SAM HIGGINBOTTOM UNIVERSITY OF A G R I C U L T U R E A N D

SCIENCES

3rd Year

[2022 – 2024]

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 SUMMER INTERNSHIP PROGRAMME

Submitted By: AMAN KUMAR

ACKNOWLDEGMENT

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 I take this opportunity to thank everyone who played a supportive role for helping me to complete my
summer training report on the topic of Digital Marketing of Advertising Company
I Would like to thank my Advisor to “Dr " for guiding me through this project and continuously
encouraging me. It would not have been possible to complete this project without his support.

I am also thankful to all the faculty members of Department Joseph School Of Business Studies
And Commerce for her guidance towards my project.

Finally, I am grateful to my family and friends for their unending support.

AMAN KUMAR

TABLE OF CONTENTS

PARTICULARS PAGE NO.

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ACKNOWLEDGMENT 3

PREFACE 4

EXECUTIVE SUMMARY 5

RESEARCH CAPITAL 9

INDIAINFOLINE 33

CUSTOMER BEHAVIOR 59

ANALYSIS 63

RESEARCH METHODOLOGY 67

DATA ANALYSIS 72

FINDINGS 83

CONCLUSION 88

APPENDICS 90

BIBLIOGRAPHY 93

Raghav Rathi
Author of the Project (167141)

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 Company Name IIFL SECURITIES LIMITED

Company Address

Posting Office Address

Organization Guide

SAM HIGGINBOTTOM
Institute Name
UNIVERSITY OF
AGRICULTURE
ANDSCIENCES
Prof. Dr
Faculty Mentor

Submitted as partial fulfillment of the

Purpose of Report
requirement of the MBA Course (2023-
2024)

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6
 PREFACE

Projects are very important for the beginners to gain a practical knowledge about organizations
and the market. Theory till not used in practical field is of no use. So our institute has fixed a
period for summer training when we can enter into the market through some organization in
order to gain some real knowledge.

This in mind I carried out my project in “INDIA INFOLINE” which is one of the largest and
reputed company in India.

The project was a study of “Research on capital market with INDIA INFOLINE” IN SRI
GANGANAGAR CITY.

This report has been prepared after the intensive study of both primary and secondary market
as well as their instruments with respect to broking firm. The information is also collected from
the Customers to understand their investment behavior in both primary and secondary market
respectively as well as their attitude towards the broking firm and its features.

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 EXECUTIVE SUMMARY

Training is the first step to enter into the permanent job. Market research, market
surveys are some of the pillars which helps us in future to stand with potentiality, knowledge
and smart work.

Keeping this in mind I had carried out my summer training in INDIA INFOLINE
which is India’s favorite share trading company with the largest number of customers. India
infoline offers investors a seamless, hassle-free and paperless way to trade shares, as it
integrates the banking, trading and settlement part of the business. India infoline is trusted by
over a lakh share investors, due to its negotiable brokerage rates, consultation services, margin
facilities, good software as well as many other services like insurance mutual funds etc.It
provided me a platform to deeply analyze the capital market as well as customer investment
perception towards it.

As Systematic, planned and disciplined work always leads to success. Keeping this in mind the
project has been divided into parts.

Firstly with the joining of company as a trainee my induction process was started where I got
familiar with the employees working there.

Secondly, I talked to all the knowledgeable people of the organization who helped me to get an
initial idea about the company and its product and services. I was than lead by the officer who
dealt with the customer to know the kind of services that the company offers to their
customers.

Thirdly, I learned about the various instruments of capital market, working of broking industry
as well as got the practical experience about it also. Then the consumers of Sri Ganganagar city
were selected and interviewed about the company that they used, their views on India infoline
and stock market of India, their expectation from the company, their satisfaction regarding the
special services provided by the company and their investment preferences regarding the
capital market. I got the real time experience about the process of listing of IPO’s as two IPO’s
i.e. Technofeb engineering Ltd., Hindusthan media venture Ltd. were released and widely
promoted by IIFL during my training period. I also learned the practical knowhow of the
trading mechanism of equities, commodities, mutual funds, currencies etc.

Lastly, all the data were compiled together to make a complete report by analyzing the data
collected. Some findings and recommendation were also added to keep the brand
ssssssname growing with its value.

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ABOUT INDIAINFOLINE LTD.

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India Infoline originally incorporated on October 18, 1995 as PROFITY RESEARCH AND
SERVICES PVT LTD. at Mumbai under the Companies Act,1956 with Registration
No.1193797.and became a public limited company on April 28, 2000.The

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name of the Company was changed to India Infoline.comLimited on May 23, 2000 and later to
India Infoline Limited on March 23,2001. It is the first Company in India to foray into the
online distribution of Mutual Funds It is a one-stop financial services shop, most respected for
quality of its advice, personalized service and cutting-edge technology. TheNo.1Corporate
agent for IIFLPrudentialLife Insurance Company. Research acknowledged by Forbes as “Must
Read for investor in South Asia “Listed on Bombay and National Stock Exchange with a net
worth
of INR 200 crore and a market cap of over INR 1970 crore.The company has a network of 976
business locations (branches and sub-brokers) spread across 365 cities and towns. It has more
than800, 000 customers. It is registered with NSDL as well as CDSL as a depository
participant.

India Infoline Commodities Pvt Limited is engaged in the business of commodities broking.
Our experience in securities broking empowered us with the requisite skills and technologies to
allow us offer commodities broking as a contra-cyclical alternative to equities braking. We
enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges,
and recently acquired membership of DGCx. We have a multi-channel delivery model, asking
it among the select few to offer online as well as offline trading facilities.

Objective of the study

The main objective of the study is to analyze the capital market mainly the primary
and secondary market and their instruments, understanding the working of

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broking industry as well as competitive analysis of India infoline with reference to other
broking firms operating in the same area.

The following study was mainly done with an objective to know the state of mind of the
investors who wanted to invest in the stock market & also to know the attitude and preference
of the prospective investors regarding capital market with special reference to India infoline
which is a online brokage house in India.

Research on capital market

Capital Market:

A capital market is a market for securities (debt or equity), where business enterprises
(companies) and governments can raise long-term funds. It is defined as a market in which
money is provided for periods longer than a year [1], as the raising of short-term funds takes

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place on other markets (e.g., the money market). The capital market includes the stock market
(equity securities) and the bond market (debt). Financial regulators, such as the UK's
Financial Services Authority (FSA) or the U.S.

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Securities and Exchange Commission (SEC), oversee the capital markets in their designated
jurisdictions to ensure that investors are protected against fraud, among other duties.
Capital markets may be classified as primary markets and secondary markets. In primary
markets, new stock or bond issues are sold to investors via a mechanism known as
underwriting. In the secondary markets, existing securities are sold and bought among
investors or traders, usually on a securities exchange, over-the- counter, or elsewhere.
Primary Market:

A market that issues new securities on an exchange. Companies, governments and other groups
obtain financing through debt or equity based securities. Primary markets are facilitated by
underwriting groups, which consist of investment banks that will set a beginning price range
for a given security and then oversee its sale directly to investors.
Also known as "new issue market" (NIM). The primary markets are where investors can get
first crack at a new security issuance. The issuing company or group receives cash proceeds
from the sale, which is then used to fund operations or expand the business. Exchanges have
varying levels of requirements which must be met before a security can be sold.
Once the initial sale is complete, further trading is said to conduct on the secondary market,
which is where the bulk of exchange trading occurs each day. Primary markets can see
increased volatility over secondary markets because it is difficult to accurately gauge investor
demand for a new security until several days of trading have occurred.

Secondary market:

A market where investors purchase securities or assets from other investors, rather than from
issuing companies themselves. The national exchanges - such as the New York Stock
Exchange and the NASDAQ are secondary markets. Secondary markets exist for
equities, commodities or when funds, investment banks, or entities such as Fannie Mae
purchase mortgages from issuing lenders. In any secondary market trade, the cash proceeds go
to an investor rather than to the underlying company/entity directly.

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Capital Market Instruments:

Capital market instruments are responsible for generating funds for companies, corporations,
and sometimes national governments these are used by the investors to make a profit out of
their respective markets. There are a number of capital market instruments used for market
trade, including

Stocks
Equitie commodities
Bonds
Debentures
Treasury-bills
Foreign Exchange
Fixed deposits

Capital market is also known as securities market because long term funds are raised through
trade on debt and equity securities. These activities may be conducted by both companies
and governments. This market is divided into primary capital market and secondary capital
market. The primary market is designed for the new issues and the secondary market is meant
for the trade of existing issues. Stocks and bonds are the two basic capital market instruments
used in both the primary and secondary markets. There are three different markets in which
stocks are used as the capital market instrument: the physical, virtual, and auction markets.

Physical market

Virtual Market

Auction Market

Bonds, however, are traded in a separate bond market. This market is also known as a debt,
credit, or fixed income market. Trade in debt securities are done in this market. There are also
the T-bills and Debentures which are used as capital market instruments by the
investors. These instruments are more secured than the
others, but they also provide less return

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than the other capital market instruments. While all capital market instruments are designed to
provide a return on investment, the risk factors are different for each and the selection of the
instrument depends on the choice of the investor. The risk tolerance factor and the expected
returns from the investment play a decisive role in the selection by an investor of
a capital market instrument. Capital market instruments should be selected only after
doing proper research in order to increase one.

Brief about stock market

The Securities Contracts (Regulation) Act, 1956, has defined Stock Exchange as an
"association, organization or body of individuals, whether incorporated or not, established for
the purpose of assisting, regulating and controlling business of buying, selling and dealing in
Securities". Stock exchange as an organized security market provides marketability and price
continuity for shares and helps in a fair evaluation of securities in terms of their intrinsic worth.
Thus it helps orderly flow and distribution of savings between different types of investments.
This institution performs an important part in the economic life of a country, acting as a free
market for securities where prices are determined by the forces of supply and demand.
Apart from the above basic function it also assists in mobilizing funds for the Government
and the Industry and to supply a channel for the investment of savings in the performance of its
functions.

The Stock Exchanges in India as elsewhere have a vital role to play in the development of the
country in general and industrial growth of companies in the private sector in particular and
helps the Government to raise internal resources for

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the implementation of various development programmes in the public sector. As a segment of
the capital market it performs an important function in mobilizing and channelizing resources
which remain otherwise scattered. Thus the Stock Exchanges tap the new resources and
stimulate a broad based investment in the capital structure of industries.

A well developed and healthy stock exchange can be and should be an important institution in
building up a property base along with a socialist in India with broader distribution of wealth
and income. Thus Stock Exchange is a vital organ in a modern society. Without a stock
exchange a modern democratic economy cannot exist. The system of joint stock companies
financed through the public investment as emerged has put the vast means of finances almost
to entrepreneurs' needs.

Finance from external sources mainly from the investing public can become possible only
when an institute like Stock Exchange provides opportunities for the conversion of scattered
savings into profitable investments with the promises of a reasonable yield and minimum
element of risk. Such a mechanism as provided by Stock Exchanges is not merely a source of
capital but also a conduit which channelizes the savings into investment along with a free
movement of capital.

With the probable exception of a totalitarian state no Government will be able to mobilize
resources from the public if the money market in the form of stock exchange does not exist.
The Stock Exchange benefits the entire community in a variety of way. It enables the
producers to raise capital which directly and indirectly gives gainful employment to millions of
people on the one hand and helps consumers to get; the variety of goods needed by them on the
other. It provides opportunities to savers to store the value either as temporary abode of
purchasing power or as a permanent abode of purchasing power in the form of financial assets.
It also helps the segments of the savers who put their savings in commercial firms and non-
banking financial intermediaries because these institutions avail themselves of the services of
Stock Exchange to invest the money thus collected.

The Stock Exchange comes close enough to a perfectly competitive market allowing the forces
of demand and supply a reasonable degree of freedom to operate as compared to other markets
specially the commodity markets. This segment of the factor market can be considered as a
perfect or a nearly perfect market. Apart from providing a mechanism for transacting business
in stock and shares it generates genuine potential for a new entrepreneur to take up
initiative in the private sector

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enterprises and allows the expansion of investing community by offering gainful development
of their otherwise sluggish or shy capital. The Stock Exchange must assume the responsibility
of protecting the rights of investors specially the small investors in the Joint Stock Companies.

Evolution

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meagre and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used to
be transacted towards the close of the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.

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The 1850's witnessed a rapid development of commercial enterprise and brokerage business
attracted many men into the field and by 1860 the number of brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply from United States of Europe
was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about
200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began
(for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs.
87).

At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found
a place in a street (now appropriately called as Dalal Street) where they would conveniently
assemble and transact business. In 1887, they formally established in Bombay, the "Native
Share and Stock Brokers' Association" (which is alternatively known as “The Stock Exchange
"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in
1899. Thus, the Stock Exchange at Bombay was consolidated.

Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom which was followed by a
slump. But, in 1943, the situation changed radically, when India was fully mobilized as a
supply base.

On account of the restrictive controls on cotton, bullion, seeds and other commodities, those
dealing in them found in the stock market as the only outlet for their activities. They were
anxious to join the trade and their number was swelled by numerous others. Many new
associations were constituted for the purpose and Stock Exchanges in all parts of the country
were floated.

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The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940)
and Hyderabad Stock Exchange Limited (1944) were incorporated.

In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the
Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947, amalgamated
into the Delhi Stock Exchange Association Limited.

INTRODUCTION AND CONCEPT OF SHARE TRADING

Trading in shares is old phenomena its regulation had been started when securities contract act
had been formed in 1956. Transfer of resources from those with idle resources to others who
have a productive need for them is most efficiently achieved through the securities market. It
provides a channel for reallocation of savings to investments. The share market can be
segmented in two parts one is Primary Market another is Secondary Market.
Primary Market
It provides opportunity to issuers of securities government as well as corporate to raise
resources to meet their requirements of investments. In this market companies issue fresh
security sin exchange of funds through public issues or private placements. The market design
for primary market is provided in the provision of Companies Act, 1956 which deals with
issues, listing and allotment of securities. The investors have to apply the shares by filling the
application form issue by the company along with the application money. According to
Disclosure and Investor Protection guidelines of SEBI, 1992 company has to disclose all the
necessary information regarding pricing of issues, listing requirements, disclosure norms lock-
in-period for promoters contribution, contents of offer documents pre and post issue
obligations etc.

Company can issue shares at face value, at premium or at discount. Another method of
pricing which is now days common is issuing the securities through online system of the stock
exchange has to comply with the section 55 to 68a of the companies Act, 1956 and SEBI
guidelines 2000. The company is required to enter in to an agreement with the stock exchanges
which have the requisite system for online offer of securities. The advantages for this new
system are:-

➢ The investors part with money only after allotment.

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 ➢ It eliminates refunds except in case of direct applications.
➢ It reduces the time taken for issue process
➢
Secondary Market

Secondary market is the place for sale and purchase of existing securities. It enables an
investor to adjust his holdings of securities in response to changes in his assessment about risk
and return. It enables him to sell securities for cash to meet his liquidity needs. It essentially
comprises of the stock exchanges which provide platform for trading of securities and a host of
intermediaries who assist in trading of securities and clearing and settlement of trades. The
securities are traded, cleared and settled as per prescribed regulatory framework under the
supervision of the exchanges and oversight of SEBI.

Trading Mechanism
Earlier trading on stock exchanges in India used to take place through open outcry without use
of information technology for immediate matching or recording of trades. This was time
consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to
provide efficiency, liquidity and transparency National Stock Exchange introduced a nation
wide on line fully automated screen based trading system where a member can punch in to the
computer quantities of securities and the prices at which he likes to transact and the
transaction is executed as soon as it finds a matching sale or buy order from a counter party.
Screen based trading electronically matches orders on a price/time priority and hence cuts
down on time, cost and risk of error, as well as on fraud resulting in improved operational
efficiency. It enables market participants, irrespective of their geographical locations to trade
with one another and it provides equal access to everybody.

NSE has main computer which is connected through Very Small Aperture Terminal (VSAT)
installed at its office. The main computer runs on a default tolerant STRATUS mainframe
computer at the exchange. Brokers have terminals installed at their premises which are
connected through VSATs. An investor informs a broker to place an order on his behalf.

Trading Pattern of the Indian Stock Market

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Trading in Indian stock exchanges are limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified securities (forward list) and
non-specified securities (cash list). Equity shares of dividend paying, growth-oriented
companies with a paid-up capital of at least Rs.50 million and a market capitalization of
atleast Rs.100 million and having more than 20,000 shareholders are, normally, put in the
specified group and the balance in non- specified group. Two types of transactions can be
carried out on the Indian stock exchanges:

(a) Spot delivery transactions "for delivery and payment within the time or on the date
stipulated when entering into the contract which shall not be more than 14 days following the
date of the contract" :

(b) Forward transactions "delivery and payment can be extended by further period of 14
days each so that the overall period does not exceed 90 days from the date of the contract". The
latter is permitted only in the case of specified shares. The brokers who carry over the out
standings pay carry over charges (can tango or backwardation) which are usually determined
by the rates of interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell securities for
his clients on a commission basis and also can act as a trader or dealer as a principal, buy and
sell securities on his own account and risk, in contrast with the practice prevailing on New
York and London Stock Exchanges, where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old conventional style of
face-to-face trading with bids and offers being made by open outcry. However, there is a great
amount of effort to modernize the Indian stock exchanges in the very recent times.

MARKET DESIGN

Primary Market

1. Corporate Securities:

The Disclosure and Investor Protection (DIP) guidelines prescribe a substantial body of
requirements for issuers/intermediaries, the broad intention being to ensure

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 that all concerned observe high standards of integrity and fair dealing, comply with all the
requirements with due skill, diligence and care, and disclose the truth, whole truth and
nothing but truth. The guidelines aim to secure fuller disclosure of relevant information
about the issuer and the nature of the securities to be issued so that investors can take
informed decisions. For example, issuers are required to disclose any material ‘risk factors’
and give justification for pricing in their prospectus. An unlisted company can access the
market up to 5 times its pre-issue net worth only if it has track record of distributable profits
and net worth of Rs. 1 crore in 3 out of last five years. A listed company can access up to 5
times of its pre-issue net worth. In case a company does not have track record or wishes
to rise beyond 5 times of its pre-issue net worth, it can access the market only through book
building with minimum offer of 60% to qualified institutional buyers. Infrastructure
companies are exempt from the requirement of eligibility norms if their project has
been appraised by a public financial institution and not less than 5% of the project cost is
financed by any of the institutions, jointly or severally, by way of loan and/or subscription
to equity. The debt instruments of maturities more than 18 months require credit rating. If
the issue size exceeds Rs. 100 crore, two ratings from different agencies are required. Thus
the quality of the issue is demonstrated by track record/appraisal by approved financial
institutions/credit rating/subscription by QIBs. The lead merchant banker discharges most
of the pre- issue and post-issue obligations. He satisfies himself about all aspects of offering
and adequacy of disclosures in the offer document. He issues a due diligence certificate
stating that he has examined the prospectus, he finds it in order and that it brings out all the
facts and does not contain anything wrong or misleading. He also takes care of allotment,
refund and dispatch of certificates. The admission to a depository for dematerialization of
securities is a prerequisite for making a public or rights issue or an offer for sale. The
investors, however, have the option of subscribing to securities in either physical form or
dematerialized form. All new IPOs are compulsorily traded in dematerialized form. Every
public listed company making IPO of any security for Rs. 10 crore or more is required to do
so only in dematerialized form.

2 . Government Securities:

The government securities market has witnessed significant transformation in the 1990s.
With giving up of the responsibility of allocating resources from securities market,
government stopped expropriating seigniorage and started borrowing at near

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- market rates. Government securities are now sold at market related coupon rates through a
system of auctions instead of earlier practice of issue of securities at very low rates just to
reduce the cost of borrowing of the government. Major reforms initiated in the primary
market for government securities include auction system (uniform price and multiple price
method) for primary issuance of T-bills and central government dated securities, a system of
primary dealers and non-competitive bids to widen investor base and promote retail
participation, issuance of securities across maturities to develop a yield curve from short to
long end and provide benchmarks for rest of the debt market, innovative instruments like,
zero coupon bonds, floating rate bonds, bonds with embedded derivatives, availability of full
range ( 91-day and 382-day) of T-bills, etc.

Secondary Market

Corporate Securities:

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The stock exchanges are the exclusive centres for trading of securities. Though the area of
operation/jurisdiction of an exchange is specified at the time of its recognition, they have
been allowed recently to set up trading terminals anywhere in the country. The three newly
set up exchanges (OTCEI, NSE and ICSE) were permitted since their inception to have
nation wide trading. The trading platforms of a few exchanges are now accessible from many
locations. Further, with extensive use of information technology, the trading platforms of a
few exchanges are also accessible from anywhere through the Internet and mobile devices.
This made a huge difference in a geographically vast country like India.

Exchange Management:

Most of the stock exchanges in the country are organized as “mutuals” which was considered
beneficial in terms of tax benefits and matters of compliance. The trading members, who
provide brokering services, also own, control and manage the exchanges. This is not an
effective model for self-regulatory organizations as the regulatory and public interest of the
exchange conflicts with private interests. Efforts are on to demutualise the exchanges
whereby ownership, management and trading membership would be segregated from one
another. Two exchanges viz. OTCEI and NSE are demutualised from inception, where
ownership, management and trading are in the hands of three different sets of people. This
model eliminates conflict of interest and helps the exchange to pursue market efficiency and
investor interest aggressively.

Membership:

The trading platform of an exchange is accessible only to brokers. The broker enters into
trades in exchanges either on his own account or on behalf of clients. No stock broker or sub-
broker is allowed to buy, sell or deal in securities, unless he or she holds a certificate of
registration granted by SEBI. A broker/sub-broker complies with the code of conduct
prescribed by SEBI. Over time, a number of brokers - proprietor firms and partnership firms
– have converted themselves into corporate. The standards for admission of members stress
on factors, such as corporate structure, capital adequacy, track record, education, experience,
etc. and reflect a conscious endeavor to ensure quality broking services.

Listing:

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 A company seeking listing satisfies the exchange that at least 10% of the securities, subject
to a minimum of 20 lakh securities, were offered to public for subscription, and the size of
the net offer to the public (i.e. the offer price multiplied by the number of securities offered to
the public, excluding reservations, firm allotment and promoters’ contribution) was not less
than Rs. 100 crore, and the issue is made only through book building method with allocation
of 60% of the issue size to the qualified institutional buyers. In the alternative, it is required
to offer at least 25% of the securities to public. The company is also required to maintain the
minimum level of non-promoter holding on a continuous basis. In order to provide an
opportunity to investors to invest/trade in the securities of local companies, it is mandatory
for the companies, wishing to list their securities, to list on the regional stock exchange
nearest to their registered office. If they so wish, they can seek listing on other exchanges as
well. Monopoly of the exchanges within their allocated area, regional aspirations of the
people and mandatory listing on the regional stock exchange resulted in multiplicity of
exchanges. The basic norms for listing of securities on the stock exchanges are uniform for
all the exchanges. These norms are specified in the listing agreement entered into between the
company and the concerned exchange. The listing agreement prescribes a number of
requirements to be continuously complied with by the issuers for continued listing and such
compliance is monitored by the exchanges. It also stipulates the disclosures to be made by
the companies and the corporate governance practices to be followed by them. SEBI has
been issuing guidelines/circulars prescribing certain norms to be included in the listing
agreement and to be complied with by the companies. A listed security is available for
trading on the exchange. The stock exchanges levy listing fees - initial fees and annual fees -
from the listed companies. It is a major source of income for many exchanges. A security
listed on other exchanges is also permitted for trading. A listedcompany can voluntary delist
its securities from non-regional stock exchanges after providing an exit opportunity to holders
of securities in the region where the concerned exchange is located. An exchange can,
however, delist the securities compulsorily following a very stringent procedure.

Trading Mechanism:

The exchanges provide an on-line fully-automated screen based trading system (SBTS)
where a member can punch into the computer quantities of securities and the prices at which
he likes to transact and the transaction is executed as soon as it finds a matching order from a
counter party. SBTS electronically matches orders on a strict price/time priority and hence
cuts down on time, cost and risk of error, as well

26
as on fraud resulting in improved operational efficiency. It allows faster incorporation of
price sensitive information into prevailing prices, thus increasing the informational efficiency
of markets. It enables market participants to see the full market on real- time, making the
market transparent. It allows a large number of participants, irrespective of their geographical
locations, to trade with one another simultaneously, improving the depth and liquidity of the
market. It provides full anonymity by accepting orders, big or small, from members without
revealing their identity, thus providing equal access to everybody. It also provides a perfect
audit trail, which helps to resolve disputes by logging in the trade execution process in
entirety.

Trading Rules:

Regulations have been framed to prevent insider trading as well as unfair trade practices. The
acquisitions and takeovers are permitted in a well-defined and orderly manner. The
companies are permitted to buy back their securities to improve liquidity and enhance the
shareholders’ wealth

Price Bands:

Stock market volatility is generally a cause of concern for both policy makers as well as
investors. To curb excessive volatility, SEBI has prescribed a system of price bands. The
price bands or circuit breakers bring about a coordinated trading halt in all equity and
equity derivatives markets nation-wide. An index-based market-wide circuit breaker system
at three stages of the index movement either way at 10%, 15% and 20% has been prescribed.
The movement of either S&P CNX Nifty or Sensex, whichever is breached earlier, triggers
the breakers. As an additional measure of safety, individual scrip-wise price bands of 20%
either way have been imposed for all securities except those available for stock options.

Demat Trading:

The Depositories Act, 1996 was passed to proved for the establishment of depositories in
securities with the objective of ensuring free transferability of securities with speed, accuracy
and security by (a) making securities of public limited companies freely transferable subject
to certain exceptions;(b) dematerialising the

27
securities in the depository mode; and (c) providing for maintenance of ownership records in
a book entry form. In order to streamline both the stages of settlement process, the Act
envisages transfer of ownership of securities electronically by book entry without making the
securities move from person to person. Two depositories, viz. NSDL and CDSL, have come
up to provide instantaneous electronic transfer of securities. At the end of March 2002, 4,172
and 4,284 companies were connected to NSDL and CDSL respectively. The number of
dematerialized securities increased to
56.5 billion at the end of March 2002. As on the same date, the value of dematerialized
securities was Rs. 4,669 billion and the number of investor accounts was 4,605,588. All
actively traded scrips are held, traded and settled in demat form. Demat settlement accounts
for over 99% of turnover settled by delivery. This has almost eliminated the bad deliveries
and associated problems To prevent physical certificates from sneaking into circulation, it has
been mandatory for all new IPO’s to be compulsorily traded in dematerialized form. The
admission to a depository for dematerialization of securities has been made a prerequisite for
making a public or rights issue or an offer for sale. It has also been made compulsory for
public listed companies making IPO of any security for Rs. 10 crore or more to do the same
only in dematerialized form.

Charges:

A stock broker is required to pay a registration fee of Rs.5, 000 every financial year, if his
annual turnover does not exceed Rs. 1 crore. If the turnover exceeds Rs. 1 crore during any
financial year, he has to pay Rs. 5,000 plus one-hundredth of 1% of the turnover in excess of
Rs.1 crore. After the expiry of five years from the date of initial registration as a broker, he
has to pay Rs. 5,000 for a block of five financial years. Besides, the exchanges collect
transaction charges from its trading members. NSE levies Rs. 4 per lakh of turnover. The
maximum brokerage a trading member can levy in respect of securities transactions is 2.5%
of the contract price, exclusive of statutory levies like SEBI turnover fee, service tax and
stamp duty. However, brokerage charges as low as 0.15% are also observed in the market.
Rolling settlement on T+3 basis gave way to T+2 from April 2003. The market has moved
close to spot/cash market.

Risk Management:
To pre-empt market failures and protect investors, the regulator/exchanges have developed a
comprehensive risk management system, which is constantly monitored and upgraded. It
encompasses capital adequacy of members, adequate margin

28
requirements, limits on exposure and turnover, indemnity insurance, on-line position
monitoring and automatic disablement, etc. They also administer an efficient market
surveillance system to curb excessive volatility, detect and prevent price manipulations.
Exchanges have set up trade/settlement guarantee funds for meeting shortages arising out of
no fulfillment/ partial fulfillment of funds obligations by the members in a settlement. A
clearing corporation assures the counterparty risk of each member and guarantees financial
settlement in respect of trades executed on NSE.

Government Securities:

The reforms in the secondary market include Delivery versus Payment system for settling
scrip less SGL transactions to reduce settlement risks, SGL Account II with RBI to enable
financial intermediaries to open custody (Constituent SGL) accounts and facilitate retail
transactions in scrip less mode, enforcement of a trade-for-trade regime, settlement period of
T+0 or T+1 for all transactions undertaken directly between SGL participants and up to T+5
days for transactions routed through NSE brokers, routing transactions through brokers of
NSE, OTCEI and BSE, repos in all government securities with settlement through SGL,
liquidity support to PDs to enable them to support primary market and undertake market
making, special fund facility for security settlement, etc. As part of the ongoing efforts to
build debt market infrastructure, two new systems, the Negotiated Dealing System (NDS) and
the Clearing Corporation of India Limited (CCIL) commenced operations on February 15,
2002. NDS, interalia, facilitates screen based negotiated dealing for secondary market
transactions in government securities and money market instruments, online reporting of
transactions in the instruments available on the NDS and dissemination of trade information
to the market. Government Securities (including T-bills), call money, notice/term money,
repos in eligible securities, Commercial Papers and Certificate of Deposits are available for
negotiated dealing through NDS among the members. The CCIL facilitates settlement of
transactions in government securities (both outright and repo) on Delivery versus Payment
(DvP-II) basis which provides for settlement of securities on gross basis and settlement of
funds on net basis simultaneously. It acts as a central counterparty for clearing and settlement
of government securities transactions done on NDS.

THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED

29
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 the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in
April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in
June 1994. The Capital Market (Equities) segment commenced operations in November 1994
and operations in Derivatives segment commenced in June 2000.

NSE's Mission

NSE's mission is setting the agenda for change in the securities markets in India. The NSE
was set-up with the main objectives of:
1. Establishing a nation-wide trading facility for equities, debt instruments and hybrids,

30
2. Ensuring equal access to investors all over the country through an appropriate
communication network,
3. Providing a fair, efficient and transparent securities market to investors using electronic
trading systems, enabling shorter settlement cycles and book entry settlements systems
4. Meeting the current international standards of securities markets.
5. The standards set by NSE in terms of market practices and technologies have become
industry benchmarks and are being emulated by other market participants. NSE is more than a
mere market facilitator. It's that force which is guiding the industry towards new horizons and
greater opportunities.

NSE Group
National Securities Clearing Corporation Ltd. (NSCCL)
It is a wholly owned subsidiary, which was incorporated in August 1995 and commenced
clearing operations in April 1996. It was formed to build confidence in clearing and settlement
of securities, to promote and maintain the short and consistent settlement cycles, to provide a
counter-party risk guarantee and to operate a tight risk containment system.

NSE.IT Ltd.
It is also a wholly owned subsidiary of NSE and is its IT arm. This arm of the NSE is uniquely
positioned to provide products, services and solutions for the securities industry. NSE.IT
primarily focus on in the area of trading, broker front-end and back- office, clearing and
settlement, web-based, insurance, etc. Along with this, it also provides consultancy and
implementation services in Data Warehousing, Business Continuity Plans, Site Maintenance
and Backups, Stratus Mainframe Facility Management, Real Time Market Analysis &
Financial News.

India Index Services & Products Ltd. (IISL)

It is a joint venture between NSE and CRISIL Ltd. to provide a variety of indices and index
related services and products for the Indian Capital markets. It was set up in May 1998.
IISL has a consulting and licensing agreement with the Standard and Poor's (S&P), world's
leading provider of investible equity indices, for co-branding equity indices.

31
 National Securities Depository Ltd. (NSDL)

NSE joined hands with IDBI and UTI to promote dematerialization of securities. This step was
taken to solve problems related to trading in physical securities. It commenced operations in
November 1996.

Bombay Stock Exchange (BSE)

A very common name for all traders in the stock market, BSE, stands for Bombay Stock
Exchange. The oldest market not only in the country, but also in Asia. The early days of BSE
was known as "The Native Share & Stock Brokers Association." It was established in the year
1875 and became the first stock exchange in the country to be recognized by the government.
In 1956, BSE obtained a permanent recognition from the Government of India under the
Securities Contracts (Regulation) Act, 1956. In the past and even now, it plays a pivotal
role in the development of the country's capital market. This is recognized worldwide and its
index, SENSEX, is also tracked worldwide. Earlier it was an Association of Persons (AOP), but
now it is a demutualised and corporatized entity incorporated under the provisions of the
Companies Act, 1956, pursuant to the BSE (Corporatization and Demutualization) Scheme,
2005 notified by the Securities and Exchange Board of India (SEBI).

32
BSE Facts
 First in India to introduce Equity Derivatives
 First in India to launch a Free Float Index

 First in India to launch US$ version of BSE Sensex

 First in India to launch Exchange Enabled Internet Trading Platform

 First in India to obtain ISO certification for Surveillance, Clearing & Settlement

 'BSE On-Line Trading System (BOLT) has been awarded the globally recognized the
Information Security Management System standard BS7799-2:2002.

SEBI:-
SEBI as the Capital Market Regulator in India, has twin objectives i.e. of regulating as well as
developing the Market.

33
The SEBI is the main regulatory body in the Indian capital market scenario . SEBI is
responsible for :

▪ Protecting the interests of investors in securities

▪ Promoting the development of the securities markets
▪ Regulating the securities markets
On April 12, 1988, the Securities and Exchange Board of India (SEBI) was established with a
dual objective of protecting the rights of small investors and regulating and developing the
stock markets in India. In 1992, the Bombay Stock Exchange (BSE) , the leading stock
exchange in India, witnessed the first major scam masterminded by Harshad Mehta (Mehta) .
Analysts unanimously felt that if more powers had been given to SEBI, the scam would not
have happened. As a result, the Government of India (GoI) brought in a separate legislation by
the name of 'SEBI Act 1992' and conferred statutory powers to it.

Since then, SEBI had introduced several stock market reforms. These reforms significantly
transformed the face of Indian stock markets. SEBI introduced on-line trading and demat of
shares which did away with the age-old paper-based trading, thus bringing more transparency
into the trading system. Analysts and experts appreciated SEBI for these reforms. One stock
market analyst said, "I'm sure that most of us would agree that SEBI has handled the challenges
exceptionally well."

In spite of SEBI's capital market reforms and increasing regulatory powers over the years,
analysts felt that it had failed miserably in stopping stock market scams. In the ten years after
the Mehta scam, several scams came to light, casting doubt on the efficiency of SEBI as a
regulatory body. However, a few analysts felt there was a need to confer more powers to SEBI
to stop these scams. One analyst commented, "It's rather daunting task of putting in place a
regulatory framework for the market against all odds."

In the 1980s, Indian capital markets witnessed significant changes. During the sixth Five-Year
plan (1980-85), many major industrial policy changes were introduced. These included opening
up the Indian economy to foreign corporations and emphasizing a greater role for the private
sector.

Many companies tapped the primary market to raise required funds from the public. The
total capital raised from the primary market increased from Rs 1.96 bn in the fiscal 1979-80 to
Rs. 65 bn in 1989-90. With more companies raising money by issuing shares, retail investors
got another investment avenue to park their surplus funds.

34
Between 1987 and 1991, 12% of household savings were invested in equity and corporate
debentures as compared to only 7% between 1982 and 1985, signifying the increasing number
of retail investors in the stock market.

TRADING MEMBERSHIP

Stock Brokers

Introduction
A broker is an intermediary who arranges to buy and sell securities on behalf of clients (the
buyer
and the seller). According to Rule 2 (e) of SEBI (Stock Brokers and Sub-Brokers) Rules, 1992,
a stockbroker means a member of a recognized stock exchange. No stockbroker is allowed to
buy, sell or deal in securities, unless he or she holds a certificate of registration granted by
SEBI. A stockbroker applies for registration to SEBI through a stock exchange or stock
exchanges of which he or she is admitted as a member. SEBI may grant a certificate to a stock-
broker [as per SEBI (Stock Brokers and Sub-Brokers) Rules,1992] subject to the conditions
that:

a) He holds the membership of any stock exchange;

b) He shall abide by the rules, regulations and bye-laws of the stock exchange or stock
exchanges of which he is a member;

c) In case of any change in the status and constitution, he shall obtain prior permission
SEBI to continue to buy, sell or deal in securities in any stock exchange;

d) He shall pay the amount of fees for registration in the prescribed manner; and

e) He shall take adequate steps for redressal of grievances of the investors within one month
of the date of the receipt of the complaint and keep SEBI informed about the number, nature
and other particulars of the complaints. While considering the application of an entity for
grant of registration as a stock broker, SEBI shall take into account the following namely,
whether the stock broker applicant -

35
a) is eligible to be admitted as a member of a stock exchange;

b) Has the necessary infrastructure like adequate office space, equipment and man power to
effectively discharge his activities;

c) Has any past experience in the business of buying, selling or dealing in securities;

d) Is being subjected to any disciplinary proceedings under the rules, regulations and bye-
laws of a stock exchange with respect to his business as a stockbroker involving either
himself or any of his partners, directors or employees.

Sub-Brokers

A Sub-broker is a person who intermediates between investors and stock brokers. He acts on
behalf of a stock-broker as an agent or otherwise for assisting the investors for buying, selling
or dealing in securities through such stock-broker. No sub-broker is allowed to buy, sell or
deal in securities, unless he or she holds a certificate of registration granted by SEBI. A sub-
broker may take the form of a sole proprietorship, a partnership firm or a company.
Stockbrokers of the recognized stock exchanges are permitted to transact with sub-brokers.
Sub-brokers are required to obtain certificate of registration from SEBI in accordance with
SEBI (Stock Brokers & Sub-brokers) Rules and Regulations, 1992, without which they are
not permitted to buy, sell or deal in securities. SEBI may grant a certificate to a sub- broker,
subject to the conditions that:

(a) He shall pay the fees in the prescribed manner;

(b) He shall take adequate steps for redressal of grievances of the investors within one month
of the date of the receipt of the complaint and keep SEBI informed about the number, nature
and other particulars of the complaints received;

(c) In case of any change in the status and constitution, the sub- broker shall obtain prior
permission of SEBI to continue to buy, sell or deal in securities in any stock exchange; and

(d) He is authorized in writing by a stock-broker being a member of a stock exchange for

affiliating himself in buying, selling or dealing in securities. In case of company, partnership
firm and sole proprietorship firm, the directors, the partners and the individual, shall comply
with the following requirements:

36
(a) The applicant is not less than 21 years of age;

(b) The applicant has not been convicted of any offence involving fraud or dishonesty;

(c) The applicant has at least passed 12th standard equivalent examination from an institution
recognized by the Government.

(d) They should not have been debarred by SEBI.

(e) The corporate entities applying for sub-broker ship shall have a minimum paid up capital
of Rs. 5 lakh and it shall identify a dominant shareholder who holds a minimum of 51%
shares either singly or with the unconditional support of his/her spouse.

ABOUT INDIAINFOLINE LTD.

2.2 COMPANY OVERVIEW

India Infoline originally incorporated on October 18, 1995 as PROBITY RESEARCH AND
SERVICES PVT LTD. at Mumbai under the Companies Act,1956 with Registration
No.1193797.and became a public limited company on April 28, 2000.The name of the
Company was changed to India Infoline.comLimited on May 23, 2000 and later to India
Infoline Limited on March 23,2001. It is the first Company in India to foray into the online
distribution of Mutual Funds It is a one-stop financial services shop, most respected for quality
of its advice, personalized service and cutting-edge technology. TheNo.1Corporate agent for
IIFLPrudentialLife Insurance Company. Research acknowledged by Forbes as “Must Read for
investor in South Asia “Listed on Bombay and National Stock Exchange with a net worth

37
of INR 200 crore and a market cap of over INR 1970 crore.The company has a network of 976
business locations (branches and sub-brokers) spread across 365 cities and towns. It has more
than800, 000 customers. It is registered with NSDL as well as CDSL as a depository
participant.

Vision
“Our vision is to be the most respected company in the financial services space”

Performance of the company:

1995:Incorporated as an equity research and Consulting firm with a client base that included
leading FIIs, banks, consulting firms and corporate.

1999: Restructured the business model to embrace the internet; launched

www.indiainfoline.com; mobilized capital from reputed private equity investors.

38
2000: Commenced the distribution of personal financial products; launched online equity
trading; entered life insurance distribution as a corporate agent. Acknowledged by Forbes as
‘Best of the Web’ and‘...Must read for Investors’.

2004: Acquired commodities broking license; launched Portfolio Management Service.

2005: Listed on the Indian stock Markets.

2006: Acquired Membership Of DGCX; launched investment banking Services.

2007: Launched a proprietary trading platform; inducted an institutional equities team; formed
a Singapore subsidiary; raised over USD 300mn in the group; launch edconsumerfinance
business under the ‘Money line ‘Brand.

2008:Launched wealth management services under the ‘IIFL Wealth ‘brand; set up India Info
line Private Equity fund; received the Insurance broking license from IRDA; received the
venture capital license; received in principle approval to sponsor a mutual fund; received ‘Best
broker- India’ award from Finance Asia; ‘Most Improved Brokerage- India’ award from Asia
money.

2009: Received registration for a housing finance company from the National Housing Bank;
received ‘Fastest growing Equity Broking House Large firms’ in India by Dun Bradstreet.

INDIA INFOLINE Ltd.

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

39
40
INDIA INFOLINE MEDIA AND RESEARCH SERVICES LIMITED.

The content services represent a strong support that drives the braking, commodities, mutual
fund and portfolio management services businesses. Revenue generation is through the sale of
content to financial and media houses, Indian as well as global. It undertakes equities research
which is acknowledged by none other than Forbes as 'Best of the Web' and '...a must read for
investors in Asia'. India Info line’s research is available not just over the internet but also on
international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet
Securities where India Infoline is amongst the most read Indian brokers.

INDIA INFOLINE COMMODITIES LIMITED.

India Infoline Commodities Pvt Limited is engaged in the business of commodities broking. Our
experience in securities broking empowered us with the requisite skills and technologies to allow
us offer commodities broking as a contra-cyclical alternative to equities braking. We enjoy
memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and
recently acquired membership of DGCx. We have a multi- channel delivery model, asking it
among the select few to offer online as well as offline trading facilities.

41
INDIA INFOLINE MARKETING & SERVICES

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

INDIA INFOLINE INVESTMENT SERVICES LIMITED

Consolidated shareholdings of all the subsidiary companies engaged in loans and financing
activities under one subsidiary. Recently, Orient Global, a SingaP9re-based investment
institution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services.
This will help focused expansion and capital raising in the said subsidiaries for various lending
businesses like loans against securities, SME financing, distribution of retail loan products,
consumer finance business and housing finance business. India Infoline Investment Services
Private Limited consists of the following step-down subsidiaries.

(a) India Infoline Distribution Company Limited (Distribution of Retail Loan Products)

(b) Money line Credit Limited (Consumer Finance)

(c) India Infoline Housing Finance Limited (Housing Finance)

IIFL (Asia) Pte Limited

IIFL (Asia) Pte Limited is wholly owned subsidiary which ,has been incorporated in Singapore
to pursue financial sector activities in other Asian markets. Further to obtaining the necessary
regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars.

42
PRODUCTS AND EQUITIES
SERVICES

India Infoline provided the prospect of researched investing to its clients, which was hitherto
restricted only to the institutions. Research for the retail investor did not exist prior to India'
Infoline. India Infoline leveraged technology to bring the convenience of trading to the investor's
location of preference (residence or office) through computerized access. India Infoline made it
possible for clients to view transaction costs and ledger updates in real time.

PMS

Our Portfolio Management Service is a product wherein an equity investment portfolio is created
to suit the investment objectives of a client. We at India Infoline invest your resources into
stocks from different sectors, depending on your risk-return profile. This service is particularly
advisable for investors who cannot afford to give time or don't have that expertise _or day-to-
day management of their equity portfolio.

Research
Sound investment decisions depend upon reliable fundamental data and stock selection
techniques. India Infoline Equity Research is proud of its reputation for, and we want you to
find the facts that you need. Equity investment professionals routinely use our research and
models as integral tools in their work.They choose Ford Equity Research when they can clear
your doubts.

43
Commodities

India Infoline’s extension into commodities trading reconciles its strategic intent to emerge as a
one-stop solutions financial intermediary. its experience in securities broking has empowered it
with requisite skills and technologies. The Company's commodities business provides a contra
cyclical alternative to equities broking. The Company was among the first to offer the facility of
commodities trading in India's young commodities market (the MCX commenced operations
only in 2003). Average monthly turnover on the commodity exchanges increased from Rs. 0.34
bn to Rs 20.02 bn. The commodities market has several products with different and non-
correlated cycles. On the whole, the business is fairly insulated against cyclical gyrations in the
business.

Mortgages and home loans

During the year under review, India Infoline acquired a 75% stake in Money tree Consultancy
Services to mark its foray into the business of mortgages and other loan products distribution.
The business is still in the investing phase and at the time of the acquisition was present only in
the cities of Mumbai and Pune. The Company brings on board expertise in the loans business
coupled with existing relationships across a number of principals in the mortgage and personal
loans businesses. India Infoline now has plans to roll the business out. across its pan-Indian
network to provide it with a truly national scale in operations.

Personal Loans
Freedom to choose from 4 flexible options to repay
Loan against residential and commercial property, Expert recommendations, Easy
documentation, Quick processing and disbursal, No guarantor requirement, Expert
recommendations Easy documentation, Quick processing and disbursal, No guarantor
requirement

44
Invest Online
India Infoline has made investing in Mutual funds and primary market so effortless. All you have
to do is register with us and that's all. No paperwork no queues and No registration charges.

Invest In MF
India Infoline offers you a host of mutual fund choices under one roof, backed by in- depth
research and advice from research house and tools configured as investor friendly.

Apply In IPO's
You could also invest in Initial Public Offers (IPO's) online without going through the hassles of
filling ANY application form! Paperwork.
SMS
Stay connected to the market
The trader of today, you are constantly on the move. But how do you stay connected to the
market while on the move? Simple, subscribe to India Infoline's Stock Messaging Service and
get Market on your Mobile!

There are three products under SMS Service:

Market on the move.

Best of the lot.

VAS (Value Added Service)

Insurance

An entry into this segment helped complete the client's product basket; concurrently, it graduated
the Company into a one-stop retail financial solutions provider. To ensure maximum reach to
customers across India, we have employed a multi pronged approach and reach out to customers
via our Network, Direct and Affiliate channels. Following the opening of the sector in 1999-
2000, a number of private sector insurance service providers commenced operations aggressively
and helped grow the market.. The Company's entry into the insurance sector derisked the
Company from a predominant dependence on broking and equity-linked revenues. The
annuity based

45
income generated from insurance intermediation result in solid core revenues across the
tenure ofthe policy.

Wealth Management Service

Imagine a financial firm' with the heart and soul of a two-person organization. A world- leading
wealth management company that sits down with you to understand your needs and goals. We
offer you a dedicated group for giving you the most personal attention at every level.

Newsletters
The Daily Market Strategy is your morning dose on the health of the markets. Five intra- day
ideas, unless the markets are really choppy coupled with a brief on the global markets and any
other cues, which could impact the market. Occasionally an investment idea from the research
team and a crisp round up of the previous day's top stories. That's not all. As a subscriber to the
Daily Market Strategy, you even get research reports of India Infoline research team on a priority
basis. The India Infoline Weekly Newsletter is your flashback for the week gone by. A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
Investment ideas, Leader Speak and features are delivered in your inbox every Friday evening.

Equities

India Infoline provided the prospect of researched investing to its clients, which was hitherto
restricted only to the institutions. Research for the retail investor did not exist prior to India
Infoline leveraged technology to bring the convenience of trading to the investor's location of
preference (residence or office) through computerized access. India Infoline made it possible for
clients to view transaction costs and ledger updates in real time.

46
Over the last five years, India Infoline sharpened its competitive edge through the following
initiatives:

Multi-channel delivery model:

The Company is among the few financial intermediaries in India to offer a complement of online
and offline broking. The Company's network of branches also allows customers to place orders
on phone or visit our branches for trading.

Integrated middle and back office:

The customer can trade on the BSE and NSE, in the cash as well as the derivatives segment all
through the available multiple options of Internet, phone or branch presence.

Multiple-trading options:
The Company harnessed technology to offer services at among the lowest rates in the business.
Membership: "The Company widened client reach in trading on the domestic and international
exchanges.’

Technology:
The Company provides a prudent mix of proprietary and outsourced technologies, which
facilitate business growth without a corresponding increase in costs.

Content:
The Company has leveraged its research capability to provide regular updates and investment
picks across the short and long-term.

Service:

Clients can access the customer service team through various media like toll-free lines, emails
and Internet- messenger chat for instant query resolution. The Company's customer service
executives proactively contact customers to inform them of key changes and initiatives taken by
the Company. Business World rated the Company's customer service as 'Best' in their survey of
online trading sites carried out in December 2003.

47
 Key features

❖ Membership on the Bombay Stock Exchange Limited and the National Stock
Exchange.

❖ Registered with the NSDL as well as CDSL as a depository participant, providing a one-
stop solution for clients trading in the equities market.

❖ Broking services in cash and derivative segments, online as well as offline under the
brand of 5paisa.com

❖ Presence across 19 states through a 177 strong branch network, with 75,000 online
registered users. '

❖ Provision of free and world-class research to all clients.

PILLARS OF THE ORGANIZATION

❖ Unlike others, India Infoline has the concept of an Investment Team.
❖ The brains behind all the investment strategies and decisions regarding Wealth
Management Services are:

43
 WORKING OF BROKING INDUSTRY W.R.T.IIFL

DEMAT ACCOUNT

De-mat account is a safe and convenient means of holding securities just like a bank account
is for funds. Today, practically 99.9% settlement (of shares) takes place on De-mat mode
only. Thus, it is advisable to have a Beneficiary Owner (BO) account to trade at the
exchanges.

Bank Account Vs De-mat Account

Basis Of
S. Differentiatio Bank Account De-mat Account
No. n
Form of
1. Holdings/Dep Funds Securities
osits
Safekeeping of Safekeeping of
2. Used for money shares
Transfer of money Transfer of shares
3. Facilitates (without actually (without actually
handling money) handling shares)
Where to A DP of choice (can
4. open A bank of choice be a bank)
Requirement
5. of PAN Not Mandatory Mandatory (effective
Number from April 01, 2006)

Interest income is
Interest subject to the No interest accruals
6. accrual on on securities held in
applicable rate of
holdings interest demat account

AQB* maintenance is
Minimum specified for certain No such
7. balance requirement
bank
requirement accounts

44
 Either or
8. Survivor Available Not available
facility

AQB - Average Quarterly Balance

S. BASIS OF
No. SIMILARIT PARTICULARS
Y
Security and Both are very safe and convenient means of
1. Convenience holding deposits/securities
Number of No legal barrier on the number of bank or
2. accounts demat accounts that can be opened
Transfer of
3. deposits (funds Funds/securities are transferred only at the
or securities) instruction of the account holder

Physical transfer
of Physical transfer of money/securities is not
4. involved
money/securitie s

Nomination
5. Facility Available

45
 Benefits Of De-mat Account:

1. A safe and convenient way of holding securities (equity and debt instruments both).

2. Transactions involving physical securities are costlier than those involving dematerialized
securities (just like the transactions through a bank teller are costlier than ATM
transactions). Therefore, charges applicable to an investor are lesser for each transaction.

3. Securities can be transferred at an instruction immediately.

4. Increased liquidity, as securities can be sold at any time during the trading hours (between
9:55 AM to 3:30 PM on all working days), and payment can be received in a very short
period of time.

5. Risks like forgery, thefts, bad delivery, delays in transfer etc, associated with physical
certificates, are eliminated.

6. Pledging of securities in a short period of time.

7. Reduced paper work and transaction cost.

8. Odd-lot shares can also be traded (can be even 1 share).

9. Nomination facility available.

10. Any change in address or bank account details can be electronically intimated to all
companies in which investor holds any securities, without having to inform each of them
separately.

46
11. Securities are transferred by the DP itself,so no need to correspond with the
companie.

Opening a De-mat Account

To start dealing in securities in electronic form, one needs to open a De-mat account with a
DP of his choice. An investor already having shares in physical form should ensure that he
gets the account opened in the same set of names as appearing on the share certificate;
otherwise a new account can be opened in any desired pattern by the investor.

47
Getting started
Choose a DP
Fill up an account opening form provided by
DP, and sign an agreement with DP in a
standard format prescribed by the depository.
DP provides the investor with a copy of the
agreement and schedule of charges for his
future reference.
DP opens the account and provides the
investor with a unique account number, also
known as Beneficiary Owner Identification
Number (BO ID).
Documents to be attached
Passport size photographs
Proof of residence (POR) - Any one of Photo
Ration Card with DOB / Photo Driving License
with DOB / Passport copy / Electricity bill /
Telephone bill
Proof of identity (POI) - Any one of Passport
copy / Photo Driving License with DOB /
Voters ID Card / PAN Card / Photo Ration
Card with DOB
PAN card

Note:
 The agreement required to be signed by the investor details the rights and duties of the
investor and DP.

 DP may revise the charges by giving a 30 days prior notice. SEBI has rationalized the
cost structure for inaction by removing account opening charges, transaction charges
for credit of securities and custody charges, effective from January 28, 2005.

Maximum Number of holders in a De-mat Account

A maximum of three persons are allowed to open a joint De-mat account in names.

DEMATERIALISATION

Dematerialization is the process of converting physical shares (share certificates) into an

electronic form. Shares once converted into dematerialized form are held in a De-mat
account.

48
Dematerialization Process:

An investor having securities in physical form must get them dematerialized, if he intends to
sell them. This requires the investor to fill a De-mat Request Form (DRF) which is available
with every DP and submit the same along with the physical certificates. Every security has an
ISIN (International Securities Identification Number). If there is more than one security than
the equal number of DRFs has to be filled in.

The whole process goes on in the following manner:--

49
Rematerialisation

50
The process of getting the securities in an electronic form, converted back into the

51
 physical form is known as Rematerialisation. An investor can rematerialize his shares by
filling in a Remat Request Form (RRF).

The whole process goes on as follows: ---

➢ Depository - An organization that facilitates holding of securities in the electronicform and

enables DPs to provide services to investors relating to transaction insecurities. There are two
depositories in India, namely NSDL and CDSL. As per aSEBI

52
 guideline, the minimum net worth stipulated for a depository is Rs.100 crore.

➢ NSDL/CDSL - The securities are held in depository accounts, like the funds are held in bank
accounts. There are two depositories in India namely NSDL and CDSL. NSDL (National
Securities Depository limited) was established in August 1996 and is the first depository in
India. CDSL (Central Depository Securities Limited) is the other depository and was
established in 1999.

➢ DP (Depository Participant) - A Depository Participant can be a financial organization like

banks, brokers, financial institutions, custodians, etc., acting as an agent of the Depository to
make its services available to the investors. There are a total of 1334 DPs registered with
SEBI, as on March 31, 2009 and each DP is assigned a unique identification number known
as DP-ID.
Trading account:

It is that type of account with the help of which a De-Mat account holder can buy or sell
shares. India Infoline Ltd. Provide their customer software Trade Terminal for trading by free
of cost and unlimited number of scripts.

In India info line both demat and trading a/c are opened simultaneously

Formalities required for opening of De-Mat and Trading a/c in India Infoline Ltd.

For Individual

53
  PAN Card(compulsory for all joint holders)

 Address proof of all joint holders

 Specimen copy of cheque

For NRI

 Foreign and Indian Address proof

 PAN Card(compulsory)

 Bank a/c indicating type of a/c as NRE/NRO

 Specimen copy of cheque

For HUF

 Address proof and identity proof of karta

 PAN Card of HUF(compulsory)

 Specimen copy of cheque

 Declaration giving details of the family members of the HUF with their names, date
of birth & relationship with the karta.

For Minor

 Minor PAN Card

 Birth certificate of minor

 Address and identity proof of guardian

 Specimen copy of cheque

Products and Services offer by India Infoline ltd

54
A product for every need: 5paisa.com is the most comprehensive website, which allows you
to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other financial
products. Simply put we offer you a product for every investment need of yours.

1. Trading in shares:
5 paisa.com offers you various options while trading in shares.

Cash Trading :

This is a delivery based trading system, which is generally done with the intention of taking
delivery of shares or monies.

Margin Trading :

You can also do an intra-settlement trading upto 3 to 4 times your available funds, wherein
you take long buy/ short sell positions in stocks with the intention of squaring off the position
within the same day settlement cycle.

Spot Trading :

This facility can be used only for selling your demat stocks which are already existing in your
demat account. When you are looking at an immediate liquidity option, 'Cash on Spot' may
work the best for you, On selling shares through "cash on spot", money is credited to your
bank a/c the same evening & not on the exchange payout date.

BTST :

Buy Today Sell Tomorrow (BTST) is a facility that allows you to sell shares even on 1st and
2nd day after the buy order date, without you having to wait for the receipt of shares into your
demat account.

Call NTrade® :

CallNTrade® allows you to call on a local number in your city & trade on the telephone
through our Customer Service Executives. This facility is currently available in over 11
major states across India.

55
Trading on NSE/BSE :

Through 5paisa.com, you can trade on NSE as well as BSE.

Market Order :

You could trade by placing market orders during market hours that allows you to trade at
the best obtainable price in the market at the time of execution of the order.

Limit Order :

Allows you to place a buy/sell order at a price defined by you. The execution can happen at a
price more favorable than the price, which is defined by you, limit orders can be placed by
you during holidays & non market hours too.

2. TRADE IN DERIVATIVES:

FUTURES

Through 5paisa.com, you can now trade in index and stock futures on the NSE. In futures
trading, you take buy/sell positions in index or stock(s) contracts having a longer contract
period of up to 3 months.Trading in FUTURES is simple! If, during the course of the
contract life, the price moves in your favor (i.e. rises in case you have a buy position or falls
in case you have a sell position), you make a profit. Presently only selected stocks, which
meet the criteria on liquidity and volume, have been enabled for futures trading.

OPTIONS

An option is a contract, which gives the buyer the right to buy or sell shares at a specific
price, on or before a specific date. For this, the buyer has to pay to the seller some money,
which is called premium. There is no obligation on the buyer to complete the
transaction if the price is not favorable to him. To take the buy/sell position on index/stock
options, you have to place certain % of order value as margin. With options trading, you can
leverage on your trading limit by taking buy/sell positions much more than what you could
have taken in cash segment. The Buyer of a Call Option has the Right but not the Obligation
to Purchase the Underlying Asset at the specified strike price by paying a premium whereas
the Seller of the Call has the obligation of selling the Underlying Asset at the specified Strike
price.

56
The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying
Asset at the specified strike price by paying a premium whereas the Seller of the Put has
the obligation of Buying the Underlying Asset at the specified Strike price.

By paying lesser amount of premium, you can create positions under OPTIONS and take
advantage of more trading opportunities.

3. Investing in Mutual funds:

5paisa.com brings you the same convenience while investing in Mutual funds also - Hassle
free and Paperless Investing. With the inclusion of Fidelity MF, you can now invest on-line
in 19 mutual Funds through India Infoline. Prudential IIFLMF, JM MF, Alliance MF,
Franklin Templeton MF, Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI
MF,Reliance MF,Kotak MF,Tata MF,DSP Merrill Lynch MF, ING MF,CHOLA
MF,Deutsche MF,HSBC MF and Standard Chartered MF are the Mutual Funds available for
investment. You can invest in mutual funds without the hassles of filling application forms
or any other paperwork. You need no signatures or proof of identity for investing.

Once you place a request for investing in a particular fund, there are no manual processes
involved. Your bank funds are automatically debited or credited while simultaneously
crediting or debiting your unit holdings. You also get control over your investments with
online order confirmations and order status tracking. Get to know the performance of your
investments through online updation of MF portfolio with current NAV.

Redemption:

In addition to giving hassle-free paperless redemption, India Infoline offers faster liquidity.
You can redeem the mutual fund units through India Infoline. The money will be credited to
your bank account automatically 3 days after the order placement date.
Switch:

To suit your changing needs you may wish to shift monies between different schemes. You
can switch your monies online from one scheme to another in the same fund family without
any thassles.

57
.

Systematic Investment plans (SIP):

SIP allows you to invest a certain sum of money over a period of time periodically. Just fill in
the investment amount, the period of investment and the frequency of investing and submit.
India Infoline will do the rest for you automatically investing periodically for you.

Systematic withdrawal plan:

This allows you to withdraw a certain sum of money over a period of time periodically.

Transfer-in:

You can convert your existing Mutual funds into electronic mode through a transfer- in
request.

4. IPOs and Bonds Online:

You could also invest in Initial Public Offers (IPOs) and Bonds online without going through
the hassles of filling ANY application form/ paperwork. Get in-depth analyses of new IPOs
issues (Initial Public Offerings) which are about to hit the market and analysis on these. IPO
calendar, recent IPO listings, prospectus/offer documents, and IPO analysis are few of the
features, which help you, keep on top of the IPO markets.

5. Personal Finance:

58
Use our Personal Finance section and get hold of tools that can help you plan your
investments, retirement, tax etc. Analyse your risk profile through the Risk Analyzer and get
a suitable investment portfolio plan using Asset Allocator.

6. Customer Service Features:

With 'India Infoline' you can trouble shoot all your problems online.
Address your trading queries on-line through "Easy Mail". You can view and
change your profile or password on-line through General Profile option. Get
details of IIFL Centers, our sales and service offices, across India through branch
locator.
View your Account Statement and Bill Summary of your transactions online using
bills & accounts.
View your Digital Contract Notes instantly. View various charges through the Fee
Schedule option.Give your feedback or viewpoint through the Viewpoint online The
marketing strategy is such that people are made aware of the of advantages of on-line
trading. The other important thing is customer service. If you ask me as to what IIFL is doing
in customer service, I would put it succinctly as the ease of allowing trading, back-office
operations and seamless connectivity to the bank and the DP.

Perfect Portfolio Management Services

Intermediaries and investment consultants for retail, high net worth individuals and
corporations helping them leverage the booming Indian economy by profitably participating
in Indian Equity and Commodities Markets. We offer customised solutions based on the risk
profile of each investor by planning a personalised asset allocation program and effectively
utilising various available cash and derivative products (including futures / options and
related strategies like spreads, straddles, strangles etc.)

Features of IIFL
A/C opening charge-Rs.750/- (refundable against brokerage)+ 555/-

59
Margin money- minimum Rs.10, 000/-

Name of the software used- Trader Terminal advance

Software installation charge- Nil.

No. of scripts provided by the software- unlimited.

Maintainance charge- Nil.

Exposure- 8 to 10 times (intra day) 4 times (delivery).

Name of the bank with the help of which customer get the facility of net banking- HDFC
Bank, Axis Bank, ICICI Bank, Bank of Baroda

Services provided- Equity, IPO, MF, PMS, Commodities, Insurance, Wealth Management
Services, Mortgages.

DP sells charge- 15 per instruction + service tax. Brokerage-

0.01% to.05% intraday 0.1% to 0.5% deliveries. Transaction

Report- sms, daily mail, daily courier,

Prepaid Scheme- not available.

Types of trading accounts provided- De-Mat a/c, Trading a/c , Margin a/c.

Network- 1145 branches and 800000 customers.

60
 Customer behavior in relation to stock market

Who is a customer?

A customer refers to individuals or households that purchase goods and services generated
within the economy. The word historically derives from "custom," meaning "habit"; a
customer was someone who frequented a particular shop, who made it a habit to purchase
goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her
"custom," meaning expected purchases in the future.

Why the stock market is called a market?

A market is a place where goods are bought and sold. The stock market is where people buy
and sell one type of product. That unique product is shares of ownership in a company,
which are also known as stocks. Potential investors get to choose from many companies that
sell a variety of goods, from clothing to medicines to sports equipment to toys. When people
buy and sell stock, it's called trading.

The various categories of customer in stock market

Not every person use to invest in stock market nor persons of a particular class invests in
stock market .the major type of investors belongs to following categories:
❖ Businessmen
❖ Salaried person
❖ Retired person

Behavior of customer with respect to the various categories Businessmen:-

61
They are more likely to take risks in investing because they have previous experience of
taking risks in their previous wealth creation. These individuals have a high-risk tolerance
and less of a need for security. They also need to feel in control of their investments, often to
the extent of becoming highly involved with the running of their investments, researching or
becoming overly involved with technicalities. The need for control is related to the fact that
they have a strong belief in themselves and their own abilities. Once they feel they are losing
control of an investment situation, their risk tolerance reduces. By being actively involved
and in control, these investors feel they are reducing risk. However such involvement may
actually be detrimental as it is likely to be a source of irritation to their investment advisor
who cannot get on with the business of running their clients affairs due to constant
questioning and harassment. The classes of occupation that are likely to be active investors
include: small business owners who have developed their own businesses rather than
inherited, medical surgeons, independent professionals, such as lawyers or accountants, who
work for themselves rather than a large firm, entrepreneurs, and self-employed consultants.

Active investors are more likely to get personally involved with the running of their financial
affairs, and may believe they know more than their advisor does. They are less likely to
delegate the maintenance of those parts of their investment portfolio in which they believe
they have experience or have had personal success. However, these individuals are more
likely to be contrarian in their stock picking habits and have less need to be completely
diversified. Age tends to soften their need to be constantly in control, so that older clients
may be more malleable and open to their advisors suggestions.

Government employees / Salaried person:-

To these investors security is more important than risk In addition, certain classes of
occupation are more likely to contain passive investors. For example:- State/Centre govt.
employees, non-surgical doctors, corporate executives, lawyers and accountants who work in
companies. Reasons for this are that these individuals are less likely to have high financial
resources at an early stage in their careers, having had to delay earning good salaries in order
to study or having to repay student loans. Once earning a decent wage, they are then more
careful with their money, having a greater need for security. Anyone, therefore, with reduced
financial recourses is likely to be more risk conscious and, hence, a passive investor. For
these individuals it's important to hang on to their money.

62
Passive investors make good clients because they tend to trust their financial advisor and are
more likely to delegate the running of their financial affairs. And because they are risk
averse, they tend to like diversified portfolios of investments in quality companies or
investment products. However, they can believe that an investment is more risky than it is,
which may keep them out of potentially lucrative opportunities. Passive investors are also
more likely to need the approval of others and are unlikely to take a first step into unknown
investment territory by being a contrarian. Consequently, they are more likely to follow the
investment herd when it comes to stock market investment and stick to following the trend.

Retired person:-

These investor are cautious and intent on safeguarding their wealth, shunning volatility or
excitement.
those who take the path of least resistance, looking primarily for security and safety in their
investments and doing what has worked previously.

63
CUSTOMER BEHAVIOR WITH RESPECT TO INDIA INFOLINE LTD

Who are the customers in INDIA INFOLINE LTD?

All those person who had there demat account open with India Infoline ltd are called the
customer of India Infoline ltd.

Various categories of customer defined by India Infoline ltd

INDIA INFOLINE LTD classify there customer on the basis of there response to stock market.
Such as if a customer is regularly trading in stock market through it’s demat account then that
customer is treated as TEQ (trading on equity) customer.

In the same way other categories of customer are

NT (non trader):
All those customer who had open there demat account with India Infoline ltd but not started
trading in stock market through that demat account after 3 month of its account opening date
those customer are treated as non trader by India Infoline ltd.
ST (stop trader)
Those entire customers who had traded with its account once or twice and after that stop trading
through its account due to some reasons are known as stop traders.

64
 ANALYSIS

SWOT analysis of India Infoline

WHAT IS SWOT ANALYSIS?

A scan of the internal and external environment is an important part of the strategic planning
process. Environmental factors can be classified as Strengths (S) or Weakness (W), and those
external to the firm can be classified as OPPURTUNITY (O) or THREATS (T). Such an
analysis of the strategic environment is referred to as a

SWOT ANALYSIS.

The SWOT analysis provides information that is helpful in matching the firm’s resources and
capabilities to the competitive environment in which it operates. As such, it is instrumental in
strategy formulation and selection. The following diagram shows how SWOT ANALYSIS fits
into an environmental scan:

65
 ENVIRONMENTAL SCAN

INTERNAL ANALYSIS EXTERNAL ANALYSIS

STRENGTHS WEAKNESS OPPURTUNITIES THREATS

SWOT ANALSIS FRAMEWORK

Strengths:

A firm’s strengths are its resources and capabilities that can be used as a basis for developing
66
acompetitive advantage. Examples of such strengths include:

67
➢ 2-in-1 account integrates your broking and demat accounts. All accounts are from IIFL
and very well integrated. This feature makes IIFL the most interesting player in online
trading facility. There is absolutely no manual interfere require. This is truly online
trading environment.
➢ Unlike most of the online trading companies in India which require transferring money
to the broker's pool or towards deposits, at IIFL you can manage your own demat.

➢ Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all
from one website. General Insurance is also available from IIFL Lombard.

➢ Trading is available in both BSE and NSE

➢ Good reputation among customers as INDIA INFOLINE ltd provides a

relationship manager to every client.
➢ Cost advantages from proprietary know how.
➢ Exclusive access to high-grade natural resources.
➢ Online trading platform
➢ Diverse Branch Network provides ample opportunities to penetrate deep into the existing
& untapped market. Its subsidiaries have grown from a single location to a nationwide
network spread over various cities.
➢ Personal relationship manager who will help assist the clients in share trading
➢ No custodial charge
➢ It does not keep any condition as to collect minimum amount of brokerage from its
clients
➢ Equity analysis report to support the investment decision of its clients
➢ Trading via branch network, telephones and internet account i.e. both online and offline
➢ Strong market presence and increased market share leading to a virtuous cycle of growth
and profitability
➢ The incentive model is created such that it leads to generation of higher revenue for the
organization. This acts as a motivating factor for the employees to perform well.
➢ Induction of new employees through an extensive computer based training module that
equips them to service their clients efficiently.

68
 ➢ An added advantage of INDIA INFOLINE ltd is its strong brand name, which helps
its sales force to sell the products.

Weakness:

➢ Getting access to India Infoline website during market session can be frustrating.
➢ IIFLbrokerage is high.
➢ Not all stocks are available under Margin Plus
➢ Too many people try to eat the same piece of pie i.e. people employed in INDIA
INFOLINE ltd hit the same area to target their customers.
➢ There should be a separate set of staff working in fields and trading on behalf of their
clients: INDIA INFOLINE ltd has same set of staff who are making clients and also
trading on behalf of clients this hinders the relationship manager to provide adequate and
necessary tips to the clients and at times the managers are not in the position to answer
the questions of their clients relating to the current market position as they are on fields.
➢ Due to the continuous need to meet the targets, some of the Relationship managers crack
under pressure and thus leave the organization
➢ There is no limit to the maximum number of clients that a Relationship manager can
handle. This affects the level of service provided to the clients who are not volume
traders.

Opportunities:

The external environmental analysis may reveal certain new opportunities for profit and growth
some examples of such opportunities include:

➢ The market will gradually evolve into two segments, where there will be self-directed traders
and those who seek advice for making their investment decisions. The latter set will prefer to
speak to the broker, get his advice and then trade through certain channels. So both have to
co-exist, as is the case in almost all the mature markets
➢ Scope of online trading on BSE

➢ An unfulfilled customer need.

➢ Market expansion i.e. opening branches at untapped areas

69
➢ The Capital market in the last few years has turned out to be one of the favorable avenues for
the retail investors. This is due to the performance of the Indian Industry in various sectors
and the Economy in general. Even the future outlook looks promising
➢ Market seems favorable for commodities trading.
➢ Arrival of new technologies

Threats:

Changes in the external environmental also may present threat to the firm some of the examples
include
➢ Companies like Relegates Share khan, and Private Brokers are major threats to IIFL.
➢ Local brokers capable of charging lower brokerage
➢ Industry competitors vying for the same target segment.
➢ Changes in SEBI guidelines & other tax implications.
➢ Government Regulations
➢ Shifts in consumer tastes away from firm’s products
➢ Emergence of competitor company who charging less brokerage

70
 RESEARCH METHDOLOGY

INTRODUCTION

Research in common parlance refers a search for knowledge. Once can also define research as a
scientific and systematic search for pertinent information on a specific c topic. Infect, research is
an art of scientific investigation. “Research as a systematized effort to gain new knowledge”

Research is an original contribution to the existing stop of knowledge for it advancement. It is

the pursuit of truth with help of study observation comparison and experiment insured research
for knowledge through objective and systematic method of finding solution to a problem is
research. Research refers to the systematic method consisting of enunciating the problem,
formulating the hypothesis, collection of the facts.

Research is a process of steps used to collect and analyze information to increase our
understanding of a topic or issue". It consists of three steps: Pose a question, collect data to
answer the question, and present an answer to the question.

Title Of The Study

“Research on capital market with INDIAINFOLINE LTD”.

Objective Of The Study

➢ To study the company profile of Indiainfoline Ltd.
➢ To study customer satisfaction level of Indiainfoline Ltd.
➢ To study the various services provided by Indiainfoline Ltd.
➢ To know the expectation of Indiainfoline Ltd Customers.

71
Sample:-

The sample was selected randomly from the people of different fields another survey and
telephonic interview was done among the customers of IIFL.

Sample size:-

Total sample size was restricted to 100 for all segments.

Scope of the study:-

The study helps me to know the state of mind of the investors & their expected charges
regarding Brokerage, Return, Annual maintenance charges, and so on as well as their investment
preferences regarding capital market.
The Brokerage house is also benefited as it come to know what an individual investor expects
when he or she is going to invest in capital market, to which extent the customer is satisfied
with the IIFL. The firm will also come to know about the investors mindset about their
investment in primary market or secondary market.
By this study the firm will come to know about the lagging areas and the loopholes and can
overcome them and it can also formulate various efficient competitive strategies with the
help of competitive analysis to outrage their competitors.

Hypothesis

A hypothesis is a hypothetical statement regarding the relation between two or more variables.
They must be statements of the relationship between variables and they must carry clear
implications for testing the stated relations.
A broad hypothesis is given below from which more focused hypothesis may be derived “Car
manufacturers have ignored the preferences of women in car design”. By reducing

72
the problem to a hypothetical statement, the problem has become more focused and the
hypothesis can be tested through research methods.

Research Methodology

The project started by approaching India Info line Ltd to know about the capital market, working
of broking industries along with the competitive analysis of India Info line with reference to the
other broking companies operating in the same area. The studies also focus on consumer
behavior towards stock markets, their investment preference towards capital market and their
expectations from a brokerage house . This will be reflected from the questions contained in the
questionnaire discussed later in the project report.

The survey was also conducted to know the state of mind of the investors who wanted to invest
in the stock market & also to know the attitude and preference of the prospective investors
regarding India info line.

A Questionnaire is designed to collect the needed information regarding the survey. For the
survey I have taken 70 existing and prospecting investors, I got the questionnaire filled by them
to know the state of mind of the investors who wanted to invest in the stock market, their
expected charges regarding Brokerage, Return, Annual maintenance charges & also to know the
attitude and preference of the prospective investors regarding capital market. Results are
cautiously viewed as sample is coming from a specific population. The response that is generated
during this exercise is converted in the form of percentage to have a comparative outlook. As the
number itself cannot explain the true picture. These percentages are then represented through the
simple tools like Bar graph, Pie charts etc…

Method of data collection:

All the data was collected through one to one interview and telephonic interview. All the
questions discussed below were explained to the respondent proper care has been

73
taken to see that respondent understand the question clearly and answer to in without any hurry.
All the respondents were interviewed at their convenience so that there is no chance that the
interviewer comprehends. The responses were clearly taken without suffering from any
ambiguity.

Type of Data

In My project I have used both Primary & Secondary data.

✓ For Primary Data: -

I made a questionnaire and the questionnaire filled by the prospective investors who wanted to
invest in the capital market. Data Observed or collected directly from first- hand experience data
is called primary data.

➢ Direct personal observation:-

This is a very general method of collecting primary data. Here the investigator directly contact
the informants, solicits their cooperation and enumerates the data. The Information is collected
by direct personal interviews.

➢ Indirect oral Interview:-

Information are not collected directly from the source but by interviewing persons closely
related with the problem. This method is time saving and involves relatively less cost.

➢ Questionnaire Method:-

Especially when the inquiry is quite extensive. It involves preparation of a list of questions
relevant to the inquiry and presenting them in the form of a booklet, often called a questionnaire.

✓ For Secondary Data: -

I have taken the information from the official website of India Info line ltd. that is
www.indiainfoline.com, 5paisa.com, magazines, journals, other companies’ websites

74
etc. Published data and the data collected in the past or other party is called secondary data.

➢ Internet:-
Data from previous projects was gathered from the internet such as Security market surveys from
magazines. The data may not be directly relevant to the topic under study but was of immense
value for planning out the study. Some of the data available may be outdated but can be useful
for forming the basis of our study.

➢ Literature:
Collect literature and reviews to get a general overview of the Security market in India. Study
the existing reports undertaken for assessing the traits of Investor.

➢ Customer Feedback Forms:-

I have collect data from customer feedback forms, which are collected on-premises. Customer
satisfaction survey (i.e. service response time, delivery timing, professionalism)

Limitation of the study

➢ Customers were in hurry so they were not interested to talk and also to fill the
questionnaire.

➢ Some time customers fill half of the questionnaire and walk out of the office.

➢ Some customer feels shy in filling the questionnaire and talking about their
investment behavior.

75
 ➢ Most of the customers are not interested to give the answer of all the questions, so it
generally creates a huge problem at that time.

➢ The Sample size used for the research was small.

➢ Analysis of the data might differ depending on the statistical tools and techniques used.

ANALYSIS OF CUSTOMER BEHAVIOUR

Q1 what is your profession?

a) Government/ Salaried employees
b) Businessman
c) Retired person

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 Category No. Of People Percentage
Employees 43 43%
Businessmen 27 27%
Retired 30 30%
Total 100 100%

Interpretation:
➢ 43% of the customer surveyed in Sri Ganganagar who visited
the branch of India Infoline ltd belongs to Govt. employees or
salaried person 27% are businessmen and rest are the 30%
retired persons.

Q2 Do you like invests your money?

a) Yes
b) No

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 Category No. Of People Percentage
Yes 75 75%
No 25 25%
Total 100 100%

Interpretation:
➢ Among the various people Surveyed only 75 were interested in investing there
money rest 25 were not interested to invest there money.

Q3 In which market does you invest your money?

a) Primary market
b) Secondary market
c) Other

Category No’s of People Percentage

Primary 26 26%
Secondary 43 43%

78
 Other 31 31%
Total 100 100%

Interpretation:
➢ Most of the people are afraid of investing there money in secondary market and they
use to invest there money in factors of primary market or in various post office
schemes.69% of people are interested in investing in stock market, others do invest in
Mutual funds, banks, post office etc.

Q4. Do you have your own demat account?

a) Yes
b) No

Category No. Of People Percentage

Yes 63 63%
No 37 37%
Total 100 100%

Interpretation:

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 ➢ Among those who are interested in stock market trading only 63% of them have demat
a/c
➢ Rest of them either has shares in physical form or do trades through their
broker’s demat a/c

Q5 Do you have your demat account with India Infoline ltd?

a) Yes
b) No

40%
ye
s
60%
no

Category No. Of People Percentage

Yes 60 60%
No 40 40%

80
 Total 100 100%
Interpretation:

81
 ➢ 60% are person surveyed are the existing customer of India Infoline ltd and rest 40% do
not have their demat account with India Infoline ltd.

Q6. Do you know about online share trading?

(a) Yes
(b) No

Category No. Of People Percentage

Yes 65 65%
No 35 35%
Total 100 100%
Interpretation:

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 ➢ 65% of the person having their demat account know about the online
trading facilities but still 35% of the people are not aware of this facility.

Q7. Other then the demat account of India Infoline ltd with which other brokage house do you
have your demat account?
a) Karvy
b) Religare
c) Sharekhan
d) Aanand Rathi

Karvy Religare Share khan

15%

40%

30%

15%

Company No. Of People Percentage

Karvy 15 15%
Religare 30 30%
Share khan 15 15%
Aanand Rathi 40 40%
83
Total 100 100%

84
Interpretation:
➢ 30% of A/Cs are opened in Religare
➢ 15% of A/C in Karvy
➢ 15% of A/Cs in Sharekhan
➢ 40% of A/Cs in Aanand Rathi

Q8. How do you invest your money?

a) Equity
b) Mutual funds
c) IPOs
d) Others

50%
45%
40% equity,
40%
35%
30%
mutualfunds,
25% 25
% other,
20%
20%
15%
10%
ipo's,
5%
15%
0%
0 1 2 3 4 5

85
 Category No. Of People Percentage
Equity 40 40%
mutual funds 25 25%

86
 IPO’s 15 15%
other 20 20%
Total 100 100%

Interpretation:
➢ The survey show that 40%invest money in equity,25% mutuslfunds,20%others and
15%Ipo’S.

Q9. What type of trading do you prefer?

a) Delivery based
b) Intraday
c) Margin trading

Category Businessmen Salaried Retired

Delivery 15% 45% 50%
Intraday 65% 25% 20%
Margin based 20% 30% 30%

87
Interpretation:
➢ The survey show that 65% of the businessmen do intraday trading and 20% does
margin based trading only 15% of the businessmen does delivery based trading as they
like to earn more in less time . On the other hand 45% and 50% of the salaried and
retired person respectively like delivery based trading very few of them like to do intra
day or margin based trading as they mainly prefer the safety of there money which is
possible in long term trading .
Q10. How do you choose to invest in a particular type of securities at a particular time ?
a) Do analysis of the market by yourself
b) Ask some of your colleagues
c) Take stock tips from media
d) Information given on the website of India Infoline ltd

Category No.Of People Percentage

Self analy. 30 30%

From Colleagues 37 37%

88
Analyst 22 22%

89
 Website 11 11%
Total 100 100%

Interpretation:
➢ .Survey show that 37% people invest ask to some of your colleagues,30% self
analy,22% analyst and rest 11% from website.

Q11 are you satisfied with India Infoline ltd as a brokage house?
a) Yes
b) no

Y
Ne
os
0
%

Category NNoo. Of People Percentage

Yes 27% 73 73%
No 27 27%
Total 100 100%
Yes
73
%

Interpretation:
➢ Only a proportion of 73% of people are satisfied with India Infoline ltd rest 27%
people are not aware of the various facilities provided by India Infoline ltd such as
research tips, margin ,free software facility, services of RM’s etc that is why they are
not satisfied with INDIA INFOLINE ltd.

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 FINDINGS
About stock market:-

 This analysis contributes to our understanding that every investor is different, with
different financial goals, different tolerances to risk, different personal situations and different
desires. The Objectives being the type of return being sought, while constraints include factors
such as time horizon, how liquid the investor is, any personal tax situation and how risk is
handled.

 The analysis also show that the majority of investors are more probable to sell (buy) stocks
in a company after a positive (negative) earnings surprise, and are biased towards buying after
the disclosure of new financial statement information. Large investors, on the other hand, show
behavior opposite to that of the majority of investors. We suggest investor overconfidence and
asymmetric information as possible explanations for the documented behavior.

 Uneducated mass do not have much information about the stock market but invest in stock
market according to the saying of other.

 Businessmen make more investment in stock market whereas a salaried investors are busy
at work during the week and consider trading decisions mainly during the weekend and
consequently they are more likely to trade (either buy or sell) on Mondays.

 There is a fear factor among general public in concerned with share market. They think it
is speculation.

91
 How to analyze equity.

 How to analyze index value :-

= current market capitalization X base value.

Base market capitalization

How to calculate net asset value:-

 Sum of market value of shares
+ Liquid assets
+ Dividends/interest accrued
- amount due on unpaid assets
- Expenses accrued but not paid
No. of shares outstanding

ABOUT INDIA INFOLINE LTD:-

1. According to the survey most of the customers of “Infoline Ltd”says that it is
pocket friendly.
2. Coming to faith 70% say IndiaInfoline Ltd is better than othersstock
brokers due to customers satisfaction.
3. Lack of promotional activities undertaken by IndiaInfolinesecurities Ltd.
4. Main purposes of investments are returns & liquidity.
5. Investors take risk as well as returns into their mind while making the investment.
6. Businessmen are more interested in the stock market than the others.
7. Commodity market is less preferred by the investors, might because of less
awareness about commodity market.
8. People want to invest their money in the security market but the have not the proper
knowledge.
9. People pay more emphasis on brokerage than service provide by brokerage houses.

92
 FINDINGS

➢ People are not aware of using the online trading facilities

➢ INDIA INFOLINE LTD has captured the market because of its brand name and the
brand awareness in the minds of the consumers. But people are yet to know about its
excellent service which would definitely help the company to capture more and more
new customer.
➢ Customer feel that the brokage charged by INDIA INFOLINE LTD are very high as
compared to other brokage house but they are not aware of the various facilities(margin
trading, recommendation etc) provided by India Infoline ltd to its customer which make it
unique .
➢ Many clients did not know about the change of RM. This leaves a bad impression on the
concerned client, damaging the reputation of the firm
➢ Many time clients are not given confirmation after the trade
➢ Some time the database (including customer contact number and address) maintained by
the company is wrong that create a problem to the company to have a regular touch with
its customer.

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RECOMMENDATION

Working of Back Office

▪ There should be a person solely responsible for checking the Registration Kit to ensure
that it is complete in all respects and there are no rejections.
▪ The policies related to Trading and DP should be consistent and in congruence with
each other.
▪ The time lag between giving in the kits for registration and opening the account should
be reduced to ensure speedy and efficient service.
▪ Any change in the policies of company should be given at least one month notice before
implementing it.

After getting Leads attention should be made on following points:

1. The calls made should be more informative and assertive.
2. The RM should provide an in depth demonstration of the software and client should be
assisted regularly.
3. Provision of a manual for online clients for ease of operation.
4. Time lag between the complaints put and follow up should be reduced.
5. Database should be verified properly, so that repeated entries do not occur. This will reduce
inconvenience to the clients, who complained about multiple calls received.

Analysis of Client Interaction (Already existing clients)

Client interaction and after sales services are the most crucial aspects for any business. We
carried out a study to gauge the level of satisfaction of the clients with the services of India
Infoline ltd. This helped us in understanding why India Infoline ltd has become one of the most
trusted brands within a short span of its commencement.

1. The Relationship Managers (RM) should be made responsible to ensure that the clients are
well catered, thus, reducing switching over of a lot of time lag is there

94
 between the follow up and the change of RM, as a result, the calls could not leave a positive
impact on the clients, so contacted. Therefore, follow up should be done fast without any
time lag.
2. The customers, who were satisfied with the services, appreciated this kind of follow up.
Therefore, such follow-ups are done from time to time, to gain customer confidence.
3. Many clients are not given confirmation after the trade, so they should be given due
information about it.
4. Complete net knowledge should be given to clients so that they may not find any difficulty in
login of their A/C on the website of India Infoline ltd .
5. Routing, thereby reducing loss of business to the firm.

95
 CONCLUSION

Indian economy is growing faster. This is one of the best growing economies among the world.
You can say the best emerging economy of the world. Stock market is the reflection of economy.
Naturally stock market of India is roaring. Sensex (One of the best Index of Bombay Stock
Exchange) has climbed from 3,000 to 22,000 in last five years and it is believed that it will reach
40000 in coming years. Now a day's every investor and trader enjoying sweet taste of stock.
More all less every day many stock prices have been increasing. Some of them are heating the
upper circuit (5%,10%20%). While making an investment in Indian stock market there are lots
of thing you should consider before it. I will guide you most important thing and tips that you
can implement while making any investment in stock market of India. These stock market
tips and tricks are based on many years of expertise experience and as a professional expert in
Indian stock market. These are the Stock market secrets........
✓ Buy at low and sell at high: - This is way to make money in stock market that you should
buy at lower prices and should sell at higher prices. It determines the success and failure
of an investor in stock market of India
✓ Current Trend of Stock Market: - As per current trend of stock market it has been seen
that once stock market rise at higher speed it down also with same speed and if stock
market have gone down there is more possibilities of getting up. This is the current
market trends but it can be change in future.

Keep patience: - Patience is also plays a vital role in your winning and losing. In stock market
many people’s take immediate decisions which can result in big losses later on. This is the nature
of stock market every step should be take after a deep thinking and consideration on it.

From the above survey & comparison charts : We can conclude that the majority of prospective
investors from the sample i.e.70% does not want to invest in the capital market because either
they don’t have sufficient knowledge about stock market or they don’t have time or they feel that
it is risky to invest in stock market.
At last from my study I would like to conclude that India Infoline ltd is growing at a good pace.
It is rapidly increasing its market share by capturing new consumers.

96
However the beat and the unique qualities of the company are yet to be known by the people.
The investors must be informed about its facilities like 2in1 account, margin based trading,
research tips given on website.
Even though there are lots of opportunities to expand & progress for the company but still it is
making sufficient profit.
Last but not the least, India Infoline ltd is customer friendly and this obviously makes a value
addition to any company in this competitive environment.
My experience with this company as a summer trainee was a overwhelming, which gave
me a lot of knowledge and idea about stock market and the brokage house. Besides I came to
know the difference between the class room study and the real work done in the market to make
a product rise in the market

97
 APPENDICES

Customer behavior analyzer questioner Name:

……………………….
Contact no.………………..
Age …………………….....

Q1 what is your profession/occupation?

a) Government/Salaried employees
b) Business
c) Retired person

Q2 Do you like to invest your money?

a) yes
b) no

Q3 In which markets do you invest your money?

a) Primary market
b) secondary market
c) Others

Q4 Do you have your own demat account?

a) yes
b) no

Q5 Do you have your demat account with India Infoline ltd?

a) Yes
98
 b) No

Q6 Do you know about online share trading?

a) Yes
b) No

Q7 Other then the demat account of India Infoline ltd with which other brokage house do you
Have your Demat Account ?
a) Karvy
b) Religare
c) Sharekhan
d) Do not have other demat account.

Q8 How do you invest your money?

a) Equity
b) Mutual Funds
c) IPOS
d) Others

Q9 What type of trading do you prefer?

a) Delivery Based
b) Intraday
c) Margin trading

Q10 How do you choose to invest in a particular type of securities at a particular time?
a) Do analysis of the market by yourself
b) Ask some of your colleagues
c) You and your friend both analyses the market and then invest.
d) See the recommendation given on the website of India Infoline ltd
99
Q11. Are you satisfied with India Infoline ?
a) Yes
b) No

NAME CONTACT NO.

1. ……………………… ……………………
2. ……………………… ……………………
3. ……………………… .…………………...
4. ……………………… ……………………

10
0
 BIBLIOGRAPHY:

➢ Kotler Philip Marketing Management, millennium edition, prentice Hall

inc.Publication,2011.

➢ Kothari C.R.Research Methology, 3rd Edition,New age Publication,2009.

➢ Sharma D.D.Marketing Research,3rd Edition,Publication Sultan Chand & son

Publication,2010.

News Papers

➢ The Economic Times

➢ Business Standard

WEBLIOGRAPHY

➢ http:/www.wikipedia.com
➢ www.infibeam.com
➢ 5paisa.com.

➢ www.indiainfoline.com

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1