CHAPTER-I

INTRODUCTION

1
 INTRODUCTION

“Change is the law of nature”. There were times when man was a wanderer or a
normal. He himself had to go place to place in search of food, water and now everything
is available at your doorstep just at the click of the mouse. The growth of information
technology has affected almost all sectors of life. Internet has enabled us to get every
information at our doorstep. When Internet has affected all sectors he could “stock
markets” the most important player of the economy, has remained far behind? Like all
other sectors Internet has set its feet in the stock markets also.
Internet trading commissions are clearly posted on the websites of the various
services, and are typically a fixed rate charge, depending upon the type of security being
traded and the size of trade. In theory, therefore, an Interest investor always knows what
commission he is being charged on each trade. Internet investors can take as much time
as they would like to take prior to placing a trade order. Similarly the online investor
likely does not have to worry that his broker is making unauthorized trades. Since there is
no individual broker making a commission, the only person who is authorized to trace in
the account is the actual investor. Furthermore, the internet investor can never become a
victim of excessive trading (where for the broker) since the investor maintains total
control over the number of transactions which take place in the account.
All of these positive features of internet trading may lead the unwary investor to
believe that Internet trading is a way to take control of their finances and save more
money in the process. Unfortunately, this is not always the case. The advantages of
Internet stock trading have also its weaknesses and these weaknesses present significant
drawbacks for the average investor.

First and foremost, the average investor is not an expert in the financial markets.
There is a danger for allowing the autonomy of online trading to hull you into the belief
that you are an expert investor. An online investor sitting at home at a personal computer

2
also foregoes proper investment advice and financial planning, perhaps among the most
valuable services provided by traditional brokers.

There are, of course, additional risks relative to performing transactions over the
Internet especially on a shared computer. Those people whom investors have provided
their account number and password can freely trade that account while the investor will
have little, if any, resource against the brokerage firm for the breach of security.

The online trading is simply defined as “dealing securities on net”. In online

trading system, from a single location anywhere, can service investors across the country.

3
NEED FOR THE STUDY:

The present study to review the online trading procedure a case study of ONLINE
TRADING at INDIA INFOLINE., as the exchange has changed it’s trading from it
and there is need to assess the performance of the capital market.

OBJECTIVES OF THE STUDY:

 It is to analyze the changes in trading after the exchange shifted from outcry to
online trading system.
 It is to study the functions of INDIA INFOLINE through various departments.
 To know the online screen based trading system adopted by INDIA
INFOLINE and about its communication facilities. The appropriate
configuration to set the network, which would link the INDIA INFOLINE to
individual / members.
 To know about the latest and future development in the stock exchange
trading system.

4
METHODOLOGY OF THE STUDY:

The data collection methods include both primary and secondary

Collection methods.

Primary method:
This method includes the data collected from the personal interaction with authorized
members of India infoline Securities limited.

Secondary method:
The secondary data collection method includes:
 The lecturers delivered by the superintendents of respective departments.
 The brochures and material provided by India infoline Securities limited.
 The data collected from the magazines of the NSE, economic times, etc.
 Various books relating to the investments, capital market and other related topics.

5
 LIMITATIONS OF THE STUDY:
The study confines to the past 2-3 years and present system of the trading procedure in theand
the Indiainfoline study is confined to the coverage of all the related issues in brief. The data is
collected from the primary and secondary sources and thus is subject to slight variation than
what the study includes in reality.

The study is confined to online trading procedure only. Problems of listing are not
covered due to limited time and to keep the study in manageable limits.

6
 CHAPTER-II
REVIEW OF LITERATURE

7
 REVIEW OF LITERATURE

ONLINE TRADING

Before getting in to the online trading we should know some things about the internet,
e-commerce and etc.

1. Internet
Internet is a worldwide, self-governed network connecting several other smaller
networks and millions of computers and persons, to mega sources of information.
This technology shrinks vast distances, accelerating the pace of business reforms and
revolutionizing the way companies are managed. It allows direct, ubiquitous links to
anyone anywhere and anytime to build up interactive relationships.

A combination of time and space, called the Internet promises to bring

unprecedented changes in our lives and business. Internet or net is an inter-connection
of computer communication networks spanning the entire globe, crossing all
geographical boundaries. It has re-defined the methods of communication, work
study, education, business, leisure, health, trade, banking, commerce and what not it
is virtually changing every thing and we are living in dot.com age. Net being an
interactive two way medium, through various websites, enables participation by
individuals in business to business and business to consumer commerce, visit to
shopping arcades, games, etc. in cyber space even the information can be copied,
downloaded and retransmitted.
The use of Internet has grown 2000 percent in last decade and is currently
growing at 12 percent per month. In India, growth of Internet is of recent times. It is
expected to bring changes in every functional area of business activity including
management and financial services. It offers stock trading at a lower cost. Internet can
change the nature and capacity of stock broking business in India.

8
2. E-commerce
Electronic commerce is over computer communication networks. It helps conduct
traditional commerce through new way of transferring and processing of information.
Information is electronically transferred from computer to computer in an automated
way. E-commerce refers to the paperless exchange of business information using
electronic data inter change, electronic technologies. It not only reduces manual
processes and paper transactions but also helps organization move to a fully
electronic environment and change the way they operated.

PC’s and networking attempts to introduce banks of the tools and technologies
required for electronic commerce. The computers are either workstations of
individual office works or serves where large databases and information reside.
Network connects both categories of computers; the various operating systems are the
most basis program within a computer. It manages the resources of the computer
system in a fair and efficient manner.
Now we can enter in to the concept known as online trading.

In the past, investors had no option but to contact their broker to get real time
access to market data. The net brings data to the investor on-line and net broking
enables him to trade on a click of mouse. Now information has become easily
accessible to both retail as well as big investor.

9
EVOLUTION OF BROKING IN INDIA:

The evolution of a broking in India can be categorized in three phases -

 Stockbrokers will offer on their sites features such as live portfolio manager,
live quotes, market research and news, etc. to attract more investors.
 Brokers will offer online broking and relationship management by providing
and offering analysis and information to investors during broking and non-
broking hours based on their profile and needs, i.e. customized services.
 Brokers (now e-brokers) will offer value management or services like initial
public offering online, on-line asset allocation, portfolio management,
financial planning, tax planning, insurance services, etc. and enables the
investors to take better and well considered decisions.

The actual definition of “Online Trading” is as explained below:

“Online trading is a service offered on the internet for purchase and sale of
shares. In the real world you place orders on your stockbroker either verbally
(personally or telephonically) or in a written form (fax).” In online trading,
you will access a stockbroker’s website through your internet enabled PC and
place orders through the broker’s internet based trading engine. These orders
are routed to the stock exchange without manual intervention and executed
thereon in a matter of a few seconds.The net is used as a mode of trading in
internet trading. Orders are communicated to the stock exchange through
website.
In India:
Internet trading started in India on 1st April 2000 with 79 members seeking
permission for online trading. The SEBI committees on internet based securities
trading services has allowed the net to be used as an Order Routing System (ORS)
through registered stock brokers on behalf of their clients for execution of transaction.
Under the ORS the client enters his requirements (security, quantity, price buy/sell)
on broker’s site.

10
Objectives:

Internet trading is expected to

 Increase transparency in the markets,
 Enhance market quality through improved liquidity, by increasing quote
continuity and market depth,
 Reduce settlement risks due to open trades, by elimination of mismatches,

 Provide management information system,

 Introduce flexibility in system, so as to handle growing volumes easily and to
support nationwide expansion of market activity.

Besides, through internet trading three fundamental objectives of securities

regulation can be easily achieved, these are:
 Investor protection
 Creation of a fair and efficient market, and
 Reduction of the systematic risks.
Some of the brokers offering net trading include ICICI direct, kotakstreet, etc.

Requirements for net trading:

For investors:

1. Installation of a computer with required specification

2. Installation of a modem
3. Telephone connection
4. Registration for on-line trading with broker
5. A bank account
6. Depository account
7. Compliance with SEBI guidelines for net trading

11
The following should be produced to get a demat account and online trading
account:
As identity proof & address proof any one of the following:

 Voter ID card
 Driving license
 PAN card( in case of to trade more than 50000)
 Ration card
 Bank pass book
 Telephone bill
Other requirements, which are necessary
 First page of the bank pass book and last 6 months statement.
 Bank manager’s signature along with bank’s seal, manager registration code on
photograph.
For stock brokers:
1. Permission from stock exchange for net trading
2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.

The net is used as a medium of trading in internet trading. Orders are

communicated to the stock exchange through website. Internet trading started in India
on 1st April 2000 with 79 members seeking permission for online trading. The SEBI
committees on internet based securities trading services has allowed the net to be
used as an Order Routing System (ORS) through registered stock brokers on behalf of

12
their clients for execution of transaction.
Under the Order Routing System the client enters his requirements (security, quantity,
price, and buy/sell) in broker's site. They are checked electronically against the clients
account and routed electronically to the appropriate exchange for execution by the
broker. The client receives a confirmation on execution of the order. The customer's
portfolio and ledger accounts get updated to reflect the transaction. The user should
have the user id and password to enter into the electronic ring. He should also have
demat account and bank account. The system permits only a registered client to log in
using user id and password. Order can be placed using place order window of the
website.
Procedure for net trading

Step 1: Those investors, who are interested in doing the trading over internet system
i.e. NEAT-IXS, should approach the brokers and get them self registered with the
Stock Broker.
Step 2: After registration, the broker will provide to them a Login name, Password
and personal identification number (PIN).
Step 3: Actual placement of an order. An order can then be placed by using the place
order window as under:
(a) First by entering the symbol and series of stock and other parameters like
quantity and price of the scrip on the place order window.
(b) Second, fill in the symbol, series and the default quantity.
Step 4: It is the process of review. Thus, the investor has to review the order placed
by clicking the review option. He may also re-set to clear the values.
Step 5: After the review has been satisfactory, the order has to be sent by clicking on
the send option.
Step 6: The investor will receive an "Order Confirmation" message along with the
order number and the value of the order.
Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain
reasons such as invalid price limit, an appropriate message will appear at the bottom
of the screen. At present, a time lag of about 12 seconds is there in executing the

13
trade.
Step 8: It is regarding charging payment, for which there are different mode. Some
brokers will take some advance payment from the investor and will fix their trading
limits. When the trade is executed, the broker will ask the investor for transfer of
funds to his account.
Internet trading provides total transparency between a broker and an investor in the
secondary market. In the open outcry system, only the broker knew the actually
transacted price. Screen based trading provides more transparency. With online
trading investors can see themselves the price at which the deal takes place.
The time gap has narrowed in every stage of operation. Confirmation and execution
of trade reaches the investor within the least possible time, mostly within 30 seconds.
Instant feedback is available about the execution. Some of the websites also offer;
 News and research report
 BSE and NSE movements
 Stock analysis
 IPO and mutual fund centers

STOCK EXCHANGES IN INDIA

Stock exchanges are the perfect type of market for securities whether of government
and semi-govt bodies or other public bodies as also for shares and debentures issued
by the joint-stock companies. In the stock market, purchases and sales of shares are
affected in conditions of free competition. Government securities are traded outside
the trading ring in the form of over the counter sales or purchase. The bargains that
are struck in the trading ring by the members of the stock exchanges are at the fairest
prices determined by the basic laws of supply and demand.
Definition of a stock exchange:

“Stock exchange means any body or individuals whether incorporated or not,

constituted for the purpose of assisting, regulating or controlling the business of
buying, selling or dealing in securities.” The securities include:
14
 Shares of public company.
 Government securities.
 Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19 th century were those of Mumbai
setup in 1875 and Ahmedabad set up in 1894. These were organized as voluntary
non-profit-marking associations of brokers to regulate and protect their interests.
Before the control on securities under the constitution in 1950, it was a state subject
and the Bombay securities contracts (control) act of 1925 used to regulate trading in
securities. Under this act, the Mumbai stock exchange was recognized in 1927 and
Ahmedabad in 1937. During the war boom, a number of stock exchanges were
organized. Soon after it became a central subject, central legislation was proposed and
a committee headed by A.D.Gorwala went into the bill for securities regulation. On
the basis of the committee’s recommendations and public discussion, the securities
contract (regulation) act became law in 1956.
Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities contracts
(regulation), Act, 1956. Those are:

Ahmedabad Stock Exchange Association Ltd.

Bangalore Stock Exchange
Bhubaneshwar Stock Exchange Association
Calcutta Stock Exchange
Cochin Stock Exchange Ltd.
Coimbatore Stock Exchange
Delhi Stock Exchange Association
Guwahati Stock Exchange Ltd

15
Hyderabad Stock Exchange Ltd.(Presently not working)
Jaipur Stock Exchange Ltd
Kanara Stock Exchange Ltd
Ludhiana Stock Exchange Association Ltd
Madras Stock Exchange
Madhya Pradesh Stock Exchange Ltd.
Magadh Stock Exchange Limited
Meerut Stock Exchange Ltd.
Mumbai Stock Exchange
National Stock Exchange of India
OTC Exchange of India
Pune Stock Exchange Ltd.
Saurashtra Kutch Stock Exchange Ltd.
Uttar Pradesh Stock Exchange Association
Vadodara Stock Exchange Ltd.

Out of these major stock exchanges were:

NSE
The National Stock Exchange of India Limited has genesis in the report of the
High Powered Study Group on Establishment of New Stock Exchanges, which
recommended promotion of a National Stock Exchange by financial institutions (FI’s)
to provide access to investors from all across the country on an equal footing. Based
on the recommendations, NSE was promoted by leading Financial Institutions at the
behest of the Government of India and was incorporated in November 1992 as a tax-
paying company unlike other stock exchanges in the country. On its recognition as a
stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993,
NSE commenced operations in the Wholesale Debt Market (WDM) segment in June
1994. The Capital Market (Equities) segment commenced operations in November
1994 and operations in Derivatives segment commenced in June 2000

16
 NSE's mission is setting the agenda for change in the securities markets in India. The
NSE was set-up with the main objectives of:
 Establishing a nation-wide trading facility for equities and debt instruments.
 Ensuring equal access to investors all over the country through an appropriate
communication network.
 Providing a fair, efficient and transparent securities market to investors using
electronic trading systems.
 Enabling shorter settlement cycles and book entry settlements systems, and
 Meeting the current international standards of securities markets.
The standards set by NSE in terms of market practices and technology, have become
industry benchmarks and are being emulated by other market participants. NSE is
more than a mere market facilitator. It's that force which is guiding the industry
towards new horizons and greater opportunities.
BSE
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as
"The Native Share and Stock Brokers Association". It is the oldest one in Asia, even
older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary
non-profit making Association of Persons (AOP) and is currently engaged in the process
of converting itself into demutualised and corporate entity. It has evolved over the years
into its present status as the premier Stock Exchange in the country. It is the first Stock
Exchange in the Country to have obtained permanent recognition in 1956 from the Govt.
of India under the Securities Contracts (Regulation) Act 1956.The Exchange, while
providing an efficient and transparent market for trading in securities, debt and
derivatives upholds the interests of the investors and ensures redresses of their grievances
whether against the companies or its own member-brokers. It also strives to educate and
enlighten the investors by conducting investor education programmers and making
available to them necessary informative inputs.
A Governing Board having 20 directors is the apex body, which decides the policies
and regulates the affairs of the Exchange. The Governing Board consists of 9 elected
directors, who are from the broking community (one third of them retire ever year by
rotation), three SEBI nominees, six public representatives and an Executive Director

17
 & Chief Executive Officer and a Chief Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-
day administration of the Exchange and the Chief Operating Officer and other Heads
of Department assist him.
The Exchange has inserted new Rule No.146 A in its Rules, Byelaws pertaining to
constitution of the Executive Committee of the Exchange. Accordingly, an Executive
Committee, consisting of three elected directors, three SEBI nominees or public
representatives, Executive Director & CEO and Chief Operating Officer has been
constituted. The Committee considers judicial & quasi matters in which the
Governing Board has powers as an Appellate Authority, matters regarding annulment
of transactions, admission, continuance and suspension of member-brokers,
declaration of a member-broker as defaulter, norms, procedures and other matters
relating to arbitration, fees, deposits, margins and other monies payable by the
member-brokers to the Exchange, etc.
REGULATORY FRAME WORK OF STOCK EXCHANGE

A comprehensive legal framework was provided by the “Securities Contract

Regulation Act, 1956” and “Securities Exchange Board of India 1952”. Three tier
regulatory structure comprising
 Ministry of finance
 The Securities And Exchange Board of India
 Governing body
Members of the stock exchange:
The securities contract regulation act 1956 has provided uniform regulation for the
admission of members in the stock exchanges. The qualifications for becoming a
member of a recognized stock exchange are given below:
 The minimum age prescribed for the members is 21 years.
 He should be an Indian citizen.
 He should be neither a bankrupt nor compound with the creditors.
 He should not be convicted for fraud or dishonesty.

18
  He should not be engaged in any other business connected with a company.
 He should not be a defaulter of any other stock exchange.
 The minimum required education is a pass in 14th standard examination.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
The securities and exchange board of India was constituted in 1988 under a resolution
of government of India. It was later made statutory body by the SEBI act
1992.according to this act, the SEBI shall constitute of a chairman and four other
members appointed by the central government.
With the coming into effect of the securities and exchange board of India act, 1992
some of the powers and functions exercised by the central government, in respect of
the regulation of stock exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI

 To protect the interest of investors in securities.

 Regulating the business in stock exchanges and any other securities market.
 Registering and regulating the working of intermediaries associated with
securities market as well as working of mutual funds.
 Promoting and regulating self-regulatory organizations.
 Prohibiting insider trading in securities.
 Regulating substantial acquisition of shares and take over of companies.
 Performing such functions and exercising such powers under the provisions of
capital issues (control) act, 1947and the securities to it by the central
government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

 Board of Directors of Stock Exchange has to be reconstituted so as to include

non-members, public representatives and government representatives to the extent
of 50% of total number of members.

19
 Capital adequacy norms have been laid down for the members of various stock
exchanges depending upon their turnover of trade and other factors.
 All recognized stock exchanges will have to inform about transactions within 24
hrs.

TYPES OF ORDERS:
Buy and sell orders placed with members of the stock exchange by the investors. The
orders are of different types.
Limit orders: Orders are limited by a fixed price. E.g. ‘buy Reliance Petroleum at
Rs.50.’Here, the order has clearly indicated the price at which it has to be bought and
the investor is not willing to give more than Rs.50.
Best rate order: Here, the buyer or seller gives the freedom to the broker to execute
the order at the best possible rate quoted on the particular date for buying. It may be
lowest rate for buying and highest rate for selling.
Discretionary order: The investor gives the range of price for purchase and sale. The
broker can use his discretion to buy within the specified limit. Generally the
approximation price is fixed. The order stands as this “buy BRC 120 shares around
Rs.40”.
Stop loss order: The orders are given to limit the loss due to unfavorable price
movement in the market. A particular limit is given for waiting. If the price falls
below the limit, the broker is authorized to sell the shares to prevent further loss. E.g.
Sell BRC limited at Rs.24, stop loss at Rs.22.
Buying and selling shares: To buy and sell the shares the investor has to locate
register broker or sub broker who render prompt and efficient service to him. The
order to buy or sell specifying the number of shares of the company of investors’
choice is placed with the broker. The order may be of any type. After receiving the
order the broker tries to execute the order in his computer terminal. Once matching
order is found, the order is executed. The broker then delivers the contract note to the
investor. It gives the details regarding the name of the company, number of shares
bought, price, brokerage, and the date of delivery of share. In this physical trading
form, once the broker gets the share certificate through the clearing houses he delivers

20
the share certificate along with transfer deed to the investor. The investor has to fill
the transfer deed and stamp it. The stamp duty is one of the percentage
considerations, the investor should lodge the share certificate and transfer deed to the
register or transfer agent of the company. If it is bought in the DEMAT form, the
broker has to give a matching instruction to his depository participant to transfer
shares bought to the investors account. The investor should be account holder in any
of the depository participant. In the case of sale of shares on receiving payment from
the purchasing broker, the broker effects the payment to the investor.
Share groups: The scrips traded on the BSE have been classified into
‘A’,’B1’,’B2’,’C’,’F’ and ‘Z’ groups. The ‘A’ group represents those, which are in
the carry forward system. The ‘F’ group represents the debt market segment (fixed
income securities). The Z group scrips are of the blacklisted companies. The ‘C’
group covers the odd lot securities in ‘A’, ‘B1’&’B2’ groups.

21
 CHAPTER-III
INDUSTRY
&
COMPANY PROFILE

22
 INDUSTRY PROFILE
Following diagram gives the structure of Indian financial system:

23
 FINANCIAL MARKET

Financial markets are helpful to provide liquidity in the system and for smooth
functioning of the system. These markets are the centers that provide facilities for
buying and selling of financial claims and services. The financial markets match the
demands of investment with the supply of capital from various sources.

According to functional basis financial markets are classified into two types.
They are:
 Money markets (short-term)
 Capital markets (long-term)
According to institutional basis again classified in to two types. They are
 Organized financial market
 Non-organized financial market.

The organized market comprises of official market represented by recognized

institutions, bank and government (SEBI) registered/controlled activities and
intermediaries. The unorganized market is composed of indigenous bankers,
moneylenders, individual professional and non-professionals.

MONEY MARKET:
Money market is a place where we can raise short-term capital.
Again the money market is classified in to
 Inter bank call money market
 Bill market and
 Bank loan market Etc.
 E.g.; treasury bills, commercial papers, CD's etc.

24
 CAPITAL MARKET:
Capital market is a place where we can raise long-term capital.
Again the capital market is classified in to two types and they are
 Primary market and
 Secondary market.
E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:
Primary market is generally referred to the market of new issues or market for
mobilization of resources by the companies and government undertakings, for new
projects as also for expansion, modernization, addition, diversification and up
gradation. Primary market is also referred to as New Issue Market. Primary market
operations include new issues of shares by new and existing companies, further and
right issues to existing shareholders, public offers, and issue of debt instruments such
as debentures, bonds, etc.
The primary market is regulated by the Securities and Exchange Board of India
(SEBI a government regulated authority).
Function:
The main services of the primary market are origination, underwriting, and
distribution. Origination deals with the origin of the new issue. Underwriting contract
make the shares predictable and remove the element of uncertainty in the
subscription. Distribution refers to the sale of securities to the investors.
The following are the market intermediaries associated with the market:
1. Merchant banker/book building lead manager
2. Registrar and transfer agent
3. Underwriter/broker to the issue
4. Adviser to the issue
5. Banker to the issue
6. Depository
7. Depository participant
Investors’ protection in the primary market:

25
 To ensure healthy growth of primary market, the investing public should be protected.
The term investor protection has a wider meaning in the primary market. The
principal ingredients of investors’ protection are:
 Provision of all the relevant information
 Provision of accurate information and
 Transparent allotment procedures without any bias.

SECONDARY MARKET

The primary market deals with the new issues of securities. Outstanding securities are
traded in the secondary market, which is commonly known as stock market or stock
exchange. “The secondary market is a market where scrip’s are traded”. It is a
market place which provides liquidity to the scrip’s issued in the primary market.
Thus, the growth of secondary market depends on the primary market. More the
number of companies entering the primary market, the greater are the volume of trade
at the secondary market. Trading activities in the secondary market are done through
the recognized stock exchanges which are 23 in number including Over The Counter
Exchange of India (OTCE), National Stock Exchange of India and Interconnected
Stock Exchange of India.
Secondary market operations involve buying and selling of securities on the stock
exchange through its members. The companies hitting the primary market are
mandatory to list their shares on one or more stock exchanges in India. Listing of
scrip’s provides liquidity and offers an opportunity to the investors to buy or sell the
scrip’s.
The following are the intermediaries in the secondary market:
1. Broker/member of stock exchange – buyers broker and sellers broker
2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.

26
 COMPANY PROFILE

About Us
Management Team

Nirmal Jain R Venkataraman Nilesh Vikamsey Sat Pal Khattar

Chairman, Executive Director, Independent , Non Executive ,
Managing Director   Director Director

History

We were founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as
an independent business research and information provider. We gradually evolved
into a one-stop financial services solutions provider. Our strong management team
comprises competent and dedicated professionals

We are a pan-India financial services organization across 1,361 business locations

and a presence in 428 cities. Our global footprint extends across geographies with
offices in New York, Singapore and Dubai. We are listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE).

We offer a wide range of services and products comprising broking (retail and
institutional equities and commodities), wealth management, credit and finance,
insurance, asset management and investment banking.

We are registered with the BSE and the NSE for securities trading, MCX, NCDEX
and DGCX for commodities trading, CDSL and NSDL as depository participants.
We are registered as a Category I merchant banker and are a SEBI registered

27
portfolio manager. We also received the FII license in IIFL Inc. IIFL Securities Pte
Ltd received approval from the Monetary Authority of Singapore to carry out
corporate advisory and dealing in securities operations. Two subsidiaries – India
Infoline Investment Services and Moneyline Credit Limited – are registered with
RBI as non-deposit taking non-banking financial services companies. India infoline
Housing Finance Ltd, the housing finance arm, is registered with the National
Housing Bank.

Milestones
1995
Incorporated as an equity research and consulting firm with a client base that
included leading FIIs, banks, consulting firms and corporates.
1999
Restructured the business model to embrace the internet; launched
archives.indiainfoline.com mobilised capital from reputed private equity investors.
2000
Commenced the distribution of personal financial products; launched online equity
trading; entered life insurance distribution as a corporate agent. Acknowledged by
Forbes as ‘Best of the Web’ and ‘...must read for investors’.
2004
Acquired commodities broking license; launched Portfolio Management Service.

2005
Listed on the Indian stock markets.
2006
Acquired membership of DGCX; launched investment banking services.

2008
Launched a proprietary trading platform; inducted an institutional equities team;
formed a Singapore subsidiary; raised over USD 300 mn in the group; launched

28
consumer finance business under the ‘Moneyline’ brand.
2012
Launched wealth management services under the ‘IIFL Wealth’ brand; set up India
Infoline Private Equity fund; received the Insurance broking license from IRDA;
received the venture capital license; received inprinciple approval to sponsor a
mutual fund; received ‘Best broker- India’ award from FinanceAsia; ‘Most
Improved Brokerage- India’ award from Asiamoney.
2013
Received registration for a housing finance company from the National Housing
Bank; received ‘Fastest growing Equity Broking House - Large firms’ in India by
Dun & Bradstreet.

Company Structure

India Infoline Limited is listed on both the leading stock exchanges in India, viz. the
Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is
also a member of both the exchanges. It is engaged in the businesses of Equities
broking, Wealth Advisory Services and Portfolio Management Services. It offers
broking services in the Cash and Derivatives segments of the NSE as well as the
Cash segment of the BSE. It is registered with NSDL as well as CDSL as a
depository participant, providing a one-stop solution for clients trading in the
equities market. It has recently launched its Investment banking and Institutional
Broking business.

29
A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to
clients. These services are offered to clients as different schemes, which are based
on differing investment strategies made to reflect the varied risk-return preferences
of clients.
India Infoline Media and Research Services Limited.
The content services represent a strong support that drives the broking,
commodities, mutual fund and portfolio management services businesses. Revenue
generation is through the sale of content to financial and media houses, Indian as
well as global.
It undertakes equities research which is acknowledged by none other than Forbes as
'Best of the Web' and '…a must read for investors in Asia'. India Infoline's research
is available not just over the internet but also on international wire services like
Bloomberg (Code: IILL), Thomson First Call and Internet Securities where India
Infoline is amongst the most read Indian brokers.
India Infoline Commodities Limited.
India Infoline Commodities Pvt Limited is engaged in the business of commodities
broking. Our experience in securities broking empowered us with the requisite skills
and technologies to allow us offer commodities broking as a contra-cyclical
alternative to equities broking. We enjoy memberships with the MCX and NCDEX,
two leading Indian commodities exchanges, and recently acquired membership of
DGCX. We have a multi-channel delivery model, making it among the select few to

30
offer online as well as offline trading facilities.
India Infoline Marketing & Services
India Infoline Marketing and Services Limited is the holding company of India
Infoline Insurance Services Limited and India Infoline Insurance Brokers Limited.
(a) India Infoline Insurance Services Limited is a registered Corporate Agent with
the Insurance Regulatory and Development Authority (IRDA). It is the largest
Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's
largest private Life Insurance Company. India Infoline was the first corporate agent
to get licensed by IRDA in early 2001.
(b) India Infoline Insurance Brokers Limited is a newly formed subsidiary which
will carry out the business of Insurance broking. We have applied to IRDA for the
insurance broking licence and the clearance for the same is awaited. Post the grant
of license, we propose to also commence the general insurance distribution business.

India Infoline Investment Services Limited

Consolidated shareholdings of all the subsidiary companies engaged in loans and
financing activities under one subsidiary. Recently, Orient Global, a Singapore-
based investment institution invested USD 76.7 million for a 22.5% stake in India
Infoline Investment Services. This will help focused expansion and capital raising in
the said subsidiaries for various lending businesses like loans against securities,
SME financing, distribution of retail loan products, consumer finance business and
housing finance business. India Infoline Investment Services Private Limited
consists of the following step-down subsidiaries.
(a) India Infoline Distribution Company Limited (distribution of retail loan
products)
(b) Moneyline Credit Limited (consumer finance)
(c) India Infoline Housing Finance Limited (housing finance)
IIFL (Asia) Pte Limited
IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated in
Singapore to pursue financial sector activities in other Asian markets. Further to

31
obtaining the necessary regulatory approvals, the company has been initially
capitalized at 1 million Singapore dollars.

CHAPTER-IV
DATA ANALYSIS
&
INTERPRETATION
32
 DATA ANALYSIS&INTERPRETATION

OUTCRY SYSTEM

The broker has to buy or sell securities for which he has received the orders. For this,
the broker or his authorized representatives goes to the stock exchange. This method
is called the open outcry system. Basically the brokers shout while buying or selling
the securities. The floor of the stock exchange is divided into a number of markets
also known as ‘post pit’ or wing based on particular securities dealt there.
In the post pit or wing, the broker using ‘open outcry’ method makes an offer or
bid price. For making the necessary bargain, he quotes his purchase or sale price, also
known as offer or bid price. The dealer, to whom the price is quoted, quotes his own
price when the quotation of the dealer suits the broker, he may loose the bargain. If he
is not satisfied with the quote price, he may turn to some other dealer. On the close of
the bargain, the dealer as well as the broker makes a brief note of the particulars of
the deal. Such notes are made on some pad and on it the number of shares, the price
agreed upon, the name of the party, what membership number etc., are noted.

33
 DISADVANTAGES OF OUTCRY SYSTEM:

 It lacks transparency.
 The scope of manipulation, speculation and mal practice is more.
 Signal were more important in the outcry system any member who could not
interpret the buy/sell signal correctly often landed himself in disaster situation.
 In audibility was another disadvantage of the outcry system.
 Due to the above disadvantages of the outcry system the INDIA INFOLINE has
shifted from outcry system to online trading from February 29th 1997.

MANUAL TRADING

Trading procedure before introduction of online trading

Trading on stock exchanges is officially done in the trading ring. In the trading ring
the space is provided for specified and non-specified sections, the members and their
authorized assistants have to wear a badge or carry with them an identity card given
by the exchange to enter the trading ring. They carry a sauda book or confirmation
memos, duly authorized by the exchange and carry a pen with them. The stock
exchanges operations are floor level are technical in nature .Non-members are not
permitted to enter in to stock market. Hence various stages have to be completed in
executing a transaction at a stock exchange .The steps involved in this method of
trading have given below:

Choice of broker:
The prospective investor who wants to buy shares or the investors, who wants to sell
shares and transact business, have to act through member brokers only. They can also
appoint their bankers for this purpose as per the present regulations.

34
Placement of order:
The next step is the placing order for the purchase or sale of securities with a broker.
The order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid
delay, it is placed generally over the phone. The orders may take any one of the forms
such as At Best Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary
Order, and Open Order, Stop Loss Order.

Execution of order or contract:

Orders are executed in the trading ring of the BSE. This works from 13:30 to 2.30
P.M on all working days Monday to Friday, and a special one-hour session on Saturday.
The members or the authorized assistants have to wear a badge given by the exchange to
enter into the trading ring. They carry a sauda Block Book or conformation memos,
which are duly authorized by the exchange when the deal is struck; both broker and
jobber make a note in their sauda block books. From the sauda book, the contract notes
are drawn up and posted to the client. A contract note is written agreement between the
broker and his clients for the transaction executed.
Drawing Up and Bills:

Both sale and purchase bills are prepared along with the contract note and it is posted
on the same day or the next day. This in a purchase transaction, once the shares are
delivered to the client effects payment for the purchases and pays the stamp fees for
transfer, a bill is made out giving the total cost of purchase, including other expenses
incurred by the broker in the price itself. With this, the process ends.

DEMATERLIZATION:

Dematerialization is the process by which physical certificates of an investor are

converted to an equipment number of securities in electronic from and credited in the
investor account with his DP. In order to dematerialize the certificates, an investor
has to first open an account with a DP and then request for the Dematerialization
Request Form, which is DP and submit the same along with the share certificates. The

35
investor has to ensure that he marks “Submitted for Dematerialization” on the
certificates before the shares are handed over to the DP for demat. Dematerialization
can only be done to those certificates, which are already registered in your name and
belong to the list of securities admitted for Dematerialization at NSDL.
Most of the active scrip’s in the market including all the scrip’s of S&P CNX NIFTY
and BSE SENSEX have already joined NSDL. This list is steadily increasing.
Briefly, the process is as follows: after completion of transfer, the investor gets the
option to dematerialize such shares. Investor’s willing to exercise this option sends a
Demat request along with the option letter sent by the company to his DP. The
company or its R&T agent would confirm the Demat request on its receipt from the
DP to reduce risk of loss in transit.
Dematerialized shares do not have any distinctive or certificate numbers. These
shares are fungible-which means that 120 shares of a security are the same as any
other 120 shares of the security. Odd lot shares certificates can also be
dematerialized.
Dematerialization normally takes about fifteen to thirty days. To get back
dematerialized securities in the physical form, request DP for Rematerialization of the
same is made.
Rematerialization is the process of converting electronic shares in to physical shares.
Benefits of Demat:
 It reduces the risk of bad deliveries, in turn saving the cost and wastage of
time associated with follow up for rectification. This has lead to reduction in
brokerage to the extent of 0.5% by quite a few brokerage firms.
 In case of transfer of electronic shares, you save 0.5% in stamp duty. You
avoid the cost of courier / notarization.
 You can receive your bonuses and rights issues into your DA as a direct
credit, this eliminating risk of loss in transit.
 You can also expect a lower interest charge for loans taken against Demat
shares as compared to loans against physical shares.
 There is no lost in transit, thus the overheads of getting a duplicate copy in
such circumstances is reduced.

36
  RBI has also reduced the minimum margin to 25% for loans against
dematerialized securities as against 50% for loans against physical securities.

TRADING AND SETTLEMENT AT SHARE KHAN

The NSE first introduced online trading in India. The Online trading system imparted
a greater level of transparency and investors preferred exchanges that offered Online
trading because of the following factors:

 The ease of operation from the view of the both members and the investors.
 Increase in the confidence of the investors because of higher level of
transparency.
 Facilities better monitoring of the market by the exchange.
 The best price achieved in buying and selling.
All these resulted in ever-increasing volumes on the exchanges offering the online
trading.
TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING

Share Khan deals in buying and selling equity shares and debentures on the National
Stock Exchange (NSE), the Bombay Stock Exchange (BSE) and the Over-The-
Counter Exchange of India (OTCEI).
Share Khan is provided with a computer and required software from their
registered stock exchanges. These centers are called “Broker Work Stations”. These
computers are connected to the server at the stock exchanges through cable.
The member or broker sitting in his office can send the quotations, orders,
negotiations, deals, in-house deals, auction orders etc., through the computer. The
Central trading system (CTS) will accept these orders and send it for match. If there is
any mistake in the order, CTS will reject the orders and send respective error message
to the member concern. All these operations are in built. The main objective of CTS
is to monitor the Stock Exchanges operations.

37
 Order placed by the broker will be sent for a match and if the match is found suitable,
the transaction will be executed. Otherwise, the order will be deleted automatically
after completion of trading time. The carry forward transactions (Good Till
cancellation) are forwarded to the next day. Even if the match is not found with in the
prescribed period, the order will not cancel.

TRADING SESSION
Trading timings are from 9:55 A.M. to 3:30 P.M. on all 5 days of the trading period.
Monday to Friday is the trading period in all the stock exchanges. SEBI has stipulated
that all the stock exchanges in India must have same trading period.

38
BROKER WORK STATION:

At the broker workstation the BBO’s, the last traded price, the day‘s opening price,
previous day’s closing price, highest and lowest prices, the weighted average price
and total trade value will be available continuously, as the BBO for each scrip.
Other information will be available on query from the BWS. These include top
gainers /losers of the day. Trader-wise, scrip wise net position, client wise net
position, top scrip by the volume/value, market summary etc.
Brokers are also provided with information relating to the companies in the matter of
Book closure, Dividend declarations, resolutions in board meeting, information about
liquidated companies, company report etc.

ORDERS:
 Orders can be done one at a time or in a batch mode.
 The submitted order will be accepted at the CTS, after validation if it finds
any invalid reason the order is return back to the BWS, with the appropriate
error message.
 If Accepted at the CTS it will be added to the local pending order book.
 The order will then be taken up for matching, if it is a buy order the system
tries to find a sell order, which fits the requirement of the buy order, when
such match is found a trade gets executed. Each trade involves two brokers
and
respective traders who sent the order. Both these traders are informed of the
trade being executed at their respective BWS.
 At the BWS the trade is added to the local trade book.

Orders sent by the brokers are two types:

 Good for the day (GFD)
 Good till cancellation(GTC)

39
Good for the day:
This is also called as “market order”. For an order if the member selects the deal
as good for the day, the order is treated as market order. If a “best bid” founds match
with “best order” then the transaction gets executed. If the match is not found then
after trade time the order gets cancelled that day. Next day he has to place a new
order.
For example if a member wants to purchase 1200 shares of satyam info @ 400 each
through Good for Day order. If the correct match is not found, order gets cancelled
automatically and new quotation has to be placed the next day.

Good till cancellation:

This order is forwarded to the last trading day of that settlement period. This is
also called as carry forward order like GFD; broker has to select the option of GTC
for the order. If the order finds match with in the trading settlement period, the order
is executed. If no match is found, the order is cancelled on the last day of settlement
period. This order is not carried forward to the next settlement period.
For example, if a member a place purchase order of 500 shares of SBI @ 690 per
share and selects the order as GTC and place an order. If the match is not found on
that day it will be forwarded to the next day until trading settlement period day.
SETTLEMENT OF TRANSACTIONS:
Clearing of transaction in the form of shares and cash is called settlement. Buyers will
take the delivery of shares through the depository participants like SHARE KHAN
and others.
Finally, the settlement is made by means of delivering the share certificates along
with the transfer deeds. The transferor (or the seller) duly signed transfer deed. It
bears a stamp of the selling broker. The buyer then fills up the certificates fills up the
particulars in the transfer deed. Settlement can be done in the following way.

Spot settlement: under this method, the delivery of securities and payment for them
are affected on the day of the contract itself.

40
 Rolling settlement: Under this rolling settlement the trading is on “T+2”,basis i.e. if
Monday is trading day then Wednesday is the paying day . In case on non-delivery,
the securities will go for auction.

DETAILS OF PROCEDURES:

Delivery in : The members who are in pay-out position delivers share certificates in
to clearing house within the settlement period along with the delivery Chelan filled in
with the details of share certificates which has folio numbers or distinctive numbers
etc.

Delivery out: The buyer of shares who made pay in position will take delivery of
shares from the clearing house.

Pay-in: The member who is in paying position shall pay for value of shares with in
the trading settlement period (T+2).

Payout: The cheques paid in the clearinghouse will be paid to members who are in
paying position.

All disputes arising between members regarding non-deliveries, non-payments, good

and bad deliveries pertaining to the settlement will be settled by the settlement
committee of the exchange.

The given flow chart clearly explains the process of online trading:

41
 L o g in

B u y t r a n s c a t io n S e ll t r a n s c a t io n
T h e s y s te m w ill c h e c k y o u r
T h e s y s te m w ill c h e c k b u y in g d p ac c o u n t q u a n tity
lim its

O rd e rs ac c e p te d R e je c t e d o r d e r s w o u ld b e o rd e rs a c c e p te d
c o m m u n ic a t e d a lo n g w it h r e a s o n s

y o u r o r d e r is t r a n s m it t e d t o e x c h a n g e f o r e x e c u t io n

p e n d in g b u y o r d e r s o n e x e c u t io n p e n d in g s e ll o r d e r s
w o u ld b e d is p la y e d o f y o u r o rd e rs w o u ld b e d is p la y e d
o n y o u r s c re e n o n y o u r s c re e n

y o u m a y e d it y o u r y o u m a y d e le t e y o u m a y e d it y o u r y o u m a y d e le t e y o u r
p e n d in g o r d e r y o u r p e n d in g o r d e r p e n d in g o r d e r p e n d in g o r d e r

f la s h e d o n y o u r c o n f o r m a t io n c o u l c o n t r a c t n o t e w o u ld
s c r e e n im m e d ia t e ly d b e s e n d to y o u r b e s e n t t o b y m a il
o n e x e c u t io n e - m a il a n d m o b ile o r h a n d d e liv e r y

COMPARATIVE ANALYSIS
42
THE MAJOR PLAYERS IN ONLINE TRADING

 INDIA INFOLINE

 5PAISA

 KOTAKSTREET

 INDIABULLS

 ICICIDIRECT

 HDFCSEC.

SHARE KHAN

Company Background

 India infoline is the retail broking arm of SSKI Securities Pvt Ltd. SSKI owns
56% in India infoline, balance ownership is HSBC, First Caryle, and Intel
Pacific
 Into broking since 80 years
 Focused on providing equity solutions to every segment
 Largest ground network of 212 Branded Share shops in 90 cities

Online Account Types

 Classis Account / Applet : Investor in equities
 Speed Trade : Trader in equities & derivatives

PRICING FOR HNI CLIENTS

43
Speed Trade
 Account Opening : Rs 1200 ( Refundable against brokerage in Month + 1)
 Demat 1st Yr : Incl in Account Opening
 Initial Margin : Nil
 Min Margin Retainable : NIL
 Brokerage :
Trading 0.12% each side + All Taxes
Delivery 0.50% each side + All Taxes
(Negotiable based on volume)
 Account Access Charges
Monthly Rs 500, adjustable qtrly against brokerage of Rs 9000/- for qtr.
No access charges for gold customers (Above 1 lac brokerage p.a)

Pricing for Retail Customers

Classic / Applet
 Account Opening : Rs 750
 Demat 1st Yr : NIL
 Initial Margin : NIL
 Min Margin Retainable : NIL
 Brokerage:

Trading 0.12% each side + All Taxes

Delivery 0.50% each side + All Taxes

44
India infoline online Trading Interfaces
The customer can choose the online trading interface that meets his requirement
based on his trading habits and preferences

CLASSIC / APPLET
The website is meant for customers who Invests in Equities

SPEEDTRADE
The speed trade is meant for customers who trade in Equities

DIAL-N-TRADE – Toll Free

The DNT is a value added services meant for all customers who
Want to transact but are not online.

DNT – TOLL FREE FERTURES

 Dedicated Toll – Free number for Order placements
 Automatic fund transfer with phone banking*
 Simple and secure IVR based system for authentication
 No wait time, on entry of Phone Id & TPIN, the call is transferred
 Trusted, professional advice of Tel-brokers who offer undiluted India infoline
Research Inputs
 After-hours order placement facility **
 Transfer of money using phone banking is available with Citibank only
** Between 9 a.m to 9.55 am and 3.30p.m to 6 p.m

CLASSIC/WEBSITE FEATURES
 Facility to integrate choice of 4 Banks/DP/Trading Account
 Instant credit for shares sold from DP
 Automatic pick-up of shares from linked DP for pay – in
 Automatic deposit of shares into linked DP after pay-out
 4 Times leverage on Margin Trades

45
  Margin Trading available for entire marker session
 Slab wise brokerage structure for delivery and margin trades, shortly
 Free calls for order placement on Toll-Free
 Trusted, Professional advice of Tele-brokers
 Facility to enter After Market Orders online & via Phone

CLASSIC/WEBSITE FEATURES
 Daily Research newsletter (Investor Eye) Via e-mail
 Access to new IPO without any paperwork
 Advanced portfolio monitoring Tools
 Integrated DP account with trading account
 Option of linking additional 4 DP accounts to trading account
 Choice of linking 4 banks to trading a/c for online payments
 Cash and Derivatives trading in a single account
 E-mail confirmations for all transactions
 Choice of electronic/Physical contracts

SPEEDTRADE EXE FEATURES

ALL THE FEATURES OF CLASSIC

*Real – time streaming quotes using 2 Marker Watches
*Trade Execution in 2-3 seconds
* Instant Order/trade confirmations in the same window
*Hot keys similar to a Broker’s Terminal
*MULTIPLE Tic-by-Tic Intra-day charts with multiple indicators
* Availability of 2 ISP & 6 Servers ensuring maximum uptime
* Customized alerts based on multiple parameters
* Cancel All/Square Off All Facility
* Window for Top Gainers, Top Losers, and Most Active updated Live

46
 5PAISE

Company Background

 Indiainfoline was founded in 1995 and was positioned as a research firm

 In 2000 e-broking was started under the brand name of 5paisa.com.

 Apart from offering online trading in stock market the company offers mutual
funds online.

 It also acts as a distributor of various financial services i.e. GOI securities,

Company Fixed Deposits, Insurance.
 Limited ground network, present in 20 cities

Online Account Types

 Investor Terminal : Investors / Students
 Trader Terminal : Day Traders / HNI’s

PRICING FOR RETAIL CLIENTS

Investor Terminal

 Account Opening : Rs 500

 Demat 1st Yr : Rs 250
 Initial Margin : Rs 2500 (Compulsory)
 Min Margin Retainable : Rs 1200
 Brokerage :
Trading 0.12% each side + ST
Delivery 0.50% each side + ST

PRICING FOR HNI CLIENTS

Trader Terminal
 Account Opening : Rs 500
 Demat 1st Yr : Rs 250

47
 Initial Margin : Rs 5000(Compulsory)
 Min Margin Retainable : Rs 1200
 Brokerage :
Trading 0.12% each side + ST
Delivery 0.50% each side + ST
(Negotiable to 0.05% each side & 0.25%)
 Account Access Charges
Monthly Rs 800, adjustable against Brokerage
Yearly Rs 8000, adjustable against brokerage

KOTAK STREET

Company Background:

Kotakstreet is the retail arm of Kotak Securities. Kotak Securities limited is a joint
venture between Kotak Mahindra Bank and Goldman Sachs.

Online Account Type

 Twin Advantage / Green Channel : 2 DP’s, Limit against shares

 Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction

 High Trader : 6 Times Exposure Cash & Derivatives, Auto sq off 2:55

 Cash Expressway : Spot payment, additional 0.5% charges

For Kotak FastLane / Keat Lite / Keat Desktop are trading interfaces.

Keat Desktop with advanced tools comes at a charge of Rs 500 p.m, Non refundable.

PRICING OF KOTAK

 Account Opening : Rs 500

 Demat: Rs 22.5 p.m

 Initial Margin : Rs 5000(Compulsory)

 Min Margin Retainable : Rs 1200

48
 Brokerage Slab wise: Higher the volume, lower the brokerage.

Even older customers (on 0.25% & 0.40%) have been moved to the slab wise
structure w.e.f 1/4/2004

Slab structure of Kotak

Delivery Vol p m Brokerage * Square Vol P.M. Brokerage **

< 1 lakhs 0.65% < 12 lakhs 0.12% Both Sides

1 lakhs – 5 lakhs 0.60% 12 lakhs – 25 lakhs 0.08% Both Sides

5 lakhs – 12 lakhs 0.50% 25 lakhs - 2 Cr0.05% Both Sides

12 lakhs - 20 lakhs 0.40% 2 Cr - 5 Cr 0.04% Both Sides

20 lakhs – 60 lakhs 0.30% > 5 Cr 0.035% Both Sides

60 lakhs - 2 Cr 0.25% ---do--- 0.03% Both Sides

>2 0.20% ---- --------

* Brokerage is inclusive of All Taxes * Brokerage is inclusive of All Taxes

* DP Charges Extra

* Min Brokerage of Rs 0.05 per share * Min Brokerage of Rs 0.01 per share

Derivatives Vol off p m Brokerage

< 2 Cr 0.07% Both Sides

2 Cr - 5.5 Cr 0.05% Both Sides

5.5 Cr – 12 Cr 0.04% Both Sides

> 12 Cr 0.03% Both Sides

* Brokerage is inclusive of All Taxes.

49
 INDIABULLS

Company Background:

India Bulls is a retail financial services company present in 70 locations covering 62

cities. It offers a full range of financial services and products ranging from Equities
to Insurance. 450 + Relationship Managers who act as personal financial advisors.

Online Account Type:

 Signature Account: Plain Vanilla Account with focus on Equity Analysis. The
equity analysis is a paid service even for A/c holders.

 Power India bulls: Account with sophisticated trading tools, low commissions
and priority access to R.M.

Pricing of IB Accounts:

Signature Account Power India Bulls

* Account Opening: Rs 250 * Account Opening: Rs 750

* Demat: Rs 200 if POA is signed, * Demat: Rs.200 if POA is signed,

No AMC for this DP No AMC for this DP

* Initial Margin: NIL * Initial Margin: NIL

* Brokerage: Negotiable * Brokerage: Negotiable

PAID Research:

SCHEME FACILITY

WebBased-1-Month-500: View & Print on Website

WebBased-1-Month-6000: View & Print on Website

PrintReport-1-Month-750: View & Print on Website

+ 12 Reports Delivered

PrintReport-1-Month-9000: View & Print on Website

+ 12 Reports Delivered

50
 ICICI DIRECT

 Account Opening: Rs 750

 Schemes: For short periods Rs 750 is refundable against brokerage generated in a

qtr. These schemes are introduced 3-4 times a year.

 Demat: NIL, 1st year charges included in Account Opening Plus a facility to open
additional 4 DP’s without 1st yr AMC. Only Rs 120 as linking charges per DP

 Initial Margin : Nil

 Brokerage: ICICI’s brokerage rates are inclusive of Stamp duty (0.002%) for
trading and 0.012% for delivery while service tax (12.2%) on BROKERAGE land
turnover tax is EXTRA.

 Delivery Vol per QTR Brokerage Square Vol P.M. Brokerage

< 12 lakhs 0.75% < 50 lakhs .12% Both Sides

12 – 25 lakhs 0.70% 50 lakhs – 2 Cr .08% Both Sides

25 – 50 lakhs 0.55% 2Cr-5Cr .05% Both Sides

50 lakhs - 1 Cr 0.45% 5Cr- 12 Cr .04% Both Sides

1 Cr – 2 Cr 0.35% 12Cr -20 Cr .035% Both Sides

2 Cr – 5 Cr 0.30% > 20 Cr .03% Both Sides

> 5 Cr 0.25% ---- --------

51
 HDFC SECURITIES

Company Background:

HDFC Securities Ltd is promoted by the HDFC Bank, HDFC and Chase Capital
Partners and their associates. Pioneers in setting up Dial-a-share service with the largest
team of Tele-brokers.

Online Account Type:

 HDFC Online Trading A/c: Plain Vanilla Account with focus on 3 in 1

advantage.

Pricing of HDFC Account

 Account Opening: Rs 750

 Demat: NIL, 1st year charges included in Account Opening

 Initial Margin : Rs 5000/- for non HDFC Bank Customers (AQB)

 Brokerage:

Trading 0.17%* each side + ST

Delivery 0.50%** each side + ST

*Rs 25 Min Brokerage per transaction

**Rs 8 Min Brokerage per transaction

52
SWOT ANALYSIS
Strengths

 Strong credibility among investors because of its heritage.

 Excellent reputation among the business society.
 Capability of providing superior customer service.
 Quality research team.
 Easier access to the customer due to largest ground network of 280 branded share
shops in 140 cities.
 Abundant information about economy and companies.
 Ability to attract and retain superior and quality personnel.
 Highly sophisticated infrastructure.
 Efficient research and analysis team, which by interpreting the economy and
company’s performance accurately is enhancing the profitability of the clientele.
Weaknesses

 Limited customer appeal as the company product line does not include mutual
funds which is increasingly becoming a preferred customer investment option.
 Inadequate product awareness among the retail investors.
 Limited customer appeal as the company does not have access to the BSE online
space.
 Brand awareness is low in the financial market.
 Promotional activities conducted by the company are not at par with the other
firms.
Opportunities
 Hyderabad covers only 2% of investors which gives huge potential for the market
penetration.
 Bullish phase of the market attracts investing public.
 Access to the BSE online space for the retail investors creates opportunity to
increase clientele base.
 Awareness campaigns about online trading creates new market.

53
SHARE PRICES OF DR.REDDY’S FOR THE MONTH OF
MARCH 2017:

DATE OPEN HIGH LOW CLOSE

1ST MARCH 2017 650.1 655 647 648.8

2nd MARCH 2017 650.1 655 647 648.8
3rd MARCH 2017 650.1 655 647 648.8
4th MARCH 2017 655..90 664 650.05 654.7
5th MARCH 2017 657 660 649.5 655.7
6th MARCH 2017 645.35 660 645.35 650.17
7th MARCH 2017 652 652 640.8 646.4
8th MARCH 2017 644 644 627.3 631.55
9th MARCH 2017 644 644 627.3 631.55
12th MARCH 2017 644 644 627.3 631.55
13th MARCH 2017 640 644 622.05 625.25
14th MARCH 2017 627 629 608.9 613.2
15th MARCH 2017 616.9 632.5 613.5 627.8
16th MARCH 2017 635 641 632.5 638.5
16th MARCH 2017 640 643.9 630.5 632.4
17th MARCH 2017 640 643.9 630.5 632.4
17th MARCH 2017 640 643.9 630.5 632.4
18th MARCH 2017 635.1 637 627 631.17
19th MARCH 2017 630 637 630 635.45
20th MARCH 2017 639 644 637.1 641.6
21st MARCH 2017 644 649.9 640.6 645.5
22nd MARCH 2017 647 654 644.05 650.25
23rd MARCH 2017 647 654 644.05 650.25
24th MARCH 2017 647 654 644.05 650.25
25th MARCH 2017 652 653 646 650.1
26th MARCH 2017 660 660 648.25 649.95
27th MARCH 2017 651 655.65 647 653.65
28th MARCH 2017 656 661 650.5 654.8
29th MARCH 2017 655.1 659.88 652 655.95
30TH MARCH 2017 655.1 659.88 652 655.95

54
 GRAPHICALLY SHOWN
3-DColumn 1
670
1ST MARCH2017
660
650 2nd MARCH2017
640 3rd MARCH2017
630 4th MARCH2017
620 5th MARCH2017
610 6th MARCH2017
600 7th MARCH2017
590 8th MARCH2017
580 9th MARCH2017
OPEN HIGH LOW CLOSE
12th MARCH2017
13th MARCH2017
14th MARCH2017

INTERPRETATION :
It was noticed that the price of the Dr.Reddys stock is quoted 652 On 7 th March it
decreased to a rate of 635 and in the next week it increased to 644. Again in the last week
also it increased to 655 this shows good sign to the investor as its price increasing
throughout the month and market conditions of the Dr.reddys is good.

SHARE PRICES OF INFOSYS DURING THE MONTH MARCH 2017

DATE OPEN HIGH LOW CLOSE
1ST MARCH 2017 1935 1949.7 1930.17 1940.05

55
2nd MARCH 2017 1935 1949.7 1930.17 1940.05
3rd MARCH 2017 1935 1949.7 1930.17 1940.05
4th MARCH 2017 1950 1952.7 1912 1917.45
5th MARCH 2017 1925 1949 1906 1941.45
6th MARCH 2017 1949.5 1968.9 1932.65 1938.9
7th MARCH 2017 1935 1970.1 1920 1954.5
8th MARCH 2017 1935 1977 1912 1951.05
9th MARCH 2017 1935 1977 1912 1951.05
12th MARCH 2017 1935 1977 1912 1951.05
13th MARCH 2017 1975 1994.9 1968 1980.1
14th MARCH 2017 1983.7 1998.9 1975.35 1986.75
15th MARCH 2017 1986 1997.85 1975 1982.4
16th MARCH 2017 1992 2030 1990 2020.05
16th MARCH 2017 2032 2039 2000.1 2012.35
17h MARCH 2017 2032 2039 2000.1 2012.35
17th MARCH 2017 2032 2039 2000.1 2012.35
18th MARCH 2017 2009 2026 1985 1988.9
19t MARCH 2017 1985 1985 1942.5 1956.85
20h MARCH 2017 1960 1974 1950.3 1954.1
21st MARCH 2017 1955 1965 1945.35 1956.5
22nd MARCH 2017 1958 1965 1934.35 1950.7
23rd MARCH 2017 1958 1965 1934.35 1950.7
24th MARCH 2017 1958 1965 1934.35 1950.7
25th MARCH 2017 1959 1962.8 1921.25 1935.85
26th MARCH 2017 1940.1 1948 1920 1922.45
27th MARCH 2017 1925 1948.7 1920 1936.2
28th MARCH 2017 1946 1949.8 1917 1925.9
29th MARCH 2017 1951 1975 1922 1929.2
30th MARCH 2017 1951 1975 1922 1929.2

GRAPHICALLY SHOWN

56
 1ST MARCH2017
2050
2nd MARCH2017
2000 3rd MARCH2017
4th MARCH2017
1950 5th MARCH2017
6th MARCH2017
1900
7th MARCH2017
1850 8th MARCH2017
9th MARCH2017
1800 12th MARCH2017
13th MARCH2017
14th MARCH2017

INTERPRETATION :
It was noticed that the price of the INFOSYS stock is quoted 1935 On 7 th March it
Increased to a rate of 992 and in the next week it decreased to 1955. Again in the last
week also it decreased to 1951 this shows bad sign to the investor as its price decreasing
throughout the month and market conditions of the Infosys is not good.

SHARE PRICES OF RELIANCE ENERGY DURING THE

MONTH MARCH2017:

57
 DATE OPEN HIGH LOW CLOSE
1ST MARCH 2017 545.1 549.5 538.05 541.7
2nd MARCH 2017 545.1 549.5 538.05 541.7
3rd MARCH 2017 545.1 549.5 538.05 541.7
4th MARCH 2017 546.9 554 537 541.25
5th MARCH 2017 542 553 532.9 550.55
6th MARCH 2017 550 554 530.05 533.1
7th MARCH 2017 529 542 525.25 528.1
8th MARCH 2017 526 528 518.05 520.85
9th MARCH 2017 526 528 518.05 520.85
12th MARCH 2017 526 528 518.05 520.85
13th MARCH 2017 539 539 517 517.35
14th MARCH 2017 520 522 508.1 517.05
15th MARCH 2017 518 527.4 516 520.05
16th MARCH 2017 527 531 524.3 526.6
16th MARCH 2017 529 548.95 529 531.5
17th MARCH 2017 529 548.95 529 531.5
17th MARCH 2017 529 548.95 529 531.5
18th MARCH 2017 540 544 526 530.05
19th MARCH 2017 535 541 522.9 535.65
20th MARCH 2017 539 547.7 535 538
21st MARCH 2017 539.9 564 536 560.4
22nd MARCH 2017 561.05 597.4 560.1 590.2
23rd MARCH 2017 561.05 597.4 560.1 590.2
24th MARCH 2017 561.05 597.4 560.1 590.2
25th MARCH 2017 590 604.7 587 590.75
26th MARCH 2017 592 596.6 586 589.8
27th MARCH 2017 590 592 576.05 578.2
28th MARCH 2017 578 578.95 582.3 616.1
29th MARCH 2017 585 617.45 582.3 616.1
30th MARCH 2017 585 617.45 582.3 616.1

GRAPHICALLY SHOWN:

58
 1STMARCH2017
700
2ndMARCH2017
600 3rdMARCH2017
500 4thMARCH2017
5thMARCH2017
400
6thMARCH2017
300 7thMARCH2017
200 8thMARCH2017
9thMARCH2017
100
12thMARCH2017
0 13thMARCH2017
14thMARCH2017
15thMARCH2017

Interpretation :
It was noticed that the price of the Reliance stock is quoted 529 On 7 th March it
decreased to a rate of 527 and in the next week it increased to 539. Again in the last week
also it increased to 585 this shows good sign to the investor as its price increasing
throughout the month and market conditions of the Reliance is good.

Date Open High Low Close Volume Change Change%

31/1/2017 36.1 36.17 35.96 36.06 17,178,000 0.160 -0.39%

30/1/2017 35.6 36.22 35.59 36.2 19,284,700 0.670 1.886%

29/1/2017 35.82 35.97 35.43 35.53 18,174,900 0.440 -1.22%

28/1/2017 35.9 36.19 35.87 35.97 16,333,800 0.240 0.672%

24/1/2017 35.89 36.1 35.71 35.73 18,067,700 0.230 0.648%

23/1/2017 35.5 35.82 35.38 35.5 22,461,120 - -
22/1/2017 36 36.19 35.42 35.5 18,183,400 0.512 -1.42%
21/1/2017 35.73 36.14 35.48 36.01 17,066,200 0.150 0.362%
18/1/2017 35.41 35.88 35.28 35.88 43,320,800 0.512 1.442%

59
17/1/2017 35.65 35.71 35.27 35.37 16,736,500 0.370 -1.04%

17/1/2017 35.81 36.14 35.48 35.74 17,997,120 0.260 -0.72%

17/1/2017 36.28 36.48 36 36 17,385,000 0.220 -0.61%

16/1/2017 35.8 36.22 35.78 36.22 17,368,600 0.400 1.137%

13/1/2017 36.03 36.16 35.75 35.82 15,175,700 0.312 -0.86%

12/1/2017 35.85 36.23 35.8 36.15 17,615,900 0.390 1.091%

9/1/2017 35.88 36.13 35.7 35.74 17,559,400 0.320 -0.89%
8/1/2017 36.03 36.21 36.01 36.06 14,023,120 0.070 -0.19%
7/1/2017 36.14 36.28 36.05 36.15 14,305,200 0.012 0.028%
4/1/2017 35.82 36.23 35.72 36.14 20,328,900 0.570 1.603%
3/1/2017 35.74 335.83 35.45 35.55 17,964,600 0.050 -0.16%
2/1/2017 35.08 35.69 35.06 35.6 17,912,800 0.380 1.079%

1/1/2017 35.24 35.39 35.17 35.22 17,206,700 0.020 0.057%

Date Open High Low Close Volume Change Change%

1/1/2017 35.24 35.39 35.17 35.22 17,206,700 0.020 0.057%
8/1/2017 36.03 36.21 36.01 36.06 14,023,120 0.070 -0.19%
17/1/201 36.28 36.48 36 17,385,000 0.220 -0.61%
22/1/2017 36 36.19 35.42 35.5 18,183,400 0.512 -1.42%
29/1/2017 35.82 35.97 35.43 35.53 18,174,900 0.440 -1.22%

DATA ANALYSIS :

60
 Interpretation :
It was noticed that the price of the GE stock is quoted 35.2. On 17 th january it
increased to a rate of 36 and in the next week it increased to 36.01. Again in the last week
also it increased to 36.06 this shows good sign to the investor as its price increasing
throughout the month and market conditions of the GE is good.

61
 NO OF INITIAL PUBLIC OFFER(IPO’S) FROM LAST FIVE YEARS
FY YEAR NO OF COMPANYS AMOUNT GATHERD
(IN CR)
2012-13 140 50000
2013-14 165 57820
2014-15 214 145760
2015-16 89 85000
2016-17 130 89000

140000
120000
100000
80000 2012-13
60000 2013-14
40000 2014-15
20000 2015-16
0 2016-17
NOOF AMOUNT
COMPANYS GATHERD(IN
CR)

Interpretation :
It was noticed that the Many company are getting funds from public offerings.
Due to it is very is east get money from public for reputed companys like
Reliance,Tata,ICIC Etc. If company have reputation in market that type of company
easily getting funds from public.After privatization Public also aware of stock market
Transaction this is also one reason for growth in IPO Funds.

62
 FII INVESTMENTS FROM LAST FIVE YEARS

FY YEAR INVESTMENT IN (RS CRORES)

2012-13 56000
2013-14 79500
2014-15 140000
2015-16 78000
2016-17 120000

140000
120000
100000 2012-13
80000 2013-14
60000 2014-15
40000 2015-16
2016-17
20000
0
INVESTMENT IN(RS CRORES)

Interpretation :
If company have reputation in market that type of company easily getting funds
from public.After privatization Public also aware of stock market Transaction this is also
one reason for growth in IPO Funds.

63
 BSE TREND FROM LAST FIVE YEARS
FY YEAR HIGEST LOWEST
2012-13 14630 9659
2013-14 22360 16590
2014-15 21520 13660
2016-17 17560 14140

25000

20000
2012-13
15000 2013-14
2014-15
10000 2015-16
2016-17
5000

Interpretation :
It was noticed that the Many company are getting funds from public offerings.
Due to it is very is east get money from public for reputed companys like
Reliance,Tata,ICIC Etc. If company have reputation in market that type of company
easily getting funds from public.After privatization Public also aware of stock market
Transaction this is also one reason for growth in IPO Funds.

64
CHAPTER-V
FINDINGS
SUGGESTIONS
CONCLUSION

65
 FINDINGS :
It was noticed that the price of the Dr.Reddys stock is quoted 652 On 7 th
March it
decreased to a rate of 635 and in the next week it increased to 644. Again in the last week
also it increased to 655 this shows good sign to the investor as its price increasing
throughout the month and market conditions of the Dr.reddys is good.
It was noticed that the price of the INFOSYS stock is quoted 1935 On 7 th March it
Increased to a rate of 992 and in the next week it decreased to 1955. Again in the last
week also it decreased to 1951 this shows bad sign to the investor as its price decreasing
throughout the month and market conditions of the Infosys is not good.

It was noticed that the price of the Reliance stock is quoted 529 On 7 th March it
decreased to a rate of 527 and in the next week it increased to 539. Again in the last week
also it increased to 585 this shows good sign to the investor as its price increasing
throughout the month and market conditions of the Reliance is good.
It was noticed that the price of the GE stock is quoted 35.2. On 17 th january it
increased to a rate of 36 and in the next week it increased to 36.01. Again in the last week
also it increased to 36.06 this shows good sign to the investor as its price increasing
throughout the month and market conditions of the GE is good.
It was noticed that the Many company are getting funds from public offerings.
Due to it is very is east get money from public for reputed companys like
Reliance,Tata,ICIC Etc. If company have reputation in market that type of company
easily getting funds from public.After privatization Public also aware of stock market
Transaction this is also one reason for growth in IPO Funds.
 In the trading week most of the players closed up their contracts to make profit.
As the price was low, the open interest was low and the number of characters
traded decline to 19145.

66
SUGGESTIONS :

After a comprehensive study of the stock market the suggestions made are as follows.
The online trading system is easy to operate but very to maintain and
difficult to learn. The delivery and issue of shares consumes lot of time and hence it has
to be reduced to bring about quickness.
The tradable financial products should be made easy to transact or trade
in order to attract domestic and foreign investors. Stock market should not be a vague
concept for a common man and should arouse his interest and involvement with certain
of protection to the investor.
I suggest the exchange authorities take steps to educate investors about their right and
duties, try to increase investor confidence. I suggest the exchange authorities to be
vigilant to curb wide fluctuations of prices on the exchange in the prices, not attracting
the genuine investors to the greater extent towards the market. Try to explain them how
the fraud will take place so that they will be alert and they can take necessary steps to
avoid the frauds.
Genuine investors are not at all interested in the speculative gain as their
investment is based on the future profits, therefore the authorities of the exchange should
be more vigilant in imposing heavy margin to curb the speculative of securities.
Necessary steps should be taken by the exchanges to deal with the situation
arising due to break down in online trading.

67
 CONCLUSION

 Things have changed for the better with the INDIA INFOLINE going on-line
coupled with endeavor to stream line the whole trading system, things have
changed dramatically over the last 3 to 4 years. New and advanced technologies
have breached geographical and cultural barriers, and have brought the
countrywide market to doorstep.
 In the present scenario to compete with the Broker’s would require sound
infrastructure and trading as per international standards.
 The introduction of on-line trading would influence the investors resulting in an
increase in the business of the exchange. It has helped the brokers handling a vast
amount of transactions and this can be an efficient trading, delivering, settlement
system with adequate protection to investors. The trading of INDIA INFOLINE
of the first day was Rs. 1.8 crores.
 Due to invention of online trading there has been greater benefit to the investors
as they could sell / buy shares as and when required and that to with online
trading.
 The broker’s has a greater scope than compared to the earlier times because of
invention of online trading.
 The concept of business has changed today, this is a service oriented industry
hence the survival would require them to provide the best possible service to the
clients.

68
MARKET WATCH WINDOWS:
BLUE COLOUR INDICATE SHARE VALUE INCREASE
RED COLOUR INDICATE SHARE VALUE DECREASE
NSE Scrip’s

NSE & BSE Scrip’s

69
(BUY Order Form)

(Sell Order Form)

70
(Market Depth)

(Order Book)

71
Client Margin

Trade Book

72
Client Activity Report

Exercise Report

73
BIBLIOGRAPHY

74
 BIBLIOGRAPHY

BOOKS:

 Investment management
-V.K.Bhalla
 Investment management
-Preethi Singh
 Security Analysis And Portfolio Management
-V.A.Avadhani
 Marketing of Financial Services
-V.A.Avadhani
 Indian Financial System
-M.Y.Khan

WEBSITES:

 www.bseindia.com
 www.sebi.com
 www.moneycontrol.com
 www.economictimes.com
 www.nseindia.com

75