University of Mumbai

PROJECT REPORT ON

A STUDY ON ATTITUDE OF INVESTORS TOWARDS

INVESTMENT IN STOCK MARKET W.R.T THANE REGION

A Project Submitted To

UNIVERSITY OF MUMBAI

FOR PARTIAL COMPLETION OF THE DEGREE

OF B.COM (ACCOUNTING AND FINANCE)

UNDER FACULTY OF COMMERCE

BY

Mr. PARTH SUNIL KADAM

ROLL NO. 45

Under The Guidance Of

ASS.PROF. MANOJ SHIVDAS WAGH

SATISH PRADHAN DNYANASADHANA COLLEGE,

THANE (ARTS, SCIENCE & COMMERCE)

Off Eastern Express Highway, Dnyanasadhana Marg,

Thane – 400604

ACADEMIC YEAR - 2021-22

i
 SATISH PRADHAN DNYANASADHANA COLLEGE, THANE
(ARTS, SCIENCE AND COMMERCE)
OFF EASTERN EXPRESS HIGHWAY, DNYANASADHANA
MARG,
THANE 400604.

CERTIFICATE

This is to certify that Ms.______________________________________________

has worked and duly completed her/ his Project Work for the degree of Bachelor in
Commerce (Accounting and Finance) under the faculty of Commerce, entitled,
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
under my supervision. I further certify that the entire work has been done by the
learner under my guidance and that no part of it has been submitted previously for any
Degree or Diploma of any University. It is his/her own work and facts reported by
her/his personal findings and investigations.

Name and Signature of Guide

ii
 DECLARATION BY LEARNER

I the undersigned Mr. PARTH SUNIL KADAM here by, declare that the work
embodied in this project work titled “A STUDY ON ATTITUDE OF INVESTORS
TOWARDS INVESTMENT IN STOCK MARKET W.R.T THANE REGION.”,
forms my own contribution to the research work carried out under the guidance of
Asst. Prof. Manoj Shivdas Wagh is a result of my own research work and has not
been previously submitted to any other University for any other Degree/ Diploma to
this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Mr. Parth Sunil Kadam

Certified by

Name and signature of the Guiding Teacher

iii
 Acknowledgment

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me the chance
to do this project.

I would like to thank my I/C Principal, Dr. Bhushan P. Langi Sir for providing the
necessary facilities required for the completion of this project.

I take this opportunity to thank our Vice Principal and Coordinator DR. Shraddha
M. Bhome, for her moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Asst. Prof.
Manoj S. Wagh whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference
books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my Parents and Peers who supported
me throughout my project.

Mr. Parth Sunil Kadam

iv
 INDEX

SERIAL NO. CONTENTS PAGE NO.

1 Title page -

2 Certificate I

3 Declaration II

4 Acknowledgment III

5 INDEX IV-VIII

6 Abstract IX

CHAPTER 1 INTRODUCTION 1-30

1.1 INTRODUCTION TO SECONDARY

MARKET

1.2 PRODUCT AVAILABLEIN

SECONDARY MARKET

1.3 FUNCTION OF SECONDARY MARKET

1.4 STOCK EXCHANGE

1.5 ORIGIN OF INDIAN STOCK

EXCHANGE

v
1.6 BRIEF HISTORY OF STOCK
EXCHANGE

1.7 STOCK EXCHANGE GROWTH

1.8 VARIOUS STOCK EXCHANGE IN

INDIA.

1.9 BOMBAY STOCK EXCHANGE

1.10 COMPANIES LISTED ON BSE

1.11 NATIONAL STOCK EXCHANGE

1.12 COMPANIES LISTED ON NSE

1.13 REGULATORS

1.14 INTRODUCTION TO INVESTMENT

1.15 TYPES OF INVESTMENT

1.16 INVESTMENT PURPOSE

1.17 INVESTMENT AND SPECULATION

1.18 INVESTMENT AVENUES

1.19 THE STOCK MARKET IS BETTER THAN

ANOTHER INVESTMENT.

1.20 CURRENT DAY STATE OF AFFAIRS

vi
 1.21 AWARDS

1.22 BOARD OF DIRECTORS

1.23 SWOT ANALYSIS

1.24 THE REASONS FOR STOCK PRICES

GOING "UP" AND "DOWN"

CHAPTER 2 RESEARCH METHODOLOGY 31-33

2.1 INTRODUCTION TO TOPIC

2.2 OBJECTIVES OF THE STUDY

2.3 HYPOTHESIS OF THE STUDY

2.4 LIMITATION OF STUDY

2.5 RESEARCH METHODOLOGY

CHAPTER 3 REVIEW OF LITERATURE 34-47

3.1 REVIEW OF RESEARCH PAPER.

3.2 REVIEW OF BOOKS.

3.3 Indian author’s literature.

3.4 Foreign author’s literature.

CHAPTER 4 ANALYSIS AND INTERPRETATION OF 48-61

DATA.

vii
4.1 AGE WISE DISTRIBUTION OF
RESPONDENTS

4.2 GENDER WISE DISTRIBUTION OF

RESPONDENTS

4.3 OCCUPATION-WISE DISTRIBUTION OF

RESPONDENTS.

4.4 TYPES OF INVESTMENT MADE BY THE

RESPONDENTS.

4.5 INVESTMENT IN SHARES BY THE

RESPONDENTS

4.6 TOTAL INVESTMENT ANNUALLY DONE

BY THE RESPONDENTS.

4.7 PURPOSE OF INVESTMENT OF THE

RESPONDENTS.

4.8 INVESTMENT IN SHARE MARKET

OF THE RESPONDENTS

4.9 TYPES OF TRANSACTIONS OF THE

RESPONDENTS

4.10 TIME PERIOD SINCE WHEN THE

RESPONDENTS ARE INVESTING.

4.11 REASONS FOR INVESTING IN

STOCK MARKET

4.12 ATTRACTION TOWARDS EQUITY

MARKET ACCORDING TO
RESPONDENTS.

4.13 SECTORS THAT THE

RESPONDENTS INVEST.

4.14 FUTURE OF EQUITY MARKET IN INDIA

AS PER RESPONDENT.

viii
CHAPTER 5 CONCLUSION 62-69

BIBLOGRAPHY

ANNEXURE

ix
 ABSTRACT

Without a doubt, stock markets are an important and necessary aspect of any country's
economy. However, the impact of stock markets on a country's economy may differ
from the impact of stock markets on other countries’ economies. This is because the
impact of stock markets on the economy is influenced by a variety of factors such as
the organization of stock exchanges, their link with other financial system
components, the country's governance system, and so on. Because each of these
characteristics is unique to each country, the impact of stock markets on a country's
economy is likewise unique.
The Indian capital market system has experienced considerable fundamental
institutional changes over the years, resulting in lower transaction costs, more
efficiency, transparency, and safety. All of these changes have resulted in the
economy's development through stock markets. Similarly, technical advancements
have fueled economic growth. Furthermore, a strong need for stock market
development is projected as a result of economic expansion supported by improved
technology, product, and service innovation.
The introduction section of the paper briefly reviews the stock markets and
developments in Indian stock markets to help us understand how stock markets have
evolved into the driving economic forces that they are today; the next section presents
several studies that review the impact of financial development, stock market
development, and functions, and about the probable impact on economic grow

x
 CHAPTER 1: INTRODUCTION

1.1 INTRODUCTION TO SECONDARY MARKET

The secondary market, is also called the aftermarket, is the financial market in
which previously issued financial instruments such as stock, bonds options, and future
s are bought and sold. Another frequent usage of "secondary market" is to refer to
loans that are sold by a mortgage bank to invest in or such as Fannie Mae and Freddie
Mac.
The term "secondary market" is also used to refer to the market for any used goods or
assets, or alternative use for an existing product or asset where the customer base is
the second market (for example, corn has been traditionally used primarily for food
production and feedstock, but a "second" or "third" market has developed for use in
ethanol production).
With primary issuances of securities or financial instruments, or the primary market,
investors purchase these securities directly from issuers such as corporations issuing
shares in an IPO or private placement, or directly from the federal government in the
case of treasuries. After the initial issuance, investors can purchase from other
investors in the secondary market.
The secondary market for a variety of assets can vary from loans to stocks, from
fragmented to centralized, and from illiquid to very liquid. The major stock
exchanges are the most visible example of liquid secondary markets - in this case, for
stocks of publicly traded companies. Exchanges such as the New York Stock
Exchange, London Stock Exchange, and Nasdaq provide a centralized, liquid
secondary market for the investors who own stocks that trade on those exchanges.
Most bonds and structured products trade “over the counter,” or by phoning the bond
desk of one’s broker-dealer. Loans sometimes trade online using a Loan Exchange.
The secondary market provides liquidity to the investors in the primary market. Today
we would not invest in any instrument if there was no medium to liquidate our
position. The secondary markets provide an efficient platform for trading those
securities initially offered in the primary market. Also, those investors who have
applied for shares in an IPO may or may not get allotment. If they don‘t then they can
always buy the shares (sometimes at a discount or a premium) in the secondary
market. Trading in the secondary market is done through the stock exchange. The
1
Stock exchange is a place where the buyers and sellers meet to trade shares in an
organized manner
1.2 PRODUCTS AVAILABLE IN THE SECONDARY MARKET
Equity: The ownership interest in a company of holders of its common and preferred
stock. The various kinds of equity shares are as follows:-
1.2.1 Equity Shares :An equity share, commonly referred to as an ordinary share
also represents the form of fractional ownership in which a shareholder, as a fractional
owner, undertakes the maximum entrepreneurial risk associated with a business
venture. The holders of such shares are members of the company and have voting
rights. Rights Issue / Rights Shares: The issue of new securities to existing
shareholders at a ratio to those already held.
1.2.2 Bonus Shares: Shares issued by the companies to their shareholders free of cost
by the capitalization of accumulated reserves from the profits earned in the earlier
years.
Preferred stock / Preference shares: Owners of these kinds of shares are entitled to
a fixed dividend or dividend calculated at a fixed rate to be paid regularly before the
dividend can be paid in respect of equity share. They also enjoy priority over the
equity shareholders in payment of surplus. But in the event of liquidation, their claims
rank below the claims of the company’s creditors, bondholders/ debenture holders.

Cumulative Preference Shares: A type of preference share on which dividend

accumulates if remains unpaid. All arrears of preference dividends have to be paid out
before paying a dividends on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares where the

dividend payable on the same accumulates, if not paid. After a specified date, these
shares will be converted into equity capital of the company.

Participating Preference Share: The right of certain preference shareholders to

participate in profits after a specified fixed dividend contracted for is paid.
Participation right is linked with the quantum of dividend paid on the equity shares
over and above a particular specified level.

Security Receipts: Security receipt means a receipt or other security, issued by a

securitization company or reconstruction company to any qualified institutional buyer

2
under a scheme, evidencing the purchase or acquisition by the holder thereof, of an
undivided right, title, or interest in the financial asset involved in securitization.

Government securities (G-Secs): These are sovereign (credit risk-free) coupon-

bearing instruments that are issued by the Reserve Bank of India on behalf of the
Government of India, instead of the Central Government's MARK borrowing
program. These securities have a fixed coupon that is paid on specific dates on a half-
yearly basis. These securities are available in a wide range of maturity dates, from
short-dated (less than one year) to long-dated (up to twenty years).
Debentures: Bonds issued by a company bearing a fixed rate of interest usually
payable half-yearly on specific dates and principal amount repayable on a particular
date on redemption of the debentures. Debentures are normally secured/charged
against the asset of the company in favour of the debenture holder.
Bond: A negotiable certificate evidencing indebtedness. It is normally unsecured. A
debt security is generally issued by a company, municipality, or government agency.
A bond investor lends MONEY to the issuer and in exchange, the issuer promises to
repay the loan amount on specified maturity date. The issuer usually pays the
bondholder periodic interest payments over the life of the loan. The various types of
Bonds are as follows.
Zero-Coupon Bond: Bond issued at a discount and repaid at a face value. No
periodic interest is paid. The difference between the issue price and redemption price
represents the return to the holder. The buyer of these bonds receives only one
payment, at the maturity of the bond.
Convertible Bond: A bond giving the investor the option to convert the bond into
equity at a fixed conversion price
Commercial Paper: A short-term promise to repay a fixed amount that is placed on
the MARKET either directly or through a specialized intermediary. It is usually
issued by companies with a high credit standing in the form of a promissory note
redeemable at par to the holder on maturity and therefore, doesn’t require any
guarantee. Commercial paper is a money market instrument issued normally for the
tenure of 90 days.
Treasury Bills: Short-term (up to 91 days) bearer discount security issued by the
Government as a means of financing its cash requirements.

3
1.3 FUNCTIONS OF SECONDARY MARKET
In the secondary market, securities are sold by and transferred from one investor or
speculator to another. It is therefore important that the secondary market be highly
liquid(originally, the only way to create this liquidity was for investors and
speculators to meet at a fixed place regularly; this is how stock exchanges originated,
see History of the Stock Exchange). As a general rule, the greater the number of
investors that participate in a given marketplace, and the greater the centralization of
that marketplace, the more liquid the market. Fundamentally, secondary markets mesh
the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her
money for a long period, in case the investor needs it to deal with unforeseen
circumstances) with the capital user's preference to be able to use the capital for an
extended period. Accurate share price allocates scarce capital more efficiently when
new projects are financed through a new primary market offering, but accuracy may
also matter in the secondary market because 1) price accuracy can reduce the agency
costs of management, and make a hostile takeover a less risky proposition and thus
move capital into the hands of better managers, and 2) accurate share price aids the
efficient allocation of debt finance whether debt offerings or institutional borrowing

1.4 STOCK EXCHANGE

Definition of Stock and Shares Stocks are “a type of security that signifies
ownership in a corporation and represents a claim on part of the corporation’s assets
and earnings”. In the physical plane, a stock certificate is simply a contract, a
notarized piece of paper corresponding to a stake in the company. There are at the
very basic level two types of stock, “Common” stock and “Preferred” stock.
Common stock has two primary benefits: it can gain value and be sold for profit or it
can be retained and the holder will receive quarterly (usually) dividends. However,
dividends are dependent on the company’s ability to receive or increase its earnings
because dividends are dispensed using the company’s earnings. Preferred stock
differs from common stock in that although it doesn’t provide as much room for
profit, it guarantees dividends. In addition, holders of preferred stock are allowed to
vote on company decisions and are also paid before holders of common stock. These
categories are not invariable or comprehensive, however, as the issuing company has

4
some flexibility in what properties its stock issues have. The amount of stock owned
is quantified as shares. The amount of shares one holds also determines their stake in
a company (in other words, how much of the company they own). For example, if a
company has issued 1000 shares and individual purchases 200 shares, he or she has a
20% stake in the company (owns 20%). A company can be either privately or publicly
held (with great ramifications on how its management is regulated). The essential
difference is that s publicly held company’s stocks are available for trade on the open
market, whereas those of a privately held one is not. A private company can “go
public” by conducting an Initial Public Offering, where shares are created and sold to
the public. IPOs became a particularly prominent phenomenon during the Dot-Com
bubble of 1995-2001, as covered later. The final fundamental stock behavior is a
“split,” where a company decides to let each stock entitle the bearer to more shares,
with a corresponding decline in the value of each. A company’s total valuation is
determined by multiplying the number of shares available by the current market price
per share. This is referred to as the company’s market capitalization. For example, if
a company has 1000 shares available for $10.00 per share, the company is valued by
the market at $10,000. One important use for market capitalization is how the major
indexes are weighted. The Standard and Poor’s 500 (S&P 500), for example, indexes
the 500 stocks weighted by greatest market capitalization and uses that price as an
(amazingly good) indicator of the performance of American industry as a whole.
Notice that the word “value” is never used in the absolute sense here: the idea is that
no asset has an intrinsic value independent of offers to pay for it. The valuation is
what the market is willing to pay.
1.5 ORIGIN OF THE INDIAN STOCK MARKET
The origin of the stock market in India goes back to the end of the eighteenth century
when long-term negotiable securities were first issued. However, for all practical
purposes, the real beginning occurred in the middle of the nineteenth century after the
enactment of the companies Act in 1850, which introduced the features of limited
liability and generated investor interest in corporate securities.
An important early event in the development of the stock market in India was the
formation of the native share and stockbrokers ‘Association at Bombay in 1875, the
precursor of the present-day Bombay Stock Exchange. This was followed by the
formation of associations/exchanges in Ahmedabad (1894), Calcutta (1908), and

5
Madras (1937). In addition, a large number of ephemeral exchanges emerged mainly
in buoyant periods to recede into oblivion during depressing times subsequently.
Stock exchanges are intricacy inter-woven in the fabric of a nation’s economic life.
Without a stock exchange, the saving of the community- the sinews of economic
progress and productive efficiency- would remain underutilized. The task of
mobilization and allocation of savings could be attempted in the old days by a much
less specialized institution than the stock exchanges. But as business and industry
expanded and the economy assumed more complex nature, the need for ‘permanent
finance‘ arose. Entrepreneurs needed money for long term whereas investors
demanded liquidity – the facility to convert their investment into cash at any given
time. The answer was a ready market for investments and this was how the stock
exchange came into being.
Stock exchange means any body of individuals, whether incorporated or not,
constituted to regulate or control 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 in or of any incorporated company or other body corporate;

(ii) Government securities; and

(iii) Rights or interest in securities.

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd
(NSE) are the two primary exchanges in India. In addition, there are 22 Regional
Stock Exchanges. However, the BSE and NSE have established themselves as the
two leading exchanges and account for about 80 per cent of the equity volume traded
in India. The NSE and BSE are equal in size in terms of daily traded volume. The
average daily turnover at the exchanges has increased from Rs 851 crore in 1997-98
to Rs 1,284 crore in 1998-99 and further to Rs 2,273 crore in 1999-2000 (April –
August 1999). NSE has around 1500 shares listed with a total market capitalization
of around Rs 9, 21,500 crores.
The BSE has over 6000 stocks listed and has a market capitalization of around Rs 9,
68,000 crores. Most key stocks are traded on both exchanges and hence the investor
could buy them on either exchange. Both exchanges have a different settlement
cycle, which allows investors to shift their positions on the bourses. The primary

6
index of BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE 50 Index
(Nifty) which consists of fifty stocks. The BSE Sensex is the older and more widely
followed index.

Both these indices are calculated on the basis of market capitalization and contain the
heavily traded shares from key sectors. The markets are closed on Saturdays and
Sundays. Both the exchanges have switched over from the open outcry trading system
to a fully automated computerized mode of trading known as BOLT (BSE on Line
Trading) and NEAT (National Exchange Automated Trading) System.
It facilitates more efficient processing, automatic order matching, faster execution of
trades and transparency; the scrip’s traded on the BSE have been classified into ‘A’,
‘B1′, ‘B2′, ‘C’, ‘F’ and ‘Z’ groups. The ‘A’ group shares represent those, which are in
the carry forward system (Badla). The ‘F’ group represents the debt market (fixed
income securities) segment. The ‘Z’ group scrip’s are the blacklisted companies. The
‘C’ group covers the odd-lot securities in ‘A’, ‘B1′ & ‘B2′ groups and Rights
renunciations. The key regulator governing Stock Exchanges, Brokers, Depositories,
Depository participants, Mutual Funds, FIIs and other participants in Indian
secondary and primary market is the Securities and Exchange Board of India (SEBI)
Ltd.

1.6 BRIEF HISTORY OF STOCK EXCHANGES

Do you know that the world’s foremost marketplace New York Stock Exchange
(NYSE), started its trading under a tree (now known as 68 Wall Street) over 200 years
ago?
Similarly, India’s premier stock exchange Bombay Stock Exchange (BSE) can also
trace back its origin to as far as 125 years when it started as a voluntary non-profit
making association.

News on the stock market appears in different media every day. You hear about it any
time it reaches a new high or a new low, and you also hear about it daily in statements
like ‘The BSE Sensitive Index rose 5% today’. Obviously, stocks and stock markets
are important. Stocks of public limited companies are bought and sold at a stock
exchange. But what really are stock exchanges? Known also as the stock market or
bourse, a stock exchange is an organized marketplace for securities (like stocks,

7
bonds, options) featured by the centralization of supply and demand for the
transaction of orders by member brokers, for institutional and individual investors.
The exchange makes buying and selling easy. For example, you don’t have to actually
go to a stock exchange, say, BSE – you can contact a broker, who does business with
the BSE, and he or she will buy or sell your stock on your behalf.

1.7 STOCK MARKET GROWTH

The number of stock exchanges in India increased from 11 in 1990 to 23 now. All the
exchanges are fully computerized and offer 100% on line trading. 9359 companies
were available for trading on stock exchanges at the end of March 2003. The trading
platform of the stock exchanges was accessible to 9368 stock brokers 829 derivative
brokers and 12815 sub brokers from over 400 cities on the same time. The market
capitalization grew ten fold between 1990-91 and 1999-2000. It declined thereafter
following major market misconduct. It however picked up in 2003-2004 to Rs.13, 77,
612crores which indicates the size of the market increased sharply to 60% by March
2000. Traditionally manufacturing companies and financial services sector accounted
for a major share in market capitalization. However in the recent past, the importance
of these traditional sectors has declined and new sectors like information technology,
pharmaceuticals and fast moving consumer goods have picked up. The trading
volumes on exchanges have been witnessing phenomenal growth during 1990s. The
average daily turnover grew from about Rs.150 crore in 1990 to Rs.12000 crore in
2000. The turnover ratio which reflects the volume of trading in relation to the size of
the market has been increasing by leaps and bounds after the advent of screen based
trading system by the NSE. The turnover ratio for the year 2000-01 increased to 448
but fell substantially to 118 during 2003-03. The average trade size in the equity
segments of the changes was about Rs.27000 during 2003-03. NSE is the market
leader with over 89% of the total turnover in 2003-03.

8
1.8VARIOUS STOCK EXCHANGES IN INDIA

Sr. Name of the Exchange Valid Upto

No.

1 Ahmadabad Stock Exchange Ltd. PERMANENT

2 Bangalore Stock Exchange Ltd. PERMANENT

3 Bhubaneswar Stock Exchange Ltd. June 04, 2012

4 Bombay Stock Exchange Ltd. PERMANENT

5 Calcutta Stock Exchange Ltd. PERMANENT

6 Cochin Stock Exchange Ltd. November 07, 2011

7 Coimbatore Stock Exchange Ltd. September 17, 2006

Due to pending litigation before

the Hon'ble Madras High Court
,Coimbatore Stock Exchange Ltd.
(CSX) has not filed application for
renewal of recognition which
expired on 17.09.06. However, in
terms of order dated 15.09.06 of
the Hon'ble Court, the right of
CSX to apply for renewal shall be
subject to further orders of the
court and the stock exchange shall
not be entitled to oppose the
renewal solely on the ground of
lapse of time.
8 Delhi Stock Exchange Ltd., The PERMANENT

9 Gauhati Stock Exchange Ltd. April 30, 2012

9
10 Hyderabad Stock Exchange
Ltd.,The

The Hyderabad Stock Exchange Ltd.

(HSE) failed to diluteatleast 51% of
its equity share capital to public
other than shareholders having
trading rights on or before the
stipulated date i.e. August 28, 2007.
Consequently, in terms of section
5(2) of the
Securities Contracts
(Regulation) Act, 1956, the
recognition granted to HSE stands
withdrawn with effect from August
29, 2007.

11 Interconnected Stock Exchange of November 17, 2011

India Ltd.
12 Jaipur Stock Exchange Ltd. January 08, 2012
13 Ludhiana Stock Exchange Ltd., April 27, 2012
14 Madhya Pradesh Stock Exchange Ltd PERMANENT
15 Madras Stock Exchange Ltd. PERMANENT
16 Magadh Stock Exchange Ltd.

"SEBI vide order dated September 3,

2007 refused to renew the recognition
granted to Magadh Stock
Exchange Ltd."

10
 17 * Mangalore Stock Exchange

As per Securities Appellete Tribunal

order dated October 4, 2006, the
Mangalore Stock Exchange is a de-
recognized Stock Exchange under
Section 4 (4) of SCRA
18 MCX Stock Exchange Ltd September 15, 2011
19 National Stock Exchange of India Ltd. PERMANENT
20 OTC Exchange of India August 22, 2012
21 Pune Stock Exchange Ltd. September 01, 2012
22 Saurashtra Kutch Stock Exchange Ltd.
SEBI vide order dated July 06,
2007 has withdrawn the recognition
granted to Saurashtra Kutch Stock
Exchange Limited.
23 U.P. Stock Exchange Limited June 02, 2012
24 United Stock Exchange of India March 21, 2012
Limited
25 The Vadodara Stock Exchange Ltd. January 03, 2012

There are two leading stock exchanges in India which help us trade are:
i. National Stock Exchange: National Stock Exchange incorporated in the year 1992
provides trading in the equity as well as debt market. Maximum volumes take place
on NSE and hence enjoy leadership position in the country today ii. Bombay Stock
Exchange: BSE on the other hand was set up in the year 1875 and is the oldest stock
exchange in Asia. It has evolved in to its present status as the premier stock
exchange.

11
1.9BOMBAY STOCK EXCHANGE
Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd. and
established as "The Native Share and Stock Brokers' Association") is one of Asia’s
fastest stock exchanges, with a speed of 200 microseconds and one of India’s leading
exchange groups. BSE is a corporatized and demutualized entity, with a broad
shareholder-base that includes two leading global exchanges, Deutsche Bourse and
Singapore Exchange, as strategic partners. BSE provides an efficient and transparent
market for trading in equity, debt instruments, derivatives, and mutual funds. It also
has a platform for trading in equities of small-and-medium enterprises (SME). Over
the past 139 years, BSE has facilitated the growth of the Indian corporate sector by
providing an efficient capital-raising platform.

More than 5000 companies are listed on BSE, making it the world's top exchange in
terms of listed members. The companies listed on BSE Ltd. command a total market
capitalization of USD 1.51 Trillion as of May 2013.[1]It is also one of the world’s
leading exchanges (3rd largest in March 2014) for Index options trading (Source:
World Federation of Exchanges). BSE also provides a host of other services to
capital market participants, including risk management, clearing, settlement, market
data services, and education. It has a global reach with customers around the world
and a nation-wide presence. BSE systems and processes are designed to safeguard
market integrity, drive the growth of the Indian capital market, and stimulate
innovation and competition across all market segments. BSE is the first exchange in
India and the second in the world to obtain an ISO 9001:2000 certification and the
Information Security Management System Standard BS 7799-2-2002 certification for
its On-Line trading System (BOLT). It operates one of the most respected capital
market educational institutes in the country (the BSE Institute Ltd.). BSE also
provides depository services through its Central Depository Services Ltd. (CDSL)
arm. BSE’s popular equity index - the S&P BSE SENSEX (Formerly SENSEX) - is
India's most widely tracked stock market benchmark index. It is traded
internationally on the EUREX as well as leading exchanges of the BRCS nations
(Brazil, Russia, China and South Africa). On Tuesday, 19 February 2013 BSE has
entered into Strategic Partnership with S&P DOW JONES INDICES and the
SENSEX has been renamed as "S&P BSE SENSEX".

12
1.10COMPANIES LISTED ON BSE

1.Axis Bank

1.Bajaj Auto Ltd

1.Bharat Heavy Electricals Ltd

3.BhartiAirtel Ltd

5.Cipla Ltd

6.Coal India Ltd

7.Dr. Reddy's Laboratories Ltd

8.GAIL (India) Ltd

9.HDFC Bank Ltd

10.Hero MotoCorp Ltd

11.Hindalco Industries Ltd

12.Hindustan Unilever Ltd

13.Housing Development Finance Corporation Ltd

14.ICICI Bank Ltd

15.Infosys Ltd

16.ITC Ltd

17.Larsen & Toubro Ltd

18.Mahindra and Mahindra Ltd

19.Maruti Suzuki India Ltd

20.NTPC Ltd

21.Oil and Natural Gas Corporation Ltd

22.Reliance Industries Ltd

23.Sesa Goa Ltd

24.State Bank of India

13
 25.Sun Pharmaceutical Industries Ltd

26.Tata Consultancy Services Ltd

27.Tata Motors Ltd

28.Tata Power Company Ltd

29.Tata Steel Ltd

30.Wipro Ltd

1.11NATIONAL STOCK EXCHANGE

TheNational StockExchange of India Ltd. (NSE)

(Marathi: Rashtriya ŚhareBāzaār) is a stock exchange located in the financial capital

of India, Mumbai. National Stock Exchange (NSE) was established in the mid 1990s
as a demutualised electronic exchange. NSE provides a modern, fully automated
screen-based trading system, with over two lakh trading terminals, through which
investors in every nook and corner of India can trade.

NSE has a market capitalisation of more than US$1.5 trillion and Number of
securities (equities segment) available for trading are 3,091 as on June 2013.[2]Though
a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two
most significant stock exchanges in India, and between them are responsible for the
vast majority of share transactions. NSE's flagship index, the S&P CNX Nifty, is
used extensively by investors in India and around the world to take exposure to the
Indian equities market.

NSE was started by a clutch of leading Indian financial institutions at the behest of the
Government of India to bring transparency to the Indian market, and has a diversified
shareholding comprising domestic and global investors. The domestic investors
includes Life Insurance Corporation of India ,GIC ,State Bank of India and
Infrastructure Development Finance Company(IDFC) Ltd, while the foreign investors
include MS Strategic (Mauritius) Limited, Citigroup Strategic Holdings Mauritius
Limited, Tiger Global Five Holdings and Norwest Venture Partners X FII-Mauritius.
It offers trading, clearing and settlement services in equity, debt and equity

14
derivatives. It is India's largest exchange, globally in cash market trades, in currency
trading and index options. As on June 2013, NSE has 1673 VSAT terminals and 2720
leaselines, spread over more than 2000 cities across India.

The exchange was incorporated in 1992 as a tax-paying company and was recognized
as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956,
when Mr.P. V. Narasimha Rao was the Prime Minister of India and Dr. Manmohan
Singh was the Finance Minister. NSE commenced operations in the Wholesale Debt
Market (WDM) segment in June 1993. The Capital market (Equities) segment of the
NSE commenced operations in November 1994, while operations in the Derivatives
segment commenced in June 2000.The National Stock Exchange (NSE) is India's
leading stock exchange covering 364 cities and towns across the country. NSE was set
up by leading institutions to provide a modern, fully automated screen-based trading
system with national reach. The Exchange has brought about unparalleled
transparency, speed & efficiency, safety and market integrity. It has set up facilities
that serve as a model for the securities industry in terms of systems, practices and
procedures. NSE has played a catalytic role in reforming the Indian securities market
in terms of microstructure, market practices and trading volumes. The market today
uses state-of-art information technology to provide an efficient and transparent
trading, clearing and settlement mechanism, and has witnessed several innovations in
products & services viz. demutualisation of stock exchange governance, screen based
trading, compression of settlement cycles, dematerialisation and electronic transfer of
securities, securities lending and borrowing, professionalisation of trading members,
fine-tuned risk management systems, emergence of clearing corporations to assume
counterparty risks, market of debt and derivative instruments and intensive use of
information technology. 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 (FIs) 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
thecountry. On its recognition as a stock exchange under the Securities Contracts
(Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale

15
Debt Market (WDM) segment in June 1993. The Capital Market (Equities) segment
commenced operations in November 1994 and operations in Derivatives segment
commenced in June 2000. NSE's mission is setting the agenda for change in the
securities markets in India. The NSE was set-up with the following objectives

Company Name Industry Symbol Series ISIN Code

ACC Ltd. CEMENT & ACC EQ INE012A01025

CEMENT

PRODUCTS
Ambuja Cements Ltd. CEMENT & AMBUJACEM EQ INE079A01024
CEMENT

PRODUCTS
Asian Paints Ltd. CONSUMER ASIANPAINT EQ INE021A01026
GOODS
Axis Bank Ltd. FINANCIAL AXISBANK EQ INE238A01034

SERVICES
Bajaj Auto Ltd. AUTOMOBILE BAJAJ-AUTO EQ INE917I01010

Bank of Baroda FINANCIAL BANKBARODA EQ INE028A01013

SERVICES
Bharat Heavy INDUSTRIAL BHEL EQ INE257A01026
Electricals Ltd.
MANUFACTURING
Bharat Petroleum
ENERGY BPCL EQ INE029A01011

Corporation Ltd.
BhartiAirtel Ltd. TELECOM BHARTIARTL EQ INE397D01024

 establishing a nation-wide trading facility for equities, debt instruments

and hybrids,
 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,

16
  enabling shorter settlement cycles and book entry settlements systems,
and
 meeting the current international standards of securities markets.

1.12LIST OF COMPANIES WHICH ARE LISTED ON NSE

Cairn India Ltd. ENERGY CAIRN EQ INE910H01017

Cipla Ltd. PHARMA CIPLA EQ INE059A01026
Coal India Ltd. METALS COALINDIA EQ INE522F01014
DLF Ltd. CONSTRUCTION DLF EQ INE271C01023
Dr. Reddy's PHARMA DRREDDY EQ INE089A01023
Laboratories Ltd.
GAIL (India) Ltd. ENERGY GAIL EQ INE129A01019
Grasim Industries CEMENT & GRASIM EQ INE047A01013
Ltd. CEMENT

PRODUCTS
HCL Technologies IT HCLTECH EQ INE860A01027
Ltd.
HDFC Bank Ltd. FINANCIAL HDFCBANK EQ INE040A01026

SERVICES
Hero MotoCorp Ltd. AUTOMOBILE HEROMOTOC EQ INE158A01026
O
Hindalco Industries METALS HINDALCO EQ INE038A01020
Ltd.
Hindustan Unilever CONSUMER HINDUNILVR EQ INE030A01027
Ltd. GOODS
Housing Development
FINANCIAL HDFC EQ INE001A01036

Finance Corporation SERVICES

Ltd.
I T C Ltd. CONSUMER ITC EQ INE154A01025
GOODS

17
ICICI Bank Ltd. FINANCIAL ICICIBANK EQ INE090A01013

SERVICES
IDFC Ltd. FINANCIAL IDFC EQ INE043D01016

SERVICES
IndusInd Bank Ltd. FINANCIAL INDUSINDBK EQ INE095A01012

SERVICES
Infosys Ltd. IT INFY EQ INE009A01021
Jindal Steel & Power METALS JINDALSTEL EQ INE749A01030
Ltd.
Kotak Mahindra FINANCIAL KOTAKBANK EQ INE237A01028
Bank Ltd.
SERVICES
Larsen & Toubro CONSTRUCTION LT EQ INE018A01030
Ltd.
Lupin Ltd. PHARMA LUPIN EQ INE326A01037
Mahindra & AUTOMOBILE M&M EQ INE101A01026
Mahindra Ltd.
Maruti Suzuki India AUTOMOBILE MARUTI EQ INE585B01010
Ltd.
NMDC Ltd. METALS NMDC EQ INE584A01023
NTPC Ltd. ENERGY NTPC EQ INE733E01010
Oil & Natural ENERGY
Gas ONGC EQ INE213A01029

Corporation Ltd.
Power Grid ENERGY POWERGRID EQ INE752E01010
Corporation of India
Ltd.
Punjab National FINANCIAL PNB EQ INE160A01014
Bank
SERVICES
Reliance Industries ENERGY RELIANCE EQ INE002A01018
Ltd.
SesaSterlite Ltd. METALS SSLT EQ INE205A01025
State Bank of India FINANCIAL SBIN EQ INE062A01012

SERVICES

18
 Sun Pharmaceutical
PHARMA SUNPHARMA EQ INE044A01036

Industries Ltd.
Tata Consultancy IT TCS EQ INE467B01029
Services Ltd.
Tata Motors Ltd. AUTOMOBILE TATAMOTOR EQ INE155A01022
S
Tata Power Co. Ltd. ENERGY TATAPOWER EQ INE245A01021
Tata Steel Ltd. METALS TATASTEEL EQ INE081A01012
Tech Mahindra Ltd. IT TECHM EQ INE669C01028
UltraTech Cement CEMENT & ULTRACEMC EQ INE481G01011
Ltd. CEMENT O

PRODUCTS
Wipro Ltd. IT WIPRO EQ INE075A01022
Zee Entertainment
MEDIA ZEEL
& EQ INE256A01028

Enterprises Ltd. ENTERTAINMENT

The CNX Nifty is a well diversified 50 stock index accounting for 23 sectors of the
economy. It is used for a variety of purposes such as benchmarking fund portfolios,
index based derivatives and index funds.
CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL).
IISL is India's first specialized company focused upon the index as a core product.
• The CNX Nifty Index represents about 66.8% of the free float market
capitalization of the stocks listed on NSE as on March 31, 2021.
• The total traded value for the last six months ending March 2021 of all index
constituents is approximately 451.4 % of the traded value of all stocks on the
NSE.
• Impact cost of the CNX Nifty for a portfolio size of Rs.50 lakhs is 0.02% for the
month March 2021.
• CNX Nifty is professionally maintained and is ideal for derivatives trading.

1.13REGULATORS
The responsibility for regulating the securities market is shared by Department of
Economic Affairs (DEA), Ministry of Company Affairs (MoCA), SEBI and Reserve

19
Bank of India (RBI). The activities of these agencies are co-ordinated by High level
committee on Capital and Financial markets. The orders of SEBI under the securities
laws are appellablebefore Securities Appellate Tribunals (SAT). The orders of the
SAT are appellable only before the Supreme Court on points of lawThe powers of
the Department of Economic Affairs under the SCRA are concurrently exercised by
SEBI. The SEBI Act and Depositories Act are mostly administered by SEBI. The
rules under the securities laws are framed by government while the regulations are
framed by SEBI. The powers under the companies Act relating to issue and transfer
of securities and non payment of dividend are administered by SEBI in case of listed
public companies and public companies proposing to get their securities listed. The
securities market uses the services of a large variety of intermediaries to bring the
suppliers of funds and suppliers of securities. All the intermediaries in the securities
market are now registered and regulated by SEBI. A code of conduct has been
prescribed for each intermediary as well as for their employees in the regulations;
capital adequacy and other norms have been specified, a system of monitoring and
inspecting their operations has been instituted to enforce compliance; and
disciplinary actions are being taken against them for violating any regulation. All the
intermediaries in the marketare mandated to have a compliance officer who reports
independently to SEBI about any non-compliance observed by him.
1.14INTRODUCTION TO INVESTMENT

Investment is time, energy, or matter spent in the hope of future benefits actualized
within a specified date or time frame. Investment has different meanings
ineconomicsandfinance. In economics, investment is the accumulation of newly
produced physical entities, such as factories, machinery, houses, and goods
inventories. In finance, investment is puttingmoneyinto an asset with the expectation
of capitalappreciation,dividends, and/orinterestearnings. This may or may not be
backed by research and analysis. Most or all forms of investment involve some form
of risk, such as investment in equities, property, and even fixed interest securities
which are subject, among other things, toinflationrisk. It is indispensable for
projectinvestorsto identify and manage the risks related to the investment.It's actually
pretty simple: investing means putting your money to work for you. Essentially, it's a
different way to think about how to make money. Growing up, most of us were
taught that you can earn an income only by getting a job and working. And that's

20
exactly what most of us do. There's one big problem with this: if you want more
money, you have to work more hours. However, there is a limit to how many hours a
day we can work, not to mention the fact that having a bunch of money is no fun if
we don't have the leisure time to enjoy it You can't create a duplicate of yourself to
increase your working time, so instead, you need to send an extension of yourself -
your money - to work. That way, while you are putting in hours for your employer,
or even mowing your lawn, sleeping, reading the paper or socializing with friends,
you can also be earning money elsewhere. Quite simply, making your money work
for you maximizes your earning potential whether or not you receive a raise, decide
to work optimize or look for a higher paying job. There are many different ways you
can go about making an investment. This includes putting money
intostocks,bonds,mutual funds, or real estate (among many other things), or starting
your own business. Sometimes people refer to these options as "investment vehicles,"
which is just another way of saying "a way to invest." Each of these vehicles has
positives and negatives, which we'll discuss in a later section of this tutorial. The
point is that it doesn't matter which method you choose for investing your money, the
goal is always to put your money to work so it earns you an additional profit. Even
though this is a simple idea, it's the most important concept for you to understand

1.15TYPES OF INVESTMENT

We've already mentioned that there are many ways to invest your money. Of course,
to decide which investment vehicles are suitable for you, you need to know their
characteristics and why they may be suitable for a particular investing objective.

Bonds

Grouped under the general category called fixed-income securities, the term bond is
commonly used to refer to any securities that are founded on debt. When you
purchase a bond, you are lending out your money to a company or government. In
return, they agree to give you interest on your money and eventually pay you back
the amount you lent out. The main attraction of bonds is their relative safety. If you
are buying bonds from a stable government, your investment is virtually guaranteed,
or risk-free. The safety and stability, however, come at a cost. Because there is little
risk, there is little potential return. As a result, the rate of return on bonds is generally

21
lower than other securities. (The Bond Basics tutorial will give you more insight into
these securities.)

Stocks

When you purchase stocks, or equities, as your advisor might put it, you become a
part owner of the business. This entitles you to vote at the shareholders' meeting and
allows you to receive any profits that the company allocates to its owners. These
profits are referred to as dividends.
While bonds provide a steady stream of income, stocks are volatile. That is, they
fluctuate in value on a daily basis. When you buy a stock, you aren't guaranteed
anything. Many stocks don't even pay dividends, in which case, the only way that
you can make money is if the stock increases in value - which might not happen.

MutualFunds

A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you
are pooling your money with a number of other investors, which enables you (as part
of a group) to pay a professional manager to select specific securities for you. Mutual
funds are all set up with a specific strategy in mind, and their distinct focus can be
nearly anything: large stocks, small stocks, bonds from governments, bonds from
companies, stocks and bonds, stocks in certain industries, stocks in certain countries,
etc.

The primary advantage of a mutual fund is that you can invest your money without
the time or the experience that are often needed to choose a sound investment.
Theoretically, you should get a better return by giving your money to a professional
than you would if you were to choose investments yourself. In reality, there are some
aspects about mutual funds that you should be aware of before choosing them, but we
won't discuss them here.

Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc. So,
you now know about the two basic securities: equity and debt, better known as stocks

22
and bonds. While many (if not most) investments fall into one of these two
categories, there are numerous alternative vehicles, which represent the most
complicated types of securitiesandinvestingstrategies.

The good news is that you probably don't need to worry about alternative investments
at the start of your investing career. They are generally high-risk/high-reward
securities that are much more speculative than plain old stocks and bonds. Yes, there
is the opportunity for big profits, but they require some specialized knowledge. So if
you don't know what you are doing, you could get yourself into a lot of trouble.
Experts and professionals generally agree that new investors should focus on
building a financial foundation before speculating. (For more on how levels of risk
correspond to certain investments,

1.16INVESTMENT PURPOSE
The investment purpose of public may be set out in terms of their savings for:
(i) Transactions purpose (for daily needs or regular payments)

(ii) Precautionary purposes (for contingencies or special needs) (iii)

Speculative or asset purposes (for capital gains and building of
assets).

1.17INVESTMENT AND SPECULATION

Purchases of assets like shares and securities can be for either investment or
speculation or for both. Investment is long term in nature while speculation is short
term. All investments are risky to some extent but speculation is most risky as it
involves short term trading, buying and selling which may lead to profits sometimes
and losses at other times.

23
1.18INVESTMENT AVENUES

There is large number of investment avenues for savers in India. Some of them are
marketable and liquid while others are more risky and less safe. Risk and return are
the major characteristics which an investor has to face and handle. The investor has
to choose proper avenues from among them 72 depending on his objectives,
preferences, needs and abilities to take the minimum risk and maximize the returns.

1.19STOCK MARKET IS BETTER THEN ANOTHER

INVESTMENT

The STOCK MARKET is a great investment if you have a long time horizon. But
should you continue toinvest in stocks once you retire? When you start withdrawing
from your retirement portfolio, you will be a lot more sensitive to STOCK MARKET
fluctuations. Most financial advisers recommend reducing stock market investments
as you get older, but you don’t want to just stick the money under the mattress either.
Inflation will erode cash savings over the years, and we need to continue to invest.
Here are seven investment alternatives to the stock market:

Annuities. There are many types of annuities, but the basic idea is that we pay an
insurance company a lump sum in exchange for a guaranteed monthly payment for
life. Annuity payouts are primarily tied to interest rates, so it’s probably a good idea
to wait until rates improve. You probably don’t want to put all of your savings into
an annuity because you really don’t know how long you will live. If your pension
and Social Security payments aren't enough to pay your minimal monthly expenses,
then it’s a good idea to buy an annuity to fill that gap.

Bonds. The classic alternative to the STOCK MARKET is bonds. You can lend
money to the government or a corporation and receive some interest. When the stock
market goes south, investors turn to bonds as a good diversification from the stock
market.

CDs. CDs are not very attractive at the moment because the yields are very low.
However, the return is guaranteed and the risk is also very low. Building a CD ladder

24
is a good way to guarantee stable returns. Once interest rates improve, it will be a
good idea to INVEST in a long-term CD.

Real estate. Rental properties are a great way to generate some income, but they can
be a lot of work. If you don’t want to deal with tenants, then a property management
company can be a huge help. If you really don’t want to be a landlord, consider a real
estate investment trust (REIT) instead. Investing in a REIT is much easier than
owning rental properties, and the dividend payout is usually very good compared to
other dividend STOCKS.

Gold. Gold is another diversification from the stock market. When economic turmoil
hits, the price of gold goes up. Gold represents stability, and a small portion of your
portfolio might benefit from that. Investing in gold is easier than ever. You can
INVEST IN GOLD ETFs without having to worry about stashing gold jewelry in the
freezer.
Peer-to-peer lending. Peer-to-peer lending is a great way to generate EXTRA
INCOME.

You lend money to individual borrowers and you’ll be paid an interest rate. The good
thing about peer-to-peer lending is that you can lend in $25 increments and diversify
your lending portfolio. Some percentage of borrowers will default, but your lending
portfolio should be able to handle some losses because the interest rate is so high.
One big caveat is if we have a big recession and many people lose their jobs, then the
default rate will skyrocket.

Long-term care insurance. The cost of long-term care can put a big dent into any
retirement portfolio. A good nursing home can cost over $10,000 a month depending
on where you live. Long-term care insurance can offset that cost. If your family has
any history of Alzheimer’s, dementia, or Parkinson’s disease, long-term care
insurance might be right for you. However, the cost of long-term care insurance is
quite high, so if your family doesn’t have any history of needing long-term care, it
might be better to INVEST the money elsewhere.

Retirees shouldn’t pull out of the STOCK MARKET completely because it is still a
great investment over the long term. Retirement can last over 30 years, and we need

25
some growth in our retirement portfolio. However, retirees need to take a close look
at their portfolio and ask themselves if they can handle the volatility. Most people
think they can handle a big drop in the stock market, but when it happens, they often
sell at the wrong time and lose out on the recovery. Choosing some alternative
investments outside the stock market may bolster your finances during such an event.

1.20 CURRENT DAY STATE OF AFFAIRS

Today, the BSE is measured as the world’s 11th largest stock exchange and the
market capitalization is likely to be around $1.7 trillion. The market capitalization of
the NSE is estimated to be over $1.65 trillion. Over 5,000 companies are listed on the
BSE and 1,500 figures on the NSE. In terms of share trading volumes, still, both the
exchanges are on parity. Nowadays people can conduct online trading sitting in the
comfort of their homes. Facilities such as zero brokerage Demat and live updates are
all available with the help of the internet

1.21 AWARDS
NSE
• 2019-20
2020 Best of the Best Award for being the Index provider of the year, India
2020 Best of the Best Award for ETF Index Provider of the year, India
World’s Largest Derivative Exchange in terms of contracts traded
• 2018-19
Innovative Practices Award 2018 on Sustainable Development Goals
UN Global Compact Network India
CSR Times Awards for Best Project in Education under the Corporate Foundation
Category
• 2017-18
FICCI CSR Award for Exemplary Innovation
Capital Market: Vision 2020 - Best Stock Exchange of India
7th Annual Greentech HR Award 2017
Golden Peacock Award for Corporate Social Responsibility
ET NOW – CSR Leadership Award
Green IT award

26
India Achievers Awards, 2018 - NSE SME Driver of Entrepreneurship
Datacenter Summit and Awards 2017 for Innovation
Architecting a Digital Transformation Journey
Ranked among India’s Top 50 companies to work for
Recognized for being among the best in India’s financial services industry
BSE
As a pioneering financial institution in the Indian capital market, BSE has won
several awards and recognitions that acknowledge the work done and progress
made.
•IT Genius Awards 2017’ in the category ‘Data Centre Excellence’ for setup of
the India INX Data Centre by CORE (Centre of Recognition & Excellence)
•Digital Innovation Award 2017 for the Social Media Analytics Project by
Netmagic
•Business World Digital Leadership and CIO Award
•The IDC Digital Transformation Awards 2017
•The Best Exchange of the year award for equity and currency derivatives in
Tesla’s Commodity Economic Outlook Award 2017
•Best Brand award 2017 by Economic Times
•CIO POWER LIST 2017
•Best Corporate film encompassing Vision, History, Value and Spirit of
Excellence Award, Best Corporate film on Employer Branding award, and Most
Influential HR Leaders in India award at World HRD Congress 2017
•Best Exchange of the year' award at 4th India Bullion & Jewellery awards 2017
•Red Hat Innovation Awards 2016 by Red Hat Solutions
•Skoch Achiever Award 2016 for SME Enablement
•Best IT Implementation Award 2016 in the “Most Complex Project Category”
by PCQuest
•InfoSec Maestros Awards 2016.
•Lions CSR Precious Awards 2016
•Golden Peacock Award 2015

27
1.22 BOARD OF DIRECTOR
BSE & NSE

Name Designation

Justice Vikramajit Sen Chairman (public interest director)

Mr. Ashishkumar Chauhan - MD & CEO

Shri Sumit Bose - Public Interest Director

Shri Subhash Sheoratan Mundra - Public Interest Director

Shri David Wright - Public Interest Director

Shri Umakant Jayaram - Public Interest Director

Sushri Jayshree Vyas - Public Interest Director

Shri T. C. Suseel Kumar - Shareholder Director

Name Designation

Mr. Girish Chandra Chaturvedi Chairman & Public Interest

Director
Mr. Vikram Limaye Managing Director & CEO

Ms. Anuradha Rao Public Interest Director

Mr. K Narasimha Murthy Public Interest Director

Prof. S Sudarshan Public Interest Director

Ms. Mona Bhide Public Interest Director

Ms. Sunita Sharma Shareholder Director

Mr. VeneetNayar Shareholder Director

28
1.23 SWOT ANALYSIS

Strength:
 High return
 Large investment
 Acquire capital for expanding the business
 Secure the future losses

Weakness:
 High risk
 Based on the fluctuation. It becomes high loss when market goes down.
 Can't predict future

Opportunity:
 Lot of people wants to invest but don't invest due to insufficient knowledge.
 Market is providing new opportunities and new options to invest.

Threat:
 Recession
 New government
 Bubble burst
 Fluctuates dollar prices

1.24 THE REASONS FOR STOCK PRICES GOING "UP" AND "DOWN"

Stock prices change every day because of market forces. By this we mean that stock
prices change because of "supply and demand". If more people want to buy a stock
(demand) than sell it (supply), then the price moves up!
Conversely, if more people wanted to sell a stock than buy it, there would be greater
supply than demand, and the price would fall. (Basics of economics!)Understanding
supply and demand is easy. What is difficult to understand is what makes people like
a particular stock and dislike another stock. If you understand this, you will know
what people are buying and what people are selling. If you know this you will know
what prices go up and down!
To figure out the likes and dislikes of people, you have to figure out what news is
positive for a company and what news is negative and how any news about a
company will be interpreted by the people.

29
The most important factor that affects the value of a company is its earnings. Earnings
are the profit a company makes, and in the long run no company can survive without
them. It makes sense when you think about it. If a company never makes money, it
isn't going to stay in business. Public companies are required to report their earnings
four times a year (once each quarter).
Dalal Street watches with great attention at these times, which are referred to as
earnings seasons. The reason behind this is that analysts base their future value of a
company on their earnings projection.If a company's results are better than expected,
the price jumps up. If a company's results disappoint and are worse than expected,
then the price will fall.
Of course, it's not just earnings that can change the feeling people have about a stock.
It would be a rather simple world if this were the case! During the "dotcom bubble",
for example, the stock price of dozens of internet companies rose without ever making
even the smallest profit. As we all know, these high stock prices did not hold, and
most internet companies saw their values shrink to a fraction of their highs. Still, this
fact demonstrates that there are factors other than current eamings that influence
stocks.
So, what are "all the factors" that affect the stocks price? The best answer is that
nobody really knows for sure. Some believe that it isn't possible to predict how stock
prices will change, while others think that by drawing charts and looking at past price
movements, you can determine when to buy and sell. The only thing we do know is
that stocks are volatile and can change in price very very rapidly.

30
 CHAPTER 2: RESEARCH METHODOLOGY

2.1Introduction To Topic
The secondary market, is also called aftermarket, is the financial market in which
previously issued n financial instruments such as stock, bonds, options, bought and
sold. Another frequent usage of "secondary market" is to refer to loans which are sold
by a mortgage bank to investors such as Fannie Mae and Freddie Mac. The origin of
the stock market in India goes back to the end of the eighteenth century when long-
term negotiable securities were first issued. However, for all practical purposes, the
real beginning occurred in the middle of the nineteenth century after the enactment of
the companies Act in 1850, which introduced the features of limited liability and
generated investor interest in corporate securities. Definition of Stock and Shares
Stocks are “a type of security that signifies ownership in a corporation and represents
a claim on part of the corporation’s assets and earnings”. In the physical plane, a
stock certificate is simply a contract, a notarized piece of paper corresponding to a
stake in the company.

2.2Objectives of the Study

i. To find out investors attitudes and perceptions towards stock market
investments
ii. To analyze how investors’ level of awareness influences their.stock market.
iii. To identify the factors influencing investment decisions in stock market.
iv. To evaluate the level of satisfaction of the investors in the stock market
investment .
v. To investigate investor behaviour and the elements that influence their
investing decisions.
vi. To investigate the issues that investors face and the reasons why they do not
invest in financial products.
vii. To find out how satisfied investors are with the returns on various investment
options.

31
viii. To educate the investor on the various factors that could affect their
investment.
ix. To gain an understanding of other markets, such as the commodity and
derivatives markets.
x. To be aware of the stock market's ups and downs.

2.3Hypothesis of Study

H0: People Do Not Prefer Investment In Stock Market.

H1: People Prefer Investment In Stock Market.

2.4Limitation Of The Study

1. Research work was carried out in Thane branch only the finding may not be
applicable to the other parts of the country because of social and cultural differences.

2. The sample was collected using convenience sampling techniques. As such

result may not given an exact representation of the population.

3. Shortage of time is also reason for incomprehensiveness.

4. The view of the people are biased therefore it doesn't reflect true picture.

2.5Research Methodology

Research Universe Thane

Types of research Descriptive

Sampling method Simple random sampling method

32
Sample size 100

Sample unit Investors

Methods of data collection • Primary data

• Secondary data

Methods of primary data • Questionnaire

• Interview

• Observation

• Experiment

• Survey

Methods of secondary data • Books,

• Journals

• Websites

Types of questionnaire Structure

33
 CHAPTER 3 : REVIEW OF LITERATURE

3.1 Review of research paper:

1. Livanas.J. (2006) presented the discoveries of the study into the investors
performance when choosing amongst the array of investments with
predetermined peril returns and the duration horizon along with the features. The
study used the data through a telephonic investigation of a total of 238 investors
and a further superset of the 4000 members who have provided the demographic
and trend data. The paper concludes that the weight of money is with institutional
investors so individual investors are not in a position to affect prices; the
stockholders are likely to act on the changes in rate of savings rather than
complete wealth; that investors were given the choice of investments for the 1st
time looked to alter their peril that is based mostly on their age, with elder
depositors shifting to less risky array of investments and the younger groups
increase their risks. However, investors who always had choice do not behave in
this manner. That stockholders constantly overestimate the revenues accessible
and target from their array of investments; that depositors gained more utility
with greater return but no clear utility from time horizon;
That investors with different personality ‗type‘ behaved differently and also that
demographic differences were clearly felt, for instance, ‗switchers‘ were likely to
go at the higher levels of education.

2. Mittal. M and Vyas. R (2007)They examined various variables and their roles
such as education income occupation and certain personal information such as
age gender and also the choice of investment by various investors. The study also
shows that the investment and their preferences are completely dependent upon
the investors personal factors like income gender education age and the
occupation. It was also found that the investors are of various types like they can
be a small businessman investment banker or owner of a company. The
investment decision that is taken by a specific person can change their fate or
future as the investment made can also change the fate of the company or the
organization.

34
3. Merikas(2008)conducted a study based on the Investors behavior and the
economic factors. And found that various factors such as expected corporate
earnings, firm status in industry, condition of financial statements, protection of
the investor, recent price movements, get rich quick, ethics of the firm
significantly influence investor decisions.

4. Lovric et.al (2008)discussed a graphic model of distinct capitalist conduct during

which the asset selection was seen like an integrative method of connections
among the capitalist and the asset surroundings. The model may be accustomed
built unreal illustrations of the specific stockholders, and more considered
victimization the pattern based on the agents artificial money market.

5. Singh.S (2009)declared that investment selections created by investors aren't

exclusively passionate about value the movement and the market steadiness. The
study enlists the factors like gender, age, family, qualifications and also the
previous performances of a firm’s bonds as variables or sixty one features, have
important impact on the investment of the investors’ {decision making, deciding,
and higher cognitive method} process.

6. Al-Tamimi (2009) conducted a study on ‘Financial accomplishment and

Investment call of UAE Investors’ and located the foremost persuading issues
that affect the investments and call them spiritual explanations and also the
minimum moving issue is rumors. They conjointly found that ladies have lower
level {of money of monetary of economic} accomplishment than men and
economically educated stockholders facilitate the economic market to function
with efficiency, as the higher commerce selections are taken that are mostly
based on the elementary or the technical analysis rather than a substitute without
reasoning.

35
7. Kaleem (2009)conducted an analysis on ‘Factors moving money consultant’s
insight in the array of investment management special reference to Pakistan’. The
study argues that non public, socio-cultural, spiritual, psychological and the
gender problems effect the consultant’s insight that lead him to various problems.
The results indicate that gender, income, age, and the language assistance in the
education of nursing plays an important role in crucial asset vogue of a capitalist.

8. Kabra.G. et. al. (2010)He examined certain factors that affect the behavior of
investment and finished with the capitalists gender, age and the other factors
which decide that the investor is capable of investing in the bonds. The
outstanding growth within the market of security and the IPS that Hill initial
public offerings that are present in the market. The specific investors like their
savings or assets as per the risk which they prefer. The peril people choose
certain life insurance policies which can speed up deposit that is present in the
bank and after the workplace, the national security council and the PPF. The
occasions at times the blind assets are very rare or less, as most of the
shareholders become victims for certain supplies and other references themes
while deciding the selection of the funds. They are within certain and ties and
some physiological feature of impression which add on certainty and the framing
of slime, numerous factors are thought and ask for heterogeneous information
before execution some kind of investment dealings.

9. Lutfi (2010)He discovered ascertain important association in between or among

the stockholders demographics that is (age, gender, marital status, education,
income along with the number of family members), the final choice of the
investment product that is (assets market devices certain Bank products other
physical properties) and the tolerance towards the risk of the investor that is
(seeking risk and adverse effects). The research shows an important connection
among the investment choices of the investor along with the tolerance of risks.

10. Anderson and et.al (2011)He calculated the behavior of the assets of the
employees working with oil India limited and came to a conclusion that there

36
 were four major demographic aspects and variables that are (gender, age,
qualification and designation) they are very crucial aspects that help and give
guidance while taking an investment decision particularly the age is a very
important indicator which influences the equity savings decision. The gender has
a major effect on the current decisions of investment whereas the qualification
and designation have no role in the decision making of equity. Additional
research also shows that the demographics of shareholders play a major role
while selecting different array of investments and their willingness to opt for a
risk.

11. Fares and Khamis (2011) studied specific stockholders’ stock commerce
performance at the national capital stock market, Jordan, victimization the
multivariate analysis method. They know 4 activity features (education, age,
availability to the net and communication among the capitalist and the advisor)
that influenced the stockholders’ commerce selections. In step with the writers,
age of the stockholder’s, occupation, and their approachability to the web had a
bigger and a positive impact on the stock commerce, whereas the communication
amongst the capitalist and their advisor, had an extremely important and an
adverse impact.

12. Geetha and Ramesh (2012) examined the connectedness of the demographic
aspects in investment selections in Tamil nadu (India) and appealed that the
demographic aspects had a bigger impact over a number of the assets call
components, whereas the irrelevant effect was initiated on another components.

13. Sahi et.al (2012) the study was conducted by considering numerous demographic,
psychographic, and socio-economic variables with a aim understand the
preferences of the investor's, employing an illustration of specific stockholders
i.e. N=377, CART Classification and Regression Tree procedure was used to
confirm whether or not psychographic variables are higher forecasters than the

37
 socio-economic and demographic variables to understand a personal
stockholder's choices for the alternatives of investment. The outcomes showed
that the requirement for the money facility, the suppliers had to think about
certain psycho graphical variables at the side of demographic and socio-economic
variables, therefore on higher perceive and advise the money customers. This
may change the money service establishments to focus on their audience a lot of
sharply, therefore on develop acceptable promoting ways and to build the trust of
the investor. The study has further contributed to understand the behavior of the
capitalist.
14. Rahnuma Akhter and Sultan Ahmed

(2013)studied about behavioural characteristics of the distinct stockholders for

investment in the Bangladesh stock market .The study also revealed that good
percentage of depositors regularly read the articles that were being published in
newspapers.

15. Rakesh.pet.al(2014)Surveyed the behavior that took risk and also considered
certain social economic features such as gender, age, occupation, income,
education, along with the marital status. They survey was carried in various
communities like memon, hindu, ismaili, delhi, chinioti, Sheikh, Sodagran Behari
etc. the method used was survey with the questionnaire for the collection of
primary data using the snowball sampling method. There were two hundred
respondents who contributed to the survey. The hypothesis was tested using chi-
square test applied in SPSS a software tool used for analysis. The outcomes
disclose that the income, age, marital status, qualifications and professional
employment is suggestively allied with the behaviour of taking the risk, whereas
there is no association of gender with the behavior of taking risk. Additionally ,it
is was also discovered that the behaviour of taking risk in other societies was not
significantly diverse.

16. Islamoglu. M et.al (2015)In their examination, researched the variables that
impact singular speculator conduct. The information utilized as a part of the
examination were gotten by means of study technique from financiers in Bartin.
Engaging investigation was led so as to abridge the experimental examination
comes about with numerical portrayal and factor investigation was done to gauge

38
 the legitimacy and unwavering quality of the outlined study. Moreover, the
investigation with respect to speculation tests was executed by methods for
examination of minute structure. Because of the examination, it was
distinguished that six variables affected individual financial specialist conduct. It
was discovered that the most astounding relationship was between "cognizant
financial specialist conduct" and "managing an account and installment conduct."
Also, it was affirmed that 11 of the examination speculations were acknowledged
and that four of the exploration theories were won't. Inside this system, it was
inferred that there was a measurably huge connection between the elements
influencing singular speculators' venture practices.

3.2 Review of Books

I. Financial market and institutions – by Frederic S. Mishkin And Stanley Eakins
The sixth edition of financial market and institutions is a practical introduction to
the workings of today’s financial market and institutions. It encourages students
to understand the connection and their real world applications. By enhancing
students analytical abilities and concrete problem solving skills this textbook
prepares students for successful careers in the financial services industry or
successful interactions with financial institutions, whatever their jobs. A unifying
analytic framework that uses a few basic principles to organize students thinking.
These principles include: Asymmetric information problems, conflicts of interest,
transaction cost, supply and demand, asset market equilibrium, efficient markets
and measurement and management of risk. The practicing manager nearly twenty
hands on applications that emphasize the financial practitioner’s approach to
financial market and institutions.

II. Financial markets and services - By E. Gordon and K. Natarajan

Financial market have been increasingly influenced in recent times by financial

innovations in terms of products and instruments, adoption of modern
technologies, opening up of the market to the global economy , streamlining of
the regulatory framework and so on. Similarly many innovative financial
products are introduced to cater to the varied requirements of both corporate and

39
individual customers. In the aftermath of this changing financial scenario students
of commerce and management are badly in need of a suitable textbook covering
all these aspects incorporating the latest development in the respective fields. The
specialist of this volume is that all matters are presented in a lucid manner and in
simple language, notwithstanding the technical nature of the subject. All the latest
development has been covered and above all it is most students friendly. We are
confident that this book will serve as a beacon light to the student community
who pursue higher education in the discipline of commerce and management.
3.3 INDIAN AUTHORS LITERATURE
Gupta,Thomson Press (India), 1972 - Finance (1972) in his book has studied
the working of stock exchanges in India and has given several suggestions to
improve its working. The study highlights the need to regulate the volume of
speculation to serve the needs of liquidity and price continuity. It suggests the
enlistment of corporate securities in more than one stock exchange at the same
time to improve liquidity. The study also wishes the cost of issues to below, to
protect small investors.

L.C.Gupta (1992), "Stock Trading in India", Society for Capital Market

Research and Development, Delhi,T.Prevealed the findings of his study that
there is the existence of wild speculation in the Indian stock market. The over
speculative character of the Indian stock market is reflected in an extremely high
concentration of the market activity in a handful of shares to the neglect of the
remaining shares and high trading velocities of the speculative counters. He
opined that short-term speculation, if excessive, could lead to "artificial price".
An artificial thatis not justified by prospective earnings, dividends, financial
strength, and assets or which is brought about by speculators through rumors,
manipulations, etc. He concluded that such artificial prices are bound to crash
sometime or other as history has repeated and proved.

Yasawa J.N. "The Risk-Return Trade-off in shares" The Hindu Daily,

Vol.116, February 12, 1993, in the study titled, Indian Capital Market - A
Functional Analysis, depicts the primary market as a perennial source of supply
of funds. It mobilizes the savings from the different sectors of the economy like

40
households, public and private corporate sectors. The number of investors
increased from 20 lakhs in 1980 to 150 lakhs in 1990 (7. 5 times). In the
financing of the project costs of the companies with different sources of
financing, the contribution of the securities has risen from 35.01% in 1981 to
52.94% in 1989. In the total volume of the securities issued, the contribution of
debentures/bonds in recent years has increased significantly from 16. 21% to
30.14%.

Sunil Damodar, An Introduction to Derivatives and Risk Management in

Financial Markets", State Bank of India, Monthly Review Vol. XXXII No. 8,
August 1993. evaluated the 'Derivatives' especially the 'futures' as a tool for
short-term risk control. He opined that derivatives have become an indispensable
tool for finance managers whose prime objective is to manage or reduce the risk
inherent in their portfolios. He disclosed that the overriding feature of 'financial
futures' in risk management is that these instruments tend to be most valuable
when risk control is needed for a short- term, i.e., for a year or less. They tend to
be the cheapest and easily available for protecting against or benefiting from
short-termprices. Their low execution costs also make them very suitable for
frequent and short-term trading to manage risk, more effectively.
Amanulla S and Kamaiah B (1995): Market Integration as an Alternative
test of Market Efficiency: A case of Indian stock market. ArthaVijana,
September conducted a study to examine the Indian stock market efficiency by
using Ravallion cointegration and error correction market integration approaches.
The data used are the RBI monthly aggregate share indices relating to five
regional stock exchanges in India, viz Bombay, Calcutta, Madras, Delhi,
Ahmedabad during 1980-1983. According to the authors, the co integration
results exhibited a long-run equilibrium relationship between the price indices of
five stock exchanges, and error correction models indicated short-run deviation
between the five regional stock exchanges. The study found that there is no
evidence in favor of market efficiency of Bombay, Madras, and Calcutta stock
exchanges while contrary evidence is found in the case of Delhi and Ahmedabad.

41
PattabhiRaman.V . "Wanna Do Equity Research, Analyst, Monthly, October
1995, emphasized the need for doing fundamental analysis and doing Equity
Research (ER) before selecting shares for investment. He opined that the investor
should look for value with a margin of safety about price. The margin of safety is
the gap between price and value. He revealed that the Indian stock market is
inefficient because of the absence of a good communication network, rampant
price rigging, and the absence of free and instantaneous flow of information,
professional broking, and so on. He concluded that in such an inefficient market,
equity research will produce better results as there will be a frequent mismatch
between price and value that provides opportunities to the long-term value-
oriented investor. He added that in the Indian stock market investment returns
would improve only through quality equity research.

James Riedel (1997): “Capital Market Integration in Developing Asia”.

Blackwell Publishers Ltd. concentrated on the capital market integration in
developing Asia during the period 1970 to 1994 taking into variables such as net
capital flows, FDI, portfolio equity flows, and bond flows. He observed that
capital market integration in Asian developing countries in the 1990‟s as a
consequence of broad-based economic reforms, especially in the trade and
financial sectors, which is the critical reason for economic crises which followed
the increased capital market integration in the 1970s in many countries will not be
repeated in the 1990s. He concluded that deepening and strengthening the process
of economic liberalization in the Asian developing countries is essential for
minimizing the risks and maximizing the benefits from increased international
capital market integration.

Avijith Banerjee, "A Glimpse of Portfolio Management", The Management

Accountant, Monthly Vol. 39, No.10, October 1998, reviewed Fundamental
Analysis and Technical Analysis to analyze the worthiness of the individual
securities needed to be acquired for portfolio construction. The Fundamental
Analysis aims to compare the Intrinsic Value (I.V.) with the prevailing market
price (M.P) and to take decisions whether to buy, sell or hold the investments.
The fundamentals of the economy, industry, and company determine the value of
the security. If the 1.V is greater than the M.P., the stock is underpriced and
42
should be purchased. He observed that the Fundamental Analysis could never
forecast the M.P. of a stock at any particular point in time. Technical Analysis
removes this weakness. Technical Analysis detects the most appropriate time to
buy or sell the stock. It aims to avoid the pitfalls of wrong timing in investment
decisions. He also stated that the modern portfolio literature suggests 'beta' value
p as the most accepted measure of the risk of scrip. The securities having low P
should be selected for constructing a portfolio to minimize the risks.

Arun JethMalani, "Risky Business", The Economics Times, Daily, Vol. 39,
No. 119, July 1st, 1999, found that BSE sensitivity and national indices did not
follow random walk by using correlation analysis on monthly stock returns data
over the period January 1981 to December 1992.

Arun JethMalani, "Risky Business", The Economics Times, Daily, Vol. 39,
No. 119, July 1st, 1999, reviewed the existence and measurement of risk
involved in investing in corporate securities of shares and debentures. He
commended that risk is usually determined, based on the likely variance of
returns. It is more difficult to compare 80 risks within the same class of
investments. He thinks that the investors accept the risk measurement made by
the credit rating agencies, but it was questioned after the Asian crisis.
Historically, stocks have been considered the riskiest of financial instruments.
He revealed that the stocks have always outperformed bonds over the long term.
He also commented on the 'diversification theory' concluding that holding a small
number of non-correlated stocks can provide adequate risk reduction. A debt-
oriented portfolio may reduce short-term uncertainty, but will reduce long-term
returns. He argued that the 'safe debt-related investments' would never make an
investor rich. He also revealed that too many diversifications tend to reduce the
chances of big gains while doing little to reduce risk. Equity investing is risky if
the money will be needed a few months down the line. He concluded his article
by commenting that risk is not measurable or quantifiable. But the risk is
calculated based on historic volatility. Returns are proportional to the risks, and
investments should be based on the investors' ability to bear the risks, he advised.

43
Yoon S. Park (1999): “Characters and Measurement Indicators of
International Financial Integration in Developing Countries”. George
Washington University, Washington D.C. Feb 1999. emphasized the need for
risk management in the securities market with particular emphasis on price risk.
He commented that the securities market is a 'vicious animal' and there is more
than a fair chance that far from improving, the situation could deteriorate.

Bhanu Pant and Dr.Bishnoy(2001),”Testing Random Walk Hypothesis for

Indian Stock Market Indices, paper presented at IICM conference in
2002,analyzed the behavior of the daily and weekly returns of five Indian stock
market indices for a random walk from April 1996 to June 2001.They found that
Indian Stock Market Indices did not follow a random walk.
Nath G.C and Verma S(2003)‟ Study of Common Stochastic trend and Co
integration the Emerging Markets: A case study of India, Singapore, and
Taiwan”, Research paper, NSE- India,examine the interdependence of the three
major stock markets in south Asia stock market indices namely India (NSE-Nifty)
Taiwan (Taiex) and Singapore (STI) by employing bivariate and multivariate co
integration analysis to model the linkages among the stock markets, No co
integration was found for the entire period (daily data from January 1994 to
November 2002).They concluded that there is no long-run equilibrium.

Juhi Ahuja (2012), “Indian Capital Market: An Overview with Its Growth” VSRD
International Journal of Business & Management Research Vol. 2 (7), presents a
review of the Indian Capital Market & its structure. In the last decade or so, it has
been observed that there has been a paradigm shift in the Indian capital market.
The application of many reforms & developments in the Indian capital market has
made the Indian capital market compared with the international capital markets.
Now, the market features a developed regulatory mechanism and a modern
market infrastructure with growing market capitalization, market liquidity, and
mobilization of resources. The emergence of the Private Corporate Debt market is
also a good innovation replacing the banking mode of corporate finance.
However, the market has witnessed its worst time with the recent global financial
crisis that originated from the US sub-prime mortgage market and spread over to

44
the entire world as a contagion. The capital market of India delivered a sluggish
performance

3.4. FOREIGN AUTHORS LITERATURE

Atje, R.and B, and Jovanovic (1993), "Stock markets and development",

European Economic Review, Vol. 37, pp: 632-640.showed that stock markets
have long-run impacts on economic growth by manipulating liquidity, risk
diversifications, acquisition of information about firms, corporate governance,
and savings mobilization. These studies suggest a strong positive relationship
between stock market development and growth rates of real GDP per capita
although they have failed to discuss the importance of stock market development,
banking sector development, and economic growth in an integrated framework.

Beck, Thorsten, Demirgiic-Kunt, Ash and Levine, Ross (2001), "Law,

Politics, and Finance" World Bank Policy Research Working Paper No.
2585. were also of the opinion that with a well-functioning financial sector or
banking sector, stock markets can give a big boost to economic development. 34
How stock market development can bring about economic growth haven studied
in several studies. A few of them have been elaborated on here.

Greenwood, J. and B. Jovanovic (1990), "Financial Development, Growth,

and the Distribution of Income", Journal of Political Economy, 98, 1076-
1107. found that the provision of timely and accurate information about the firms
to the investors has increased the investors’ risk-adjusted returns considerably.

Kyle, Albert (1984), "Market Structure, Information, Futures Markets, and

Price Formation" in International Agricultural Trade: Advanced Readings
in Price Formation, Market Structure, and Price Instability, (eds) G Story, A
Schmitz and A Sarris, Westview Press, Boulder, CO. This view was also

45
supported by Kyle (1984),Holmstrom and Tirole (1998), Stiglitz and Weiss
(1981) as their studies also found that market efficiency improves by delivering
timely and accurate information to the investor. In addition to this, the stock
markets also allocate funds to the corporate sector which has a real effect on
economic growth.

Levine, Ross, (2005), "Finance and Growth: Theory and Evidence,"

Handbook of Economic Growth, in Philippe Aghion & Steven Durlauf (ed.),
Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-
934 Elsevier also gave an insight into the ambiguous predictions of the
relationship between stock market liquidity and economic growth. He analyzed
the cross-country evidence on the association between the total value of stock
transactions divided by GDP and the average economic growth rates over the
period 1976-1993. The results showed a strong positive relationship between
long-run economic growth rate and stock market liquidity. The positive
relationship was found to hold good even when there are changes in the
information used. Apart from liquidity, global risk diversification is another
major function of stock markets.

Devereux, M. B., and G. W. Smith, (1994), "International Risk Sharing and

Economic Growth", International Economic Review, 35, 535-50. found that
stock markets provide opportunities for risk reduction through global
diversification. It enables the investors to make optimal investment decisions
through the process of equilibrium pricing as well as the provision of easily and
publicly available information 36 ultimately leading to the better allocation of
funds among corporations. Consequently, higher economic growth can be
achieved.

Levine, Ross, (2005), "Finance and Growth: Theory and Evidence,"

Handbook of Economic Growth, in Philippe Aghion & Steven Durlauf (ed.),
Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-

46
934 Elsevier also gave an insight into the ambiguous predictions of the
relationship between stock market liquidity and economic growth. He analyzed
the cross-country evidence on the association between the total value of stock
transactions divided by GDP and the average economic growth rates over the
period 1976-1993. The results showed a strong positive relationship between
long-run economic growth rate and stock market liquidity. The positive
relationship was found to hold good even when there are changes in the
information used. Apart from liquidity, global risk diversification is another
major function of stock markets.

Devereux, M. B., and G. W. Smith, (1994), "International Risk Sharing and

Economic Growth", International Economic Review, 35, 535-50. found that
stock markets provide opportunities for risk reduction through global
diversification. It enables the investors to make optimal investment decisions
through the process of equilibrium pricing as well as the provision of easily and
publicly available information 36 ultimately leading to the better allocation of
funds among corporations. Consequently, higher economic growth can be
achieved.

47
 CHAPTER 4: ANALYSIS AND INTERPRETATION
OF DATA

4.1 Age wise distribution of respondents

TABLE NO : 1 - AGE WISE DISTRIBUTION OF RESPONDENTS

Age group Frequency %

20 to 35 38 76

35 to 50 9 18

50 and above 3 6
SOURCE : PRIMARY DATA

CHART : AGE WISE DISTRIBUTION OF RESPONDENTS

Age group

6%

18% 20 to35
35 to50
50 and above

76%

SOURCE : PRIMARY DATA

As per above graph 76% respondents are between the age 20 to 35 years , 18%
respondents are above 35years and below 50years and only 6% respondents are
50 years and above.

48
4.2 Gender wise distribution of respondents

TABLE 2: GENDER WISE DISTRIBUTION OF RESPONDENTS

Gender Frequency %

Male 31 62

Female 19 38
SOURCE : PRIMARY DATA

CHART : GENDER WISE DISTRIBUTION OF RESPONDENTS

70 62%
60
50
40 38%
31
30
19
20
10
0
Frequency %
Male Female
SOURCE : PRIMARY DATA

As per the above graph respondents those who are male are more than the
respondents who are female.Among all the respondents the frequency of
males is 62% and and female is 38%.

4.3 Occupation wise distribution of respondents

TABLE 3: 3 OCCUPATION WISE DISTRIBUTION OF

RESPONDENTS

Occupation Frequency %

Business 12 24

49
 Salaried 38 76

Senior Citizen 0 0
SOURCE : PRIMARY DATA

CHART : 3 OCCUPATION WISE DISTRIBUTION OF RESPONDENTS

Occupation
Frequency %

76%

38
24%
12
0 0%

Business Salaried Senior Citizen

SOURCE : PRIMARY DATA

As Per The Above Graph Among All The Respondents The Salaried Person Are
More Than The Other Occupation People.among all The respondents 24%
respondents belong to business class and 76% respondents belong to salaried
class.
4.4 What kind of investment you have made so far?

TABLE 4: TYPES OF INVESTMENT MADE BY THE RESPONDENTS

Frequency %
Saving a/c 36 19.67
Fixed Deposit 25 11.66
Mutual Funds 20 10.93
Gold
18 9.84
Stock/Equity Market
34 18.58
Real Estate
11 6.01
PPF
12 6.56

50
 Insurance 27 13.74

Total 183 100

SOURCE : PRIMARY DATA

CHART : TYPES OF INVESTMENT MADE BY THE

RESPONDENTS

Investment
s
4
03
20
01
00

Frequenc %
y

SOURCE : PRIMARY DATA

As Per the Graph Respondent Invest More in Saving A/C then in stock market,
then in insurance, in fixed deposit, mutual funds, gold, PPF and at last in Real
Estate Market
4.5 Do you invest in shares?

TABLE 5: INVESTMENT IN SHARES BY THE RESPONDENTS

Frequency %

Yes 43 86

No 7 14
SOURCE : PRIMARY DATA

51
 CHART : INVESTMENT IN SHARES BY THE RESPONDENTS

86%
90
80
70
60
43
50
40
30
14%
20 7
10
0
Frequency %
Yes No

SOURCE : PRIMARY DATA

As per the above graph respondent invest more in shares then in any other
investment. Among All the Respondents 86 % i.e. 43 Respondents Invest In
Shares Whereas 14 % i.e. 7 Respondents Don’t Invest In Shares.

4.6 How much is your total investment annually?

TABLE 6:TOTAL INVESTMENT ANNUALLY DONE BY THE

RESPONDENTS
Frequency %
Less than 15000 10 20
15000-40000 16 32

40000-60000 7 14
More than 60000 17 34
SOURCE : PRIMARY DATA

52
 TOTAL INVESTMENT ANNUALLY DONE BY THE RESPONDENTS

20%
34% Less than 15000
15000-40000
40000-60000
32% More than 60000
14%

SOURCE : PRIMARY DATA

As per the graph 34% respondent invest more than 60000 annually , 32 %
respondents invest 15000 to 40000, 20% invest less than 15000 and 14%
respondents invest between 40000 to 60000.

4.7 What is the purpose of investment?

TABLE 7: PURPOSE OF INVESTMENT OF THE RESPONDENTS

Purpose Frequency %

To meet the cost of inflation 9 10.59

To earn returns on idle resource 21 23.71

To generate a specified sum of money 39 45.88

To make a provision for uncertain future 16 18.82

Total 85 100
SOURCE : PRIMARY DATA

53
 CHART : PURPOSE OF INVESTMENT OF THE RESPONDENTS

Purpos
5 e
0
4
5
4
0
3
5
3
0
2
5
2 Frequenc
0 y%
1
5
1
05
0
To meet the To earn returns To generate To make
of
cost onidle specified
a sum provision
a
inflation resource of mone uncertain
for
y future
SOURCE : PRIMARY
DATA

As per the above observation of graph the purpose of most of respondent is to

invest to generate a specified sum of money, then to earn returns on idle resource
, then to make a provision for uncertain future and at last to meet the cost of
inflation.
4.8 What percentage of your investment is invested in equity market?
TABLE 8: INVESTMENT IN EQUITY MARKET OF THE RESPONDENTS

Frequency %

Less than 25% 26 56.52

25%-50% 13 28.26

51%-75% 5 10.87

More than 75% 2 3.35

Total 46 100
SOURCE : PRIMARY DATA

54
 CHART : 8 INVESTMENT IN EQUITY MARKET OF THE RESPONDENTS

60

50

40

30 Frequency
20 %

10

0
Less than 25%25%-50% 51%-75% More than
75%

SOURCE : PRIMARY DATA

As per the graph out of total investment of respondent individually most of them
invest less than 25% of their total investment in shares. Then some respondents
invest about 25- 50% or 51- 75% of their total investment in shares.

4.9 What type of transaction mostly done?

TABLE 9 :TYPES OF TRANSACTIONS OF THE RESPONDENTS

Transaction Frequency %

Intraday 22 40
Delivery 33 60
Total 66 100
SOURCE : PRIMARY DATA

55
 CHART : TYPES OF TRANSACTIONS OF THE RESPONDENTS

Transactions

60
50
40
Intraday
30
Delivery
20
10
0
Frequency %

SOURCE : PRIMARY DATA

As per the above graph the type of transaction mostly done is delivery than intra-
day. About 40 % respondents do transactions on intraday and 60% respondents
do transactions on delivery.

4.10 For how long you are investing in equity market?

TABLE 10: TIME PERIOD OF THE RESPONDENTS INVESTED IN EQUITY

MARKET

Frequency %

Less than 1 year 18 37.05

1 to 2 years 11 21.92

2 to 3 years 3 6.25

More than 3 years 16 31.33

Total 48 100
SOURCE : PRIMARY DATA

56
 CHART : TIME PERIOD OF THE RESPONDENTS INVESTED IN EQUITY
MARKET

40
35
30
25
20
15 Frequency
10 %
5
0
Less than 1 1 to 2 years 2 to 3 years More than 3
year years

SOURCE : PRIMARY DATA

As per the above graph most of the respondents invest for a period less than
1year. Some invest for a period of 1 to 2 years, some invest for a period of 2 to 3
years.

4.11 Why do you invest in equity market?

TABLE 11 : REASONS FOR INVESTING IN STOCK MARKET

Frequency %

For quick short term gain 17 34

For high long term gain 33 66

SOURCE : PRIMARY DATA

CHART : REASONS FOR INVESTING IN STOCK MARKET

57
 7
0
6
0
5
0
4 For quick short term
0 gain
For high long term
3
gain
0
2
0
1
0
0
Frequenc %
y
SOURCE : PRIMARY
DATA

As per the above graph most of the respondents invest for high long term gain
than quick short term gain. About 66 % respondents invest for a high long term
gain and 34% respondents invest for quick short term gain.

4.12 What attracts you towards equity market?

TABLE 12: ATTRACTION OF RESPONDENTS TOWARDS EQUITY

MARKET

Frequency %

High return 38 46.34

Company reputation 8 9.76

Speculation 4 3.88

Dividend 20 23.39

Liquidity of invested fund 12 13.63

Total 82 100
SOURCE : PRIMARY DATA

CHART : ATTRACTION OF RESPONDENTS TOWARDS EQUITY

MARKET

58
 5
04
03
02
01 Frequenc
00 %
y
High Compan Speculatio
return reputatio
y Dividen
n Liquidity
n d
ofinveste
dfun
d
SOURCE : PRIMARY
DATA

As per the above graph most of the respondents get attract as equity market give
higher returns. Some respondents are attracted to invest in equity market due
various reasons like dividend, liquidity of invested fund, company’s reputation
and speculation.

4.13 In which sector you invest most?

TABLE 13 : SECTORS THAT THE RESPONDENTS INVEST

Sectors Frequency %

IT 28 21.1
Pharmacy 15 11.36
Telecom 5 1.79
Banking 25 18.94
Petroleum
6 3.55
Automobile
18 11.64
Entertainment
2 1.51
Engineering
9 6.82
Metals and Mining
Oil and Gas 6 3.54

Total 18 11.64
132 100

59
 SOURCE : PRIMARY DATA

CHART : SECTORS THAT THE RESPONDENTS INVEST

As per the above graph most of the respondents invest mostly in IT sector. Then
in banking, automobile, oil and gas, pharmacy , engineering , petroleum , metals
and mining.

4.14 What will be the future of equity market in India as per you?

TABLE 14 :FUTURE OF EQUITY MARKET IN INDIA

Frequency %

Growing 37 74

Decline 0 0

Can’t say 13 26
SOURCE : PRIMARY DATA

60
 CHART : FUTURE OF EQUITY MARKET IN INDIA

Frequency

Growing
, 37

Can’t say
, 13

0 0.5 1 1.5 2 1.5 3 1.5

SOURCE : PRIMARY DATA

As per the above graph most of the respondent’s future of equity market is
growing year by year. About 74% respondents think that equity market is going
to increase and 26% respondents don’t know whether it is going to increase or
not.

61
 CHAPTER 5

CONCLUSION

Losses are inevitable. So a good risk management strategy can help us to limit these
losses on such positions & allows us to take the next opportunity in the market. We
have a lot of good trading/investment system in the world & there are also a lot of
good risk management strategies available. So why is it that most participants lose
their money in the market. Furthermore, why is it that despite knowing about the
various techniques & stop-losses, many lose in a big way? How can intelligent,
highly qualified& esteemed analyst be abysmal traders? Answer to all this question is
the luck which play a vital part in determining whether you win or lose in this trade.

It is possible, however to optimize your analysis & your trading system. But then,
over- optimization does not help since it improves a system by eliminating many
legitimate trading opportunities. Furthermore, each system is simply a result of
analyzing past data technical or fundamental. No one can predict the future perfectly.
There are two fundamental emotions that stand in the way of “Successful trading and
investing”

 The need to avoid pain.

 The desire to achieve pleasure.

Many investors and traders fail to implement stop losses because it is painful and
ego deflating. It means an admission of being wrong. As a consequence, the loss
grows bigger in size and eventually destroys a large part of our capital.

Also remember price never moves in a straight line. So when the price fluctuates, so
does their profits along with it. There is strong desire to grab these profits
immediately while it is available. The golden rules of Trading and investment are:
Cut your losses short and let your profits run. But most of the traders and investors
end up doing- cut their profits short and let their losses run.

62
 Rather than take a loss, people hold on and hope that things will turn around; that
would be profitable and therefore pleasurable. Along the same lines, people are quick
to take profits before it has a chance to turn around and cause pain.
Finally, I conclude that Market does not care whether investors make or lose
money. It has no conscience and never has to justify its action. Being right in the
market is not so great an achievement compared to accepting being wrong in the
market.

63
 BIBLIOGRAPHY

Journals

1. Indian Household Investors 2005. The Changing Market Environment Investors.

Preferences Problems Policy Issues, Society for Capital Market Research &
Development Delhi.
2. Ch.Kirshnudu, B. Krishna reddy and G. Rama Krishna reddy (2005), “Investment
behavior and risk management”.

3. Sridhar.R (2008). “Investment Practices of Investors in Equity Market”.

4. Sunatankhurana (2008), The ICFAI University Journal of Services Marketing-

“Customer Preference in Life Insurance Industry in India”, Vol 4, No 3, Pp. 60-
68.

5. Darshana.P (2008) “A Study on Retail Investor’s Preference towards Various

Investment Avenues”.
6. Vikram.S (2008), “Investor perception and preferences towards stock market
investments”.
7. Kasilingam.R&G.Jayabal (2009), southern economist- “Alternative Investment
Option to Small Investors”, Vol 48, No 9, September 1, 2009, Pp. 18-20.

8. Selvatharangini.P.S (2009), “Post Office Savings Schemes in the Maze of

Investment Alternatives”.
9. Kaboor.A (2010), “Determinants of investor’s financial literacy”.

10. Sultana S T (2010), “An Empirical Study of Indian Individual Investor’s

Behavior”, Global Journal of Finance and Management ,Volume 2, Number 1
(2010), pp.19-33

11. Dr.Mathivannan.S&Dr.M.selvakumar (2011), Indian Journal of Finance-

“Savings and Investment Pattern of School Teachers – A Study with Reference to
SivakasiTaluk, Tamil Nadu”, Vol 5, No 4, April 2011, Pp.12-26.
12. Manish Sitlani, Geeta Sharma &BhoomiSitlani (2011), The IUP Journal of
Behavioral Finance-“Investment choice of occupants of financial services
industry”, Vol 8, No 1, 2011, Pp. 29-39

64
13. Suman and Dr. D. P. Warne (February 2012 - Volume 2, Issue 2), “Investment
Behaviour of Individual Investor in Stock Market”.

14. V. AlaguPandian and G. Thangadurai “A Study of Investors Preference towards

Various Investments Avenues in Dehradun District” (2013) International Journal
of Management and Social Sciences Research (IJMSSR) ISSN: 2319-
4421Volume 2, No. 4, April 2013
15. Ms. K. Parimalakanthi and Dr. M. Ashok kumar (2015) “A Study Pertaining to
Investment Behaviour of Individual Investors in Coimbatore City” International
Journal of Advance Research in Computer Science and Management Studies
Volume 3, Issue 6, June 2015, Pp.149-157

Reference books:

1. Financial market and institutions – by Frederic S. MishkinAnd Stanley Eakins

published by Pearson education.
2. Financial markets and services - By E. Gordon and K. Natarajan published
Himalaya publication.
• Websites:

1. http://shodhganga.inflibnet.ac.in/bitstream/10603/2027/7/07_chapter%20
2. http://www.indianmba.com/Faculty_Column/FC1063/fc1061.html
3. http://en.wikipedia.org/wiki/Bombay_Stock_Exchange
4. http://www.bseindia.com/
5. http://www.nseindia.com/

65
 ANNEXURE

QUESTIONNAIRE

A study on attitude of investors towards investments in stock

market w.r.t thane region.

Name : -

Age :-

20-35
35-50
50 Above

Gender :- Male Female

Occupation :- Business Salaried Senior citizen

1)What kind of investments you have made so far?

- Saving a/c
- Fixed Deposit
- Mutual Funds
- Gold
- Stock /Equity Maerket
- Real Estate
- PPF
- Insurance

2) Do you invest in shares?

Yes No
If No, why don’t you invest in shares?

66
3) How much is your total investment annually?
- Less than 15000
- 15000 - 40,000
- 40,000 - 60,000
- More than 60,000

4) What is the purpose of investment?

- To meet the cost of inflation

- T o earn returns on idle resource

- To generate a specified sum of money for a specific goals in life

- To make a provision for uncertain future

5) What percentage of your investment is invested in equity

market?
- Less than 25%
- 25% - 50%
- 51 % - 75%
- More than 75%

6) What type of transaction mostly done?

- Intraday
- Delivery

7) For how long you are investing in equity market?

67
 - Less than 1 year
- 1 to 2 years
- 2 to 3 years
- More than 3 years

8) Why do you invest in equity market?

- For quick short term gain
- For high long term gain
9) What attracts you towards equity market?
- High return
- Company reputation
- Speculation
- Dividend
- Liquidity of invested fund

10) In which sector you invest most?

- IT
- Pharmacy
- Telecom
- Banking
- Petroleum
- Automobile
- Entertainment
- Engineering
- Metals & Mining
- Oil & Gas

11) What will be the future of equity market in India as per you?

- Growing
- Decline
- Can’t say

68
-

69