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Submitted to Andhra University, Visakhapatnam
In partial fulfillment of the degree of


Submitted By
REGD NO: 116231802079

Under the Esteemed Guidance of


Associate Professor
Project Guide



I hereby declare that the project work entitled “A STUDY ON EQUITY

MARKET” is being submitted by me to the Department of Management
Partial fulfillment for the Award of the Degree of “MASTER OF BUSINESS

I also declare that this project is entirely based on my own study and efforts. It
has not been submitted to any other University for the award of any Degree or

Regd. No.116231802079

I would like to express my sincere thanks to Dr. S. SARABANDI, Director of P.G

courses and Dr. SUSHMA.N, MBA, Ph.D., MHRM Head of the Department for their
constructive cooperation and valuable guidance throughout the course and also during the
project work.

I am grateful to my project guide T.PHANINDER KUMAR, MBA Department of

management studies for his valuable guidance and suggestions to complete this project
report successfully. I thank all the members in the faculty of Business management
(MBA) for the encouragement in my project work.

I am very much grateful to Mr. Nagi Reddy, Manager, who is the root cause for doing
the project in the organization.

I express my thanks to my parents and friends who helped and supported me a great
extent to complete this project. Further. I thank the Almighty in bestowing his blessings
on me for successful completion of my studies.















 Conclusion



The outburst in communication technology has led to greater integration of Indian financial
markets across the world. India is a developing country hence now-a-days many people are
interested to invest in financial markets especially in equities to get high returns and to save
income tax in the honest way. Equities are playing a major role in contribution of capital for
any business from its beginning. Since the introduction of shares concept, large number of
investors are showing interest to invest in stock market.

Stock market is the place where investors can buy and sell stocks. The stock market can be
split into two main sections: the primary market and the secondary market. The primary
market is where new issues are first sold through initial public offerings (IPOs). All
subsequent trading goes on in the secondary market, where participants include both
institutional and individual investors.

There are many different players associated with the stock market, including stockbrokers,
traders, stock analysts, portfolio managers and investment bankers. Each has a unique role,
but many of the roles are intertwined and depend on each other to make the market run

If we want to know how the stock market is performing, we can consult an index of stocks
for the whole market or for a segment of the market. Indexes are used to measure changes in
the overall stock market. There are many different indexes, each made up of a different pool
of stocks.

People often invest in various asset classes

 To beat inflation
 To find future needs
 To meet contingencies
 To maintain same standard of living after retirement
All these factors matters a lot to the investors and the mutual fund route is one way
through which people can meet their needs.
Equity Market
The market in which shares are issued and traded, either through exchanges or over-the-
counter markets. Also known as the stock market, it is one of the most vital areas of a market
economy because it gives companies access to capital and investors a slice of ownership in a
company with the potential to realize gains based on its future performance.

The Indian stock market mainly functions on two major stock exchanges, the BSE (Bombay
Stock Exchange) and NSE (National Stock Exchange). In terms of market capitalization, BSE
and NSE have a place in top five stock exchanges of developing economies of the world. Out
of total fourteen stock exchanges of emerging economies, BSE stood at fourth position.
Bombay Stock Exchange is located at Dalal street, Mumbai.

The National Stock Exchange is located in Mumbai. It was incorporated in 1992 and became a
stock exchange in 1993. The basic purpose of this exchange was to bring the transparency in the
stock markets. It started its operations in the wholesale debt market in June 1994. The equity
market segment of the National Stock Exchange commenced its operations in November, 1994
whereas in the derivatives segment, it started its operations in June, 2000. It has completely
modern and fully automated screen based trading system having more than two lakh trading
terminals, which provides the facility to the investors to trade from anywhere in India. It is
playing an important role to reform the Indian equity market to bring more transparent, integrated
and efficient stock market.

1) Equities are good resource of investment these days.

2) Investment is a game where risk is high and uncertain. The way equity instruments act
in the financial market gives an idea about investment in safe and secure market.
3) Thus it is very necessary to study the capital market to have a safe and securities in
debt investment selection.
4) The analysis of financial markets enables the investors to have grace and investment
5) The management has been widely felt among portfolios services educated to investors
as well as investment advisors.

Objective of this study is to find out KARVY Securities services for, Demat account, Equity
market. Project is sub-divided into the following objectives:

1) To study various operations of various Stock Exchange in India.

2) To study the fluctuations of selected scrip’s that is traded regularly in NSE and
suggestions given.
3) To find the competition of equity market especially in NSE trading and bring out the
awareness level of the investors who are trading with National Stock Exchange.
4) To find the advantages of the Demat account and charges by various depository
5) To study the trading procedure of karvy Securities and comparison of the broking
6) To find the cost saving analysis on the brokerage charges by the karvy Securities on
the share and derivative trading with the other broking firms.
1) The scope of the study is to give a clear picture about the comparing and selecting
best Debt Equities and Risk Equities to suggest measures to overcome the
2) Investor can assess the company financial strengths and factors that affect the

3) A small investor is one way, who is able to correctly plan and decide in which
profitable and safe instrument.

4) This report gives details about various investment objectives desired by investor’s
details about the concept selection of Equities.

The study was under taken in the trading floor of KARVY. To make the report more
authentic and valid, the collections of the data should be through reliable sources and the
approach is very important. The Information regarding the derivatives is collected from both
primary as well as secondary sources of data.

Primary data:

1) Watching the online trading live.

2) Interacting with the operators at the computer terminal’s the clients trading in karvy.
3) Collecting information from the head of each department and from the staff working
in those departments.

Secondary data:

1) Collecting the data from the website of NSE.

2) Referring the topics in textbooks and journals relating to stock exchange operations.
3) Collecting information through internet and also from Karvy Securities Limited.

As the subject chosen comparatively new one, the study suffers from certain limitations.

1) Stock Exchange is an ocean and study is an attempt to understand which a drop in the
ocean. The activities in stock exchange and derivatives market are vast and to
understand all the activities is a difficult task, as there are only few persons who can
provide information.

2) To know the entire activities of stock exchange is very difficult as it takes

a long period to understand.

3) Though the system, people and time were there, some information regarding certain
topics in stock trading was not collected due to non availability of time to the key
persons from their busy schedule.

4) Because of the comprehensive nature of some information is not disclosed though

sources of information are available.


Stock Market represents the Secondary Market, where existing Securities, Shares and
Debentures are traded; A Stock Exchange provides an organized mechanism for purchase and
sales of the Securities. At present, there are 24 Stock Exchanges in our country. The
investors want liquidity for their investments. Stock Exchange provides a place, where
Securities of different companies can be purchased and sold.

Introduction to Stock market trading:

The trading on stock exchanges in India used to take place through open outcry without use
of information technology for immediate matching or recording of trades. This was time
consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to
provide efficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully-
automated screen based trading system (SBTS) where a member can punch into the computer
quantities of securities and the prices at which he likes to transact and the transaction is
executed as soon as it finds a matching sale or buy order from a counter party. SBTS
electronically matches orders on a strict price/time priority and hence cuts down on time, cost
and risk of error, as well as on fraud resulting in improved operational efficiency. SBTS
allows faster incorporation of price sensitive information into prevailing prices, thus
increasing the informational efficiency of markets. It enables market participants, irrespective
of their geographical locations, to trade with one another simultaneously, improving the depth
and liquidity of the market.

A stock exchange, (formerly a securities exchange) is a corporation or mutual
organization which provides "trading" facilities for stock brokers and traders, to trade stocks
and other securities. Stock exchanges also provide facilities for the issue and redemption of
securities as well as other financial instruments and capital events including the payment of
income and dividends. The securities traded on a stock exchange includes: shares issued by
companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade
a security on a certain stock exchange, it has to be listed there. Usually there is a central
location at least for recordkeeping, but trade is less and less linked to such a physical place,
as modern markets are electronic networks, which gives them advantages of speed and cost
of transactions. Trade on an exchange is by members only. The initial offering of stocks and
bonds to investors is by definition done in the primary market and subsequent trading is done
in the secondary market.

Securities Includes:

a) Shares, scrip’s, Stocks, Bonds, Debentures stock or other marketable securities of a

like nature in or of any incorporated company or other body corporate;
b) Government securities; and
c) Rights or interest in securities.


The history of stock exchanges can be traced to 12th century in France, when the first
brokers are believed to have developed, trading in debt and government securities. Unofficial
share markets existed across Europe through the 1600’s, became the first official stock
exchange when it began trading shares of the Dutch East India Company. These were the first
company shares ever issued

The origin of stock exchange in India can be to the latter half of 10th Century. After the
American civil war (1860-61) due to the share mania of the public the number of brokers
dealing in the share increased. July 9th 1875: Native brokers from Bombay started the native
share and stock brokers association with 318 members on the list.
There were many changes and re -organizations and amalgamations till 1969, during
which the “The New York Stock Exchange” was formed with a maximum membership
limited to 1100.

The origin of Stock Exchanges in India is traceable in the latter half of the 19th
century. At that time, Capital Market dealings were limited to loan stock transactions of the
East India Company. By 1930, Stock Market took a turn with the emergency of some
corporate stock and development of textile mills that resulted due to the America civil war,
which gave Indian businessmen a global chance of quick profiteering by increasing exports
of cotton to America and Europe at exorbitant prices. The boom for Trade led to the
establishment of the Stock Exchange in Bombay, Ahmadabad, and Calcutta.


The term “STOCK EXCHANGES” implies is evident from the following feature of an

S - Securities provider for investor

T - Tax benefits, planning and examples
O - Optimum return of investments
C - Caution approach
K - Knowledge of Market
E - Eligibility for accruals
X - Exchange of securities transacted
C - Cyclopedia of listed companies
H - High yield
A - Authentic information
N - New entrepreneurs encouraged
G - Guidance to investors and companies
E - Equity cult

In 1860, the exchange flourished with 60 brokers. In fact the 'Share Mania' in India
began with the outbreak of American Civil war.
At the end of the war in 1874, the market found a place in a street (now called Dalal Street).
In 1887, "Native Share and Stock Brokers' Association" was established.

The next Stock Exchange, which emerged in the country, was ‘Ahmadabad Share and
Stock Brokers Association’ which was established in 1894. The third Stock Exchange was
set up at Calcutta in the year, 1908. Though some Stock Exchanges were set up before the
Independence, there was no All India Legislation to regulate their working.

To rectify this situation and to regulate the working of Stock Exchanges in the
country, the Securities Contracts (Regulation) Act was passed in 1956.

At present, there are 24 Recognized Stock Exchanges (BSE, NSE and Regional Stock
Exchanges) in India.

1. Bombay Stock Exchange –1875

2. Ahmadabad Stock Exchange--1957

3. Calcutta Stock Exchange association limited – 1957.

4. Delhi Stock Exchange – 1957

5. Madras Stock Exchange -1957

6. Indore Stock brokers association – 1958

7. Bangalore Stock Exchange – 1963

8. Hyderabad Stock Exchange- 1963

9. Cochin Stock Exchange- 1978

10. Pune Stock Exchange – 1982

11. U.P Stock Exchange association limited – 1982

12. Ludhiana Stock Exchange association limited -1983

13. Jaipur Stock Exchange association limited – 1983

14. Gauhati Stock Exchange limited – 1984

15. Mangalore Stock Exchange limited- 1985

16. Magadh Stock Exchange limited, Patna – 1986

17. Bhubaneswar Stock Exchange association limited- 1989

18. overthe Counter Exchange of India, Bombay- 1989

19. Saurashtra Kutch Stock Exchange limited – 1990

20. Vadodara Stock Exchange limited- 1991

21. Coimbatore Stock Exchange limited- 1991

22. The Meerut Stock Exchange limited – 1991

23. National Stock Exchange limited – 1992

24. Inter-connected Stock Exchange of India—1998

Names & Locations of various Stock Exchanges in India are:

1. Bombay Stock Exchange (BSE) Ltd.,- Mumbai

2. National Stock Exchange of India (NSE) Ltd., - Mumbai

3. The Ahmadabad Stock Exchange., - Ahmadabad

4. Bangalore Stock Exchange Ltd., - Bangalore

5. Bhubaneswar Stock Exchange Association Ltd., - Bhubaneswar

6. The Calcutta Stock Exchange Association Ltd., - Kolkata

7. Cochin Stock Exchange Ltd.,- Kochi

8. Coimbatore Stock Exchange Ltd.,- Coimbatore

9. The Delhi Stock Exchange Association Limited - New Delhi

10. The Guwahati Stock Exchange - Guwahati

11. Hyderabad Stock Exchange Ltd., - Hyderabad

12. Inter-connected Stock Exchange of India - Mumbai

13. Jaipur Stock Exchange Limited- Jaipur

14. The Ludhiana Stock Exchange Association Ltd., - Ludhiana

15.Madhya Pradesh Stock Exchange Ltd., - Indore

16. Madras Stock Exchange Ltd., - Chennai

17. Mangalore Stock Exchange Ltd., - Mangalore

18. Meerut Stock Exchange Ltd., - Meerut

19. overthe Counter (OTC) Exchange of India- Mumbai

20. Pune Stock Exchange Ltd., - Pune

21. Saurashtra-Kutch Stock Exchange Ltd., - Rajkot

22. The Uttar Pradesh Stock Exchange Ass. Ltd., - Kanpur

23. Vadodara Stock Exchange Ltd., - Baroda

24. The Magadh Stock Exchange Association- Patna

Securities and exchange board of India (SEBI):

SEBI was setup as an autonomous regulatory authority by the government of India “to
protect the interest of investors in securities and to promote the development of and to
regulate the securities market”. It is empowered by two acts namely the SEBI Act 1992 and
securities contract (regulation) Act 1956.

SEBI has come into force from January 30, 1992.under the provision of Act; it shall
be the duty of SEBI

(a) To protect the interest of investors in securities.

(b) Promote the development of the securities market.

(c) Regulate the securities market.


 Financial Position of the company

 Demand and supply position of scrip’s

 Role of financial institutions

 Lending rates

 Trade Cycles

 Speculation activities

 Government Control


 It is a place where securities are purchased and sold. A stock exchange is an

association of persons whether incorporated or not.

 Trading in stock exchanges are strictly regulated by the rules and regulations
prescribed by Stock Exchange Board of India (SEBI)

 Both genuine investors and speculators buy and sell shares in a Stock Exchange
Securities of corporation, trusts, Government, Municipal corporations etc., are traded
at stock exchanges.


 Ensures liquidity of capital

 Continuous market for securities

 The investors can evaluate the worth of their shares from the prices quoted at different
Stock Exchanges for those Securities

 Mobilizing surplus savings

 Helpful in raising new capital

 Platform for public debt

 Clearing house of business information and Safety in dealings


The buying and selling at stock exchanges is not allowed to outsides. They have to approach
brokers who are members of the stock exchange. The following are the things that are
involved in dealing with Stock Exchanges:

1. Selection of a Broker:

The first thing to do is to select a broker through whom the purchase or sales is to be

2. Placing an Order:

After selecting the broker, the client places an order for purchase or sale of securities.

3. Making the contract:

The authorized clerk of the broker goes to the concerned post and expresses his
intention to buy and sell securities. A deal is struck when other party agrees.

4. Contract note:

The buying and selling brokers prepare notes after their mutual consent next day.

5. Settlement:

The spot dealings are settled there in full. The settlement for ready delivery and
forward contacts is done with a different procedure.

Market Types

The Capital Market system has four types of markets.

1. Normal Market:

Normal market consists of various book types where in orders are Segregated as
Regular Lot Orders, Special Term Orders, Negotiated Trade Orders and Stop Loss Orders
depending on their order attributes.
2. Odd Lot Market:

The odd lot market facility is used for the Limited Physical Market.

3. Ret debt Market:

The RETDEBT market facility on the NEAT system of Capital Market Segment is
used for transactions in Retail Debt Market session. Trading in Retail Detail Market takes
place in the same manner as in equities (capital market) segment.

4. Auction Market:

In the Auction market, auctions are initiated by the Exchange on behalf of trading
members for settlement related reasons.


Client Brokers:

They do simple brokering between buyers and sellers and earn only brokerage for
their services from the clients.

Floor Brokers:

They are authorized clerks and sub brokers who enter the trading floor and execute
orders for the clients or for members.

Jobbers and Market Makers:

Jobbers/Market Makers are the members, who are ready to buy and sell
simultaneously in selected scrip’s, offering bid and offer rates for the brokers and sub-brokers
on the trading floor and earning profit through the margin between buying and selling rates


They are members who do inter market deals for a profit through differences in prices
as between markets.
Badla Financiers:

They are members who finance carry forward deals in specified group for a return in the form
of interest, called Badla Rate. They lend money or shares for the brokers who, over-buy or
over-sell respectively at the time of settlement. Badla is a carry forward facility from one
settlement to another without taking a delivery up to a maximum period of 90 days at a time,
now reduced to 7-15 days.


There are different types of speculators who are active on Stock Exchanges in India.
They are:


A Bull (Tejiwala) is an operator who expects prices to rise in future and sells
securities in the future. A bull tends to throw his victims up in the air.


A bear (Mandiwala) speculator expects prices to fall in future and sells securities at
present with a view to purchase them at lower prices in future. Just as bear presses, it’s
victims down to the ground.


A Stag is a cautious speculator in the stock exchange. He applies for shares in new
companies and expects to sell them at premium if he gets an allotment. He sells the shares

before being called to pay the allotment money.

Lame duck:

When a bear finds it difficult to fulfill his commitment, he is called struggling like a
lame duck.

The stock exchanges are the secondary markets. They serve not only the private sector
but also the joint and public sectors by providing a facility for the transferability of shares
held by the public. Thus the stock exchange is a medium of transfer of resources for the
securities, which have been already issued in primary market.

The brokers, the investors, mutual funds, and the financial institutions are the
important constituents of the secondary market.

According to the Securities Contract (Regulation) Act 1956, the Stock Exchange can
be defined as “An association, organization or body of individuals, whether incorporated or
not, established for the purpose of assisting, regulating business in buying, selling and dealing
in securities”.


 Ensure liquidity of capital

 Continues market for Securities

 Evaluation of Securities

 Mobilizing surplus savings

 Helpful in raising new capital

 Safety in dealings

 Listing of securities

 Platform for public debt

 Centre for business information


There is a strong need for the growth of capital market and stock exchanges in any
country. The stock exchange operations in India have shown an increasing tendency during
the period under the review. The stock exchanges have increased in India to provided
valuable services to the community.

They are:


1. It leads to economic development of the Nation.

2. They serve as an agency of the capital formation.

3. Stock exchanges divert the savings towards productive channels.

4. They provide liquidity and continuous market facility.

5. They provide a forum for raising public debt for national important projects.


1. It provides ready marketability of securities

2. It ensures safe and fair dealings in securities

3. It provides the facilities for quick disposal of securities

4. It helps to educate the public by various methods

5. They provide information about the listed companies


1. Helps in raising capital from public

2. Listing of securities is a symbol of credit worthiness of the company

3. Helps to new companies


One fateful evening in the summer of 1982, 5 young men who worked for a
renowned chartered accountancy firm decided that it was time they struck out on their own to
create an enterprise that would someday become an iconic name in the financial services

They came from ordinary middle class backgrounds. They had two assets; one was
their education and the other an unquenchable desire to succeed. They had a lot stacked
against them: the environment was not conducive to entrepreneurship; technology was not
fully supportive, financial markets were largely un-regulate, they were based out of
Hyderabad while most key players in the financial world were in Mumbai or other metros
and the wolf was at the door. The odds seemed insurmountable.

These remarkable young men’s “Never say die” approach held them in good stead
over the years. They stuck to their dreams, burnt the midnight oil, embraced technology and
made it work for them and through sheer dint of determination, eventually overcame all


The Karvy Group is a premier integrated financial services provider, ranked among
the top-5 in the country across its business segments. The Group services over 70 million
individual investors in various capacities, and provides investor services to over 600
corporate houses. Karvy Group established its presence through a wide network of over 450
branches, (or 900 offices) covering in excess of 400 cities and towns.

Karvy covers the entire spectrum of financial services, viz stock broking, depository
participant, distribution of financial products (including mutual funds, bonds and fixed
deposits), commodities broking, personal finance advisory services, merchant banking &
corporate finance, wealth management, NBFC, among others.

The Group is professionally managed and ranks among the best in technology,
operations and research across the financial industry. The Karvy Group has evolved over the
last three decades and today it assumes many avatars. Broadly the group pursues two lines of
businesses and can be graphically represented as follows:

. Karvy Stock Broking Limited (KSBL) which is the broking arm of Karvy Group, a
well diversified conglomerate whose business encompasses the entire financial services
spectrum along with data processing and managing segments.

Karvy’s financial services business is ranked among the top-five in the country across
its business segments. The Group services over 70 million individual investors in various
capacities and provides investor services to more than 600 corporate houses, comprising the
best of Corporate India.

Karvy prides itself on being extremely customer centric at all times providing leading
edge technology combined with professional management and servicing through a wide
network of offices across India.

Karvy Stock Broking Limited (KSBL) is among the country’s leading financial
services organizations renowned for its quality of investment and advice. KSBL through its
wide network of offices across India offers customized investment solutions to corporate,
institutions and individual investors.

KSBL helps investors construct a portfolio by factoring in their risk profile and future
financial needs so that their investments achieve an optimal balance between risk and returns.
Our comprehensive trading account helps clients approach various investment
avenues in an integrated fashion, providing them the facility to transact with ease. We have a
combined account facility that caters to all investment opportunities such as trade in Equities,
Derivatives, Currency and also investing in IPOs, Mutual funds and NCDs.

KSBL was awarded BSE Order of Merit award and the SKOCH – BSE Aspiring Nation
award in recognition to its efforts to educate, empower and help create financial markets

roup services over 70 million individual investors in various capacities, and provides
investor services to over 600 corporate houses. Karvy Group established its presence through
a wide network of over 450 branches, (or 900 offices) covering in excess of 400 cities and

Karvy covers the entire spectrum of financial services, viz stock broking, depository
participant, distribution of financial products (including mutual funds, bonds and fixed
deposits), commodities broking, personal finance advisory services, merchant banking &
corporate finance, wealth management, NBFC, among others.

The Group is professionally managed and ranks among the best in technology,
operations and research across the financial industry. The Karvy Group has evolved over the
last three decades and today it assumes many avatars. Broadly the group pursues two lines of
businesses and can be graphically represented as follows:


Stock markets are considered unpredictable, but they reflect the mood of the
economy. Over the years, investment in equities is considered to be the best long-term wealth
maximization option. The gap between unpredictability and a safety anchor in the market is
bridged by the in-depth knowledge of market functioning and changing trends, planning with
foresight and choosing one’s options with care. From that perspective, our equity broking and
advisory services are beyond just a medium for buying and selling stocks and shares. Instead,
we provide services which are multi-dimensional and multi-focused in its scope.

Karvy can boast of the largest-owned network among financial-services companies in

India. This has ensured that wherever a potential customer is located, it is never too far from
a Karvy office. Given the wide network, there are a number of trading terminals that provide
retail stock-broking facilities. Our services have increasingly offered customer-oriented
convenience which we provide to a spectrum of investors—high net-worth or otherwise—
with equal dedication and competence.

We offer online trading on both key platforms—National Stock Exchange and

Bombay Stock Exchange. More importantly, we make trading safe to the maximum possible
extent by accounting for several risk factors and planning accordingly. We have created a
very robust trading platform that facilitates customers to trade online not only in equities, but
also buy fixed deposits, mutual funds, commodities, currencies and also participate in a
public issue. Our online platform enables customers to view their portfolio online and also
access our various research reports and views on stocks. It also provides them with a facility
to communicate with our research/advisory teams online.

We are assisted by our in-depth research, constant feedback and sound advisory
capabilities. Our highly skilled research team—comprising technical analysts and
fundamental specialists—secure result-oriented information on market trends, market
analysis and market predictions.
This crucial information is provided as a constant feedback to our customers, through
daily reports delivered twice —the Morning moves, which predicts the market scenario for
the day; the Daily Wrap up, the final report for the day, where the market and the report itself
are reviewed.

To add to this repository of information, we publish a monthly magazine, The

Finapolis, which analyzes personal finance and offers share market tips and takes a close
look at various investment options and products available in the market. Moreover, our
weekly e-newsletter, Karvy Bazaar Baatein, keeps you informed on key trends in personal
finance and stock market trends. We cover a wide range of sectors and companies which are
categorized as large cap, mid cap and small cap. We also provide periodic macroeconomic
reports. Above all, we also offer special portfolio analysis packages and provide customized
advisory services to help you make the right financial moves to specifically suit your


The onset of the technology revolution in the financial-services industry saw the emergence
of KSBL as an electronic custodian registered with the National Securities Depository Ltd
(NSDL) and Central Securities Depository Ltd (CSDL) in 1998. We set standards enabling
further comfort to the investor by promoting paperless trading across the country, emerging
as the top-3 depository participant in India, in terms of customer serviced.

Offering a wide trading platform with dual membership of NSDL and CDSL, KSBL
is a powerful medium for trading and settlement of dematerialized shares. We have
established live DPMs, internet access to demat accounts, and an easier transaction process in
order to offer greater convenience to individuals and corporate investors. A professionally
managed team and the latest technological expertise have been allocated exclusively to our
demat division, including technological enhancements like SPEED-e. This makes our
response time quick and our delivery impeccable. Moreover, a wide national network makes
our efficiencies accessible to all.

The paradigm shift from pure selling to knowledge-based selling drives the business
today. With our wide portfolio offerings, we occupy all segments in the retail financial
services industry. A highly qualified and dedicated team of professionals, drawn from the
best of academic and professional backgrounds, are committed to maintaining high levels of
client service delivery. This has propelled us to become one of the top distribution houses for
equity and debt issues, with an estimated market share of 15% in terms of applications and
amount mobilized.

To further tap the immense growth potential in the capital markets, we enhanced the
scope of our retail arm, now providing planning and advisory services to the mass affluent.
Here, we understand customer needs and lifestyle in the context of current earnings and
provide adequate advisory services that will facilitate wealth creation in the long run. Both
market-savvy and the less knowledgeable investors find this service quite satisfactory. The
edge that we have over our competitors is the sheer depth of our portfolio of offerings and
our professional expertise. The investment planning for each customer is done with an
unbiased attitude so that the service is truly customized.


Karvy Currency Derivatives Segment, a specialized group vertical within Karvy stock
broking limited, has been established in 2008 to cater to the growing needs of corporate
houses to manage currency exchange rate risk. With the changing dynamics and increasing
volatility of exchange rates across the globe, companies exposed to currency risk face the
challenge of maintaining continued profit margins. Currency Derivatives would be one of the
best options to manage any related exchange rate risk and be free from the worries of market

At Karvy Currency derivatives segment (CDS), we provide customized hedging

strategies for importers, exporters and companies with foreign exchange exposure. We offer
forex advisory and brokerage service for the Indian currency derivative market, and provide a
robust and reliable online trading platform. Currency Derivatives Segment - Karvy Stock
Broking Limited is an active member of the National Stock Exchange (NSE), MCX Stock
Exchange (MCX-SX) and Bombay Stock Exchange (BSE).

Karvy, with over 25 years’ expertise in the financial markets, is offering

comprehensive wealth management solutions for its customers through Karvy Private Wealth
(KPW). Our wealth managers provide direction to a client’s financial decisions, enabling him
achieve his financial and life goals. As a wealth manager, we collate the relevant financial
information and life goals of the client, assess his risk tolerance level, examine his current
financial status, and identify a strategy to fulfill his goals.

Wealth management is an all-encompassing service, providing comprehensive

research-based advisory along with convenient and personalized investment execution. KPW
offers an unmatched product basket, ranging from debt, equity, mutual funds, insurance,
derivatives, commodities, structured products, international funds, art funds and real estate. It
is a unique service aimed at transforming clients’ dreams into reality.

KPW was set up to cater to HNIs, keeping in mind that they require a different kind of
financial planning and management. Our services include planning and protection of
finances, planning of business and retirement needs, and a host of other services, which will
help augment their existing as well as future finances and lifestyle. We combine a hard-nosed
business approach with a soft touch of personalized attention and dedicated customer care.

Our research reports have been widely appreciated by the HNI segment. The delivery
and support modules have been fine-tuned by giving our clients access to online portfolio
information, constant updates on their portfolios as well as value-added advice on portfolio
churning, sector switches, etc. Moreover, the investment recommendations given by our
research team in the cash market have enjoyed a high success rate.

To tap NRIs, we commenced operations in the Middle East, Dubai to cater to a

significant Indian population that resides there and is keen on participating in India’s growth
story. We have a strong team that specializes in offering not only Indian investment products
but also local investment products to these customers


Portfolio management services are meant for high net worth individuals or institutions
who want a personalized management of their finances. A team of expert professionals
conduct extensive research on markets to provide a customized solution to achieve unique
investment objectives. This ensures best selection of investment opportunity within an asset
class and active monitoring for optimized results. Investors are provided with an all time
access to track their portfolios. Our PMS offerings range across two asset classes – Equity
and Debt, with multiple options for each asset class...


Karvy Fortune helps individuals and small organizations forge a partnership with
Karvy which is one of the largest financial services group serving over 60 million investors
and provides investor services to over 400 corporate houses in the country. Karvy Fortune
already has a huge network of franchisees, with presence in 330 cities, and a total of 787
business associates all over India.

Karvy Fortune is constantly on the lookout for hard working, ambitious individuals
who would like to build a robust business without the usual hassles associated with starting
an enterprise. As a business partner of Karvy Fortune you get to be a part of an established
broking house, which is hugely successful in providing financial services to millions of
customers. The risk reward ratio for the individual/ enterprise becoming a franchisee is also
very low considering this is an already established business model and a brand name that has
great value in the financial markets in India.

In addition, as a franchisee owner one can focus on your core skills in running a
business, without the need to assemble a team of specialists from scratch, as the company
provides them with the technical and fundamental support and training.

The burgeoning stock market is offering a never before opportunity for the broking business
and a franchisee could use this opportunity to establish a profitable business.


Recognized as a leading merchant banker in the country, we are registered with SEBI
as a Category I merchant banker. We have built up a reputation as an able merchant banker
over the years by capitalizing on opportunities in corporate consolidation, mergers &
acquisitions, corporate restructuring and capital rising (including raising resources for
corporate or the government). Our success over the past two decades has given us the
confidence to focus in this sector with renewed vigor.
The high-quality professional team and our work-oriented dedication have propelled
us to offer value-added corporate financial services and serve as a professional navigator for
the long-term growth of our clients which include leading corporate, state governments,
foreign institutional investors, and public and private sector companies and banks in Indian
and global markets.

Our advisory and consultancy roles in restructuring, divestitures, acquisitions, de-

mergers, spin-offs, joint ventures, privatization and takeover defense mechanisms have
elevated our relationship with the client to one based on unshakable trust and confidence.


An ISO 9001:2008 certified company, Karvy Comtrade Limited (KCTL) is India’s

leading commodities brokerage house. We have membership of Multi Commodity Exchange
of India (MCX), National Commodity and Derivatives Exchange (NCDEX), National Multi-
Commodity Exchange of India (NMCE), National Spot Exchange (NSEL), NCDEX Spot
Exchange (NSPOT), Ace Commodity Exchange (ACE) and Indian Commodity Exchange
(ICEX). We are one of the early players in this business and have built a very strong research
which is widely acknowledged across our customer base be it the corporates or the traders
who comprise our prime customer segment. We are by far the only commodity trading
entity who has a presence in the wholesale markets where the commodities are auctioned
purely to get a very strong sense on the demand supply for most of the agricultural products...


Karvy Finance, an NBFC established in 2009, is primarily focused on Micro & Small
Enterprise Secured Business Loans with Loan against Property, Loan against Gold & Loan
for Small Commercial Vehicles. Karvy Finance believes in serving the underserved business
customers in India’s market for all their loan needs with a network of 75 neighborhood
lending branches in 35 locations. Karvy Finance aims to provide Fast, Friendly & Flexible
loan services to its target audience

Keeping in line with Karvy credo to be a leading and preferred financial services
provider, our focus at Karvy Finance is to provide the complete spectrum of financial
services products to our customers and build a strong nationwide distribution footprint to
emerge as the leader in Micro, Small & Medium Enterprise segments in India. At
KarvyFinance, we recognize your self-worth and help in growing your net worth and
achieving your dreams on your own terms.


Karvy’s Realty service is engaged in the business of value-added real estate and
property services. We offer individuals and corporate myriad options across investments,
financing and advisory services in the realty sector. Building on the Karvy brand as a leading
industry benchmark for world-class customer servicing and quality standards, we bring forth
a reputation for reliability, dependability and honesty.

We have a deep understanding of the sector, and, therefore, the needs and preferences
of our clients. Our team of qualified realty professionals facilitates long-term relationships
with buyers and sellers of properties alike across the country, thus enabling clients to put their
money in genuine properties for a decent value appreciation at the right place and at the right


Karvy Computershare is a 50:50 joint venture between Karvy and Australia-based

Computershare – the world’s largest transfer agent. Karvy Computershare is the largest
registrar in India, servicing over 70 million investor accounts spread over 1,300 issuers
including banks, PSUs and mutual funds. Karvy Computershare has a workforce of around
4,000 experienced professionals drawn from various disciplines. The worldwide network of
Computershare will hold us in good stead by keeping us abreast of the international
standards, in addition to letting us leverage the best technologies from around the world.

 Issue registry: Karvy Computershare (KCPL) has emerged as the largest

transaction-processing house in the Indian corporate sector, mobilising funds for
numerous companies. Our ability to execute voluminous transactions and our
hardcore expertise in technology applications has gained us the No.1 slot in our field
of business. We are India’s first registry to receive ISO 9002 certification and have
now migrated to the ISO 9001:2008 standard for quality management systems,
certified by Norwegian company DNV. We have also been awarded ISO 27001:2013
certification by DNV, for high standards with respect to information security and
management systems, which stands testimony to our insistence on customer service
excellence. In addition to our unique investor servicing presence across all phases of a
public issue, we at KCPL are actively coordinating with both depositories (NSDL and
CDSL) to develop special models that enable customers to access depository services
during an IPO.
 Corporate Shareholder Services: KCPL has been a customer-centric company
since inception. We offer a single platform to service multiple financial instruments,
in our bid to satisfy the varying needs of both corporates and their retail investors. In
that regard, our volume-management capability is legendary. Today, we are
recognized as a company that exceeds customer expectations, which is a prime reason
for the strong customer loyalty we generate. An opinion poll commissioned by The
Merchant Banker Update and conducted by the reputed market research agency
MARG found KCPL the “Most Admired” registrar among financial-services
 Mutual Fund Services: KCPL has attained a position of immense strength as a
provider of across-the-board transfer agency services to asset management companies
(AMCs), distributors and investors. Nearly 40% of India’s AMCs leverage our range
of high-quality services. Besides providing the entire back-office processing, we are
an interface between the AMC and the investor.

Carrying our ‘limitless’ ideology forward, we have explored new dimensions in every
aspect of mutual fund servicing, from volume management, cost-effective pricing, delivery in
the least turnaround time and efficient back-office and front-office operations, to strong
customized service. KCPL has been with AMCs every step of the way, helping them to serve
investors better by offering a diverse range of customized services. Our ‘first-to-market’
approach has earned us the reputation of an innovative service provider with a visionary bent
of mind


Forex and currencies is another business vertical of the Karvy group to venture into
Trade and Corporate Finance Segment, Forex Corporate Advisory Services. The company
has been registered with FEDAI. We offer syndication services to the Indian clients in the
area of Buyers and Suppliers Credit Services. External Commercial Borrowings, Working
capital arrangement, Bill Discounting & Short Term Investment options etc. Intermediary
services in Forex interbank broking and help companies/ corporates/individuals to explore
extra-ordinary opportunities, manage and sustain growth, and maximize their revenue by
minimizing the risks in Forex transactions.


Karvy Insurance Repository (Kinrep) is a licensed Insurance Repository in India.

Kinrep has been offering various life and general insurance companies since 2008. Kinrep
has completely home grown mature business applications to cater to the in house team as
well as clients.

Karvy Insurance Repository is a leader in transforming and managing business

processes using a blend of cutting edge technology and refined practices. Kinrep has wide
network of 500 branches across the length and breadth of the country. Kinrep is the first
insurance repository to offer full suite of services to insurers, policy holders and agents of life
insurance on a variety of mobile / tablet platforms including the conventional ones. Kinrep
brings over 2000 man-years of pooled BPO experience with over 100 man-years in the
Insurance industry. Kinrep offers the best in class security to insurers with ISO 27001
certified processes, fully owned branch network and fortified IT and operational controls.


Data Management Services offers services in the areas of E-governance processing,

insurance back office processing, record keeping, and back office for BFSI clientele and
telecom, data management requirements of large corporations.

 E- Governance
In today’s world where governments are gearing up to the ever growing needs of the
citizens and scaling to reach their mission, we offer a unique value proposition and present
our bouquet of services
 Telecom
At a time when telecom companies are looking to grow beyond the boundaries with
minimum input costs, with our pedigree and footprint in the country we are offering solutions
to help them grow. The service offerings spectrum has been designed in such a way so that an
end to end model is offered
 Banking
Banks and financial services companies are looking to penetrate into deeper untapped
markets. We are helping these companies to reach the potential markets with our wide array
of services. Here we have designed our service spectrum in such a way that it is focused for
each product category in order to help you ascertaining the services you need
 KYC Registrations

With a view to bring uniformity and remove duplication efforts in the KYC requirements
for the securities markets, SEBI has introduced the SEBI KYC Registration Agency (KRA)
Regulations, 2011


Karvy Global is a leading Business Process and Knowledge Services

Company, focuses on delivering knowledge based business solutions for its clients and
provides an innovative framework of solutions that are directly tied to improving bottom line
We serve investment banks, insurance providers, brokerages, hedge funds, research
agencies, and life settlement providers across the United States, Middle East, and Europe.
Our clients have found their cost advantage, ability to scale efforts, and specialist knowledge
regarding emerging markets to be a strong advantage in the new, fast, and unpredictable

Our areas of focus include equity research, investment banking support, commodity
research, business research and specialized transaction processing services in BFSI &
Healthcare verticals.


Karvy Insights (KI, pronounced ‘key’), is the market research arm of the Karvy
Group. It is a full-service market research and insights organization, offering both Qualitative
and Quantitative research solutions across sectors like CPG, Automotive, Finance, Retail/e-
communication, Telecom, Infrastructure, Social research to name a few. KI is all about
discovering different facets of life in all its nuances, detail and complexities. Its vision is to
offer 'operative' intelligence to facilitate growth in every sphere, person and business. So
whether it is about shopping behavior/ touch point audits, education choices, healthcare
practices, high value spends on luxury items or about regular day-to-day choices of products,
KI can support you.


Karvy Analytics is building world-class solutions for the global analytics universe. Its
solutions bring immediate business benefits to global customers interested in leveraging big
data, statistical and mathematical modeling techniques, social analytics, and mobile
descriptive analytics for new business insights. Karvy Analytics is focused on multi-industry
use cases for companies that need technology and professional services for their functional
and operational analytics projects. It has partnerships with the world’s leading brands to
ensure a strong and supportive ecosystem

In financial markets, stock is the capital raised by a corporation through the

issuance and distribution of shares. A person or organization which holds shares of stocks is
called a shareholder. The aggregate value of a corporation's issued shares is its market
capitalization. When one buys a share of a company he becomes a shareholder in that
company. Shares are also known as Equities. Equities have the potential to increase in value
over time. It also provides the portfolio with the growth necessary to reach the long-term
investment goals. Research studies have proved that the equities have outperformed than
most other forms of investments in the long term. Equities are considered the most
challenging and the rewarding, when compared to other investment options.

The first company to issue shares of stock was the Dutch East India Company, in 1602. The
innovation of joint ownership made a great deal of Europe's economic growth possible
following the Middle Ages. The technique of pooling capital to finance the building of
ships, for example, made the Netherlands a maritime superpower. Before adoption of
the joint-stock corporation, an expensive venture such as the building of a merchant ship
could only be undertaken by governments or by very wealthy individuals or families.

Equity markets, the world over, grew at a great speed in the decade of the nineties.
After the bear markets of the late eighties, the world markets saw one of the largest ever bull
markets of more than ten years. The opening up of Indian economy in the 1990's led to a
series of financial sector reforms, prominent being the capital market reforms. These
reforms have led to the development of the Indian equity markets to t standards of the major
global equity markets. All this started with the abolition of Controller of Capital Issues and
subsequent free pricing of shares.

The introduction of dematerialization of shares, leading to faster and cheaper

transactions and introduction of derivative products and compulsory rolling settlement has
followed subsequently. The introduction of online trading has given a much-needed impetus
to the Indian equity markets.

The market moved to compulsory rolling settlement and now all settlements are
executed on T+2 basis and market is gearing up for moving to T+1 settlement in 2004
while the Straight Through Processing (STP) is in place from December 2002.

The importance of equity market is increasing. Rightly, realizing the advantages of

resource allocation through market, Government of India and Reserve Bank of India have
been pushing reforms in equity markets. Series of steps are being taken to remove hurdles,
increase market efficiency and to make it attractive for the retail investors to take part in the
equity market. It may not be an exaggeration to say that the Indian markets are resourceful to
put themselves on par with the markets of the developed countries. The Indian markets have
assimilated in a relatively lesser time, many a developments that took long time in the
developed markets.


Equity is:
1. Stock or any other security representing an ownership interest.
2. On the balance sheet, the amount of the funds contributed by the owners (the
stockholders) plus the retained earnings (or losses), also referred to as "shareholder's equity".
3. In the context of margin trading, the value of securities in a margin account minus what
has been borrowed from the brokerage.

1. Invest for Real Returns
2. Keep an Open Mind
3. Never Follow the Crowd
4. Everything Changes
5. Avoid the Popular
6. Learn from your Mistakes
7. Buy during Times of Pessimism
8. Hunt for Value and Bargains
9. Search Worldwide
10. No-one Knows Everything
If you buy the same securities as other people, you will have the same results as other people.
It is impossible to produce a superior performance unless you do something different from
the majority. To buy when others are despondently selling and to sell when others are
greedily buying requires the greatest fortitude and pays the greatest reward. Bear markets
have always been temporary. And so have bull markets. Share prices usually turn upward
from one to twelve months before the bottom of the business cycle and vice versa. If a
particular industry or type of security becomes popular with investors, that popularity will
always prove temporary and, when lost, may not return for many years.

The investor should bear in mind that while he makes investment decision, he should have
idea of the company’s break-even point and company’s position in the stock exchange. For
this EQUITY RESEARCH is done. Equity Research does the research of company’s income
and growth. In the process, it uses the various sources of financial information available in
the country and accordingly advises in which company an investor should invest.


The investor while buying stock has the primary purpose of gain. If he invests for a short
period of time it is speculative but when he holds it for a fairly long period of time the
anticipation is that he would receive some return on his investment. Fundamental analysis is a
method of finding out the future price of a stock, which an investor wishes to buy. The
method for forecasting the future behavior of investments and the rate of return on them is
clearly through analysis of the broad economic forces in which they operate. The kind of
industry to which they belong and the analysis of the company's internal working through
statements like income statement, balance sheet and statement of changes of income.


Investors are concerned with those forces in the economy, which affect the performance of
organizations in which they wish to participate, through purchase of stock. A study of the
economic forces would give an idea about future corporate earnings and the payment of
dividends and interest to investors. Some of the broad forces within which the factors of
investment operate are:
1. POPULATION: - Population gives an idea of the kind of labor force in a country. In
some countries the population growth has slowed down whereas in India and someother third
world countries there has been a population explosion. Population explosion will give
demand for more industries like hotels, residences, service industries like health,
consumer demand like refrigerators and cars. Likewise, investors should prefer to invest in
industries, which have a large amount of labor force because in the future such industries will
bring better rates of return.


economic forces relating to investments would be depending on the amount of resources
spent by the government on the particular technological development affecting the
future. Broadly the investor should invest in those industries which are getting a large
amount of share in the funds of the development of the country. For example, in India
in the present context automobile industries and spaces technology are receiving a greater
attention. These may be areas, which the investor may consider for investments.

3.CAPITAL FORMATION: -Another consideration of the investor should be the

kind of investment that a company makes in capital goods and the capital it invests
in modernization and replacement of assets. A particular industry or a particular company
which an investor would like to invest can also be viewed at with the help of the economic
indicators such as the place, value and property position of the industry, group to which it
110ngs and the year-to-year returns through corporate profits.


are to a large extent responsible for a country’s economic development and overall
improvement in the condition of corporate growth. In India, technological discoveries
recycling of materials, nuclear and solar energy and new synthetics should give the
investor an opportunity to invest in untapped or recently tapped resources which would
also produce higher investment opportunity.

The industry has been defined as homogeneous groups of people doing a similar kind of
activity or similar work. In India, the broad classification of industry is made according to
stock exchange list, which is published. This gives a distinct classification to industry to
industry in different forms such as:
(A) Engineering,
(B) Banking and Insurance,
(C) Textiles,
(D) Cement,
(E) Steel Mills and Alloys,
(F) Chemicals and Pharmaceuticals,
(G) Retail,
(H) Sugar,
(I) Information Technology,
(J) Automobiles and Ancillary,
(K) Telecommunications,

Industry should also be evaluated or analyzed through its life cycle. Industry life cycle
may also be studied through the industrial life cycle state. There are generally three stages of
an industry. These stages are pioneering stage, expansion stage and stagnation stage.

1.THE PIONEERING STAGE:-The industrial life cycle has a pioneering stage

when the new inventions and technological developments take place. During this time the
investor will notice great increase in the activity of the firm. Production will rise and in
relation to production, there will be a great demand for the product. At this stage, the profits
are also very high as the technology is new. Taking a look at the profit many new firms enter
into the same field and ill; market becomes competitive. The market competitive pressures
keep on increasing with the en" of new-firms and the prices keep on declining and then
ultimately profits fall. At this stage all firms compete with each other and only a few efficient
firms are left to run the business and most of the other firms are wiped out in the pioneering
stage itself.
2. THE EXPANSION STAGE: The efficient firms, which have been in the market
now, find that it is time to stabilize them. Although competition is there, the, number of
firms have gone down during ill pioneering stage itself and there are a large number of
firms left to run the business in the industry. This is the time when each one has to show
competitive strength and superiority. The investor will find that this is the best time to make
an investment. At the pioneering stage it was difficult to find out which of the firm to invest
in, but having waited for the stability period there has been a dynamic selection process and a
few of the large number of firms are left in the industry. This is the period of security and
safety and this is also called period of maturity for the firm. This stage lasts from five years to
fifty years of a firm depending on the potential and productivity and policy to meet the
change of competition and rapid change in buyer and customer habit. After this stage
develops the stage of stagnation or obsolescence.

3.THE STAGNATION STAGE:- During the stagnation stage the investor will find
that although there is increase in sales of an organization, this is not in relation to the
profits earned by the company. Profits are also there but the growth in the firm is lower
than it was in the expansion stage. The industry finds that it is at a loss of power and cannot
expand. During most of the firms who have realized the competitive nature of the industry
and the arrival of the stagnation stage, begin to change their course of action and start on a
new venture should make a continuous evaluation of their investments. In firms in which they
have received profits for large number of years and have reached stagnation they can
plan to their investments and find better avenues in those firms where the expansion stage
has set in.


Company analysis is a study of the variables that influence the future of a firm both
qualitatively and quantitatively. It is a method of assessing the competitive position of a
firm earning and profitability, the efficiency with which it operates its financial
position and its ful1l with respect to the earning of its shareholders. The fundamental
nature of this analysis is that each share of a company has an intrinsic value, which is
dependent on the company's financial performance, quality of management and record of its
earnings and dividend. They believe that the market price of share in a period of time will
move towards its intrinsic value. If the market price of a share is lower than the intrinsic
value, as evaluated by the fundamental analysis, then the share is supposed to be undervalued
and it should be purchased but if the current market price shows that it is more than intrinsic
value then according to the theory the share should be sold. This basic approach is
analyzed through the financial statements of an organization. The basic financial
statements, which are required as tools of the fundamental analyst, are the income
statement, the balance sheet, and the statement of changes in financial position. These
statements are useful for investors, creditors as well as internal management of a firm and on
the basis these statements the future course of action may be taken by the investors of
the firm. While evaluating a company, its statement must be carefully judged to find out that
they are:

(a) Correct
(b) Complete
(c) Consistent and
(d) Comparable


Technical analysis is simply the study of prices as reflected on price charts.

Technical analysis assumes that current prices should represent all known information about
the markets. Prices not only reflect intrinsic facts, they also represent human emotion and the
pervasive mass psychology and mood of the moment. Prices are, in the end, a function of
supply and demand. However, on a moment to moment basis, human emotions…fear greed,
panic, hysteria, elation, etc. Also dramatically affect prices. Markets may move based upon
people’s expectations, not necessarily facts. A market "technician" attempts to disregard the
emotional component of trading by making his decisions based upon chart formations,
assuming that prices reflect both facts and emotion. Analysts use their technical research
to decide whether the current market is a BULL MARKET or a BEAR MARKET.

1. STOCK CHARTS: A stock chart is a simple two-axis (X-Y) plotted graph of price
and time. Each individual equity, market and index listed on a public exchange has a chart
that illustrates this movement of price over time. Individual data plots for charts can be made
using the CLOSING price for each day. The plots are connected together in a single line,
creating the graph. Also, a combination of the OPENING, CLOSING, HIGH and/or LOW
prices for that market session can be used for the data plots. This second type of data is called
a PRICE BAR. Individual price bars are then overlaid onto the graph, creating a dense visual
display of stock movement. Stock charts can be drawn in two different ways. An
ARITHMETIC chart has equal vertical distances between each unit of price. A
LOGARITHMIC chart is a percentage growth chart.

2. TRENDS: The stock chart is used to identify the current trend. A trend reflects the
average rate of change in a stock's price over time. Trends exist in all time frames and all
markets. Trends can be classified in three ways: UP, DOWN or RANGEBOUND. In an
uptrend, a stock rallies often with intermediate periods of consolidation or movement against
the trend. In doing so, it draws a series of higher highs and higher lows on the stock chart. In
an uptrend, there will be a POSITIVE rate of price change over time. In a downtrend, a stock
declines often with intermediate periods of consolidation on movement against the trend. In
doing so, it draws a series of lower highs and lower lows on the stock chart. In a downtrend,
there will be a NEGATIVE rate of price change over time. Range bound price swings back
and forth for long periods between easily seen upper and lower limits. There is no apparent
direction to the price movement on the stock chart and there will be LITTLE or NO rate of
price change.

3. VOLUME: Volume measures the participation of the crowd. Stock charts display
volume through individual HISTOGRAMS below the price pane. Often these will show
green bars for up days and red bars for down days. Investors and traders can measure buying
and selling interest by watching how many up or down days in a row occur and how their
volume compares with days in which price moves in the opposite direction. Stocks that are
bought with greater interest than sold are said to be under ACCUMULATION. Stocks
that are sold with great interest than bought are said to be under DISTRIBUTION.
When a rally runs out of new participants, a stock can easily fall. Investors and traders
use indicators such as ON BALANCE VOLUME to see whether participation is lagging
(behind) or leading (ahead) the price action Stocks trade daily with an average volume
that determines their LIQUIDITY.
4. PATTERNS AND INDICATORS: The oldest form of interpreting charts is
PATTERN ANALYSIS. This method gained popularity through both the writings of Charles
Dow and Technical Analysis of Stock Trends, a classic book written on the subject just after
World War II. The newer form of interpretation is INDICATOR ANALYSIS, a math-
oriented examination in which the basic elements of price and volume are run through a
series of calculations in order to predict where price will go next.

5. MOVING AVERAGES: The most popular technical indicator for studying

stock charts is the MOVING AVERAGE. This versatile tool has many important uses
for investors and traders. Take the sum of any number of previous CLOSE prices and then
divide it by that same number. This creates an average price for that stock in that period of
time. A moving average can be displayed by re-computing this result daily and plotting it in
the same graphic pane as the price bars. Moving averages LAG price. In other words, if price
starts to move sharply upward or downward, it will take some time for the moving average to
"catch up".

Moving averages define STOCK TRENDS. They can be computed for any period of
time. Investors and traders find them most helpful when they provide input about the
SHORT-TERM, INTERMEDIATE and LONG-TERM trends. For this reason, using
multiple moving averages that reflect these characteristics assist important decision
making. Commons moving average settings for daily stock charts are 20 days for short- term,
50 days for intermediate and 200 days for long-term.

One of the most common buy or sell signals in all chart analysis is the MOVING AVERAGE
CROSSOVER. These occur when two moving averages representing different trends.


is essential to understanding and interpreting stock charts. Just as a ball bounces when it hits
the floor or drops after being thrown to the ceiling, support and resistance defines natural
boundaries for rising and falling prices. Buyers and sellers are constantly in battle mode.
Support defines that level where buyers are strong enough to keep price from falling
further. Resistance defines that level where sellers are too strong to allow price to raise
Primary market is the place where issuers create and issue equity, debt or
hybrid instruments for subscription by the public; the secondary market enables the holders
of securities to trade them. Primary market is a market for raising fresh capital in the form of
shares. Public limited companies that are desirous of raising capital funds through the issue of
securities approach this market. The public limited and government companies are the issuers
and individuals, institutions and mutual funds are the investors in this market. The primary
market allows for the formation of capital in the country and the accelerated industrial and
economic development.

Everywhere in the world capital markets have originated as the new issues
markets. Once industrial companies are set up in a big number and with them a
considerable volume of business comes into existence a market for outstanding issues
develops. In the absence of secondary market or the stock exchange, the capital market will
be paralyzed. This is on account of the reason that the business enterprises borrow money
from the capital market for a very long period but the investors or savers whose savings are
canalized through the capital market generally wish to invest only for a short period.
Existence of the stock exchange provides a medium through which these two ends can be
reconciled. It enables the investors to sell their shares for money whenever they wish to do
so. Thus, the business enterprises keep the possession of permanent capital; the shares can
keep on changing hands.

In order to sell securities, the company has to fulfill various requirements and
decide upon the appropriate timing and method of issue. It is quite normal to obtain the
assistance of underwriters, merchant banks or special agencies to look after these aspects.

Features of Primary Market are:-

1. This is the market for new long term capital. The primary market is the market
where the securities are sold for the first time. Therefore it is also called New Issue
Market (NIM).
2. In a primary issue, the securities are issued by the company directly to investors.
3. The company receives the money and issue new security certificates to the investors.
4. Primary issues are used by companies for the purpose of setting up new business or
for expanding or modernizing the existing business.
5. The primary market performs the crucial function of facilitating capital formation in
the economy.
The new issue market does not include certain other sources of new long term
externalfinance, such as loans from financial institutions. Borrowers in the new issue market
may beraising capital for converting private capital into public capital; this is known as
‘going public’.


A public limited company can raise the amount of capital by selling its shares to the
public. Therefore, it is called public issue of shares or debentures. For this purpose it has to
prepare a ‘Prospectus’. A prospectus is a document that contains information relating to the
company such as name, address, registered office and names and addresses of company
promoters, managers, Managing Director, directors, company secretary, legal advisors,
auditors and bankers. It also includes the details about project, plant location, technology,
collaboration, products, export obligations etc. The company has to appoint brokers and
underwriters to sell the minimum number of shares and it has to fix the date of opening and
closing of subscription list.

The new issue of shares or debentures of a company are offered for exclusive
subscription of general public. The prospectus should be approved by SEBI. A minimum of
49 per cent of the amount of the issue at a time is to be offered to public. The company makes
a direct offer to the general public to subscribe the securities of a stated price. The securities
may be issued at par, at discount or at a premium. An existing company may sell the shares
at a premium. There is no practice of selling shares at a discount in India.

Public issue is a popular method of raising capital. It provides wide distribution of

ownership securities. It also promotes confidence of investors through transparency and non-
discriminatory basis of allotment. It satisfies compliance with the legal requirements.
However, the issue of securities through prospects is time consuming because there are
various formalities to be completed by the company. The cost of raising capital is also very
high due to underwriting, commission, brokerage, publicity, legal, and other
administrative costs.

A Company makes the offer of sale to individuals and institutions privately
without the issue of a prospectus. This saves the cost of issue of securities. The securities are
placed at higher prices to individuals and institutions. Institutional investors play a very
important role in the private placement. This has become popular in recent days.

This method is less expensive and time saving. The company has to complete a very
few formalities. It is suitable for small companies as well as new companies. This method
can be used when the stock market is bull. However, the private placement helps to
concentrate securities in the few hands. They can create artificial scarcity and increase the
prices of shares temporarily and then sell the shares in the stock market and mislead the
common and small investors. This method also deprives the common investors of an
opportunity to subscribe to the issue of shares.


A Company sells the securities through the intermediaries such as issue houses, and
stockbrokers. This is known as an offer for sale method. Initially, the company makes an
offer for sale of its securities to the intermediaries stating the price and other terms and
conditions. The intermediaries can make negotiations with the company and finally accept
the offer and buy the shares from the company. Then these securities or shares are re-sold to
the general investors in the stock market normally at a higher price in order to get profit. The
intermediaries have to bear the expenses of this issue. The object of this issue is to save the
time, cost and get rid of complicated procedure involved in the marketing of securities. The
issues can also be underwritten in order to ensure full subscription of the issue. The general
public’s get the shares at a higher price the middlemen are more benefited in this

A Company makes an outright sale of equity shares to a single sponsor or the lead sponsor
and such deals are known as bought out deals. There are three parties involved in the bought
out deals. The promoters of the company, sponsors and co-sponsors, sponsors are merchant
bankers and co-sponsors are the investors. There is an agreement in which an outright sale
of a chunk of equity shares is made to a single sponsor or the lead sponsor. The sale
price is finalized through negotiations between the issuing company and the purchasers. It is
influenced by various factors such as project evaluation, reputation of the promoters, current
market sentiments etc. Bought out deals are in the nature of fund-based activity where the
funds of the merchant bankers are locked in for at least for a minimum period. These shares
are sold at over the Counter Exchange of India or at a recognized stock exchange. Listing
takes place when the company gets profits and performs well. The investor-sponsors make
profits because the shares are listed at higher price.


When a company makes public issue of shares for the first time, it is called Initial
Public Offer. The securities are sold through the issue of prospectus to successful applicants
on the basis of their demand. The company has to appoint underwriters in order to guarantee
the minimum subscription. An underwriter is generally an investment banking company.

The underwriter agrees to pay the company a certain price and buy a minimum
number of shares, if they are not subscribed by the public. The underwriter charges some
commission for this work. He can sell these shares in the market afterwards and make profit.
There may be two or more underwriters in case of large issue.

The company has to issue a prospectus giving full information about the company and
the issue. It has to issue share application forms through the brokers and underwriters.
The brokers collect orders from their clients and place orders with the company. The
company then makes the allotment of shares with the help of stock exchange. The
share certificate are delivered to the investors or credited to their demat accounts through the
depository. This method saves time and avoids complicated procedure of issue of shares.
With more and more companies coming out with tempting IPO or additional offers,
there is greater need to exert caution and pick the best IPO investments. Following four
critical factors should be studied in an IPO offer document, before making an IPO
investment: Promoter, Performance, Prospects and Price.

When an existing company issues shares to its existing shareholders in proportion to the
number of shares held by them, it is known as Rights Issue. Rights issue is
obligatory for a company where increase in subscribed capital is necessary after two
years of its formation or after one year of its first issue of shares, whichever is earlier.

SEBI has issued guidelines for issue of right shares. Accordingly, only a listed
company can make right issue. Rights issue can be made only in respect of fully paid up
shares. No reservation is allowed for rights issue of fully or partly convertible
debentures. The company has to make announcement of rights issue and once the
announcement is made it cannot be withdrawn. The company has to make the appointment
Registrar but underwriting is optional. It has also to appoint category I Merchant Bankers
holding a certificate of registration issued by SEBI. Letter of offer should contain disclosures
as per SEBI requirements. The rights issue should be open for minimum period of 30 days,
and maximum up to 60 days. The company has to make an agreement with the depository for
materialization of securities to be issued in demat form. A minimum subscription of 90 per
cent of the issue should be received. A no complaints certificate is to be filed by the Lead
Merchant Banker with the SEBI after 21 days from the date of issue of offer

Bonus shares are the shares allotted by capitalization of the reserves or surplus of a company.
Issue of bonus shares results in conversion of the company's profits or reserves into
share capital. Therefore, it is capitalization of company's reserves. Bonus shares are issued to
the equity shareholders in proportion to their holdings of the equity share capital of the
company. Issue of bonus shares does not affect the total capital structure of the
company. It is simply a capitalization of that portion of shareholders equity which is
represented by reserves and surplus. The issues of bonus shares are issued subject to certain
rules and regulations. Issue of bonus shares reduces the market price of the company's shares
and keeps it within the reach of ordinary investors. The company can retain earnings and
satisfy the desire of the shareholders to receive dividend. Issue of bonus shares is generally an
indication of higher future profits. Receipt of bonus shares as compared to cash dividend
generally results in tax advantage to the shareholder.

Companies generally raise capital through public issue. In these cases companies decide the
size of the issue and also the price at which the shares are to be offered to the investors.
However in this system the issuer is not able to ascertain the price that the market may be
willing to pay for the shares, before launching the issue. This is where book building can
come to their aid. This method is also known as the price discovery method. This is a
mechanism whereby the price is determined on the basis of actual demand as evident
from the offers given by the various institutional investors and the underwriters.
In the actual public offer process, investors are not involved in determining the offer price,
whereas in book building pricing is determined on the basis of investor feedback
which assures investor demand. Since the issue price after the issue marketing there is
flexibility in the issue size and the price of the shares. The option of book building is
available to all body corporate, which are otherwise eligible to make issue of capital to
the public. The initial minimum size of issue through book-building process was fixed at Rs.
100 cores/-.
Book-Building method helps in evaluating the intrinsic worth of an instrument and the
company's credibility in the eyes of the investor. The company also gets firm commitments
on the basis of which it can decide whether to go or not to go for a particular issue
of securities. Book-Building process also provides reliable allotment procedure and
quick listing of shares on the stock exchanges. There is no price manipulation because
the price is determined on the basis of bids received' from the investors. The following
stages are involved in the book-building process:
(1) Appointment of book-runners.
(2) Drafting of prospectus and getting approval from SEBI.
(3) Circulating draft prospectus.
(4) Maintaining offer details.
(5) Intimation of aggregate orders to the book-runner.
(6) Bid analysis.
(7) Mandatory underwriting.
(8) Filing copy of prospectus with registrar of companies.
(9) Opening bank accounts for collection of application money.
(10) Collection of applications.
(11) Allotment of shares.
(12) Payment schedule and listing of shares.

A market, which deals in securities that have been already issued by companies, is called as
secondary market. It is also known as stock market. It is the base upon which the primary
market is depending. For the efficient growth of the primary market a sound secondary
market is an essential requirement. The secondary market offers an important facility of
transfer of securities activities of securities.

Secondary market essentially comprises of stock exchanges, which provide

platform for purchase and sale of securities by investors. In India, apart from the
Regional Stock Exchanges established in different centers, there are exchanges like the
National Stock Exchange (NSE), who provide nationwide trading facilities with
terminals all over the country. The trading platform of stock exchanges is accessible only
through brokers and trading of securities is confined only to stock exchanges.

The activities of buying and selling of securities in a market are carried out through the
mechanism of stock exchange. There are at present 24 Stock Exchanges in India,
recognized by the government. The first organized stock exchange was established in India
at Bombay in 1887. When the Securities Contracts (Regulation) Act was passed in 1956, only
7 stock exchanges were recognized. There are three important stock exchanges in Bombay
namely the Bombay Stock Exchange, National Stock Exchange and over the Counter
Exchange of India. There has been a substantial growth of capital market in India during the
last 25 years.

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 2004. 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 2004. 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 2003-04 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 2002-03. However, the year 2003-04 saw a turnaround in the total
trading volumes on the exchanges. It registered a volume of Rs. 16,204,977million. 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 2003-04 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 2003-04. Top 5 stock exchanges accounted for 99.88% of turnover, while the
rest 18 exchange for less than 0.12% during 2003-04. About ten exchanges reported nil
trading volume during the year.

The movement of the S&P CNX Nifty, the most widely used indicator of the market,
is presented in Chart 1-1. The index movement has been responding to changes in the
government’s economic policies, the increase in FIIs inflows, etc. However, the year
2003-04 witnessed a favorable movement in the Nifty, wherein it registered its all time high
in January 2004 of 2014.65. The point-to-point returns of Nifty was 80.14% for 2003-04

Government Securities
The trading in government securities exceeded the combined trading in equity
segments of all the exchanges in the country during 2003-04. The aggregate trading in
central and state government dated securities, including treasury bills, increased by
manifold over a period of time. During 2003-04 it reached a level of Rs. 26,792,090 million.
The share of WDM segment of NSE in total turnover for government securities
decreased marginally from 52% in 2002-03 to 47.6% in 2003-04.

However, the share of WDM segment of NSE in the total of Non-repo

government securities increased marginally from 74.01% in 2002-03 to 74.89% in 2003-04.


There are two main reasons why individuals transact in the secondary market


Information motivated investors believe that they have superior information

about a particular security than other market participants. This information leads them to
believe that the security is not being correctly priced by the market. If the information is
good, this suggests that the security is currently under-priced, and investors with access to
such information will want to buy the security. On the other hand, if the information is bad,
the security will be currently overpriced and such investors will want to sell their holdings of
the security.


Liquidity motivated investors, on the other hand, transact in the secondary

market because they are currently in a position of either excess or insufficient liquidity.
Investors with surplus cash holdings (e.g., as a result of an inheritance) will buy securities,
where as investors with insufficient cash (e.g., to purchase a Car) will sell securities.


1. To facilitate liquidity and marketability of the outstanding equity and debt instruments.
2. To contribute to economic growth through allocation of funds to the most efficient
Channel through the process of disinvestments to reinvestment.
3. To provide instant valuation of securities caused by changes in the internal
environment (that is, company-wide and industry wide factors). Such valuation
facilitates the measurement of the cost of capital and the rate of return of the
economic entities at the micro level.
4. To ensure a measure of safety and fair dealing to protect investors’ interest.

To induce companies to improve performance since the market price at the stock
exchanges reflects the performance and this market price is readily available to investors.


Listing is a process involved in listing something with someone. It is a permission to

quote shares and debentures officially on the trading floor of the stock exchange. The listed
shares appear on the official list of securities for the purpose of trading security listing is a
step that is required to register and to place on record the security of a company with the
appropriate authority i.e. the recognized stock exchange. Securities are required to be listed
under Section 9 of the Securities Contract (Regulation) Act, 1956. Thus, listing simply
means the inclusion of any security for the purpose of trading in a recognized stock exchange.
Only public companies are allowed to list their securities in the stock exchange. Private
Limited companies cannot get listing facility. They shall first convert themselves into
public limited companies and their Articles of Association shall contain prohibitions as laid
down in the listing agreement and as applicable to public limited companies.

The issuer wishing to have trading privileges for its securities satisfies listing
requirements prescribed in the relevant statutes and in the listing regulations of the
Exchange. It also agrees to pay the listing fees and comply with listing requirements on a
continuous basis. All the issuers who list their securities have to satisfy the corporate
governance requirement framed by regulators. The prices at which the securities are traded
in the stock exchange are published in the newspapers. Investors are able to know these price
trends from such publications. Compared to listed securities the trading of unlisted securities
is difficult. The price trends in respect of unlisted securities are seldom known to the
investors and the contract between the seller and buyer takes places mostly on one to one
purpose of trading by the registered members of the stock exchange and for the
official quotation of the security price for the benefit of the public and the investors.
The company has to continue listing by paying renewal fees from time to time. Listing is
mandatory for a public company, which intends to offer its securities to the public by issue of
prospectus and which wishes to provide facilities to the securities being offered to the public.
Any allotment of securities made in the absence of listing or refusal of listing is held to be
void i.e. illegal. Again, any failure to comply with the Section 21 of the Securities Contracts
(Regulation) Act attracts penalty to the parties.

The authority of the stock exchange may refuse listing of the securities of a
company. The authorities should intimate the company within 15 days with the reasons for
refusal. The company can make an appeal to the Central Government within a
prescribed period. The Central Government may either grant or refuse to grant the
permission for listing and the decision of the Central Government would be informed to the
stock exchange concerned that shall act in conformity with such a decision. The stock
exchange is empowered to suspend or withdraw an admission to dealing in securities of
company for breach or non-compliance with the listing provision on giving an
opportunity of being heard in writing. In an eventuality where any withdrawal or
suspension exceeds 3 months, the company may appeal to the SEBI who may either vary or
set aside the decision of the stock exchange. Going to be listed, to list the securities at an
early date. The central listing authority would ad as a check on the fly by night operators who
float public issues, since the listing norms would be uniformly applied as against the current
practice where the norms could be flouted, if listing is to take place in a very small exchange
where the listing requirements may be lenient.


All companies seeking listing of their securities on the Exchange are required to enter into
a listing agreement with the Exchange. The agreement specifies all the requirements to be
continuously complied with by the issuer for continued listing. The Exchange monitors
such compliance. Failure to comply with the requirements invites suspension of trading, or
withdrawal/delisting, in addition to penalty under the Securities Contracts (Regulation) Act,
1956. The agreement is being increasingly used as a means to improve corporate governance.


If the shares or securities are to be listed for the first time by a company on a stock
exchange is called initial listing.


When a company whose shares are listed on a stock exchange comes out with a public
issue of securities, it has to list such issue with the stock exchange.


When companies whose securities are listed on the stock exchange issue
securities to existing shareholders on rights basis, it has to list such rights issues on the
concerned stock exchange.


Shares issued, as a result of capitalization of profit through bonus issue shall list such
issues also on the concerned stock exchange.


When an amalgamated company issues new shares to the shareholders of the
amalgamating company, such shares are also required to be listed on the concerned stock

The securities listed can be de-listed from the Exchange as per the SEBI
(Delisting of Securities) Guidelines, 2003 in the following manner:


Any promoter or acquirer desirous of delisting securities of the company under the
provisions of these guidelines shall obtain: -

1. The prior approval of shareholders of the company by a special resolution passed at its
general meeting,
2. Make a public announcement in the manner provided in these guidelines,
3. Make an application to the delisting exchange in the form specified by the exchange, and
4. Comply with such other additional conditions as may be specified by the concerned
Stock exchanges from where securities are to be de-listed.

Any promoter of a company which desires to de-list from the stock exchange shall also
determine an exit price for delisting of securities in accordance with the book building


The stock exchanges may de-list companies which have been suspended for a minimum
period of six months for non-compliance with the listing agreement. The stock exchanges
have to give adequate and wide public notice through newspapers & also give a show cause
notice to a company. The exchange shall provide a time period of 15 days within which any
person who maybe aggrieved by the proposed delisting may make representation to the

The act of buying and selling of securities on a stock exchange is known as Stock
Exchange Trading. Jobbers’ and brokers are the two categories of dealers in the stock
exchange. A jobber is a dealer in securities while a broker is an agent or seller of
securities. Every year a member has to decide and declare in advance whether he
proposes to act as a jobber or a broker. A jobber gives two quotations as a dealer in
securities, lower quotation for buying and higher one for selling. The difference between the
two quotations is his remuneration. This system enables specialization in the dealings and
each jobber specializes in a certain group of securities. It also ensures smooth and prompt
execution of transactions. The double quotation of a jobber assures fair-trading in the market.
A broker is merely an agent to buy or sell on behalf of his clients. He is a generalist. Broker
has to negotiate terms and conditions of sale or purchase and safeguard his client’s interest.
He gets commission from his clients’, that is fixed by the stock exchange.


Demat is “dematerialization” on shares. Dematerialization is a process by which the shares,

debentures etc in the physical form get converted into the electronic form and are stored in
the computers by the depository. Earlier there used to be the hectic procedure of physical
delivery of shares. Dematerialization is a unique process of trading the shares in the
electronic form rather than the vulnerability of the physical delivery of the shares.

The introduction of NEAT and BOLT has increased the reach of capital market
manifolds. The increase in number of investors participating in the capital market has
increased the probability of being hit by a bad delivery. The cost and time spent by the
brokers for rectification of these bad deliveries tends to be higher. In this technological world
things are needed to move at a faster pace, and with the introduction of
dematerialization process the stock exchange has expanded its business at a tremendous

NSE was the first stock exchange in the country to provide nation-wide,
anonymous, order driven, screen-based trading system, known as the National Exchange for
Automated Trading (NEAT) system. The member inputs, in the NEAT system, the details of
his order such as the quantities and prices of securities at which he desires to transact. The
transaction is executed as soon as it finds a matching sale or buys order from a counter party.
All the orders are electronically matched on a price/time priority basis. This has resulted in a
considerable reduction in time spent, cost and risk of error, as well as frauds, resulting in
improved operational efficiency. It allows for faster incorporation of price sensitive
information into prevailing prices, as the market participants can see the full market
on real time basis. This increases informational efficiency and makes the market more
transparent. Further, the system allows a large number of participants, irrespective of
their geographical locations, to trade with one another simultaneously, improving the
depth and liquidity of the market. A single consolidated order book for each stock
displays, on a real time basis, buy and sell orders originating from all over the country. The
book stores only limit orders, which are orders to buy or sell shares at a stated quantity and
stated price, are executed only if the price quantity conditions match. Thus, the NEAT
system provides an Open Electronic Consolidated Limit Order Book (OECLOB), which
ensures full anonymity by accepting orders, big or small, from members without revealing
their identity. Thus, provides equal access to all the investors. A perfect audit trail, which
helps to resolve disputes by logging in the trade execution process in entirety, is also
provided. The trading platform of the CM segment of NSE is accessed not only from the
computer terminals, but also from the personal computers of the investors through the
Internet and from the hand-held devices through WAP. SEBI has allowed the use of internet
as an order routing system for communicating investors’ orders to the exchanges through
the registered brokers. These brokers should obtain the permission from their respective
stock exchanges. In February 2000, NSE became the first exchange in the country to
provide web-based access to investors to trade directly on the Exchange followed by BSE in
March 2001. The orders originating from the PCs of investors are routed through the internet
to the trading terminals of the designated brokers with whom they have relations and further
to the exchange. After these orders are matched, the transaction is executed and the
investors get the confirmation directly on their PCs. SEBI has also allowed trading
through wireless medium or Wireless Application Protocol (WAP) platform. NSE is the only
exchange to provide access to its order book through the hand held devices, which use WAP
technology. This particularly helps those retail investors, who are mobile and want to trade
from any place.

The following are the steps involved in the trading of securities at a stock exchange:


An order is to be placed by an investor with the broker either to buy or sale of certain
number of securities at a certain specified price. An order can be placed by telegram,
telephone, telex/ fax, and letter or in person. There are different types of orders. When in the
order the client places a limit on the price of the security it is called limit order. Where the
order is to be executed by the broker at the best price, such an order is called 'Best Rate
Order'. When the client does not fix any price limit or time limit on the execution of the order
and relies on the judgment of the broker is called 'Open Order'.


The broker has to execute the order placed by his client during the trading hours. The
order is executed as per requirements of the client. The broker may negotiate with other
parties in order to execute the orders.


When the order is executed, the broker prepares a contract note. It is the basis of the
transaction. Particulars such as price, quantity of securities, date of transaction, names of the
parties, brokerage etc. are entered in the contract note.


Delivery of shares takes place through the instrument known as transfer deed. The
transfer deed is signed by the transferor (seller) and is authenticated by a witness. It
contains the details of the transferee, stamp of the selling broker, etc. Delivery and
payment may be completed after 14 days as specified at the time of negotiation. Delivery and
clearing of security takes place through a clearance house.


The procedure adopted for the settlement of transactions varies depending upon the
kind of securities. On the date of settlement cheques / drafts and securities are
exchanged as per the delivery order. The clearinghouse makes the payment and delivers the
security certificates to the members on the payout day. Each broker settles the account with
every client by taking delivery or giving delivery of securities certificates and receipts or
payment of cheques.


Online trading in shares and securities has already been started in India. It has been
made possible due to introduction of demat. ICICI Web Trade, HDFC Securities, Stock
Holding Corporation of India and many other institutions have started the online trading
system. The investors can carry out buying and selling of securities while sitting in the house
or office. Internet connection is required for this purpose. The investors have to open an
account with these institutions that provide online trading. There are three accounts opened
into one place, Demat Account, Bank Account and Online Trading Account. A password is
given to each investor who is secret. Investors can carry out buying and selling securities at
BSE and NSE during normal trading hours. The settlement is done automatically with the
program of the computer. Margin Trading, Options and Futures Trading are also possible in
this method.

1. Log on to the Broker's website.
2. Register yourself as a client.
3. Fill in the client broker agreement on stamp paper.
4. Log on the broker's site using secure user ID and password.
5. The market watch page shows real time data.
6. Trade shares directly by entering the symbol of securities.
7. The broker's server will check the limit on-line and the demat account for the number
Of shares execute the trade.
8. Usually the order is executive in about 20 seconds and you get the confirmation.
9. The broker will send one e-mail confirmation and printed contract by mail.
10. On the settlement day the demat and bank accounts will automatically get debited and


Online trading offers the investors the following benefits:

The reach of online trading spans to all areas where internet connectivity is

Since all decision-making is with the investor, with sufficient and relevant
information on his stocks, the investor is empowered to take decisions based on his own

The share broking account integrates with the investors banking, broking and the
share depository accounts. This enables the investor to trade in shares without going
through the hassles of tracking settlement cycles, writing cheques and transfer
instructions, and chasing brokers for refund cheques.

The speed of executing the transaction is more as compared to a phone-based trade.

With online trading, the investor can be assured of the execution of the transaction
placed, thereby having complete control over the trades.

The clearing and settlement mechanism in Indian securities market has
witnessed significant changes and several innovations during the last decade. These
include use of the state-of-art information technology, emergence of clearing corporations
to assume counterparty risk, shorter settlement cycle, dematerialization and electronic
transfer of securities, fine-tuned risk management system, etc., though many of these are
yet to permeate the whole market.

In order to bring settlement efficiency and reduce settlement risk, in 1989, the
group of 30 had recommended that all secondary markets across the globe should adopt a
rolling settlement cycle on T+3 basis by 1992, i.e., the trades should be settled by
delivery of securities and payment of monies within three business days after the trade day.
But in India, due to multiple problems faced by the secondary market like the open outcry
system, wide geographical coverage, settlement of securities in physical form, inadequate
banking and depository infrastructure, India could not implement the G30
recommendations within the stipulated time frame. In 1999, rolling settlements were
introduced in select scripts on a T+5 basis, which had got an effect from December 2001.

After successful implementation of rolling settlement on T+5 basis, SEBI moved the
settlement to T+3 basis with effect from April 2002. To carry the reforms further in this area,
the Indian equity market has reduced the settlement cycle to T+2 basis i.e. 1st April, 2003.
The main advantage of this T+1 settlement cycle is that as the trades spread across all
trading days, this reduces undue concentration of payment of monies and delivery of
securities on a single day. As the settlement is spread across evenly, it results in efficiency
utilization of infrastructure and system capacity. In addition, trades are guaranteed by the
National Clearing Corporation. India Ltd. (NSCCL), and Bank of India Shareholding Ltd.
(BOISL), Clearing Corporation Houses of NSE and BSE respectively. The main functions of
Clearing Corporation are to work out:

(a) What counterparties owe and

(b) Why counterparties are due to receive on the settlement date.
Furthermore, each exchange has a Settlement Guarantee Fund to meet with any
unpredictable situation. The Clearing Corporation of the exchanges assumes the
counterparty risk of each member and guarantees settlement through a fine-tuned risk
management system and an innovative method of online position monitoring. It also
ensures the financial settlement of trades on the appointed day and time irrespective of
default by members to deliver the required funds and/or securities with the help of settlement
guarantee fund.


Trading regarding to state bank if India during in the month of May:


31-May-2017 198.80 205.70 196.20 204.95
30-May-2017 200.20 203.90 194.60 198.85
27-May-2017 184.00 202.40 181.50 195.90
26-May-2017 175.10 185.50 173.50 184.15
25-May-2017 171.50 175.80 171.45 175.10
24-May-2017 168.80 170.40 166.40 169.50
23-May-2017 172.30 172.70 168.20 168.40
20-May-2017 173.50 174.70 170.55 171.35
19-May-2017 181.00 181.00 171.90 172.70
18-May-2017 176.90 180.45 173.55 179.95
17-May-2017 178.50 178.60 175.25 176.85
16-May-2017 185.00 185.00 175.15 176.80
13-May-2017 187.95 187.95 184.30 184.85
12-May-2017 187.10 189.50 185.40 188.50
11-May-2017 185.40 188.50 184.10 185.00
10-May-2017 187.60 190.30 186.70 189.50
09-May-2017 186.50 189.40 185.05 188.70
06-May-2017 180.95 184.95 180.10 184.35
05-May-2017 180.25 182.70 178.50 180.35
04-May-2017 183.50 184.40 179.15 179.95
03-May-2017 187.00 189.35 183.65 184.05
02-May-2017 187.60 188.45 185.50 186.00

This graph shows daily trading report of state bank of India in the month of May:







The graph represents how the trading is taken place for STATE BANK OF INDIA in
the month of May. From the above graph we can easily understand the price fluctuations in
the month of May. In the first week of this month the high opening price is 187.60 on
2ndMay. The high price is 189.35 on 3rd May. The investors are going to sell the stocks at
high rate. The low rate is 178.50 on 5th May. The investors are going to buy the stocks at
lower price, and 186 is the high closing price on 2nd May.
At the end of the month that is on 31st May 2017. The share price goes high at 205.70
so, at this price the investor can sell his stock. Because he buy the stock at 150/-. At this stage
the investor can get profit.

Trading regarding to state bank if India during in the month of June:

Date Open High Low Close

29-June-2017 217.90 218.80 216.10 217.20

28-June-2017 216.75 218.65 215.40 215.90
27-June-2017 210.80 218.85 210.55 217.15
24-June-2017 205.90 212.35 202.50 211.25
23-June-2017 213.00 218.00 212.75 217.55
22-June-2017 214.00 215.25 211.45 212.90
21-June-2017 215.00 217.50 213.15 214.00
20-June-2017 208.00 216.70 207.90 215.90
17-June-2017 216.75 217.50 211.60 213.45
16-June-2017 216.00 218.50 213.05 216.00
15-June-2017 209.75 217.55 208.55 216.05
14-June-2017 204.35 208.60 203.80 207.70
13-June-2017 201.50 202.60 200.20 201.80
10-June-2017 209.35 211.50 205.30 205.95
09-June-2017 210.00 212.80 208.30 209.95
08-June-2017 210.15 211.90 207.55 210.70
07-June-2017 200.45 211.15 200.15 210.15
06-June-2017 197.45 202.60 197.10 198.90
03-June-2017 201.00 202.15 195.40 196.60
02-June-2017 197.85 202.30 195.55 200.55
01-June-2017 205.95 208.30 196.60 198.25

This graph shows daily trading report of state bank of India in the month of June:
The graph represents how the trading is taken place for STATE BANK OF INDIA in
the month of June. From the above graph we can easily understand the price fluctuations in
the month of June. In the first week of this month the high opening price is 205.95 on 1st
June. The high price is 208.30 on 1st June. The investors are going to sell the stocks at high
rate. The low rate is 195.40 on 3rd June. The investors are going to buy the stocks at lower
price, and 200.95 is the high closing price on 2nd June.
The share price goes high at 218.85 on 27th June 2017 so, at this price the investor
can sell his stock. Because he buy the stock at 150/-. At this stage the investor can get profit.

Trading regarding to TATAMTRDVR during in the month of May:

Date Open High Low Close
31-May-2017 300.00 317.80 298.70 314.50
30-May-2017 272.95 282.35 272.95 281.45
27-May-2017 272.35 273.25 269.00 271.70
26-May-2017 273.00 273.70 268.25 269.60
25-May-2017 264.00 271.20 264.00 270.55
24-May-2017 260.00 263.60 258.80 261.35
23-May-2017 265.70 266.35 259.10 259.90
20-May-2017 266.30 268.45 262.00 263.10
19-May-2017 270.00 273.50 264.30 266.10
18-May-2017 268.80 270.30 265.80 268.65
17-May-2017 277.70 277.70 271.00 271.70
16-May-2017 277.25 279.75 272.10 275.55
13-May-2017 276.95 280.95 274.65 276.95
12-May-2017 275.65 279.25 274.50 277.65
11-May-2017 277.00 281.90 271.45 273.85
10-May-2017 290.70 290.70 280.00 281.00
09-May-2017 289.70 291.00 285.25 289.30
06-May-2017 281.80 288.00 278.45 286.80
05-May-2017 283.80 287.05 280.05 283.05
04-May-2017 299.35 299.35 280.05 281.35
03-May-2017 299.35 311.90 298.20 300.35
02-May-2017 297.00 297.55 291.65 295.35

This graph shows daily trading report of TATAMTRDVR in the month of May:
The graph represents how the trading is taken place for TATAMTRDVR in the month
of May. From the above graph we can easily understand the price fluctuations in the month of
May. In the first week of this month the high opening price is 297 on 2ndMay. The high price
is 311.90 on 3rdMay. The investors are going to sell the stocks at high rate. The low rate is
278.45 on 6thMay. The investors are going to buy the stocks at lower price, and 300.35 is the
high closing price on 3rdMay.
At the end of the month that is on 31st May 2017. The share price goes high at 317.80
so, at this price the investor can sell his stock. Because he buy the stock at 280.15/-. At this
stage the investor can get profit.

Trading regarding to TATAMTRDVR during in the month of June:

Date Open High Low Close

29-June-2017 291.00 292.75 286.60 287.80

28-June-2017 295.80 295.90 286.40 287.55
27-June-2017 296.50 300.70 294.05 295.90
24-June-2017 288.00 299.65 280.20 298.25
23-June-2017 313.50 320.45 313.50 319.45
22-June-2017 321.65 322.55 312.00 314.80
21-June-2017 323.00 325.40 318.95 324.70
20-June-2017 311.50 321.90 311.25 320.15
17-June-2017 309.15 313.90 309.15 312.15
16-June-2017 307.25 307.25 301.10 305.85
15-June-2017 307.90 310.25 305.05 308.00
14-June-2017 302.50 306.80 301.15 304.95
13-June-2017 308.00 308.60 297.40 301.75
10-June-2017 321.30 321.90 310.60 312.65
09-June-2017 322.15 325.40 321.80 323.30
08-June-2017 321.40 324.45 320.20 322.95
07-June-2017 322.00 323.60 318.00 319.60
06-June-2017 319.00 322.00 311.25 318.05
03-June-2017 312.90 323.90 312.90 317.05
02-June-2017 307.25 314.50 305.10 311.70
01-June-2017 318.00 318.00 308.00 309.15

This graph shows daily trading report of TATAMTRDVR in the month of June:
The graph represents how the trading is taken place for TATAMTRDVR in the month
of June. From the above graph we can easily understand the price fluctuations in the month of
June. In the first week of this month the high opening price is 318 on 1st June. The high price
is 323.9 on3rdJune. The investors are going to sell the stocks at high rate. The low rate is
305.10 on 2ndJune. The investors are going to buy the stocks at lower price, and 317.05 is the
high closing price on 3rdJune.
The share price goes high at 325.40 on 21stJune 2017 so, at this price the investor
can sell his stock. Because he buy the stock at 280.15/-. At this stage the investor can get

Trading regarding to INFY during in the month of May:

Date Open High Low Close

31-May-2017 1,265.00 1,266.75 1,239.00 1,248.65
30-May-2017 1,241.50 1,272.00 1,241.50 1,267.60
27-May-2017 1,231.60 1,259.50 1,231.60 1,247.50
26-May-2017 1,210.10 1,239.80 1,210.10 1,234.15
25-May-2017 1,194.10 1,213.10 1,194.10 1,208.65
24-May-2017 1,191.05 1,191.75 1,177.60 1,187.75
23-May-2017 1,203.40 1,205.15 1,185.00 1,188.00
20-May-2017 1,205.00 1,219.50 1,200.00 1,201.60
19-May-2017 1,210.95 1,216.15 1,201.00 1,205.75
18-May-2017 1,199.00 1,214.00 1,197.90 1,209.85
17-May-2017 1,220.00 1,225.75 1,208.15 1,214.25
16-May-2017 1,210.20 1,223.65 1,205.00 1,215.00
13-May-2017 1,206.00 1,210.00 1,192.15 1,207.25
12-May-2017 1,203.90 1,213.00 1,196.80 1,210.00
11-May-2017 1,198.50 1,214.70 1,192.50 1,201.85
10-May-2017 1,202.50 1,216.65 1,196.60 1,212.80
09-May-2017 1,182.00 1,201.55 1,180.60 1,199.05
06-May-2017 1,189.80 1,189.80 1,177.05 1,181.50
05-May-2017 1,195.15 1,199.00 1,181.10 1,192.45
04-May-2017 1,181.00 1,193.00 1,170.65 1,188.85
03-May-2017 1,202.75 1,212.20 1,171.80 1,177.80
02-May-2017 1,210.00 1,211.15 1,196.15 1,201.05

This graph shows daily trading report of INFY in the month of May:
The graph represents how the trading is taken place for INFY in the month of May.
From the above graph we can easily understand the price fluctuations in the month of May. In
the first week of this month the high opening price is 1210 on 2ndMay. The high price is
1212.20 on 4thMay. The investors are going to sell the stocks at high rate. The low rate is
1170.65 on 6th May. The investors are going to buy the stocks at lower price, and 1201.05 is
the high closing price on 2ndMay.
The share price goes high at 1272 on 30thMay 2017 so, at this price the investor can
sell his stock. Because he buy the stock at 1180/-. At this stage the investor can get profit.

Trading regarding to INFY during in the month of JUNE:

Date Open High Low Close

29-June-2017 1,169.00 1,179.90 1,160.20 1,176.85

28-June-2017 1,162.80 1,172.50 1,155.10 1,159.15
27-June-2017 1,172.05 1,183.20 1,160.00 1,166.20
24-June-2017 1,188.00 1,199.00 1,160.00 1,194.55
23-June-2017 1,197.30 1,214.85 1,193.35 1,211.60
22-June-2017 1,204.00 1,211.95 1,188.15 1,199.50
21-June-2017 1,211.20 1,214.80 1,195.65 1,206.10
20-June-2017 1,181.00 1,211.80 1,179.70 1,208.75
17-June-2017 1,189.00 1,192.75 1,175.10 1,179.50
16-June-2017 1,189.50 1,189.50 1,170.10 1,186.00
15-June-2017 1,183.70 1,192.65 1,179.05 1,189.95
14-June-2017 1,182.40 1,182.40 1,167.25 1,175.00
13-June-2017 1,176.80 1,184.90 1,166.00 1,180.90
10-June-2017 1,175.40 1,190.00 1,170.10 1,180.60
09-June-2017 1,226.25 1,226.25 1,180.05 1,185.50
08-June-2017 1,263.95 1,263.95 1,235.35 1,238.10
07-June-2017 1,267.00 1,272.50 1,255.10 1,257.40
06-June-2017 1,264.90 1,277.00 1,261.10 1,266.75
03-June-2017 1,260.05 1,279.30 1,260.05 1,266.90
02-June-2017 1,255.00 1,274.90 1,254.00 1,261.55
01-June-2017 1,246.05 1,268.50 1,246.00 1,258.20

This graph shows daily trading report of INFY in the month of June:
The graph represents how the trading is taken place for INFY in the month of June.
From the above graph we can easily understand the price fluctuations in the month of June. In
the first week of this month the high opening price is 1260.05 on 3rdJune. The high price is
1279.30 on 3rdJune. The investors are going to sell the stocks at high rate. The low rate is
1246 on 1stJune. The investors are going to buy the stocks at lower price, and 1266.90 is the
high closing price on 3rdJune.
The share price goes high at 1,279.30 on 3rdJune 2017 so, at this price the investor
can sell his stock. Because he buy the stock at 150/-. At this stage the investor can get profit.

Trading regarding to coal India during in the month of May:

Date Open High Low Close
31-May-2017 293.90 295.25 287.90 291.40
30-May-2017 289.25 295.95 288.50 292.55
27-May-2017 282.25 284.50 280.20 281.30
26-May-2017 281.00 281.70 278.75 280.85
25-May-2017 280.40 281.50 277.70 281.00
24-May-2017 281.40 281.40 278.00 279.55
23-May-2017 281.00 281.50 278.20 280.50
20-May-2017 280.60 281.10 278.05 279.00
19-May-2017 284.00 284.40 279.40 280.30
18-May-2017 285.30 285.30 281.20 283.95
17-May-2017 283.75 284.90 281.80 283.85
16-May-2017 281.90 283.90 279.65 282.85
13-May-2017 283.60 283.60 278.55 281.45
12-May-2017 284.05 284.85 282.00 283.85
11-May-2017 281.70 284.40 276.65 283.80
10-May-2017 286.70 286.70 283.00 284.90
09-May-2017 282.15 286.50 282.15 285.60
06-May-2017 281.25 282.45 277.50 281.90
05-May-2017 280.50 283.15 280.00 281.80
04-May-2017 277.80 281.45 272.40 279.95
03-May-2017 289.00 289.25 277.50 279.15
02-May-2017 288.70 289.00 286.60 288.65

This graph shows daily trading report of coal India in the month of May:
The graph represents how the trading is taken place for COAL INDIA in the month of
May. From the above graph we can easily understand the price fluctuations in the month of
May. In the first week of this month the high opening price is 289 on 3rd May. The high price
is 289.25 on 3rd May. The investors are going to sell the stocks at high rate. The low rate is
272.40 on 4th May. The investors are going to buy the stocks at lower price, and 288.65 is the
high closing price on 2ndMay.
At the end of the month that is on 30thMay 2017. The share price goes high at 295.95
so, at this price the investor can sell his stock. Because he buy the stock at 250.65/-. At this
stage the investor can get profit.

Trading regarding to coal India during in the month of June:

Date Open High Low Close

29-June-2017 314.20 314.65 309.60 311.00
28-June-2017 310.75 314.25 309.90 313.30
27-June-2017 306.55 312.50 306.55 308.10
24-June-2017 308.25 314.00 305.55 312.25
23-June-2017 317.50 318.90 316.10 317.55
22-June-2017 313.00 318.40 312.00 317.50
21-June-2017 313.00 315.00 311.55 313.00
20-June-2017 310.00 313.20 309.85 312.35
17-June-2017 308.00 314.50 308.00 313.20
16-June-2017 309.05 309.50 305.50 307.55
15-June-2017 309.15 310.80 304.85 309.75
14-June-2017 310.00 310.35 306.65 308.85
13-June-2017 305.00 310.45 304.55 308.50
09-June-2017 306.80 314.40 305.40 313.00
08-June-2017 307.55 307.95 304.00 306.80
07-June-2017 307.10 309.50 305.05 307.80
06-June-2017 308.10 308.50 304.00 305.80
03-June-2017 310.00 311.90 308.05 308.95
02-June-2017 297.80 309.50 296.70 307.35
01-June-2017 292.05 299.50 289.05 297.20

This graph shows daily trading report of coal India in the month of June:
The graph represents how the trading is taken place for COAL INDIA in the month of June.
From the above graph we can easily understand the price fluctuations in the month of June. In
the first week of this month the high opening price is 310.00 on June. The high price is
311.90 on 3rdJune. The investors are going to sell the stocks at high rate. The low rate is
289.05 on 1stJune. The investors are going to buy the stocks at lower price, and 308.95 is the
high closing price on 3rdJune.
The share price goes high at 318.90 on 23rdJune 2017 so, at this price the investor
can sell his stock. Because he buy the stock at 250.65/-. At this stage the investor can get


The major findings of the study are summaries below

 Beneficiary Profile

1. Eighty three per cent of the investors are above the age of 36, of which 48% are in the age
group of 36-45.
2. Women investors form about 13% of the total number of investors.
3. The capacity to bear risk, to a large extent, depends on the gender.

 Occupational analysis of investors

a) Sixty two percent of the investors have regular income apart from the investments in
the capital market, as they are either permanent employees or professionals.
b) Ten percent of the investors are share brokers and the only source of income is the
investment in the capital market.
c) Investors do not depend wholly on the capital markets for their livelihood.

 Participation of Investors in Stock Market Operations

Fifty five per cent of the investors are not actively operating in the stock market. Twenty four
percent of the investors pointed out political instability as the major reason for this. For 19%
of the investors, deceitful practice by unscrupulous promoters is the reason for inactivity.

 Investor protection continues to remain a dream despite a plethora of laws, rules and
regulations and a host of regulators in the form of RBI, the Company Law Board and the
SEBI. Investor protection should be the goal of the regulators. All the existing regulations
and fresh regulatory proposals are to be reviewed, aiming at this goal. It is time to take
stock of the realities and make drastic measures to ensure safety of investors.

 Special regulation is needed to book the culprits in the case of vanishing companies.
SEBI should be empowered to award interest, costs and damages to investors who have
suffered on account of cheating by promoters. Provision should be made for personal
liability of promoters, directors and concerned intermediaries involved in vanishing
companies. SEBI should have the powers to attach the property of the defaulting
company and then it should be allowed to sell the property to make good the losses
suffered by the investors. Entrepreneurs setting up new companies should be asked to
furnish more details to these regulators, such as photographs, passport number etc. and at
least three references so that they do not disappear into thin air.

 There is a strong need for rating of public issues by authorized agencies like CRISIL,
CARE, etc.

 Investors should put forward their grievances to the regulatory bodies for redressal.

 Appoint an Ombudsman for redressal of investor grievances.

 Stock Exchange should remove inefficiencies and promote market access to be attractive
to investors by improving both the trading and settlement process. Assure fair deal to

 Probe into irregularities and manipulations in all transactions. The regulators should be
able to take quick corrective action, nip the problem in the bud, punish the guilty and plug
the loopholes in the system.

 Efforts should be made to revive the capital markets, both the primary and the secondary
markets. Budget proposals should include tax incentives for investment in public issues

 Ensure stability and integrity of the market. Monitor excessive volatility in the market and
take prompt action by imposing high margins. It acts as a 'brake' to excessive speed of

 More information and greater transparency in the disclosure of information is required to

inspire greater investor confidence.

 Investors need to investigate events of unrealistic boom in the share prices to control the
damage of a scam that may happen.

 Investors should try to attend company meetings to come to know about the policies of
the company.
 Diversification is a safe method of risk management. Diversify the portfolios, as it will
help to reduce risks.

 Investors should not run after hot tips. They should try to find out whether the price of a
share is a real reflection of the earning capacity and future prospects of the issuer. He
should understand that long run investing is safer. Investing requires caution; patience
and hard work and the investor should never let greed judge his sentiment.


Equity capital is a high risk-high reward, permanent source of long term finance for corporate
enterprises and short term earning for shareholders. The investors, who desire to share the
risk, return and control associated with ownership of companies would invest in equity

Today, the Indian Equity Market is one of the most technologically developed in the world
and is on par with other developed markets abroad. The introduction of on-line trading
system, dematerialization, ban of the badla system, and introduction of rolling settlement
have facilitated quick trading and settlements which lead to larger volumes. The setting up of
the National Stock Exchange of India Limited has revolutionized the face of the stock
market. NSE is the only stock exchange which covers majority equity investments every day.

Also equity capital market encourages capital formation in the country. The Specific
factor, which influences equity market, is the investor’s sentiment towards the stock market
as a whole. So investor first has to analyze and invest and not speculate in shares. The
introduction of online trading has given a much-needed impetus to the Indian equity markets.
In this technological world things are needed to move at a faster pace, and with the
MARKET, the stock exchange has expanded its business at a tremendous speed.

According to economic times, the research states the major reason behind the
irregularities of market (up and down in sale and purchase, price of share) is mainly
exchanges must disregards the emotional component of trading by making investors
decisions based upon chart formations, assuming that prices reflect both facts and
emotion. And also by creating the awareness of fundamental analysis (Fundamental analysis
is a method of finding out the future price of a stock, which an investor wishes to buy) among
the investors to avoid the irregularities while trading.

So to increase the volume of equity investment, the stock exchanges should strive
to increase transparency, strictly enforce corporate governance norms, provide more
value-added services to investors, and take steps to increase investor confidence. These stock
exchanges will have to plan strategic tie-ups with their foreign counterparts to get an
international platform. A developed and vibrant secondary market can be an engine for the
revival and growth of the primary market. So, to encourage Indian investment and face
international competition every Indian stock exchange has to stress on innovation and
sustained investment in technology to remain ahead.

Books Referred

1. Investment Management-Preeti Singh

2. Indian Financial Market-T R Venkatesh
3. Financial Market-P K Bandgar
4. Merchant Banking & Financial Services-Anil Agashe


1. Business Today
2. India Today
3. Business World