ABSTRACT

Bank nifty is one of the most traded stocks in the national stock exchange it is safe at a
soften point. It plays important role in developing diversified investment environment,
which can act as a cushion against risk from the concentration in the bank loans and
bonds market. stock market would promote efficient diversification and protects the
investors from concentrated financial markets securities. Although bank nifty stocks are
popular in developed nations it is still not popular in developing countries. Investors like
to invest in other securities than investing on Bank nifty stocks.

The main objective of the study is to determine the factors that influence investment in
bank nifty stocks market and whether the independent variables that consist of safety,
return, liquidity, tax planning, pricing structure, governance and investor protection and
regulation are significant in determining the investment in bond market by institutional
investors.

The study used structured questionnaire techniques from 100 respondents which includes
various investors from Bangalore city and rural people. The study is based on descriptive
and analytical research design. This study used quantitative method for data collection for
the purpose of analysis. Mainly structured questionnaire survey was used to generate
responses based on which statistical analysis is done to test hypothesis. The sampling
technique for the study followed convenience sampling. For the analysis of collected
data, various statistical tests such as Correlation, ANOVA and Regression test were
conducted with the help of statistical software SPSS.

There are few limitations for this study which are this study might not include all the
variables, to study the factors that influence investment in stock market, respondents are
from Bangalore only and majority of respondents are other investors which may provide
bias representation to the result.

The major findings of this research document are: there exits positive relationship
between safety, return, tax planning, governance and investor protection, regulation and
investment in Bank nifty market while negative relation between liquidity and pricing
structure.

Hypothesis test also inferred that there is significant relationship between governance and
liquidity with investment in stock market whereas safety, return, tax planning, pricing
structure and regulation did not have a significant relationship with investment in bond
market.

The study shows that low liquidity and governance present in the stock market is the
main reason for low investment in stock market. The market size of bank nifty should be
bigger to have more liquidity on the market and attract more investors on the market.
Similarly, proper trading mechanism should be established to ensure stocks are easily
traded in the market which helps to increase liquidity of the bank nifty stocks. Investors
do not like to invest on bank nifty as there is large information asymmetry present and
low degree of transparency present in the market so government should ensure that
information is provided on timely basis on transparent manner.