. Kotak Securities ICICI direct IndiaBulls Sharekhan SMC Investments Solutions Others TOTAL Frequency 42 35 60 30 15 18 200 Percentage 21 17.5 9 100 Interpretation India Bulls enjoy maximum market share of 30% followed by Kotak and ICICI direct.

another factor that is of importance are the regular updates that the organization provides to its clients. 65 . Also.Q 9: Which factor is most important while choosing a broking house? Interpretation Out the factors that attract ant investor to online trading are the low transaction cost followed by fast processing so that their margin is not lost due to time lag.

Thus. people prefer to invest in Mutual funds. it can also serve as a good opportunity to earn revenue for the company.Q 10 : Where ELSE do you invest your surplus fund? Areas Direct Equity Mutual fund Insurance Real Estate Banks Frequency 75 65 150 35 150 Interpretation We also found that besides stock Market. 66 .

we came across some good and some not so good features of this product. It should also try to collaborate with more banks so that the investor doesn’t have to go through the turmoil of opening new accounts. Now.  In case the client does some transactions for ‘Intra-day’ purpose but he gets his orders in different lots.  SMCSwift gives the client a facility to put an alarm if a certain rate of a particular stock is achieved. 1. 3.  The Margin report and Intra-day report though. increase its client base.  There was no feature of ‘Payment Gateway’ for fund transfer to and from the client in case of Pay-in and Payout. if he wants to change his order type from ‘Intra-day’ to ‘Delivery’. are a little complicated from the client’s end. contains all the necessary details. We take this opportunity to suggest some measures in order to make improvements to the product. SMC need to focus on HNI and corporate accounts more as they bring in bulk business. SMC needs to be more flexible with account types and brokerage structure so that it can cater to all types of client segments and hence. 67 . Their were some features in SMCPlus that needed to be changed and so were suggested by us. 2. then he has to go to trade log and change the ‘order type’ for each of the order lots.FINDINGS AND RECOMMENDATIONS As we worked with this project. This can be done away with by going to ‘Net Position’ feature and changing it in one go. 4.

68 . it is suggested that the company should aggressively focus more on Sales and promotional activities by efficiently utilizing the manpower resource it has. This will also benefit the company n terms of revenue. if we look in general. we find a lot of frauds happening in this field. As a whole. The company can also introduce dial and trade facility in case online system defunct. 7. Also. looking at the competitive scenario. This feature will be unique as no other software does it and can become the USP of this product. there should be proper compliance measures taken up by the company for investor protection like sending reports on the total trades done on their accounts. Thus.We suggest that a new feature should be introduced wherein an SMS facility should be provided to the clients who are on the go most of the time. 6. 5.

10 crores per day from online trading compared to a combined gross turnover of around Rs. entering the online ring promises exciting times ahead. they have to go through the entire rigmarole of opening up the bank and demat account again for easy operation. 69 .CONCLUSION Facts and figure speak in itself that as from the past years analysis of capital market we could see the bullish trend of the Indian stock This has raised to 12.000 crores handled by the BSE and NSE together. online trading has a long way to go. With some ten dotcom players. HDFC Bank. However. sharekhan. 5paisa.23. 9000-10.1 cr. Apart from the hassles involved. Compared to the Western there may also be certain extra charges involved in this exercise that may have to be built into the overall cost of online trading. icicidirect. Geojit Securities and duttstock.18 cr. Or. If investors do not have these accounts. There has been a tremendous pressure on the Indian industries to perform well as the expectations of the investors are rising with bullish market sentiments. such as kotaksecurities. The Online trading has grown tremendously since 2000-01 to 2007 form 7287. online trading is still in its infancy in India. investsmart.696.578 to 8. and a host of currently offers online trading services only to investors who have a bank or a demat account with ICICI. respectively. With trading turnover at around Rs. such as icicidirect.70 lacs till Dec. to 81033. investors can open an online trading account with SMC only if they open a demat account with it and have a bank account either with ICICI. The client base has also improved form 1. the existing online trading system suffers from a major lacunae.49. 2007. motilaloswal. indiabulls.


Do you know about investment options available? KNOWLEDGE Yes No Q 2. Most important things you take into your mind while making investments? FACTOR Risk Returns Both Q 3. Awareness related to security markets KNOWLEDGE Complete Partial Nil TOTAL Q 4.QUESTIONNAIRE Q 1. What is the basic purpose of your investment? INVESTMENT PURPOSE Liquidity Returns Capital appreciation Tax benefits Risk covering Others 71 .

8 .Q 5: Since how long have you been investing in capital market? Time Less than 3 yrs 3-5 yrs More than 5 yrs Total Q 6 : Do you trade Online? Yes No Q. Why not online? Factors LACK OF MARKET KNOWLEDGE NO COMPUTER INVESTMENT RISK POOR SERVICES COMPLICATED PROCESS IF YES Name of the company you trade with. COMPLICATED PROCESS Yes No No reply Q. Kotak Securities ICICI direct IndiaBulls Sharekhan SMC Investments Solutions Others 72 . 7.

Q 9: Which factor is most important while choosing a broking house? Low transaction Regular information Fast quarry Fast transaction Brand image Q 10 : Where ELSE do you invest your surplus fund? Areas Direct Equity Mutual fund Insurance Real Estate Banks 73 .  www. Human resource management  74   www. Research Methodology  Gupta .   www..Research Mythology Sources of Secondary Data: 1. Magazines and Journals:  S & P Emerging Stock Market Factbook  SEBI Bulletin  The Economic Times  The Mint  The Hindustan Times  The Times of India  The Wallstreet Journal  Indian Economy Magazine  Financial Management (Prasanna Chandra 12th Edition)  Marketing Research (TN Chabbra 4th Edition) 2.L  www..rbi.wikipedia. C.BIBLIOGRAPHY BOOKS  Websites   www.nse-india.