CHAPTER I

INTRODUCTION

INDUSTRY PROFILE

Stock market is a market where trading of company stocks, other securities and derivatives takes
place. Stock exchanges are corporations or mutual organizations, which are specialized in trading
stocks and securities. All sorts of company stocks are enrolled in the stock exchanges.

Some of the stock markets in India are listed below: -

•Bangalore Stock Exchange

•Mumbai (Bombay) Stock Exchange

•Calcutta Stock Exchange

•Delhi Stock Exchange

•Madras Stock Exchange

•National Stock ExchangeMumbai (Bombay) stock exchange is India’s first stock exchange. It
was founded in 1875with total number of listed stocks being more than 6,000. In India there are
total 22 stock exchanges operating across the country. The National Stock Exchange (NSE) is
situated in Mumbai The small and medium sized companies can list their stocks in Over The
Counter Exchange of India (OTCEI).The Securities and Exchange Board of India (SEBI)
regulates the functioning of capital market and protects the interests of the investors. It is situated
in Mumbai.
Some functions of SEBI are as follows: -

•Regulation of working in stock exchanges and other securities markets.

•Registration and regulation of the operation of collective investment plans, includingmutual

funds.

•Inhibition of fallacious and unfair business practices in the securities markets.

•Controlling accomplishment of shares and takeover of companies. Stock exchange means

anybody of individuals, whether incorporated or not, constituted for the purpose of regulating or
controlling the business of buying, selling or dealing in securities.

These securities include:

(i) Shares, scrip, stocks, bonds, debentures stock or other marketable securities of a like
nature inor of any incorporated company or other body corporate;
(ii) Government securities; and
(iii) Rights or interest in securities.
History of stock market in India

The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India.
The history of Indian stock trading starts with 318 persons taking membership in
NativeShare and Stock Brokers Association, which we now know by the name Bombay Stock E
xchange or BSE in short. In 1965, BSE got permanent recognition from the Government
of India. National Stock Exchange comes second to BSE in terms of popularity. BSE and NSE
represent themselves as synonyms of Indian stock market. The history of Indian stock market is
almost the same as the history of BSE. There are 23 recognized stock exchanges in India
Bombay Stock Exchange ,National Stock Exchange, Ahmadabad Stock Exchange, Bangalore
Stock Exchange, Bhubaneswar Stock Exchange, Calcutta Stock Exchange, Delhi Stock
Exchange,Guwahati Stock Exchange, Hyderabad Stock Exchange ,Jaipur Stock Exchange,
Ludhiana Stock Exchange, Cochin Stock Exchange, Coimbatore Stock Exchange, Madhya
Pradesh Stock Exchange, Magadha Stock Exchange, Madras Stock Exchange, Mangalore Stock
Exchange, Meerut Stock Exchange ,

OTC Exchange Of India Pune Stock Exchange , Saurashtra Kutch Stock Exchange,
Uttar Pradesh Stock Exchange,Vadodara Stock Exchange
COMPANY PROFILE
Share khan Ltd. (Established in the year of 1922) is founded in February 2000, by Mr.Shripal
Morakhia at Mumbai, India (Headquarters). The parent company of Share khan is BNP Paribas.
Operating in the Financial Industry as a retail broking industry and leveraged on the first wave of
digitalization, it introduced the electronic trading system when dematerialization (Demat) of
securities came into existence in the country. Now the Share khan has more than 4800 employees
all over the country and is present in over 575 cities through 150 branches, more than 2600
business partners. Share khan has 1.6 Million clients and on an average, executes more than 4
lakh trades per day in India.

The present CEO of the Share khan is Mr.Jaideep Arora.

Share khan is the India’s 3rd largest brokerage firm after the ICICI Direct and HDFC Securities
in the terms of customer’s base. Share khan is good in online trading in India. It offers broad
range of financial products and services to the clients like securities brokerage, loan against
shares, ESOP financing, etc. Share khan provides a user friendly online trading facility.

About Share khan – Always the first

The share khan is started in 2000 and it is a hold by BNP Paribas since November 2016, Share
khan was the first brokers to offer online trading in India.

Guiding India's retail stock investors for 16 years

 Registered with NSE and BSE for capital market, futures and options and currency
segments and CDSL and NSDL for depository services.
 A full-service stock broking firm providing online services right from online account
opening to trading and investments.
 Created India’s best online trading platforms: Website (www.sharekhan.com), Trade
Tiger (the ultimate desktop trading software), Share khan App (available for Android and
IOS devices) and Share khan Mini (a low bandwidth website especially for mobile
browsers)
 A strong brick-and-mortar network with over 2600 outlets in 575+ cities
 Research-based financial advice on all asset classes to suit all investing and trading styles
 Dedicated Education and training courses for investors and traders in association with
Online Trading Academy
(www.bnpparibas.com and www.sharekhan.com)
Share khan was founded by Mumbai-based entrepreneur Shripal Morakhia in 2000. Share khan
pioneered the online retail broking industry and leveraged on the first wave of digitization, when
Dematerialization (demat) of securities came into effect and electronic trading was introduced in
the stock exchange.

AWARDS

 The best brokerage firm for Overall Service Category for Liquidness Management, India
 The best Working Capital Clarification, India for Novateur Electrical & Digital Systems
Private Limited
 The best Cash Administration Result, India for Publicis Group
 The best financial website award
OUR DREAMS

We have many dreams. We dream of charming India's leading digital savings and investment
partner. 10 principles to guide our vision 2020

VISION, MISSION, QUALITY POLICY

Vision:

To be the best retail brokering brand in the retail business of stock marketing.

Mission:

To educate and empower the individual investor to make better investment decisions through the
quality advice and superior services.

Quality policy:

Excellence is all about the quality of work. We strive for delivery that is 100% error free and yet
at lightning speed. Excellence deals with the quality of work.

PRODUCT/SERVICE

Share khan provide

 Demat account
 Trading account for cash calculator
 Bank account for fund transfer
Products:

 Mutual fund schemes.

 Insurance.
 Portfolio management system.
 Shares- online and offline.
 Bonds.
 Fixed deposits.
 Commodities
Major competitors of Share khan:

 Kotak Securities
 India bulls
 ICICI direct.com
 RELIGARE
 MOTILAL OSWAL
 BAJAJ CAPITAL
 RELIANCE MONEY
 HDFC Securities
 India Info line

FUTURE GROWTH AND PROSPECTS:

 To develop as distribution networks India.

 To provision Leverage research and advisory
 To bring Investor alertness and education.
 To Increase distribution of mutual fund and insurance products
 To focus on wealth solutions and new product offering. To have a judicious use of capital
that ensures high Return on Equity and low leverage.
 To have a Flexible cost structure that maintains profitability across market cycles.
 To Build Stronger Institutional relationship through wider and quality research.
 To Increase research support.
 Building Principal Strategies Group to maximize returns using risk free arbitrage
strategies
Financial statements
Particulars March March March
2016 2017 2018
I. INCOME

1) Operating income 150.58 145.94 163.43

II. Expenses

1) Material consumed 125.71 124.16 133.41

2) Manufacturing expenses 5.08 3.82 3.80

3) Personnel expenses
4.82 5.15 5.47
4) Administrative expenses
9.34 8.73 9.95
5) Cost of sales
144.94 141.85 152.63
6) Operating profit
5.63 4.09 10.81
7) Other recurring income
1.37 1.56 1.41
8) Adjusted PBDIT
7.01 5.64 12.22
9) Financial expenses
0.44 0.26 0.53
10) Depreciation
1.15 1.20 1.23
11) Adjusted PBT
5.42 4.18 10.46
12) Tax charges

13) Adjusted PAT 1.51 1.71 3.53

14) Non- recurring items 3.90 2.46 6.93

15) Reported net profit -0.21 0.00 0.00

16) Earnings before appropriation 3.69 2.46 6.93

17) Equity dividend 8.77 9.14 14.66

18) Retained earnings

1.29 0.86 1.64

7.22 8.10 12.59

Chapter 2

MCKINSEY 7 S FRAMEWORK
The 7 S models are better known as McKinsey 7-S. This is because the two persons who
developed this model. Tom peters and Robert Waterman has been consultant at McKinsey and
company. They published their 7s model in their article “Structure is Not Organization” (1980)
and in their books “ The art of Japanese Management” (1981) and “ In Search of Excellence”
(1982).

The model starts on the premise that an organization is not just a structure, but consists of
seven elements namely,

These seven elements are distinguished as to called hard Ss and soft Ss. The hard
elements are feasible and early to identify. They can form strategy statements, corporate plans,
organizational charts and other documentation.
7s model is divided in two S’s they are:

The hard S’s are

1. Strategy.
2. Structure.
3. System.
The soft S’s are

1. Style.
2. Staff.
3. Skills.
4. Shared values.

 STRUCTURE:

Share khan is flexible in terms of makingtemporary structural changes to cope up withspecific str
ategic tasks without any hassles. If need arises, the top management can assign therole to any of i
ts employees which it considerscapable and skillful.
ORGANAIZATION STRUCTURE of Share Khan LTD:

CEO

COUNTRY HEAD

REGIONAL HEAD

BRANCH HEAD

CITY SALES MANAGER

DEALER

SALES EXECUTIVES

SE 1 SE 2 SE 3 SE 4

TRAINEE TRAINEE TRAINEE TRAINEE

  STRATEGY:
Share khan believes not only in developing thestrategies but also in its successful execution.

 SYSTEMS:

This constitutes of all the training anddevelopment systems, estimating budgets and theaccountin
g system of Share khan.

 STYLE:

Style refers to all the symbolic actions undertakenby top managers of Share khan and its influenc
eon the subordinates.

 STAFF:

Share khan values its employees as its assets andtherefore carefully trains and motivates them by
giving them incentives at regular intervals.Talented employees are assigned as mentors andgive
n real responsibility and moved into higher positions.

 SKILLS:

The term skills refer to those activitiesorganizations do best and for which they areknown. Share
khan is known for its timely advice(suggestions/tips), which it caters to its customersand it boast
s of 70-90% strike rates in bookingrecommendations.

 SUPER ORDINATE GOALS:

This refers to guiding concepts, values andaspirations that unite an organization in somecommon
purpose. It provides the customers thebest service as it believes in customer satisfactionand rete
ntion.
SWOT ANALYSIS OF SHAREKHAN:
STRENGTHS:

 The Number one registrar and transfer agent and dealer of investment products in India.
 The Good co-operation between employees.

WEAKNESS:

 High employee turnover lack of responsiveness among customers because of

nonaggressive promotional strategies (print media, newspapers, etc.).

OPPORTUNITIES:

 Promotion at rural and semi-urban areas.

 As interest on fixed deposits with post office and banks are all time low, more and more
small investors are entering into stock market.

THREATS:

 The Lack of necessary branch-offices for speedy delivery of services.

 Growing number of competitors.
 Share khan’s recognition by new clients.
CHAPTER-3

PORTFOLIO MANAGMENT SERVICE

PORTFOLIO MANGEMNT SERVICES (PMS)

Portfolio (finance) means a collection of investments held by an institution. Holding a portfolio

is often part of an investment and risk-limiting strategy called diversification. By owning several
assets, certain types of risk (in particular specific risk) can be reduced. There are also portfolios
which are aimed at taking high risks – these are called concentrated portfolios. Investment
management is the professional management of various securities (shares, bonds etc) and other
assets (e.g. real estate), to meet specified investment goals for the benefit of the investors.
Investors may be institutions (insurance companies, pension funds, corporations etc.)or private
investors (both directly via investment contracts and more commonly via collective investment
schemes e.g. mutual funds).The term asset management is often used to refer to the investment
management of collective investments, whilst the more generic fund management may refer to
all forms of institutional investment as well as investment management for private investors.

Investmentmanagers who specialize in advisory or discretionary management on behalf of (norm

allywealthy) private investors may often refer to their services as wealth management
or portfolio management often within the context of so-called "private banking".
The provision of 'investment management services' includes elements of financial analysis, asset
selection, stock selection, plan implementation and ongoing monitoring
of investments.Outsideof the financial industry, the term "investment management" is often appli
ed toinvestments other than financial instruments. Investments are often meant to include
projects, brands, patents and many things other than stocks and bonds. Even in this case, the term
implies that rigorous financial and economic analysis methods are used.

Objective of PMS

There are the following objective which is full filled by Portfolio Management Services.
  Safety Of Fund
The investment should be preserved, not be lost, and should remain in the returnable position in
cash or kind.

 Marketability
The investment made in securities should be marketable that means, the securities
must be listed and traded in stock exchange so as to avoid difficulty in their encashment.

 Liquidity
The portfolio must consist of such securities, which could be en-cashed without any
difficulty or involvement of time to meet urgent need for funds. Marketability ensures
liquidity to the portfolio.

 Reasonable return
T h e i n v e s t m e n t s h o u l d e a r n a r e a s o n a b l e r e t u r n t o upkeep the declining value
of money and be compatible with opportunity cost of the money in terms of current income in
the form of interest or dividend.

 Appreciation in Capital
The money invested in portfolio should grow and result into capital gains.

 Tax planning
Efficient portfolio management is concerned with composite tax planning covering
income tax, capital gain tax, wealth tax and gift tax.

 Minimize risk
Risk avoidance and minimization of risk are important objective of portfoliomanagement. Portfol
iomanagers achieve these objectives by effective investmen planning and periodical review of
market, situation and economic environment affecting the financial market.

Topic chosen by the study

A Study on portfolio management at share khan ltd in RT nagar Bangalore

Need for the study

As in the current scenario the effectiveness of PMS is required. As the PMS gives
investors periodically review their asset allocation across different assets as the portfolio can
get skewed over a period of time. This can be largely due to appreciation / depreciation in the
value of the investments. As the financial goals are diverse, the investment choices also need to
be different to meet those needs. No single investment is likely to meet all the needs, so one
should keep some money in bank deposits and / liquid funds to meet any urgent need for cash
and keep the balance in other investment products/ schemes that would maximize the return and
minimize the risk. Investment allocation can also change depending on one’s risk-return profile.

Review of literature

Multi objective evolution algorithms for portfolio management ; a comprehensive

literature review.
Abstract

In this paper we provide a review of the current state of research on Portfolio Management with
the support of Multiobjective Evolutionary Algorithms (MOEAs). Second we present a
methodological framework for conducting a comprehensive literature review on the
Multiobjective Evolutionary Algorithms (MOEAs) for the Portfolio Management. Third, we use
this framework to gain an understanding of the current state of the MOEAs for the Portfolio
Management research field and fourth, based on the literature review, we identify areas of
concern with regard to MOEAs for the Portfolio Management research field.

Information technology portfolio management: literature review, framework, and research

issues
Ram Kumar, Haya Ajjan, Yuan Niu

Information Resources Management Journal (IRMJ) 21 (3), 64-87, 2008

There is significant interest in managing IT resources as a portfolio of assets. The concept of IT

portfolio management (ITPM) is relatively new, compared to portfolio management in the
context of finance, new product development (NPD), and research and development (R&D).
This article compares ITPM with other types of portfolio management, and develops an
improved understanding of IT assets and their characteristics. It presents a process-oriented
framework for identifying critical ITPM decision stages. The proposed framework can be used
by managers as well as researchers.

Panagiotis Xidonas, John Psarras

International Journal of Banking, Accounting and Finance 1 (3), 285-309, 2009

The current study provides a categorised bibliography on the application of the techniques of
multiple criteria decision making (MCDM) to the problems and issues of portfolio management.
A large number of studies in the field of portfolio management have been compiled and
classified according to the different multicriteria methodological approaches that have been used.
Except the in-depth presentation of the MCDM contributions in the area of portfolio
management, the outmost aim of this paper is to stress the inarguable multiple criterion nature of
the majority of the problems that modern financial management faces.

Equity portfolio management within the MCDM frame: a literature review

Delegated portfolio management: A survey of the theoretical literature

Livio Stracca

Journal of Economic surveys 20 (5), 823-848, 2006

This paper provides a selective review of the theoretical literature on delegated portfolio
management as a principal–agent relationship. The main focus of the paper is to review the
analytical issues raised by the peculiar nature of the delegated portfolio management relationship
within the broader class of principal–agent models. In particular, the paper discusses the
performance of linear versus nonlinear compensation contracts in a single‐period setting, the
possible effects of limited liability of portfolio managers, the role of reputational concerns in a
multiperiod framework, and the incentives to noise trading. In addition, the paper deals with
some general equilibrium dimensions and asset pricing implications of delegated portfolio
management. The paper also suggests some directions for future research.

Product development decisions: A review of the literature

Viswanathan Krishnan, Karl T Ulrich

Management science 47 (1), 1-21, 2001
This paper is a review of research in product development, which we define as the
transformation of a market opportunity into a product available for sale. Our review is broad,
encompassing work in the academic fields of marketing, operations management, and
engineering design. The value of this breadth is in conveying the shape of the entire research
landscape. We focus on product development projects within a single firm. We also devote our
attention to the development of physical goods, although much of the work we describe applies
to products of all kinds. We look inside the “black box” of product development at the
fundamental decisions that are made by intention or default. In doing so, we adopt the
perspective of product development as a deliberate business process involving hundreds of
decisions, many of which can be usefully supported by knowledge and tools. We contrast this
approach to prior reviews of the literature, which tend to examine the importance of
environmental and contextual variables, such as market growth rate, the competitive
environment, or the level of top-management support.

Practices, roles, and responsibilities of middle managers in program and portfolio

management

Tomas Blomquist, Ralf Müller

Project Management Journal 37 (1), 52-66, 2006
Practices for program and portfolio management, together with the associated roles and
responsibilities of middle managers, were investigated. The results of the multi-method study
show that high-performing organizations apply dedicated portfolio management processes and
tools, plus use the associated roles of middle managers, to address the requirements stemming
from the complexity of the organization's environment and the types of projects executed. This is
not the case in low-performing organizations. The study takes a transaction costs economics
perspective and develops a contingency model for program/portfolio management roles of
middle managers. Managerial and theoretical implications are also discussed. This paper
summarizes the highlights of research findings that can be found in the full report published by
the Project Management Institute (PMI) (Blomquist & Müller, 2006).

Multi‐criteria decision aid in financial decision making: methodologies and literature

review

Constantin Zopounidis, Michael Doumpos

Journal of Multi‐Criteria Decision Analysis 11 (4‐5), 167-186, 2002
Over the past decades the complexity of financial decisions has increased rapidly, thus
highlighting the importance of developing and implementing sophisticated and efficient
quantitative analysis techniques for supporting and aiding financial decision making.
Multi‐criteria decision aid (MCDA), an advanced field of operations research, provides financial
decision makers (DMs) and analysts a wide range of methodologies, which are well suited to the
complexity of financial decision problems. The aim of this paper is to provide an in‐depth
presentation of the contributions of MCDA in the field of finance, focusing on the methods used
and their real‐world applications. Copyright © 2003 John Wiley & Sons, Ltd.

1.1 RESEARCH METHODOLOGY

1) Research design: The research design adopted is analytical design

2) Data collection
 Primary data
Primary data is collected for the 1st time it includes interview, observation.
 Secondary data
Secondary data is already published data it includes NSE(National stock
exchange), money control website, annual reports of the company and
journals.

1.2 RESTRICTIONS OF THE STUDY

 Time constraint
 The study uses yearly price instead of monthly price
 To construct a portfolio only sharp single index model
 Only 3 years data has been taken for the study

HYPOTHESIS

 Ho = while investing in stock market the portfolio has negative impact on

investors decision.
  H1= while investing in the stock market the portfolio has negative impact on the
investor’s decision

STATEMENT OF PROBLEM

The securities market is highly volatile in nature, due to this most of investors face difficulty
while identifying investment opportunities, investors fail to predict when to buy and sell
securities and performance of industries. So this analysis is directed towards the use of
technical analysis tools which help investors when to buy and sell securities.

The problem that exist the investors has a problem of holding the securities and how much
amount to be invested. The Markowitz model permits AN capitalist to show up at AN
optimum portfolio, the only index model is useful in avoiding the difficulty of knowledge
input and time price thought.

SCOPE OF THE STUDY

 The analysis has been done to construct an optimal portfolio for selected sectors
 Selection of companies are restricted based on Sensex index only
 This Analysis involves using of only technical analysis tools