Objectives

1. to learn the value of investing and utilising the stock market

2. to learn important lessons about the economy, mathematics, and financial

responsibility

3. to understand the working of the stock market while investing a specified

amount of fake money in certain stocks

4. to understand and observe the supplies necessary to successfully monitor

stock market trends

5. to understand how to calculate profit and loss on stock

6. to understand the topics like sources of business finance and capital market

7. to understand the concepts used in the stock exchange

8. to inculcate the habit of watching business channels, reading business

journals/newspapers, and seeking information from their elders

Index

a)Objectives
b)Introduction
c)Functions
d)History of Stock Exchange
e)Trading Procedure
f)List of 25 companies listed on stock exchange
g)List of holidays under the Negotiable Instruments Act.
h)Key Terms
i)Portfolio
j)Reliance Industries Ltd
k)HDFC Bank Ltd
l)Adani Enterprise Ltd
m)ITC Ltd
n)JSW Steel Ltd
o)General Reasons for Fluctuation in Prices
Introduction (Page 3)

A stock exchange is an institution which provides a platform for buying and selling
existing securities. As a market, the stock exchange facilitates the exchange of a
security (share, debenture etc.) into money and vice versa. Stock exchanges help
companies raise finance, provide liquidity and safety of investment to the investors,
and enhance the credit worthiness of individual companies.

According to the Securities Contracts (Regulation) Act 1956, stock exchange means
any body of individuals, whether incorporated or not, constituted for the purpose of
assisting, regulating, or controlling the business of buying and selling or dealing in
securities.

Functions of a Stock Exchange (Page 4)

1. Providing Liquidity and Marketability to Existing Securities: The basic

function of a stock exchange is the creation of a continuous market where
securities are bought and sold. It gives investors the chance to disinvest and
reinvest. This provides both liquidity and easy marketability to already existing
securities in the market.

2. Pricing of Securities: Share prices on a stock exchange are determined by

the forces of demand and supply. A stock exchange is a mechanism of
constant valuation through which the prices of securities are determined.
Such a valuation provides important instant information to both buyers and
sellers in the market.

3. Safety of Transaction: The membership of a stock exchange is well-

regulated, and its dealings are well defined according to the existing legal
framework. This ensures that the investing public gets a safe and fair deal on
the market.
 4. Contributes to Economic Growth: A stock exchange is a market in which
existing securities are resold or traded. Through this process of disinvestment
and reinvestment savings get channelised into their most productive
investment avenues. This leads to capital formation and economic growth.

5. Spreading of Equity Cult: The stock exchange can play a vital role in
ensuring wider share ownership by regulating new issues, better trading
practices and taking effective steps in educating the public about investments.

6. Providing Scope for Speculation: The stock exchange provides sufficient

scope within the provisions of law for speculative activity in a restricted and
controlled manner. It is generally accepted that a certain degree of healthy
speculation is necessary to ensure liquidity and price continuity in the stock
market.

History of Stock Exchanges in India (Page 5)

Security trading in India goes back to the 18 th century when the East India Company
began trading in loan securities. Corporate shares started being traded in the 1830s
in Bombay with the stock of Bank and Cotton Presses. In 1850s, 22 stockbrokers
began trading opposite the Town Hall of Bombay under a banyan tree. The shift
continued taking place as the number of brokers increased, finally settling in 1874 at
what is known as Dalal Street. This as yet informal group known as the Native Share
and Stockbrokers Association organized themselves as the Bombay Stock
Exchange (BSE) in 1875. It was Asia’s first stock exchange and was granted
permanent recognition under the Securities Contract (Regulation) Act, 1956.

The need for another stock exchange large enough to compete with BSE and need
for transparency in stock market, gave birth to the National Stock Exchange (NSE) in
1992. It was recognized as a stock exchange in 1993 and started its operations in
1994. The NSE was set up by leading financial institutions, banks, insurance
companies and other financial intermediaries and is managed by professionals, who
do not directly or indirectly trade on the exchange. The paper-based settlement was
replaced by electronic depository-based accounts and settlement of trades was
always done on time with the emergence of the NSE.
Trading Procedure (Page 6)

The following steps are involved in the screen-based trading for buying and selling of
securities:

1. If an investor wishes to buy or sell any security, he has to first approach a

registered broker or sub-broker and enter into an agreement with him. The
investor has to sign a broker-client agreement and a client registration form
before placing an order to buy or sell securities. He has also to provide certain
other details and information. These include:

● PAN number (This is mandatory)

● Date of birth and address

● Educational qualification and occupation.

● Residential status (Indian/ NRI).

● Bank account details.

● Depository account details.

● Name of any other broker with whom registered.

● Client code number in the client registration form.

The broker then opens a trading account in the name of the investor.

2. The investor has to open a ‘demat’ account or ‘beneficial owner’ (BO) account
with a depository participant (DP) for holding and transferring securities in the
demat form. He will also have to open a bank account for cash transactions in
the securities market.

3. The investor then places an order with the broker to buy or sell shares. Clear
instructions have to be given about the number of shares and the price at
which the shares should be bought or sold. The broker will then go ahead with
 the deal at the above-mentioned price or the best price available. An order
confirmation slip is issued to the investor by the broker.

4. The broker then will go online and connect to the main stock exchange and
match the share and best price available.

5. When the shares can be bought or sold at the price mentioned, it will be
communicated to the broker’s terminal and the order will be executed
electronically. The broker will issue a trade confirmation slip to the investor.

6. After the trade has been executed, within 24 hours the broker issues a
Contract Note. This note contains details of the number of shares bought or
sold, the price, the date and time of deal, and the brokerage charges. This is
an important document as it is legally enforceable and helps to settle
disputes/claims between the investor and the broker. A Unique Order Code
number is assigned to each transaction by the stock exchange and is printed
on the contract note.

7. Now, the investor has to deliver the shares sold or pay cash for the shares
bought. This is called the pay-in day.

8. Cash is paid or securities are delivered on pay-in day, which is before the T+2
day as the deal has to be settled and finalised on the T+2 day. The settlement
cycle is on T+2 day on a rolling settlement basis, w.e.f. 1 April 2003.

9. On the T+2 day, the exchange will deliver the share or make payment to the
other broker. This is called the pay-out day. The broker then has to make
payment to the investor within 24 hours of the pay-out day since he has
already received payment from the exchange.

10. The broker can make delivery of shares in demat form directly to the
investor’s demat account. The investor has to give details of his demat
account and instruct his depository participant to take delivery of securities
directly in his beneficial owner account.

S.no. Holidays Date Day

1 Republic Day January 26, Thursday

2023
2 Holi March 07, 2023 Tuesday
3 Ram Navami March 30, 2023 Thursday

4
Mahavir April 04, 2023 Tuesday

Jayanti

5
Good Friday April 07, 2023 Friday

6
Dr.Baba Saheb April 14, 2023 Friday

Ambedkar

Jayanti

7
Id-ul-fitr April 22, 2023 Saturday

(Ramzan Id)

8
Maharashtra May 01, 2023 Monday

Day
9
Eid-ul-adha June 28, 2023 Wednesday

(Bakra Eid)

10
Independence August 15, Tuesday

Day 2023

11
Ganesh September 19, Tuesday

Chaturthi 2023

12
Mahatma October 02, Monday

Gandhi Jayanti 2023

13
Dussehra October 24, Tuesday

2023

14
Diwali November 14, Tuesday
 Balipratipada 2023

15
Gurunanak November 27, Monday

Jayanti 2023

16
Christmas December 25, Monday

2023

25 Companies Listed on BSE

Reliance Industries LTD.-
TATA Consultancy Services Ltd
HDFC Bank Ltd
ICICI BANK LTD-
HINDUSTAN UNILEVER LTD.
INFOSYS LTD.
ITC LTD.
STATE BANK OF INDIA
Bajaj Finance Limited
ASIAN PAINTS LTD
AXIS BANK LTD.
WIPRO LTD.
ADANI ENTERPRISES LTD.
TATA MOTORS LTD.
NTPC LTD.
JSW STEEL LTD.
COAL INDIA LTD.
TATA STEEL LTD.
BAJAJ AUTO LTD.
BRITANNIA INDUSTRIES LTD.
Vedanta Limited
TECH MAHINDRA LTD.
PIDILITE INDUSTRIES LTD.
LTIMindtree LTD.
TATA STEEL LTD.

KEY TERMS
Closing Price-It refers to the last price at which a stock trades
during a regular trading session.
Opening Price-The opening price is the price at which a
security first trades when an exchange opens for the day. An
opening price is not identical to the previous day's closing
price.
SENSEX-SENSEX stands for Stock Exchange Sensitive
Index.The Sensex is made up of thirty of the largest and
most actively traded equities on the BSE.
NIFTY-Nifty is the Index used by the National Stock Exchange
and is made by the combination of National and Fifty (Nifty).
Nifty collects the sample of 50 performing and luring stocks
to determine the market trends. Similar to Sensex, Nifty picks
stocks from different sectors.
Depository Participant-The Depository Participant acts as an
intermediary between investors and the depository. They
give Demat account access to investors. They also offer
services such as portfolio management, IPO intermediation,
and mutual fund distribution.
Depository -A depository can be an organization, bank, or
institution that holds securities and assists in the trading of
securities.
Dematerialisation-Dematerialisation is a process through
which physical securities such as share certificates and other
documents are converted into electronic format and held in a
Demat Account.Holding share certificates in physical format
 carries risks like certificate forgeries, loss of important share
certificates, and delays in certificate transfers.
Rematerialisation-Rematerialisation is the process of
converting securities that are in digital format into physical
certificates. Investors who have converted or have their
securities in electronic format stored in Demat accounts can
opt for the rematerialisation process.
Broker-A broker is an individual or firm that acts as an
intermediary between an investor and a securities exchange.
Because stock exchanges require that persons who conduct
trades on the exchange be licensed, you'll need a broker.
Outstanding Shares- A company's shares currently held by
all its shareholders, including share blocks held by
institutional investors and restricted shares owned by the
company's officers and insiders.
Face Value of Shares-The face value of the share is the
company's net worth at the price of the share on its first
day on the stock market.
EPS-Earnings per share (EPS) is a company's profit divided by
the outstanding shares of its common stock.

Companies selected for PORTFOLIO

RELIANCE INDUSTRIES LTD.-Reliance Industries Limited
is an Indian multinational company, headquartered in
Mumbai. Its businesses include energy, petrochemicals,
natural gas, retail, telecommunications, mass media, and
textiles. Reliance is the largest public company in India by
market capitalisation and revenue and the 100th largest
company worldwide. It was founded by Mr Dhirubhai Ambani
while Mr Mukesh D. Ambani is the current CEO of reliance
industries ltd. The company has 6,766,066,838 outstanding
shares.The face value of a share of reliance industries
ltd is ₹10 while its EPS being ₹65.34. Its revenue in the
 previous year was around $99 billion amounting to ₹7.93
lakh crore.
HDFC BANK LTD-HDFC Bank Limited (also known as HDB) is
an Indian banking and financial services company headquartered
in Mumbai. It is India's largest private sector bank by assets and
world's 10th largest bank by market capitalisation.HDFC Bank
was incorporated in 1994 and has a distribution network at 7,821
branches across 3,203 cities. It has installed 430,000 POS
terminals and issued 23,570,000 debit cards and 12 million credit
cards in FY 2017. HDFC Bank provides a number of products
and services including wholesale banking, retail banking,
treasury, auto loans, two-wheeler loans, personal loans, loans
against property, consumer durable loan, lifestyle loan and credit
cards. Mr Sashidhar Jagdishan joined the bank in 1996 and was
appointed as chief financial officer in 2008, after which he was
appointed as the Managing Director(MD) and CEO. As of 2023,
the company has 1.864 billion outstanding shares and its face
value is ₹1.It has an EPS of ₹79.25.
Adani Enterprises Ltd.-Adani Enterprises Limited is an
Indian multinational publicly-listed holding company and a
part of Adani Group. It is headquartered in Ahmedabad and
primarily involved in mining and trading of coal and iron ore.
Through its various subsidiaries, it also has business
interests in airport operations, edible oils, road, rail and water
infrastructure, data centers, and solar manufacturing, among
others.The company was incorporated in 1993 under the
name Adani Exports Limited and it mainly deals with the
group's integrated resources management, power trading,
and natural resources businesses on a standalone basis. Its
various subsidiaries include Adani Cement,Adani
Mining,Adani Connnex,Adani Shipping and many more. Mr
Vinay Prakash is the current CEO of the same..The face
value of its share is ₹1 while its EPS is 14.7 and as of May
2023, the company has 1,137,392,510 outstanding
shares.
ITC LTD-ITC Limited is an Indian conglomerate company
headquartered in Kolkata. ITC has a diversified presence
across industries such as FMCG, hotels, software,
 packaging, paperboards, specialty papers and
agribusiness."ITC Limited" was originally named "Imperial
Tobacco Company of India Limited" and it ventured into
partnerships in 1911 with farmers from the southern part of
India to source leaf tobacco.As the company's ownership
was progressively Indianised, under Haskar's leadership, the
name of the company was changed from "Imperial Tobacco
Company of India Limited" to "India Tobacco Company
Limited" in 1970. In 1973, ITC set up its integrated research
center in Bangalore, aimed at diversification and venturing
into newer businesses with research and development. With
the unfolding diversification plans, the name of the company
was changed to 'I.T.C. Limited' in 1974. Sanjiv Puri is the
current Chairman & Managing Director of ITC Limited. As
onMay 2023, the company has a total of 1,242.80 Crore
shares outstanding. The face value of its share is ₹1 and
has a basic EPS of 15.15.
JSW STEEL LTD.-Jindal South West(JSW) Steel Limited is
an Indian multinational steel producer based in Mumbai and
is a flagship company of the JSW Group.JSW Steel's history
can be traced back to 1982, when the Jindal Group acquired
Piramal Steel Limited, which operated a mini steel mill at
Tarapur in Maharashtra and renamed it as Jindal Iron and
Steel Company (JISCO)Later, in 1994, Jindal Vijayanagar
Steel Limited (JVSL) was set up with its plant located at
Toranagallu in the State of Karnataka.In the year 2005,
JISCO and JVSL merged to form JSW Steel Limited. Mr
Sajjan Jindal is the CEO as well as a principal promoter of
the company. As of March 2023, the company has 241.72
Crore shares outstanding and has a basic EPS of 20.56.

CAUSE IN FLUCTUATION OF PRICES(GENERAL)

1. Internal aspects of a company: The stock prices of a company
depend on its well-being. A company that’s faring well has a higher stock
value and vice versa. Stock prices may change if a company makes
huge profits or undergoes a takeover. A scam or bankruptcy will
negatively affect its stock. Internal changes are also likely to change its
share prices.
2. Value of Indian currency: Changes in the Indian currency
exchange rate is another reason behind stock market fluctuations. When
the rupee is strong, some companies—mainly those dealing with exports
—benefit. Their stock prices shoot up. The opposite happens with the
firms that work on imports. Changes in the exchange rate result in
market volatility, which leads to price fluctuations.
3. Political scenario: When a significant political event takes place,
the stock market may witness major fluctuations. The market stays
stable when the political scenario is calm. Recession, oil prices, war, and
the health of the global economy, among other things, also influence
stock prices.
4. Natural disasters: Natural disasters like an earthquake or floods
bring volatility to the stock market. This mainly happens because such
events lead to depleted production. The companies suffer, and their
share prices plummet.
5.Industry Development-The way the industry performs is also
important in deciding the price movements of a company’s stock. If the
industry performs well or receives any favorable news, the stock prices
of all the companies belonging to that industry tend to benefit from these
developments. But falling demand, eroding customer base or other such
negative developments have an adverse effect on the stock prices.
6.Market Trends- Market phases or trends can be bullish or bearish.
Bullish phases have a favorable impact on the prices of stocks in
general, while bear markets witness falling stock prices. In a bullish
market, investors are optimistic about the future and therefore drive up
the demand.This, in turn, drives up the prices of stocks. But in bearish
market phases, investors tend to offload their holdings, leading to falling
stock prices in general.
7.Investor Sentiment-Investor sentiment is extremely sensitive to all
of the factors outlined above. A small development in a company’s
industry, in the geopolitical arena or in the interest rates can have a big
impact on how investors view the near future of the markets. If investors
suspect increased volatility or the start of a bear market, for instance,
they may tend to panic and withdraw their investments, leading to falling
stock prices.Similarly, if they deem the economic condition to be good,
or if they are hopeful about the future, they may flock to the markets
instead. This can cause stock prices to increase.