Kunal Ravindra Hande Stock Market

PROJECT REPORT
ON
“A STUDY OF INDIAN STOCK MARKET”

SUBMITTED BY
MR. HANDE KUNAL RAVINDRA
UNDER THE GUIDANCE OF

PROF. THORAT S. G.
.
To
J.T.S.S.P.M.
SHRI SHIV CHHATRAPATI COLLEGE OF ARTS,
COMMERCE &
SCIENCE, JUNNAR
IN THE PARTIAL FULFILLMENT OF

BACHOLOR OF BUSINESS ADMINISTRATION
SAVITRIBAI PHULE PUNE UNIVERSITY
A Study of Indian STOCK MARKET

Page 1
ACADEMIC YEAR 2O22-2023
J.T.S.S.P.M
SHRI SHIV CHHATRAPATI COLLEGE OF ARTS,

COMMERCE & SCIENCE, JUNNAR
NAAC Re –Accredited-“B+ ”grade

DEPARTMENT OF COMMERCE & RESEARCH CENTRE
BACHOLOR BUSINESS ADMINISTRATION
CERTIFICATE
This is to certified that project report on ‘‘A STUDY OF INDIAN STOCK MARKET” is
submitted by MR. HANDE KUNAL RAVINDRA
student of T.Y.B.B.A. Seat No. 09 has satisfactorily completed project work as laid down
by the Savitribai Phule Pune University for academic year 2022-2023
Date :
INTERNAL EXAMINER EXTERNAL EXAMINER

Page 2
DECLARATION
I hereby declare that the information, photographs, date, etc. gathered during the training
period of Project Report study shall be strictly utilized only for the purpose of Project Report. This
Project Reports a part of the partial fulfillment of degree in Bachelor in Business Administration at
S.S.C.College Junnar for the session 2022-2023under university of Pune.
I honestly state that the intention of collection of the information in my project report is
solely for the purpose of study, not for commercial purpose or any means my sole and sincere motive
to learn the procedure practically and express my views by preparing project report.
Thus the sole and honest objective for collecting the information is only for the academic
purpose and I assure that collected information shall be restricted only for project report.
MR. HANDE KUNAL RAVINDRA

BBA 3rd YEAR

Page 3
ACKNOWLEDGEMENT
On the successful completion of this project I would like to express my deep gratitude
to all the people who have helped me in completion of this project.
I am thankful to the institution, its management & the concerned faculty. I express my
sincere thanks to Prof. THORAT S. G. my project guide, who guided me in various ways
towards the completion of the project.
I would also like to thanks my family for giving the moral & financial support.
Place: Junnar
Mr. HANDE KUNAL RAVINDRA

BBA 3rd Year.

Page 4
INDEX
SR.NO. CONTENTS PAGE

NO.
1 INTRODUCTION 7
2 HISTORY 9
3 BOMBAY STOCK EXCHANGE 13
4 NATIONAL STOCK EXCHANGE 21
5 SEBI 27
6 STOCK MARKET PARTICIPANTS 31
7 ADVANTAGE IN STOCK MARKET 35
8 DISADVANTAGES IN STOCK MARKET 38
9 NIFTY 50 40
10 IMPORTANCE OF STOCKS MARKET 42
11 METHODOLOGY 44
12 FINDING AND SUGGESTIONS 45
13 CONCLUSION 47
14 BIBLIOGRAPHY
48

Page 5
Page 6
Introduction
The stock market is the collection of markets and exchanges where regular
activities of buying, selling, and issuance of shares of publicly held companies take place. Stocks, also
known as equities, represent fractional ownership in a company, and a stock market is a place where
investors can buy and sell ownership of such investible assets. Institutionalised formal exchanges or over-
the-counter (OTC) marketplaces that operate under a well-defined set of regulations, conduct such
financial activities. They make the stock market, a platform to facilitate seamless exchange of shares.
There are two main stock exchanges in India where the majority of the trade
takes place - the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). NSE, located in
Mumbai, and established in 1922 is the leading stock exchange in India where one can buy and sell shares
of publicly listed companies. NSE has a flagship index named NIFTY50. The index comprises the top 50
companies based on their trading volume and market capitalisation.
National Security Clearing Corporation Ltd (NSCCL) and Indian Clearing Corporation Ltd
(ICCL) are the subsidiaries of the National Stock Exchange and Bombay Stock Exchange respectively.
They ensure guaranteed settlement of transactions carried in stock exchanges. The clearing corporation
ensures there are no defaults either from the buyers’ or sellers’ side.
A Study of Indian Stock Market Page 7

Securities Exchange Board of India (SEBI) is the regulatory body of the Indian Stock
Markets. The main objective of SEBI is to protect the interest of retail investors, promote the development
of stock exchanges, and regulate the activities of financial intermediaries and investors in the market. SEBI
ensures that the stock exchanges (BSE and NSE), brokers and sub-brokers conduct their business fairly, the
corporate houses do not use markets as a mean to unfairly benefit themselves, the rights of small retail
investors are protected and that the large scale investors with enormous cash do not intend on manipulating
markets.
Companies raise capital through the stock market, which they can utilise in expanding
their businesses. Offering stock shares instead of borrowing from financial institutions, is beneficial to the
companies since it saves them from incurring debt and paying interest charges on that debt. It also provides
investors, those who purchase stocks, the opportunity to earn a share in the profits of publicly-traded
companies. An investor can earn from the stocks that pay regular dividends, i.e. a given amount of money
per share of stock, or may as well profit by selling their stock for a profit if the stock price increases from
their purchase price

HISTORY OF INDIAN STOCK MARKET
While independent India is 75 years young, our equity markets’ origin dates back to the
second half of the 19th century which started with a bunch of stockbrokers trading securities under a
banyan tree.
From the humble beginnings of trading under the shade of a tree to being the fifth largest in terms of
capitalisation across the world, the Indian equity odyssey has been a delight to watch.
This piece reveals the highlights of this journey that every investor must know.
While loan securities trading began when East India Company entered India in the early
1800s, stock exchanges informally popped up much later. Until 1872, 22 stock brokers operated opposite
the Town Hall of Bombay, which was later shifted to its current home in Dalal Street in 1874 as more
brocker joined

Finally, in 1875 the informal group of brokers called Native Share and Stockbrokers
Association organized themselves as the Bombay Stock Exchange (BSE).
After BSE set shop, a huge range of regional exchanges flourished over the next couple
of decades in Ahmedabad, Madras, Calcutta and Hyderabad
Year Regional Stock Exchanges
1894 Ahmedabad Stock Exchange
1908 The Calcutta Stock Exchange
1920 The Madras Stock Exchange
1944 Hyderabad Stock Exchange
Things sped up post our independence in 1947. The formalisation of the stock
market embarked on its journey after the introduction of the Securities Contracts Act in 1956. This also
became the year when BSE became the first exchange to be given permanent recognition under the act.
All the efforts to boost the equity markets were further complemented by the setting
up of Unit Trust of India in 1963 which laid the foundation for the Mutual Fund industry in our country,
currently accounting for ₹37.75 Lakh Crore of AUM.
decade later, the cult of equity investors rose with Reliance’s IPO in 1977. Becoming
the first Indian company to be listed on the stock exchange, its issue was oversubscribed by seven times
and still remains a darling of investors in the markets being the largest company in terms of market
capitalization. (₹17.5 Lakh Crore
All this while the BSE finally shifted to its current home, the Phiroze Jeejeebhoy Tower in 1980, where the
famous 1,000 kg bronze Big Bull would be installed 28 years hence.
In 1986 BSE launched India’s first benchmark index called SENSEX which has
since returned 17.2% including dividends, showcasing the wealth generation that happened over one’s
lifetime.
1992 was the year of many changes when the then Finance Minister, Manmohan Singh, opened the gate to
foreign institutional investors and introduced the LPG policy. Piggybacking on the huge wave of new
opportunities coming up, Harshad Mehta became a household name for the classic rags to riches story,
only to find himself behind the bars for The biggest securities scam India had ever seen.

Owing to these developments, the Securities Exchange Board of India was given
statutory status in 1992, which had been operating as a non-statutory body for 4 years before this.
In 1994, NSE set up shop to compete with the monopoly of BSE in trading volumes and
breed healthy competition after which in 1995 BSE introduced an electronic trading system known as BSE On-
line Trading (BOLT) replacing the open outcry floor system.
10 years after India’s first market-wide index, NSE came up with NIFTY 50 in 1996 and
setting the stage for India’s first index derivative contract to be traded in 2000.
2008 was a bad year for global markets as major indices were cut in half after the Global
Financial Crisis turmoil, including SENSEX.

In 2017 NSE IFSC started trading at GIFT City making it easier for Indian investors to diversify their portfolios
across geographies with relative ease.
In 2022 will be remembered as the year Indian markets eventually start being
recognized as mature markets, since this is when we finally entered the top 5 countries by market capitalization
and witnessed India’s biggest IPO of 21,000 crores, listing LIC at 6 lac crore valuation.
150 years have been a wild ride with booms and busts. While a lot has changed over the years, one thing
remains constant, Indian equities treading higher and higher making Indian investors wealthier as each decade
passes!

BOMBY STOCK EXCHANGE
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange. It is
located on Dalal Street in Mumbai. Established in 1875 by cotton merchant Premchand Roychand, a Jain
businessman,[6] it is the oldest stock exchange in Asia,[7] and also the tenth oldest in the world.[8] The BSE is
the 6th largest stock exchange with an overall market capitalisation in the world with more than ₹276.713 Lakh
Crore or $3.56 Trillion USD, as of January 2022.
The Bombay Stock Exchange (BSE) is the first and largest
securities market in India and was established in 1875 as the Native Share and Stock Brokers' Association.

Based in Mumbai, India, the BSE lists close to 6,000 companies and is one of the largest exchanges in the
world, along with the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan
Exchange Group, and Shanghai Stock Exchange.
The BSE has helped develop India's capital markets, including the retail debt market,
and has helped grow the Indian corporate sector. The BSE is Asia's first stock exchange and also includes an
equities trading platform for small-and-medium enterprises (SME). BSE has diversified into providing other
capital market services including clearing, settlement, and risk management.
The Bombay Stock Exchange played a vital role in the development of India’s capital
market, including the retail debt market, and providing the Indian corporate sector with an efficient platform to
raise investment capital. Also, it is popular for its electronic trading system that provides fast and efficient trade
execution. Investors can trade in equities, currencies, debt instruments, derivatives, and mutual funds on this
stock exchange. Additionally, it provides other services like risk management, clearing, settlement, and investor
education.

HISTORY OF BOMBAY STOCK EXCHANGE
The Bombay Stock Exchange, popularly known as the BSE, is the oldest stock exchange in
Asia. It was founded on 9th July 1875. BSE is also the world’s fastest stock exchange, offering trading speeds of
an unbelievable 6 seconds.
It is believed that the foundation of BSE was laid by a famous Jain businessman and cotton
trader, Premchand Roychand, who established the Native Share and Stock Brokers Association under a banyan
tree near Mumbai Town Hall in the mid-19th century. All traders gathered near the banyan tree to place bids and
receive company stocks
Unlike online trading, the entire process was paper-based then. Gradually, as the size and
volume of the market started growing, the authorities sensed the need to establish an institution to handle the
money and shares in an orderly way. This led to the establishment of the Bombay Stock Exchange (BSE) in
1875.
Between 1875 and 1928, BSE was situated in a building near the Mumbai Town Hall. In
1928, the exchange acquired a plot near Horniman Circle. It took two years for the building to get constructed
and the new BSE building became operational in 1930. To honour BSE and its activities, the street was
renamed Dalal Street. Dalal means broker in Hindi.
In 1957, the Indian Government gave recognition to the BSE under the Securities
Contracts Regulations Act. BSE’s popular index, the S&P BSE SENSEX index, was developed in 1986 to offer
an insight into the exchange’s overall performance .And, BSE’s derivatives segment was founded in 2000,
offering investors access to the S&P BSE SENSEX index futures contracts. Furthermore, the options market
was also opened by 2002, further expanding the BSE’s reach.

Like all other conventional stock exchanges of those days, BSE also followed an open
outcry system in floor trading. However, they switched to an electronic trading system in 1995. The electronic
trading system was developed by CMC Ltd. The exchange surprised everyone with the speed with which it
facilitated the transition from offline to online.
In fact, it took just fifty (50) days to convert from floor trading to online trading. The
screen-based, online trading platform was named BOLT, an abbreviated form of BSE On-Line Trading. It could
facilitate eight (8) million orders every day.
Presently, the BSE is a Partner Exchange of the United Nations Sustainable Stock
Exchange initiative. It joined the body in September 2012. BSE also set up the India INX, India’s first
international stock exchange, on 30th December 2016.
BSE enables trading in over 5,000 companies, making it one of the largest stock
exchanges in the world. The other big stock exchanges in the world include the

HOW DOES BSE WORKS ?
The Bombay Stock Exchange uses the electronic trading platform to conduct its financial
transactions. Through direct market access, investors can directly place market orders in BSE online without the
need for external specialists. Later, the focus shifted from buyers/sellers to the total value of transactions in a
day due to the lack of limit orders.
Investors can trade on the BSE stock exchange through any brokerage firm against a fee.
However, certain professional investors can apply for direct investment access who make large transactions on
the BSE stock market. Also, the stock exchange uses BOLT – Bombay Online Trading Platform for efficient
trading.
Transactions on the BSE platform require T+2 rolling days for settlement, which means that
all transactions take two days to process. Moreover, the SEBI is responsible for regulating the stock exchanges
in India and constantly updating rules to ensure smooth operation.

FUNCTIONS OF BOMBAY STOCK EXCHANGE
The following are the primary functions of the Bombay Stock Exchange –
1. Price Determination: The prices of securities in the secondary market depend on the securities’ demand
and supply. Thus, BSE helps in this process by constantly valuing all the listed securities. And investors
can easily track the prices of these securities through the index popularly known as SENSEX.
2. Contribution to the Economy: BSE offers a trading platform for securities of various companies. The
trading process involves continuous reinvestment and disinvestment. This gives an opportunity for
capital formation, funds movement and boosting of the economy.
3. Facilitates Liquidity: The most important function of BSE is ensuring a ready platform for the sale and
purchase of securities. This gives investors the confidence to convert the existing securities into cash
anytime. Thus, investors can buy and sell anytime offering them high liquidity.
4. Transactional Safety: BSE ensures that the securities are listed after verifying the company’s position.
Also, all listed companies must adhere to the rules and regulations laid out by the governing body, i.e.
Securities and Exchange Board of India (SEBI).

The Stockholders of the Bombay Stock Exchange
The BSE Initial Public Offering (IPO) was launched on 23rd January 2017. The BSE
stock is currently listed on the National Stock Exchange (NSE). The stock holding pattern of BSE ( as
of 31st March 2020) is as follows:
• Mutual Funds – 4.41
• Banks and Financial Institutions – 0.17%
• Insurance Companies – 0.83
• Foreign Institutional Investors (including Foreign Portfolio Investors) – 10.57%
• FDI – 8.36%
• Alternate investment Funds – 0.19%
• Indian Non-Institutional Corporate Bodies - 6.70%
• Retail investors – 26.01%
• HUFs, NRIs, and CM Pool Position – 7.07%
• Trading Members and Associates of Trading Members – 32.44%

The top shareholders of BSE include the following:
• Deutsche Boerse AG
• Life Insurance Corporation of India
• Siddharth Balachandran
• IDFC Mutual Fund
• State Bank of India
• Acacia Banyan Partners Limited
• National Westminster Bank PLC as Trustee of The Jupiter India Fund
• Caldwell India Holdings INC
• GKFF Ventures
• Akshay Vasantlal Mehta
• ICICI Prudential Mutual Fund
• MSPL Limited
• S Gopalakrishnan

NATIONAL STOCK EXCHANGE
National Stock Exchange of India Limited (NSE) is one of the leading stock exchanges in
India, based in Mumbai. It is the world’s largest derivatives exchange by number of contracts traded[a] and the
fourth largest in cash equities by number of trades[b] for the calendar year 2021. NSE is under the ownership of
some leading financial institutions, banks, and insurance companies.[3] NSE was established in 1992 as the first
dematerialized electronic exchange in the country. NSE was the first exchange in the country to provide a
modern, fully automated screen-based electronic trading system that offered easy trading facilities to investors
spread across the length and breadth of the country. Ashishkumar Chauhan is the Managing Director and

Chief Executive Officer of NSE.
National Stock Exchange has a total market capitalization of more than US$3.4 trillion, making
it the world’s 9th-largest stock exchange as of August 2021.[2] NSE’s flagship index, the NIFTY 50, a 50 stock
index is used extensively by investors in India and around the world as a barometer of the Indian capital market.
The NIFTY 50 index was launched in 1996 by NSE.[4] However, Vaidyanathan (2016) estimates that only
about 4% of the Indian economy / GDP is actually derived from the stock exchanges in India.[5] A number of
corruption scandals, including the 1992 Indian stock market scam and others, have rocked the Indian stock
exchanges. At various times, numerous Indian corporate groups have been charged with stock manipulation.
Unlike countries like the United States where nearly 70% of the country’s GDP is derived from
large companies in the corporate sector, the corporate sector in India accounts for only 12–14% of the national
GDP (as of October 2016). Of these only 7,400 companies are listed of which only 4000 trade on the stock
exchanges at BSE and NSE. Hence the stocks trading at the BSE and NSE account for only around 4% of the
Indian economy, which derives most of its income-related activity from the so-called unorganized sector and
household spending.
Economic Times estimates that as of April 2018, 6 crore (60 million) retail investors had invested their savings
in stocks in India, either through direct purchases of equities or through mutual funds.[21] Earlier, the Bimal
Jalan Committee report estimated that barely 1.3% of India’s population invested in the stock market, as
compared to 27% in the United States and 10% in China.

HISTORY OF NATIONAL STOCK EXCHANGE
National Stock Exchange was incorporated in the year 1992 to bring about transparency in the
Indian equity markets. Instead of trading memberships being confined to a group of brokers, NSE ensured that
anyone who was qualified, experienced, and met the minimum financial requirements was allowed to trade.[26]
In this context, NSE was ahead of its time when it separated ownership and management of the exchange under
SEBI’s supervision. Stock price information that could earlier be accessed only by a handful of people could
now be seen by a client in a remote location with the same ease. The paper-based settlement was replaced by
electronic depository-based accounts and settlement of trades was always done on time. One of the most critical
changes involved a robust risk management system that was set in place, to ensure that settlement guarantees
would protect investors against broker defaults.
NSE was set up by a group of leading Indian financial institutions at the behest of the Government
of India to bring transparency to the Indian capital market. Based on the recommendations laid out by the
Pherwani committee, NSE was established with a diversified shareholding comprising domestic and global
investors. The key domestic investors include Life Insurance Corporation, State Bank of India, IFCI Limited,
IDFC Limited and Stock Holding Corporation of India Limited. Key global investors include Gagil FDI
Limited, GS Strategic Investments Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments
(Mauritius) Pte Limited, and PI Opportunities Fund .
The exchange was Incorporated in 1992 as a tax-paying company and was recognized as a stock
exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the
Prime Minister of India and Manmohan Singh was the Finance Minister. NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The capital market (equities) segment of the NSE
commenced operations in November 1994, while operations in the derivatives segment commenced in June
2000. NSE offers trading, clearing and settlement services in equity, equity derivative, debt, commodity
derivatives, and currency derivatives segments. It was the first exchange in India to introduce an electronic
trading facility thus connecting the investor base of the entire country. NSE has 2500 VSATs and 3000 leased

lines spread over more than 2000 cities across India.
NSE was also instrumental in creating the National Securities Depository Limited (NSDL)
which allows investors to securely hold and transfer their shares and bonds electronically. It also allows
investors to hold and trade in as few as one share or bond. This not only made holding financial instruments
convenient but more importantly, eliminated the need for paper certificates and greatly reduced incidents
involving forged or fake certificates and fraudulent transactions that had plagued the Indian stock market. The
NSDL’s security, combined with the transparency, lower transaction prices, and efficiency that NSE offered,
greatly increased the attractiveness of the Indian stock market to domestic and international investors.

HOW DOES NSE WORK?
Trading on NSE happens through an ‘electronic limit order book’ method. This means when
an investor places an order to buy or sell securities in the market, the order is matched through a trading
computer. Thus, the entire process has no intervention from specialists or market makers. So the investor’s
market order is automatically matched with the limit order. Moreover, the buyers and sellers have the advantage
of remaining anonymous.
Additionally, the stock exchange offers more transparency to investors by displaying every
buy and sell order on the trading system. Investors place these orders via stockbrokers, who provide an online
trading facility. Also, few investors can avail the “direct market access” facility, where they can place orders
directly into the trading system.
The NSE Is operational from Monday to Friday except for Saturday, Sunday, or any other
declared holidays. The stock market timings are –
Pre-opening session: Order entry opens at 9:00 am and closes at 9:08 am.
Regular session: The market opens at 9:15 am and closes at 3:30 pm.
The Nifty 50 is the benchmark index of the NSE, which constitutes 63% of the total market
capitalisation of the NSE. The index includes 12 different sectors of the economy under 50 variable stocks.

FUNCTIONS OF NATIONAL STOCK EXCHANGE
The following are the major functions of NSE –
• Establishing a nation-expansive trading facility for debt, equity and other asset classes accessible to
investors.
• Providing investors with an equal opportunity to participate in the trading system through an
appropriate communication network.
• Ensuring a fair, efficient and transparent securities market to investors using electronic trading systems.
• Enabling shorter trade settlement periods and book-entry settlement systems.
• Meeting the current international standards set for the financial securities markets.
NSE was the first to create the National Securities Depository Limited (NSDL), allowing
investors to hold and trade securities electronically. Thus, this made investing simple and provided increased
transparency. Also, the price information was available only to a handful of traders present at the exchange, but
now it is widely broadcasted and available to everyone at their fingertips.

SECURITY EXCHANGE BOARD OF INDIA (SEBI)
The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and
commodity market in India under the ownership of Ministry of Finance within the Government of India. It was
established on 12 April 1988 as an executive body and was given statutory powers on 30 January 1992 through
the SEBI Act, 1992
• FUNCTIONS AND RESPONSIBILITY :-
The Preamble of the Securities and Exchange Board of India describes the basic functions of the
Securities and Exchange Board of India as “…to protect the interests of investors in securities and to promote
the development of, and to regulate the securities market and for matters connected there with or incidental
there to”.
SEBI has to be responsive to the needs of three groups, which constitute the market
1. Issuers of securities
2. Investors
3. Market intermediaries

SEBI has three powers rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.
It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive
function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an
appeal process to create accountability. There is a Securities Appellate Tribunal which is a three-member
tribunal and is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High
Court.[7] A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in
streamlining disclosure requirements to international standards.
♦ SEBI committees
• Technical Advisory Committee
• Committee for review of structure of infrastructure institutions
• Advisory Committee for the SEBI Investor Protection and Education Fund
• Takeover Regulations Advisory Committee
• Primary Market Advisory Committee (PMAC)
• Secondary Market Advisory Committee (SMAC)
• Mutual Fund Advisory Committee
• Corporate Bonds & Securitisation Advisory Committee
POWER OF SEBI
For the discharge of its functions efficiently, SEBI has been vested with the following powers:
• To approve by−laws of Securities exchanges.
• To require the Securities exchange to amend their by−laws.

• Inspect the books of accounts and call for periodical returns from recognised Securities exchanges.
• Inspect the books of accounts of financial intermediaries.
• Compel certain companies to list their shares in one or more Securities exchanges.
• Registration of Brokers and sub-brokers.
SEBI DEPARTMENT
SEBI regulates Indian financial market through its 20 departments.[
• Commodity Derivatives Market Regulation Department (CDMRD)
• Corporation Finance Department (CFD)
• Department of Economic and Policy Analysis (DEPA)
• Department of Debt and Hybrid Securities (DDHS)
• Enforcement Department – 1 (EFD1)
• Enforcement Department – 2 (EFD2)
• Enquiries and Adjudication Department (EAD)
• General Services Department (GSD)
• Human Resources Department (HRD)
• Information Technology Department (ITD)
• Integrated Surveillance Department (ISD)
• Investigations Department (IVD)
• Investment Management Department (IMD)

• Legal Affairs Department (LAD)
• Market Intermediaries Regulation and Supervision Department (MIRSD)
• Market Regulation Department (MRD)
• Office of International Affairs (OIA)
• Office of Investor Assistance and Education (OIAE)
• Office of the chairman (OCH)
• Regional offices (ROs)

STOCK MARKET PARTICIPANTS
The main participants of the stock market include :-
1. Regulator
If you are an ardent cricket fan, you would know that cricket in India is governed by the Board
Council for Cricket in India (BCCI). This body is responsible in governing, administering and ensuring that all
cricket regulations, including that of the Indian Premier League (IPL) are followed.
So, if something like a large sport needs to be governed and regulated, why not your investments?
In the stock market, there is a regulatory body that oversees the functioning and fairness of the
stock market and the entities involved that are engaged in financial activity.

The goal of this regulator is to ensure that fraud is prevented, and if taken place is investigated
thoroughly. They help keep markets efficient and transparent. And more importantly ensure that investors such
as you are treated fairly and honestly.
There are various regulators for different sectors of the financial market like Ministry of Finance,
RBI, SEBI (Securities and Exchange Board of India), IRDA (Insurance Regulatory and Development
Authority), PFRDA (Pension Fund Regulatory and Development Authority) etc But for the Indian Stock
Market, SEBI is the regulator.
Let’s understand the major role and functions of Securities and Exchange Board of India (SEBI)
• Protects investor’s interests in securities by conducting awareness programs
• Regulates stock market activities
• Prevents fraud or malpractices
• Helps develop the Indian Stock Market
• Grants investment advisory licenses
Consider the SEBI as a guardian of capital market participants. So, in this regard its main purpose
would be to create such an environment for all participants and financial market enthusiasts to ensure that the
securities market functions efficiently and works smoothly.
So, since it’s a regulatory body, here are its main functionalities:
• It designs guidelines and a proper code of conduct for financial intermediaries to abide by
• It can conduct inquiries and audits of all concerned as per the SEBI Act.
• It registers and regulates various intermediaries like brokers, sub brokers, merchant bankers, etc.
• It performs and exercises powers in its control and can impose penalties for violations of the rules.

2. Stock exchanges
Let’s look into the second participant of the stock market – the stock exchange.
The stock exchange also known as a securities exchange is a trading platform. It facilitates the
registered stockbrokers and investors to transact in securities electronically. India has two premier stock
exchanges include National Stock Exchange (NSE) and the and BSE Limited (BSE).
3. Companies
Every share that you see available to be purchased or sold in the stock market today are those
issued by publicly traded companies. When a company makes an Initial Public Offer (IPO), it becomes publicly
traded, which means it introduces itself in the stock exchange.
Now we come to the most important participant in the stock market — investors and traders
such as you.
4. Investors and traders
You may know that trading and investing are two very different activities. But when you invest
in a publicly listed company in the stock exchange, you are regarded as an investor.
On the other hand, if you are looking to buy into a security for a short-term horizon with the
intention of profiting from price fluctuation in a stock, you are regarded as a trader.
In the stock market, traders and investors have different objectives, strategies and modes of
approaching financial markets.
Within investors, there are two types. These include:
Retail investors – These are investors who invest in the stock market directly.

Institutional investors – These are typically financial institutions like banks, Asset Management Companies
(AMC), insurance companies, pension funds, etc. The investors could be domestic or foreign. We now arrive at
the fifth and final stock market participant — market intermediaries.
4. Market intermediaries
Intermediaries are entities that are involved in a financial transaction in the market apart from the
buyer and seller. These are institutions that help you carry out your investment activity smoothly while ensuring
all the rules laid out by the regulator are met.

ADVANTAGES IN STOCK MARKET
1. Better over time returns
The Indian and worldwide stock markets have historically given investors excellent returns over
time. One of the main advantages of stock investment is the chance to be patient and witness your investment
grow and multiply. Even if stock prices fluctuate on a daily basis, the stock market as a whole tends to gain
value.
The stock market has historically produced the highest returns for investors, beating all other
forms of financial assets and the housing market for many years, according to an analysis of various asset
classes. The SENSEX and NIFTY indexes have rarely let down investors when compared to the returns on the
Indian stock market since the 1980s. These stock indices have expanded enormously despite setbacks like the
2008 financial crisis and the 2020 pandemic. Although previous performance cannot predict future results, the
evidence does indicate that long-term stock investing typically produces favourable outcomes when given
enough time.
2. Dividend paying
Many shareholders receive their income through the company’s dividends, which are given out as
a portion of their profits. Dividends are often paid once every three months. However, not all businesses do.
They might opt to reinvest this gain back into the business. Even though the value of the stock has decreased,
firms can send dividends to shareholders as a part of their profits.
Investors may profit from a number of advantages from dividends earned through stock
ownership. Your investment’s overall return on the stock may grow due to dividend payments. By supporting
the stock price, they also aid in reducing stock price volatility.Dividend payments that are steady and increasing
are typically signs of earnings growth and firm stability. People frequently use these dividend payouts to
supplement their portfolio values or fund their retirement.

3. Benefits of diversification & liquidity
The stock market offers a variety of financial instruments that give investors a choice of
securities to invest in depending on their risk tolerance and financial objectives, such as shareholdings,
securities, mutual funds, and derivatives. Investment in a variety of equities also provides excellent
diversification because it lessens the concentration of your portfolio. By providing portfolio diversification and
balancing market risks, this flexibility is useful in reducing the risks associated with stock investing. By
utilizing growth in many economic sectors, a well-diversified portfolio aids in expanding your wealth and
generates a return even if certain individual companies decline in value.
Stock investments also have the advantage of being very liquid investments. Without having to
look for sellers or buyers for your assets, they let you purchase or sell equities right away. Other assets, such as
real estate or long-term debt instruments, cannot be claimed to be similar. Liquidity, as defined by economists,
is the ability to swiftly and cheaply convert shares of stock into cash.
4 . Ownership
Buying stock is equivalent to acquiring ownership in a corporation. A shareholder typically has
the ability to cast a vote on corporate decisions. Due to their ownership of the business, the shareholders can
influence management to make decisions that are in their best interests.
5.Invest to prevent inflation
Your money is supposedly falling back if it isn’t moving forward, according to some. The
disposable income of wealth is affected in this way by inflation. In the current economic climate, investing in
equities can be advantageous as a hedge against growing inflation. In the past, stock gains have consistently
outperformed inflation rates. Increased profits for businesses can result from higher prices, which in turn might
raise share values. Growth stocks, such as those in technology, FMCG, etc., have been observed to outperform
the broader market and offer a reliable inflation hedge.
6.Transparency
The “Stock Exchange Board of India” (SEBI) is responsible for monitoring and regulating the

Indian stock market. With the creation of such an organization, stock market investing is now safer and more
transparent. Investor interest protection is seen as a first priority by SEBI. This considerably aids in lowering
hazards brought on by corporate fraud.
Today, stock investing is regarded as one of the greatest methods for building long-term wealth.
Investors can use the stock market to help them reach their long-term financial objectives with a planned
investment plan. Nevertheless, investing in stocks entails a number of hazards. After all, the fundamental rule of
the risk-reward trade-offs governs the world of investing: higher risk and higher profits. Before making an
investment, one should have a thorough understanding of the dangers connected to stocks and appropriate risk
management techniques.
7.Voting rights
The equity shares provide shareholders the ability to vote on issues affecting their interests. As a
result, the Companies Act of 2013 mandates that all significant decisions must be approved by shareholders at
an AGM or extraordinary general meeting. This gives the company’s investors participation in how the
business is run.
8. Easy to sell and buy
Among the most liquid kinds of investment is the stock market because there is no set
investment time, unlike fixed bank deposits or government bonds. Additionally, the title transfer process is far
shorter and involves fewer legal requirements than real estate transactions.
9. Tax advantages
The Income Tax Act of 1961’s Section 112A permits investors to claim a tax benefit on long-term capital gains;
however, the term varies according to the security’s kind and whether the company is listed or unlisted.
Whereas earnings from many other investment alternatives are subject to high tax rates, those from strategic
security investments are tax-free.

DISADVANTAGES IN STOCK MARKET
1. Business risk
The most frequent risk facing investors who buy individual equities is a company-specific risk.
Investors risk losing their money if the firm they invested in is unable to generate sufficient sales or profits. The
market value of a corporation might also decrease due to subpar operational performance.
2. Headline danger
A part of company risk that is frequently evaluated is headline risk. This is the danger posed by
media reports that could harm a company’s reputation and bottom line. A single unfavourable headline can
trigger a market retaliation against a certain business or an entire industry, and frequently both. The early
November drop of the Tesla stock is a prime illustration. Elon Musk made waves when he tweeted about
whether or not he should divest 10% of his firm shares. Soon after this news hit the news, the stock value
plummeted.
3. Market danger
Due to the total systematic risk afflicting the financial markets, investors may suffer losses. A
prime illustration of increased market risk is stock market crashes. Although it cannot be totally eradicated,
market risk can be protected.

4. Liquidity Risk
A significant and obvious risk involved in stock market investing is liquidity risk. Even though
most shares and ETFs have significant liquidity, they are not all created equal. Certain small-cap stocks or
penny stocks may have liquidity problems. Investors may experience difficulties while buying and selling these
products at their fair price.
5. Low margin and high brokerage
Brokers are still necessary for the market to operate smoothly, despite the fact that it is now
much more accessible. They demand large brokerage fees, which reduces investors’ profit margins and detracts
from the appeal of the investment option.
6. Inadequate knowledge
The investors’ ignorance of their investments and the firms they invest in is one of the obvious
drawbacks of the stock market. The majority of issuers rely on broker recommendations or market trends,
which might not be their greatest advantage.
The majority of shareholders are unable to analyze and make use of this information to their
advantage, even though the SEBI & stock exchanges compel issuer businesses to disclose pertinent knowledge
for the benefit of investors. The regulator has a pressing need for investor education and training activities.
7.Time-consuming
The act of trading stocks has gotten easier and faster thanks to the development of online
trading. Still, the registration process, such as registering a Demat account, takes a little longer. The data and
analysis needed before making a valid investment, however, still require diligent work because it is a one-time
activity.

NIFTY 50
The NIFTY 50 is a benchmark Indian stock market index that represents the weighted average
of 50 of the largest Indian companies listed on the National Stock Exchange.[1] It is one of the two
main stock indices used in India, the other being the BSE SENSEX
Nifty 50 is owned and managed by NSE Indices (previously known as India Index
Services & Products Limited), which is a wholly owned subsidiary of the NSE Strategic Investment
Corporation Limited. NSE Indices had a marketing and licensing agreement with Standard & Poor’s for co-
branding equity indices until 2013. The Nifty 50 index was launched on 22 April 1996, and is one of the many
stock indices of Nifty.
The NIFTY 50 Index has shaped up to be the largest single financial product in India, with
an ecosystem consisting of exchange-traded funds (onshore and offshore), and futures and options at NSE and
SGX. NIFTY 50 is the world’s most actively traded contract. WFE, IOM and FIA surveys endorse NSE’s
leadership position.
The NIFTY 50 Index covers 13 sectors (as on 30 April 2021) of the Indian economy and offers
investment managers exposure to the Indian market in one portfolio. Between 2008 & 2012, the NIFTY 50
index’s share of NSE’s market capitalisation fell from 65% to 29%[10] due to the rise of sectoral indices like
NIFTY Bank, NIFTY IT, NIFTY Pharma, NIFTY SERV SECTOR, NIFTY Next 50, etc. The NIFTY 50
Index gives a weightage of 39.47% to financial services, 15.31% to Energy, 13.01% to IT, 12.38% to consumer
goods, 6.11% to Automobiles and 0% to the agricultural sector.
The NIFTY 50 Index is a free float market capitalisation weighted index. The index was
initially calculated on a full market capitalisation methodology. On 26 June 2009, the computation was changed
to a free-float methodology.[12] The base period for the NIFTY 50 index is 3 November 1995, which marked
the completion of one year of operations of the National Stock Exchange Equity Market Segment. The base
value of the index has been set at 1000 and a base capital of ₹ 2.06 trillion.

IMPORTANCE OF STOCKS MARKET
Stock market is an important part of the economy of a country. The stock market plays a
play a pivotal role in the growth of the industry and commerce of the country that eventually affects the
economy of the country to a great extent. That is reason that the government, industry and even the central
banks of the country keep a close watch on the happenings of the stock market. The stock market is important
from both the industry’s point of view as well as the investor’s point of view.
Whenever a company wants to raise funds for further expansion or settling up a new
business venture, they have to either take a loan from a financial organization or they have to issue shares
through the stock market. In fact the stock market is the primary source for any company to raise funds for
business expansions. If a company wants to raise some capital for the business it can issue shares of the
company that is basically part ownership of the company. To issue shares for the investors to invest in the
stocks a company needs to get listed to a stocks exchange and through the primary market of the stock
exchange they can issue the shares and get the funds for business requirements. There are certain rules and
regulations for getting listed at a stock exchange and they need to fulfill some criteria to issue stocks and go
public. The stock market is primarily the place where these companies get listed to issue the shares and raise
the fund. In case of an already listed public company, they issue more shares to the market for collecting
more funds for business expansion. For the companies which are going public for the first time, they need to
start with the Initial Public Offering or the IPO. In both the cases these companies have to go through the
stock market.
This is the primary function of the stock exchange and thus they play the most important
role of supporting the growth of the industry and commerce in the country. That is the reason that a rising
stock market is the sign of a developing industrial sector and a growing economy of the country.
Of course this is just the primary function of the stock market and just an half of the role
that the stock market plays. The secondary function of the stock market is that the market plays the role of a
common platform for the buyers and sellers of these stocks that are listed at the stock market. It is the
secondary market of the stock exchange where retail investors and institutional investors buy and sell the
stocks. In fact it is these stock market traders who raise the fund for the businesses by investing in the stocks.
For investing in the stocks or to trade in the stock the investors have to go through the
brokers of the stock market. Brokers actually execute the buy and sell orders of the investors and settle the
deals to keep the stock trading alive. The brokers basically act as a middle man between the buyers and
sellers. Once the buyer places a buy order in the stock market the brokers finds a seller of the stock and thus
the deal is closed. All these take place at the stock market and it is the demand and supply of the stock of a
company that determines the price of the stock of that particular company.
So the stock market is not only providing the much required funds for boosting the
business, but also providing a common place for stock trading. It is the stock market that makes the stocks a
liquid asset unlike the real estate investment. It is the stock market that makes it possible to sell the stocks at
any point of time and get back the investment along with the profit. This makes the stocks much more liquid
in nature and thereby attracting investors to invest in the stock market.

RESEARCH METHODOLOGY
The purpose of this study is to analyse the market capitalisation, year effect and the risk and returns
of the important stock market (NSE and BSE) of about 20 years from 2000 to 2020 and to analyse the
investment pattern of traders in stock market. In order to assess the objective both primary data and secondary
data were used. The primary data was collected from 30 respondents from Thrichur district by using google
form. The secondary data was collected from various journals, articles, publications and online websites.

FINDING AND SUGGESTIONS
Stock market is the physically existing institutionalised set up where

instruments of security stock market like shares, debentures, bonds, securities are traded. Stock market
makes a floor available to the buyers and sellers of stocks and liquidity comes to the stocks. At this
scenario the importance of investing in stock market is getting higher. The number of investors and the
number of stock market out of which a majority are online markets , are increasing day to day. Currently
investing in stock market and having an intraday trading is considered as the best way to earn money.
Considering its importance the present study concentrate on ‘A Study on Indian Stock Market: NSE and
BSE’.
The objectives of the study are to study about the emerging stock markets in India
such as NSE and BSE, to study about the trend of year effect of the Indian stock market (BSE and NSE)
from 2000 to 2020, to examine the market capitalisation of Indian stock market (NSE and BSE) from
2000 to 2020, to examine the trend of risk and return of Indian stock market (NSE and BSE) from 2000
to 2020 and to study about the type of trading preferred by the investors in stock market. In order to
assess the objective both primary data and secondary data were used. The primary data were collected
from 30 respondents from Thrichur district by using google form. The secondary data was collected from
various journals, articles, publications and online websites.
Findings of the study
• Due to covid-19 pandemic, Sensex lost 3,934.72 points (13.15%) to 25, 981.24 and Nifty lost
1,135 points (12.98%) to 7610.25.
• The biggest stock market crashes in India were caused mainly due to covid19 pandemic, 2008
financial crisis, Harshad Mehta scam.
• Nifty has less risk and higher liquidity than Sensex. Nifty suffer lower market impact cost than
Sensex.
• Covid-19, strong correlation with the trends and indices of the global market as BSE Sensex and
Nifty 50 fell by 38%. The total market cap lost a staggering
• 27.3% from the start of the year.
• Pre covid-19, market capitalisation on each major exchange in India was about $2.6 trillion. The
Sensex returned around 14% for the year 2019 prominently featured blue chip companies such
as HDTV bank, TCS, Infosys, Reliance, ICICI, without which Sensex return would have been
negative.
• Despite a population of over 1.2 billon, there exist only 20 million active trading accounts in
India.
• The banking sector have maximum risk and return of 1.9 and 10 respectively ICICI in automobile

sector Eicher motor have maximum return of 35.9 Ashok Leyland have maximum risk of 1.9 IT
sectors have maximum return of 17.7 and maximum risk of Oracle of 6.6 and in fast moving
consumer goods sector, Godrej have maximum return of 14.8 and highest risk in ITC of 0.5.
• The stock of bank of India, HDTV bank, Mahindra bank are less volatile in nature. The stock of
federal bank, Indus land bank, Canara bank, ICICI bank, PNB, SEBI are moderately volatile in
nature. The stock of yes bank and axis Bank have high volatile in nature.
• Among all the investment avenues in the stock market banking is considered as the most sensitive
investment avenue the fine stocks of banking sectors shows Arch effect which means period of
high vitality is followed by similar high volatility and low is followed by low volatility.
• The S&P 500 experienced it’s fastest ever bear market, clocking in at just 33 days before it’s
third fastest recovery to a break-even level in about 5 months.
• 80% of the stockholders invest/trade in stock market for higher return rather than safety and
liquidity.
• 50% of the stockholders got information regarding stock market from financial advisors or
brokers.
• 63% of the stockholders prefer to have long term trading as it involves less risk. Intraday trading
has higher risk thus only 7% preferred intraday trading.
• All the stockholders prefer to have online mode of trading.
• advancement of technology and the pandemic scenario have made stock
• market into an online node of trading.

CONCLUSION
Indian stock market now grown into a great material with a lot of qualitative inputs and
emphasis on investor protection and disclosure norms. The market has become automated, transparent and self-
driven. It has integrated with global markets, with Indian companies seeking listing on foreign capital markets
exchange, off shore investments coming to India and foreign funds floating their schemes and thus bringing
expertise in to our markets. India has achieved the distinction of possessing the largest population of investors
next to the U.K., perhaps ours is the country to have the largest number of listed companies with around several
equity fund management avenues and National Fund managers most of them automated. India now has world
class regulatory system in place.
Thus, at the dawn of the new millennium, the equity funds market has increased the wealth
of Indian companies and investors. No doubt strong economic recovery, upturn in demand, improved market
structure, and other measures have also been the contributory driving forces. Even though Covid pandemic has
fall in India stock market, it recovered with huge hikes along with the economic recovery of the nation.

BIBLIOGRAPHY
• Anju balan (2013), Indian stock market- review of literature, TRANS Asian journal of
marketing and management research
• Avijan Datta, gautham bandopadhyay, prediction of stock performance in the Indian stock
market using logistic regression, international journal of business and information.
Website
• www.nseindia.com
• www.bseindia.com
• www.businessinsider.in

an A Study of Indian Stock Market Page 49

Kunal Ravindra Hande Stock Market

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kunal Ravindra Hande Stock Market

Uploaded by

Copyright:

Available Formats

PROJECT REPORT

“A STUDY OF INDIAN STOCK MARKET”

MR. HANDE KUNAL RAVINDRA

UNDER THE GUIDANCE OF

IN THE PARTIAL FULFILLMENT OF

A Study of Indian STOCK MARKET

SHRI SHIV CHHATRAPATI COLLEGE OF ARTS,

NAAC Re –Accredited-“B+ ”grade

INTERNAL EXAMINER EXTERNAL EXAMINER

A Study of Indian STOCK MARKET

MR. HANDE KUNAL RAVINDRA

A Study of Indian STOCK MARKET

Mr. HANDE KUNAL RAVINDRA

A Study of Indian STOCK MARKET

SR.NO. CONTENTS PAGE

3 BOMBAY STOCK EXCHANGE 13

4 NATIONAL STOCK EXCHANGE 21

6 STOCK MARKET PARTICIPANTS 31

7 ADVANTAGE IN STOCK MARKET 35

8 DISADVANTAGES IN STOCK MARKET 38

10 IMPORTANCE OF STOCKS MARKET 42

12 FINDING AND SUGGESTIONS 45

A Study of Indian STOCK MARKET

A Study of Indian Stock Market Page 7

A Study of Indian Stock Market Page 8

A Study of Indian Stock Market Page 9

Year Regional Stock Exchanges

1894 Ahmedabad Stock Exchange

1908 The Calcutta Stock Exchange

1920 The Madras Stock Exchange

1944 Hyderabad Stock Exchange

A Study of Indian Stock Market Page 10

line Trading (BOLT) replacing the open outcry floor system.

Financial Crisis turmoil, including SENSEX.

A Study of Indian Stock Market Page 11

across geographies with relative ease.

A Study of Indian Stock Market Page 12

Crore or $3.56 Trillion USD, as of January 2022.

The Bombay Stock Exchange (BSE) is the first and largest

A Study of Indian Stock Market Page 13

Exchange Group, and Shanghai Stock Exchange.

capital market services including clearing, settlement, and risk management.

A Study of Indian Stock Market Page 14

receive company stocks

renamed Dalal Street. Dalal means broker in Hindi.

was also opened by 2002, further expanding the BSE’s reach.

A Study of Indian Stock Market Page 15

facilitated the transition from offline to online.

facilitate eight (8) million orders every day.

international stock exchange, on 30th December 2016.

A Study of Indian Stock Market Page 16

day due to the lack of limit orders.

in India and constantly updating rules to ensure smooth operation.

A Study of Indian Stock Market Page 17

capital formation, funds movement and boosting of the economy.

Securities and Exchange Board of India (SEBI).

A Study of Indian Stock Market Page 18

of 31st March 2020) is as follows:

• Mutual Funds – 4.41

• Banks and Financial Institutions – 0.17%

• Insurance Companies – 0.83

• Foreign Institutional Investors (including Foreign Portfolio Investors) – 10.57%

• Alternate investment Funds – 0.19%