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A Project Study Report On

Training Undertaken at

Motilal Oswal Securities Limited

Titled Investment and Securities Analysis


Submitted in partial fulfillment for the Award of degree of

Master of Business Administration

Submitted By: Jitendra MBA 4th SEM

Submitted To:Dr. Sonal Jain H.O.D.

Deepshikha College of Technical Education, Jaipur


2009-2011

Jitendra Virahyas
JVIRAHYAS@GMAIL.COM

Certificate
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DECLARATION

Jitendra S/O Mr. ............... declares that the project report titled Investment and Securities Analysis is based on my project study. This project report is my original work and this has not been used for any purpose anywhere.

Jitendra
MBA 4th SEM

Deepshikha College of Technical Education, Jaipur

Preface
Masters of Business Administration is conducted with providing knowledge to the students regarding various type of management like financial management, marketing management and production management etc. As per the requirement of MBA course Motilal Oswal Securities Limited has been kind enough to permit me to complete my project on Investment And Securities Analysis. This report prepared during the practical training. Which is students first and greatest treasure as it is full of experience, observation and knowledge. The summer training was very interesting and gainful as it is close to real what have been studied is all the years through was seen implemented in a modified and practical form. I have done my training in Motilal Oswal Securities Limited at Sumerpur for 45 days. Mr. Jitendra Virahyas {jvirahyas@gmail.com} help in my study. During this training period I have learned about Back office work, trading work, and security market and sector analysis. I have come to know that how does security market function and how one can deal in stock market and how to manage risk and portfolio. Thus it was really beneficial for me in terms of knowledge and experience. The only fault was that the time available was short and there was much to learn, yet the things learned shall never be oblivion and are of great aid in the near future. I sincerely believe that the research can be useful to the organization and others as well Motilal Oswal Securities Limited.

Acknowledgement

I express my sincere thanks to my project guide, Mr. Jitendra Virahyas, Branch in charge (Money Seed), of Motilal Oswal Securities Limited., for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him/her/them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support he/she/they had provided to me with all stages of this project. I would also like to thank the supporting staff of all the company Department, especially for the Mr. Jitendra Virahyas {jvirahyas@gmail.com} for their help and cooperation throughout our project.

( Jitendra )

Executive Summery
The Indian stock market have seen various stages of economic cycles if we look at market condition then we find that at the beginning of the year 2008 the market was on cloud nine (all time high on 10 January 2008) Sensex was 21207.83. But after reaching its all time high it has started to show strong resistance to carry on and the result of the resistance and sharp slump in the world economy, the bull suddenly turned into bear and all expectations of investors that market will reach 25000 just turned into dream and according to current situation that is for away from reality. Investors just shocked due to slump in the market condition, they have rethink about investment alternatives risk and returns. Capital appreciation and time value of money. Since investment become a basic need of everyone so each and every person wants to secure his investment and willing to get good returns and capital appreciation upon the investment fund. This study really gives an overview about how and when we invest in various sectors. That how can invest money for future safety in various markets such as primary market, secondary market, Govt. security market etc. Thus the study is providing knowledge about investment scenario and guiding the investors for safe investment with the help of economic analysis, fundamental analysis, and financial analysis. One can analysis the market and understand the nature and movement of market for safe investment and can become wiser investor that is most challenging thing in current scenario.

Contents
1. Introduction to the industry 2. Introduction of organization 3. Research Methodology 3.1. Title of the Study 3.2. Duration of the Project 3.3. Objective of Study 3.4. Type of Research 3.5. Sample Size and method of selecting sample 3.6. Scope of Study 3.7. Limitation of Study 4. Facts and Findings 5. Analysis and Interpretation 6. SWOT 7. Conclusion 8. Recommendation and Suggestions 9. Appendix 10. Bibliography 8 14 72 72 72 72 72 73 73 77 78 79 84 95 96 97 100

1. INTRODUCTION TO THE INDUSTRY


Broking industry is growing for last ten year with leaps & bounces to Indian economy and stock market. Brokerage houses are known as intermediaries between market and investor and play a key role in execute the functions to carry on the stock market. All the brokerage houses having different sort of charges and fee according to their facilities and efficiency provided to investors. They manage the portfolio, risk management and providing guidance to investor for dealing in security market the major players of Indian broking industry are as follows:1. Motilal Oswal Securities Limited 2. Bonanza Portfolio Limited 3. Religare Limited 4. Hem Securities Limited 5. Angle Broking Limited 6. India bulls Securities Limited 7. Anand Rathi Securities Limited 8. Share khan Limited

1.1. ANALYSIS OF PLAYERS IN THE INDUSTRY


Unicon Unicon has been founded with the aim of providing world class investing experience to hitherto underserved investor community. The technology today has made it possible to reach out to the last person in the financial market and give him the same level of service which was available to only the selected few. unicon give personalized premium service with reasonable commissions on the NSE, BSE & Derivative market through our Equity broking arm Unicon Securities Pvt. Ltd. With our sophisticated technology you can trade through your computer and if you want human touch you can also deal through our Relationship Managers out of our more than 100 branches spread across the nation. Religare securities Trading in Equities with Religare truly empowers you for your investment needs. We ensure you have a superlative trading experience through

A highly process driven, diligent approach Powerful Research & Analytics and One of the best-in-class dealing rooms Further, Religare also has one of the largest retail networks, with its presence

in more than 1800* locations across more than 490* cities and towns. This means, you can walk into any of these branches and connect to our highly skilled and dedicated relationship managers to get the best services. The Religare Edge:

Pan India footprint Powerful research and analytics supported by a pool of highly skilled research analysts

Ethical business practices Offline/Online delivery models Single window for all investment needs through your unique CRN
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Anand Rathi Anand Rathi (AR) is a leading full service securities firm providing the entire gamut of financial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan India presence as well as an international presence through offices in Dubai and Bangkok. AR provides a breadth of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance, structured products all of which are supported by powerful research teams. India set to emerge as one of the worlds largest retail financial services markets. Indias GDP growth has averaged 6.5% since 1994 and expected to continue to grow at 8+%.

Increasing sophistication of financial markets Indian consumers affinity for equity Emergence of large domestic retail brokerage houses India has nearly 10,000 brokers; most of them are small family businesses The last 5-7 years has witnessed the emergence of large institutional players driving consolidation of the retail financial services market

Global players are starting to make strategic inroads into the retail financial services market

Foreign broking houses dominate FII based institutional broking Some global majors like Citigroup are making inroads into retail by leveraging their network

E-trade has announced majority ownership of IL&FS Investment

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Bonanza Portfolio Limited Bonanza, a leading financial services &brokerage house working diligently since 1994 can be describe in a single word as a financial powerhouse. With acknowledged industry leadership in execution and clearing services on exchange traded derivatives and cash market products, bonanza has spread its trustworthy tentacles all over the country with more than 1050 outlets spread across 350 cities. It provides an extensive range of services in equity, commodities, currency derivatives, wealth management, distribution of third party product, etc.

1.2. COMPETITION WITHIN THE INDUSTRY:


Competition within this industry is very high , there are lots of new companys coming in this business , although Bonanza Portfolio Limited has good reputation but competition is so high and due to recession all the brokerage firm are badly affected and Bonanza Portfolio Limited is also affected . This market is centre of attraction to new entrepreneur because it is already fast growing market and it is for sure that it will go further, and there are many opportunities lying ahead in the way .but although it is successful industry competition affect the major players. And bonanza is one of the successful players in this industry. it is working very efficiently to fight back with competition and challenging its competitor by satisfying its customer at most level of their satisfaction. It has many competitors which are providing different type of services .the brief introduction of its competitor is given below: 5paisa.com: 5paisa is the trade name of India info line securities private limited (5paisa), member of NSE and BSE. 5paisa is the wholly owned subsidiary of India info line limited, Indias leading and most popular finance and investment portal. 5paisa has emerged as one of leading player in e-broking space in India .their key products are investors terminal and trade terminal .its special feature is that it is not charging any kind of AMC which provides comfortable tariff card to its client. It provides the facility of margin for intraday and delivery as well as.
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Icici Direct.com: Icici Direct.com is the most comprehensive website, which allows its client the opportunity to invest in share, mutual fund, derivative (future and option) and other financial products .they offer their clients a product for every investment need. This provide the facility of cash trading, margin trading, margin plus trading, spot trading and BTST facility to its client. It also provides the facility of margin and funding for facilitating its client to trade with more money. Share khan: Share khan is also one of the close competitors of bonanza. It facilitate its client in many ways .although it is not as big as India info line and icici direct.com, etc, but it is still going forward speedily by winning the trust of its customers. Its product range includes classic trade, speed trade, and speed trade plus. Which facilitate its client during trading? It has also the producer for providing the market and funding the trade. Anand Rathi: Anand rathi (AR) is a leading full service securities firm providing the entire range of financial services. AR provides a breadth of financial and advisory services including wealth management, investment banking, corporate advisory, brokerage and distribution of equities, commodities, mutual funds and insurance all of which are supported by powerful research team. Its product includes demate and trading account. it only provides margin for intraday to its clients , it does not provide funding for delivery. Religare: Religare is driven ethical and dynamic process for wealth creation. based on this , the company stared its Endeavour in the financial market .a company promoted , controlled and managed by the promoters of ranbaxy , religare , was founded with the vision of providing integrated financial care driven by the relationship of trust .

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Kotak security: Kotak mahindra is one of Indias leading financial institutions, offering complete financial solution that encompasses every sphere of life. From commercial banking, to stock broking, to mutual fund, to life insurance, to investment banking, the group caters to the financial needs of individual and corporate. Kotak institutional equities has full financial service capability , which includes derivative , facilitating market access through affiliated and the distinctive offering of corporate access to investors. The division services over 250 client including files, pension and mutual fund. The division has sales desk in Mumbai, London and New York, with India desk also servicing clients in Hong Kong, Singapore, Japan and Australia.

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2. INTRODUCTION TO THE ORGANIZATION


Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small subbroking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 2000 member team. Registered Office Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai - 400 064. Corporate Office Hoechst House, 3rd Floor, Nariman Point, Mumbai - 400 021. Regional Motilal Oswal Securities Ltd. SBI Life Insurance Building, Opp. Main Post Office, Jawai Bandh Road, Sumerpur-306902 (Rajasthan)

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2.1. COMPANY PROFILE


Motilal Oswal Securities Ltd. (MOSL) was found in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled it to blossom into an almost 2000 member team. Motilal Oswal Securities Ltd. is a well diversified financial services firm offering a range of financial products and services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies. We have a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. We are headquartered in Mumbai and as of September 30th, 2010, had a network spread over 591 cities and towns comprising 1,504 Business Locations operated by our Business Partners and us. As at September 30th, 2010, we had 666,633 registered customers.

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In 2006, the Company placed 9.48% of its equity with two leading private equity investors based out of the US New Vernon Private Equity

Limited and Bessemer Venture Partners. The company got listed on BSE and NSE on September 9, 2007. The issue which was priced at Rs.825 per share (face value Rs.5 per share) got a overwhelming response and was subscribed 27.18 times in turbulent market conditions.
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The issue gave a return of 21% on the date of listing. As of end of financial year 2008, the group net worth was Rs.7 bn and market capitalization as of March 31, 2008 was Rs.19 bn. Credit rating agency Crisil has assigned the highest rating of P1+ to the Companys short-term debt program. Shareholding Pattern at on 31st December 08. As of December 31st, 2008; the total shareholding of the Promoter and Promoter Group stood at 70.37%. The shareholding of institutions stood at 10.07% and non-institutions at 19.56%.

2.2. MOTILAL SERVICE 2.2.1. EQUITY

OSWAL

SECURITIES

LIMITED

PRODUCT

AND

Trading Platform offers online Equity & Equity Derivatives trading facilities for investors. This high-end, efficiently integrated application makes trading convenient, quick and hassle free. Equity Advisory Group: In keeping with its tradition of personalized service, Motilal Oswal Securities Limited provides Customized Equity Advisory Group to clients based on their profile. Equity Research is an inherent strength of MOSt. Our advisory team has highly trained equity professionals, who act as your Equity Advisor. Centralized Advisory Desk (CAD):The MOSt Equity Advisory Group is based in Mumbai at largest dealing and advisory floor of India. This centralized advisory team caters to peculiar Investment need of every HNI & MNI client and business partner; in a seamless, speedy and reliable manner using state-of-the-art technology and telecommunication infrastructure. Online: MOSt Online is the techno savvy alternate of our broking services. Online service is for a segment of investors who have different expectations from an equity wealth manager restricting their willingness and ability to sort to premium advisory services.
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Benefits MOSt Advisory Group is equipped to augment and alter the investments in an effort to create healthy portfolio. MOSt Equity Advisor adjusts the portfolio to value addition and erosion across the researched companies. On the trading side the ideas are picked out of bouquet of products suitable to the trading appetite. Customers will receive regular portfolio valuation reports to enable you to monitor performance and view the progress towards the investment objective.

2.2.2. DERIVATIVE
Futures &Options (F&O): Futures & options are derivatives, which use equity as their underlying. Hence our Equity Advisory Group (EAG), will also act as your advisors for F&O & help you take informed decisions while trading in these derivative instruments. Why F&O: Since derivatives instrument provide good leverage opportunity, it is a great tool for speculation. Leverage is a double edge sword for which one requires an equity advisor. Our advisors will also help you with various strategies like Bull Spread, Bear Spread, Cover call writing, hedging strategies etc. This is to help you to make better trading returns. EAG Process (Derivatives) Client Profiling: MOSt Equity Advisor determines each EAG client's profile before deciding the set of derivative strategies that will ideally suit him/her. Hence if you have a good risk appetite & are willing to take riskier bets in the expectations of better returns we will suggest aggressive strategies like buying naked futures. Trading: The MOSt Equity Advisor is an expert in providing trading ideas, and at the same time monitoring those ideas as per your profile. Integrated Approach: We use integrated approach in our trading strategy using a combination of futures, writing calls, buying puts to help you reach your trading goal. Portfolio Tracking Software: Your F&O position will be continuously monitored using Portfolio Tracking Software.
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Benefits As the underlying is equities is pays to have the same advisor who is capable of dealing in both cash as well as derivatives. Also you will not have to deal with multiple people for equities as a product. Since the advisory only deals with equity as an asset class, his understanding of the derivatives and nuances of the market will be better than someone who deals with multiple asset classes. The most important of all, the EAG gets inputs from the technical and derivatives research group, whose sole objective is to identify trading opportunities with a favourable risk-reward ratio. The research products of the derivative and Technical desk will be available for you as a client.

2.2.3. ONLINE TRADING


My Broker: Welcome to Motilal Oswal Securities Ltd. and Trade online through our MyBroker platform. Be your own broker with complete research support from MOSL which helps you to make right decision at right time. You can choose your trading a/c which suits your trading habits & preference and trade anywhere, anytime. Buying and selling is as easy as click of a button. MyBroker Easy works very fast on low speed internet connection. MyBroker Mobile Helps you to buy or sell through your mobile phone MyBroker Desktop works best on high speed internet connection and suited best for heavy traders MyBroker Spectrum is suited best for investors and traders who want live market watch and faster execution.

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Product Offerings Value Pac Margin account Value Pac: Value Pac schemes offers you true Value for Money. It is the upfront subscription scheme, which gives you hefty discounts in brokerage rates with defined time period to use it. With the wide range of Value Pacs, based on the Volume of your Trade and the Validity period you can enjoy the benefits of placing your trades at reduced charges. Margin account: In case you don't want to commit on Value Pac (upfront subscription) and still take benefit of reduced brokerage rate; you can opt for our Margin Account where you would have to give defined upfront margin amount at the time of opening account. IPO Offerings Apply for IPOs online without filling up physical forms or writing out cheques Check your IPO order status details Modify/cancel your bids online Transfer funds online to your IPO account Access the latest information and news relating to IPOs Mutual Funds Offerings Transfer funds online to your MF account Get the latest news and information in the world of Mutual Funds Avail of top class research on various Mutual Funds

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2.2.4. INSURANCE
Motilal Oswal Securities added Life Insurance during April 2008 to our Wealth Management Portfolio thereby filling the gap in our basket of the products and thus providing comprehensive financial planning to our clients covering not all wealth creation solutions, but also wealth protection through proper risk management process. MOSL through our insurance partners offers insurance coverage and wealth creation opportunities to meet your different financial goals during the various stages of your life. The plans offer you the control to manage your protection and investment in one account. It is designed to remove your worries and making you secure in the knowledge that you and your loved ones are protected against any untoward events. On the basis of which life stage you are in and the corresponding insurance needs, plans we offer, can be categorized into the following types:
EktronJS,EktronW

Offerings

Wealth Solutions Retirement Solutions Education Solutions Securing Life

2.2.5. COMMODITIES
Ever since the dawn of civilization commodities trading have become an integral part in the lives of mankind. The very reason for this lies in the fact that commodities represent the fundamental elements of utility for human beings. Over the years commodities markets have been experiencing tremendous progress, which is evident from the fact that the trade in this segment is standing as the boon for the global economy today. The promising nature of these markets has made them an attractive investment avenue for investors. Earlier investors invested in those companies, which specialized in the production of commodities. This accounted for the indirect investments in commodity assets.

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About MOCBPL Unique Experience Motilal Oswal Commodities Broker Pvt. Ltd. (MOCBPL) is a fully owned subsidiary of Motilal Oswal Financial Services Ltd. and has been providing commodity trading facilities and related products and services on MCX and NCDEX. Besides access to the best of research in the form of Daily Fundamentals & Technical Reports on highly traded commodities, our clients also get access to our exclusive Customized Trading Advice on both the trading platforms. Solid Research: Client at MOCBPL gets access to the best of research in the form of Daily Fundamental and Technical Research Reports on highly traded commodities. One Stop Shop: MOCBPL provides end-to-end advice for all the

commodities to all our prestigious individual investors. Privileged customers also get exclusive & customized advice. Dual Membership: MOCBPL has membership to MCX and NCDEX exchanges which gives the clients to take advantage of the dual exchange trading facility provided by us. Personalized Service: We provide personalized service through

dedicated relationship managers for quick and efficient execution of transactions and for regular follow ups.

2.2.6. MUTUAL FUNDS


Investments can seem complicated and mystical. Since all the traditional investment avenues like bank deposits, RBI Bonds, NSC, KVP etc are becoming unattractive with the interest rate falling continuously, one needs to look for other investments alternatives. Mutual funds offer the ideal platform to participate in the Equity & Debt market indirectly through professional management. Mutual funds are becoming the most popular investment vehicles offering various kinds of schemes with different investment objectives. Investments through Mutual funds are one of the safest, easiest and convenient ways of making successful investments. The investments are in congruence to the laid down investment objectives securing the goals & objectives of the unit holders.
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At Motilal Oswal Securities Ltd, we understand the importance of financial goals of our privileged clients and provide you comprehensive solutions to all your financial needs. Through our tailor made portfolios, we serve your needs better and help you make informed investment decisions. Our dedicated Mutual fund desk gives you Solid advice backed services thus giving you the edge that you always wanted. Services Offered Need based advisory, fully backed with solid research. Dedicated Mutual fund advisors to understand your needs and help you ild a tailor made portfolio. Monthly review of portfolios. Monthly Fact-sheet covering our analysis of various funds. Knowledge sharing through educational seminars and workshops

2.2.7. IPO
Book Building and Fixed Price Issue are the two types of Initial Public Offerings (IPOs) through which a public company can raise money in the capital market. In a book building public issue the bids are received at different price levels and the demand for the issue is built up over a period of time. Depending upon the bids received at different price levels the issue price is ascertained. In a fixed price issue the issue price is pre ascertained by the issuer. There are two types of IPOs Book Building means a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicit and built up and the price of the security is assessed on the basis of the bids obtained for the quantum of securities offered for subscription by the issuer. This method provides an opportunity to the market to discover the price for securities. In case of a fixed price issue the issue price is fixed. ONLINE IPO
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MOSL facilitates the IPO application for all of its clients through online platform. Using the Online IPO service, an existing can apply for the IPO using the weblink www.onlinetrade.motilaloswal.com. BENEFITS MOSL has the best of both the worlds for IPO. It has on of the distribution network of outlets. Once the shares are allotted they can be sold at the same outlet. At the same time MOSL has a very convenient online trading platform through which you can invest in IPOs in three easy steps. Why IPOs at MOSL? Easy access to our Business locations with over 1289 Business locations spread across over 548 cities. Research and advice on new issues. Regular updates on ongoing and forthcoming issues to investors.

2.2.8. DEPOSITORY
MODES- Motilal Oswal Depository Services In the times of T+2 having a demat account linked to your trading account becomes really convenient. The non-trading clients can also avail of MODES. Today MODES is available at all business locations of Motilal Oswal. In terms of number of accounts MODES is the second biggest Depository Participant in CDSL with over 150,000 accounts. The trust they have in Motilal Oswal is reflected by their cumulative holding in MODES worth over Rs. 3400 crores. Holder of a MODES account receives regular account reports and an efficient service at all times. Clients having holdings over Rs. 10 lac receive special SMS service. They get recommendations on their holdings based on Motilal Oswal Research rated the "Most Independent Research - Local Brokerage" by Asia Money Brokers Poll 2006.

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Benefits As an investor you will enjoy many benefits if you buy and sell shares in the depository mode. The following are some of the benefits you will enjoy: No bad deliveries No risk of loss, mutilation or theft of share certificates No stamp duty for transfer of shares Reduced paper work Fast settlement cycles Low margin on securities pledged with banks Increase in liquidity of your securities because of faster transfer and istration of securities in your account Instant disbursement of non-cash benefits like bonus and rights into your account. Regular account status updates available from MODES at any point of time.

2.2.9. LOAN AGAINST SHARES


Loan Against Securities (LAS) is getting instant liquidity from your investment without selling them. All you have to do is pledge your securities in favour of Motilal Oswal Financial Services Limited (MOFSL). This enables you to enjoy all corporate benefits accrued on your securities and still avail loan against them. No EMI or prepayment charges applicable. Interest will be charged only on the actual amount and that too for the time it is utilized. Process Account Opening We at MOFSL understand your needs and help you meet your liquidity requirements. As an Individual or Corporates, you can avail LAS in 3 simple steps:

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Open a Trading and Demat account with Trading Member and depository Participant. Sign Master Loan Agreement with MOFSL. Open Bank Account with a designated bank. Borrowing limit based on your Financials 10 times of latest Income Tax Return. One time of your net worth as certified by a CA. Understanding your investing eligibility and funds available can get complicated, so we at MOFSL will calculate your eligibility for you. This information can be accessed any time through your separate web login. Benefits of LAS with MOFSL Exhaustive list of approved securities. Loan go up to 75% of securities amount. Pay interest only on the amount outstanding and only for the time used. Interest is calculated on the daily outstanding balance and debited to your account at the end of every month. Can also be availed against open ended mutual fund schemes. Enjoy all corporate benefits like bonus, dividends etc accrued on your securities.

2.2.10. ASSET MANAGEMENT:


Portfolio Management Services (PMS) Our team of portfolio managers design portfolios to suit every customers needs. Constantly scrutinizing the developments in market and moving stocks, we aim for maximum capitalization. We suggest the most appropriate product to customers, based on factors like their investment spheres, return expectation and risk tolerance. Our experience, expertise and research helps us give our customers investments the best upshots.

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2.2.11. PRIVATE EQUITY


Motilal Oswal Private Equity Advisors Private Limited (MOPEAPL) is the private equity arm of Motilal Oswal Financial Services Limited (MOFSL). Started in 2006, it has quickly emerged as one of the most active private equity funds in the country with the primary investment objective of achieving long-term capital appreciation by providing financial, strategic and operational assistance to emerging companies in the Mid Market (MMEs) space and Real Estate sector. Currently manages and advices two funds: India Business Excellence Fund India Business Excellence Fund [IBEF] is a sector agnostic fund with a corpus of INR 5.5 bln (US$125 mln) from both Indian and Overseas investors. IBEF makes investments in Indian MMEs looking for growth capital and has made eight investments since its inception in January 2007 in companies across various industries. Key features of the fund are: The fund can invest at the early stage of land acquisition giving it a competitive edge Flexibility of investments in terms of size, timing, method and partnering with midsized developers will provide easier entry and exit strategies Diversified portfolio of assets spanning across geography, asset class and type providing lower risk and higher returns Focused on residential and commercial projects, opportunistic investments in retail and other assets with a moderate timeframe for completion Focus on top 15 urban agglomerations due to high growth in urbanization Fund large-midsized regional developers looking for equity partnership and also large size developers having fund requirements for land acquisitions

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2.2.12. INVESTMENT BANKING


Motilal Oswal Investment Advisors Private Limited (MOIAPL) Founded in June 2006, MOIAPL offers comprehensive Investment Banking solutions and transaction expertise covering private placement of equity, debt and convertible instruments covering international & domestic capital markets, mergers & acquisitions advisory and restructuring advisory & implementations. The team comprises of multi-disciplinary professionals with extensive collective banking and corporate finance advisory experience. An in-depth understanding of different sectors within the Investment Banking team underpinned by the two decade old research strength of the group company, Motilal Oswal Securities Limited enables us to provide customized financial solutions to our clients across industries. To pursue our mission, the team inculcates the following values with utmost sincerity: Integrity: We honour our commitments and work on transactions keeping in mind the long term interests of the clients. Client Orientation: We start with gaining a thorough understanding of the clients needs and then offer solutions keeping in mind the priorities and suitability to them. Knowledge based solution offering: Our quest for offering the optimum solutions is supported by the knowledge and research on the underlying business and products, resulting in high quality financial and strategic advice. Quality: Our endeavour to follow the best global service standards and processes resulting in outstanding execution support for the transactions. Passion: We are passionate about our work. This results in innovative solutions and greatly enhances the probability of transaction closures.

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Offerings:

EktronJS,EktronW

Domestic Capital Markets We are a Category-I Merchant Banker registered with the Securities and Exchange Board of India (SEBI) authorizing the company to manage, advice and underwrite domestic capital market issues. We have expertise in Initial Public Offerings, Qualified Institution Placements, Follow-On Public Offerings, Rights Issues, Open Offers and Buy Backs. International Capital Markets We work with Indian Corporates to tap overseas investors through listing an FCCB or GDR issue on a reputed international stock exchange. We have placed FCCBs with overseas investors leveraging our strong relationships with overseas process agents, international lawyers and listing agents
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Private Equity Syndication We leverage our extensive network of relationships with Private Equity Funds to raise growth capital for our clients to fund their expansion strategies. Structured Finance Syndication We have built a strong reputation for advising and executing complex Structured Finance transactions. Implementation of a structured finance solution allows corporate clients to postpone or limit equity raising thereby leading to lower dilution. Mergers and Acquisitions Advisory We focus on providing solutions and support in implementing strategic decisions of our clients on target evaluation, acquisition, strategic alliances, divestitures, restructuring, de-mergers, privatization and mitigation of potential takeover threats. We are active on both buy-side and sell-side mandates leveraging our industry knowledge, deep relationships and extensive experience in facilitating and financing acquisitions. Financial Restructuring Advisory We specialize in helping companies come out of financial distress. We work with our clients in all aspects of the transaction including structuring, valuation, negotiations for most optimal settlement and fund raising to facilitate implementation of the proposed solution. Real Estate Advisory We assist firms in raising funds for real estate construction / development projects at the holding entity level as well at the project SPV level. We work with our clients through all stages of the transaction from developing a nuanced understanding the clients cash flow requirements to capital structuring of the transaction, evaluating of various funding raising options and execution of the transaction up to assisting in documentation, regulatory clearances and eventual funding.

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2.2.13. WEALTH MANAGEMENT


At Motilal Oswal it has been our constant endeavour to go beyond traditional services and provide customized value. That's the reason we have devised a holistic approach to Wealth Management. We believe the Wealth Management needs are varied. For some they may lie in personal Wealth Management, while for others it may extend to business requirements. To cater to such diverse needs, we have launched a Wealth Management service called Purple.

At Purple, your dedicated Purple Wealth Partner will provide customised advice to take care of both your personal and business wealth management needs.

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2.3. MOTILAL OSWAL SECURITIES LIMITEDS STRENGTHS

Analytical advisory Professional knowledge Brand affiliation Well Trained. Good Investor Base. Highly Determined. Well Established Network. Exclusive Concept. Diversified Operations Team.

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2.4. Motilal Oswal Securities Limiteds Superior Technology and Robust Risk Management Tools
We recognize the need to have a sophisticated technology network in place to meet our customer needs as well as to Effective use of Technology Our IT infrastructure includes a world class data centre, offline and online trading platforms with 99.8% planned uptime and a cost effective combination of VSAT, leased lines, VPN and other modes to provide superior connectivity to our wide spread business network. Over 8500 terminals are managed through this network across various equity & commodity Dedicated data center at Malad, Mumbai with 28,500 sq ft area Robust risk management system Monitor and control risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems Real-Time Risk Management - Gives users information on clients open positions Risk management department analyses this data in conjunction with our risk management policies and takes appropriate action where necessary to minimise risk.

2.5. Motilal Oswal Securities Limited Core Purpose And Values


Core Purpose: To be a well respected and preferred global financial services organization enabling wealth creation for all our customers.

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Values: Integrity Teamwork Meritocracy Passion & Attitude Excellence in Execution A Company honouring commitment with highest ethical and business practices. Attaining goals collectively and collaboratively. Performance gets differentiated, recognized and rewarded in an apolitical High energy and self motivated with a Do It attitude and entrepreneurial spirit. Time bound results within the framework of the company s value system.

2.6. Motilal Oswal Securities Limiteds Pillars: Management Team

Motilal Oswal Trustee, Chairman & Managing Director Oswal is an associate director and is the Chairman of the Board of Motilal Oswal Trustee Company Limited. He is also Managing Director of Motilal Oswal Financial Services Ltd. He has varied experience of over 2 decades in the financial service sector. Mr. Oswal has served on the governing board of the Bombay Stock Exchange (BSE) as a Director. He has also been member of the National Stock Exchange (NSE) committee for F&O and a member of the Managing Committee of Indian Merchants' Chamber (IMC). He is a board member and a Director of Jain International Trade Organisation (JITO). He is also a Director on the Board of various Companies. Mr. Oswal has received the "Rashtriya Samman Patra" awarded by the Government of India for being amongst the highest Income Tax payers in the country for a period of 5 years from FY95FY99.
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The Indian Council of Management Executives (ICME) has awarded the Knight of the Millennium to Mr. Oswal for the Capital Market. BOARD OF DIRECTORS Mr. Motilal Oswal Chairman and Managing Director, Chief Executive Officer and Chief Financial Officer Mr. Raamdeo Agrawal Joint Managing Director Mr. Navin Agarwal Director Mr. Ramesh Agarwal Independent Director Mr. Balkumar Agarwal Independent Director Mr. Madhav Bhatkuly Independent Director Company Secretary and Compliance Officer Mr. Samrat Sanyal Bankers Citibank N.A. HDFC Bank Standard Chartered Bank Auditors M/s Haribhakti & Co., Chartered Accountants

2.7. Motilal Oswal Securities Limiteds Vision & Mission


VISION: To enhance our customers the financial Security by creating wealth. To be one of the most trusted and globally reputed financial distribution companies. To Become No-1 In India Through Fair Practices & Keep Maintain This Position Forever. Be a world class financial service provider, value based wealth creation to my clients & become a well reputed organization
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MISSION: To provide the customers the financial freedom by enhancing Wealth Management. Truly Value Based Wealth Creation Of Every Customer With Disciplined, Integrated & Customize Services Way. Expand business both in the value, volume wise make it no 1 in its segment

2.8. Motilal Oswal Securities Limiteds growth:


BROKING AND DISTRIBUTION Distribution expands to 1397 business locations across 584 cities More than 6,00,000 registered customers Depository assets at over Rs. 113 billion Indias largest dealing room (over 26,000 sq feet) Over 100 investment education seminars conducted ASSET MANAGEMENT Portfolio Management Services AUM of Rs. 9.8 billion Approval received from SEBI for starting Mutual Fund business First scheme offer document filed with SEBI for approval WEALTH MANAGEMENT AUM of Rs. 8 billion Presence in Mumbai, Kolkata, Pune and Ahmedabad Unique Wealth Management offering (Purple) based on financial profiling and client need analysis INVESTMENT BANKING 66 deals in 4 years across the product spectrum and sectors Cumulative revenues since inception : over Rs. 2 billion Facilitated periodic thematic conclaves between corporate and investors PRIVATE EQUITY India Business Excellence Fund (US$ 125 million) over 61% invested across 10 transactions India Realty Excellence Fund closed at INR 1.64 billion
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INSTITUTIONAL EQUITIES Over 300 institutional clients, including 200 FIIs. Research covering 236 companies in 27 sectors and 23 commodities Research received 10 awards in the ET- Starmine Analyst Awards 2009 including Best Broker FUND-BASED BUSINESSES Margin funding book of Rs.1.6 billion Principal Strategies Group in place to optimise treasury yields

2.9. Motilal Oswal Securities Limited Depatments 2.9.1. TRADING DEPARTMENT


Motilal Oswal is one of the broker who is acting as wholesalers and as a broker, it is the duty of it to provide service of collecting funds and securities from the investors and send it to clearing house and vice versa. According to SEBI investor has to open trading account for trading in shares. Client can open an account in any depository. Trading department is divided into three parts: Pre-trading (A/c opening, Deposits, ect.) Trading (Dealing room, Sauda punching, conformation) Post-trading (Payout process, Bills, Pay-in-process, Contract note)

2.9.2. MARKETING DEPARTMENT


The main aim of marketing activities at Motilal oswal is that the customer should get enough guidance to join the company and how he can get the best service than any other stockbroker. This year MOFSL introduced a new brand philosophy. The relentless focus on research and insight, which is the DNA of the company, has manifested itself in the brand idea - Knowledge First. This simple philosophy of 'Knowledge First' has been brought alive through a multimedia campaign in TV, print, outdoor and the web.
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2.9.3. HUMAN RESOURCE DEPARTMENT


MOFSL has grown at a scorching pace, not only in terms of business but also in terms of its most valuable asset -people. They have an ever-growing employee strength of 2315 associates that operates out of a rapidly expanding Company network. HR at Motilal Oswal, on the one hand strives to make every employee of the organization its brand ambassador and on the other hand make the Motilal Oswal brand stand for the best people practices. The 3 pillars of HR strategy are: A clear and relentless (persistent) focus on leadership development Stringent (severe) focus on the identification and development of 'High Potentials' at all levels Investment in technology to deliver state-of-the-art HR processes across the organization in a time and cost efficient manner

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2.10. MOTILAL OSWAL SECURITIES LIMITED RESEARCH DESK


Motilal Oswal Securities Limited Research desk has a dedicated team of research analysts and experts that have an in-depth knowledge of the market place. They offer value perspectives, focus on opportunities for investment and growth and endeavor to reduce risk potential. It's premium advisory services are based on technical and fundamental views and strategies. Research is the solid foundation on which Motilal Oswal Securities advice is based. Almost 10% of revenue is invested on equity research and we hire and train the best resources to become advisors. At present we have a expert team of Research Analysts researching over 27 sectors and 24 commodities. From a fundamental, technical and derivatives research perspective; Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Our consistent efforts towards quality equity research has reflected in an increase in the ratings and rankings across various categories in the Asia Money Brokers Poll over the years. Our unique Wealth Creation Study, authored by Mr. Raamdeo Agrawal, Jt. Managing Director, is now in its 15th year. Investors keenly await this annual study for the wealth of information it has on the companies that created wealth during the preceding five years.

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2.11. Motilal Oswal Securities Limiteds Achievement:

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2.12. MARKET 2.12.1. The capital market


The capital market is the market for securities, where the companies and government can raise long term funds. It is a marketing which money is lent for periods longer than a year. The capital market includes the stock market and bond market. The capital market consists of primary and secondary markets. Primary market: The primary market deal with the issue of new instruments by the corporate sector such as equity shares, preference shares and debt instruments. Central and State Government, various public sector industrial units, statutory and other authorities such as state electricity boards and port trusts also issue bonds/debt instruments. The primary market in which public issue of securities is made through a prospectus is a retail market and there is no physical location. Offer for subscription to securities is made to investing community. Secondary Market: The secondary market or stock exchange is a market for trading and settlement of securities that have already been issued. The secondary market consists of 22 stock exchanges. The secondary market provides a trading place for the securities already issued to be bought and sold. It also provides liquidity to the initial buyers in the primary market to re-offer the securities to any interested buyers at any price, if mutually accepted.

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2.13. Analysis of Investment and Securities Market 2.13.1. Securities and Exchange Board of India
SEBI is the Regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad SEBI has to be responsive to the needs of three groups, which constitute the market:

the issuers of securities the investors The market intermediaries.

SEBI has three functions 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 appeals process to create accountability. There is a Securities Appellate Tribunal which is a three member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court. SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2 basis). SEBI has been active in setting up the regulations as required under law. With the objective of improving market efficiency, enhancing transparency, checking unfair trade practices and bringing the Indian market up to international standards, a package of reforms consisting of measures to liberalize, regulate and develop the securities market was introduced during the 1990s. This has changed corporate securities market beyond recognition in this decade.
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2.13.2. National Stock Exchange


The National Stock Exchange commenced its operations in 1947 as a first step in reforming the securities market the exchange. Before the NSE was set up trading on the stock exchange 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. The practice of physical trading imposed limits on trading volumes as well as, the speed with which new information was incorporated in to prices. To obviate this, the NSE introduced screen-based trading system where a member can punch into the computer the quantities of shares and the prices at which he wants to transact. The transaction is executed as soon as the quote punched by a trading member finds a matching sale or buys quote from counterparty.

2.13.3. Bombay Stock Exchange:


BSC Sensex or Bombay Stock Exchange Sensitive index is a value-weighted index composed of 30 stocks started in 01 of Jan, 1986. it consist of the 30 largest and most actively traded stock , representative of various sectors, on the Bombay stock exchange .these companies account for around one-fifth of market capitalization of the BSE. The base value of the sensex is 100 on April 1, 1979, and the base year of BSE-SENSEX is 1978-79. At irregular intervals, the Bombay stock exchange (BSE) authorities review and modify its composition to make sure it reflect current market conditions. The index is calculated based on free float capitalization method; a variation of the market cap method. Instead of using a companys outstanding share it uses its float, or share that are readily available for trading. The free float method, therefore, dose not includes restricted stocks, such as those held by company insiders.

2.13.4. Equities: What is Equity: - Funds brought in to a business by shareholders is called equity. It is a measure of a stake of a person or group of persons starting a business.
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What does investing in equity mean: - When you buy a companys equity, you are in effect financing it, and being compensated with a stake in the business. You become part-owner of the company, entitled to dividends and other benefits that the company may announce, but without any guarantee of a return on your investments. Fundamental analysis: - The analysis of factual information like financial figures, balance sheet, and other information publicly available is known as fundamental analysis. This information is used to derive a fair price of the share of the share of the company. The faithful fundamentalists believe that the market incorporates all facts relating to the financial performance of the company. Technical Analysis: - Technical analysis is the study of historic price movements of securities and trading volumes. Technical analysis believes that prices of the securities are determined largely by forces of demand and supply. Share prices move in patterns which are easily identifiable. Crucial insights in to these patterns can be obtained by keeping track of price charts, leading to predictions that a stock price may move up to down. The belief is that by knowing the past, future prices can predict. Settlement cycle: - The accounting period for the securities traded on the Exchange. On the NSE, the cycle beings on Wednesday and ends on the following Tuesday, and on the BSE the cycle commences on Monday and ends on Friday. At the end of this period, the obligations of each broker are calculated and the brokers settle their respective obligations of each broker are calculated and the brokers settle their respective obligations as per the rules, bye-laws and regulations of the clearing corporation. If a transaction is entered on the first day of the settlement, the same will be settled in the eighth working day excluding the day of transaction. However, if the same is done on the last day of the settlement, it will be settled on the fourth working day excluding the day of transaction.

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Rolling settlement: - The rolling settlement ensures that each days trade is settled by keeping a fixed gap of a specified number of working days between a trade and its settlement, at present, this gap is five working days after the trading day. The waiting period is uniform for all trades. Deliver the shares and pay the money to broker: - As a seller, in order to ensures smooth settlement you should deliver the shares to your broker immediately after getting the contract note for sale but in any case before the pay-in day. Similarly, as a buyer, one should pay immediately on the receipt of the contract note for purchase but in any case before the pay-in day. Short selling: - short selling is a legitimate trading strategy, it is a sale of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller take the risk that they will be able to buy the stock at a more favourable price than the price at which they sold short Auction: - An auction is conducted for those securities that members fail to deliver/short deliver during pay-in. three factors primarily give rise to an auction, short deliveries, un-rectified bad delivering up-rectified company objection. The buy/sell auction for a capital market security is managed through the auction market. As opposed to the normal market where trade matching is an on-going process, the trade matching process for auction starts after the auction period is over. If the shares are not bought at the auction, if the shares are not offered for sale, the exchange squares up the transaction as per SEBI guidelines, the transaction is squared up at the highest price from the relevant trading period till the auction day or at 20 percent above the last available closing price whichever is higher. The pay in and pay out of funds for auction square up is held along with the pay-out for the relevant auction. Hawala Rate: - Hawala rate is a making-up price at which buyers and sellers settle their speculative transaction at the end of the settlement. It is the basis for buy and sells for the investor opting for carry forward during the next settlement. This price is fixed by taking the weighted average of trades in the last half-an-hour of trading on the settlement day for securities in the carry forward list, also knows as the A group or specified group.
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This price is significant because for a speculative buyer or a seller, the Hawala rate is the standard rate for settling his trade and for carrying forward business to the next settlement. For example, an investor buys the stock of x company at Rs.100 on Monday. By Friday (BSE settlement day), if Rs. 90 is the weighted average price in the last half-an-hour, the buyer would have to carry forward his trade at this price of Rs. 90. He then settles at Rs. 90 and enters in to a contract at Rs. 90 plus BLESS charges for the next settlement. Normally, Stock Exchange does not interfere with the Hawala rates. However, there are instances, when rates have been changed to ensure safety of the markets. This is so because in case the market witnesses a sharp fall during a settlement, the chances of a broker default are extremely high. This is when the exchange administration steps in and raises the Hawala rate to avert any possible default. Book-closure and record date: - When shares of a joint stock company invariably change hands during market trades, identifying the owner of some shares becomes difficult. So it is difficult to pass on certain benefits (like share bonus issue, splits and dividend payments) to shareholders. So, when a joint stock company declares dividends or bonus issues, there has to be a cut-off date for such benefits to be transferred to the shareholders. This date is termed as "Book Closure" date or "Record Date". It is the date after which the company will not handle any transfer of shares requests until the benefits are transferred. Only shareholders marked in the company's register at the Book Closure Date or the Record Date would be entitled to receive these benefits. If a company announces book closure as 1 January, shareholders who as on that day own the stock will be entitled to the dividend/bonus/split benefit. e.g. If Mr. Y buys this stock from Mr. X on 2 January, the benefit of bonus issue or splits or dividend will still be transferred to Mr. X by the company. A company generally announces such a date along with the announcement of the bonus issue or splits or dividend announcement, as the case may be.

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In an efficient market as per the efficient-market hypothesis (EMH) the effect of the price change due to bonus issue or splits or dividend as on the Book Closure date gets adjusted in the price of the stock in the market effective with the opening of the trade floor on the book closure date

2.14. Commodity Market


India has a long history of futures trading extending over 125 year , while gold and silver were widely trade commodities in the 19 century , other Agro product like chana , urad , sugar wheat etc; were only added recently in most market. The bull run in commodity markets coupled with the setting up of national level commodity exchanges in India and has lead to a large scale improvement in transportation , warehousing and financing etc; placing India internationally in commodities markets. Commodity future perform an important role of price discovery and risk management, which is beneficial for all the section of society i.e. producer, trader and consumer etc. Globally volumes on commodity future market are about five times of equity market. Some of major commodities exchange is Chicago Board of Trade (CBOT), New York Mercantile Exchange (NYMEX), London Metal Exchange (LME), Tokyo Commodity Exchange (TOCOM), and Bursa Malaysia (KLSE).

2.14.1. MCX:
Multi Commodity Exchange (MCX) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the period Apr-Dec 2008 was INR 32 Trillion. MCX offers futures trading in Agricultural Commodities, Bullion, Ferrous & Non-ferrous metals, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and other soft commodities. MCX has also setup in joint venture the National Spot Exchange a purely agricultural commodity exchange and National Bulk Handling Corporation (NBHC) which provides bulk storage and handling of agricultural products.
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It is now regulated by forward market commission.

MCX is India's No. 1 commodity exchange with 84% Market share in 2008($0.84 trillion)

The exchange's competitor is National Commodity & Derivatives Exchange Ltd Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil and gold in futures trading

The crude volume touched 23.49 Million barrels on January 3, 2009 The highest traded item is gold with an average monthly turnover of Rs 1.42 Trillion ($29 Billion).

MCX has 10 strategic alliances with leading commodity exchange across the globe

The average daily turnover of MCX is about US$ 2.4 billion MCX now reaches out to about 500 cities in India with the help of about 10,000 trading terminals

2.14.2. NCDEX:
NCDEX is the only commodity exchange in the country promoted by national level institutions. This unique parentage enables it to offer a bouquet of benefits, which are currently in short supply in the commodity markets. The institutional promoters and shareholders of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nationwide reach, technology and risk management skills. NCDEX is a public limited company incorporated on April 23, 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of Business on May 9, 2003. It commenced its operations on December 15, 2003. NCDEX is a nation-level, technology driven de-mutualised on-line commodity exchange with an independent Board of Directors and professional management - both not having any vested interest in commodity markets. It is committed to provide a worldclass commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency.
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NCDEX currently facilitates trading of 57 commodities AgricultureBarley, Cashew, Castor Seed, Chana, Chili, Coffee - Arabica, Coffee - Robusta, Crude Palm Oil, Cotton Seed Oilcake, Expeller Mustard Oil, Groundnut (in shell), Groundnut Expeller Oil, Guar gum, Guar Seeds, Gur, Jeera, Jute sacking bags, Indian Parboiled Rice, Indian Pusa Basmati Rice, Indian Traditional Basmati Rice, Indian Raw Rice, Indian 28.5 mm Cotton, Indian 31 mm Cotton, Masoor Grain Bold, Medium Staple Cotton, Mentha Oil, Mulberry Green Cocoons, Mulberry Raw Silk, Mustard Seed, Pepper, Potato, Raw Jute, Rapeseed-Mustard Seed Oilcake, RBD Palmolein, Refined Soy Oil, Rubber, Sesame Seeds, Soybeans, Sugar, Yellow Soybean Meal, Tur, Turmeric, Urad, V-797 Kapas, Wheat, Yellow Peas, Yellow Red Maize. MetalsAluminium, Ingot, Electrolytic Copper Cathode, Gold, Mild Steel Ingots, Nickel Cathode, Silver, Sponge Iron, Zinc Ingot. EnergyBrent Crude Oil, Furnace Oil. At subsequent phases trading in more commodities would be facilitated.

2.15. Currency Market


The foreign exchange market (currency, Forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another.

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The foreign exchange market that we see today started evolving during the 1970s when world over countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system until 1971. Presently, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.Since then, the market has continued to grow. According to Euro moneys annual FX Poll, volumes grew a further 41% between 2007 and 2008. The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollars, Euros, Japanese yen, Pounds Sterling, etc., and the need for trading in such currencies.

2.16. Derivatives
The emergence of the market for derivative products, most notably forwards, futures and options, can be traced back to the willingness of risk adverse economic agent to guard themselves against uncertainties arising of fluctuations in assets prices. By there very nature, the financial markets are marked by a very high degree of volatility. Through the use of derivative product, it is possible to partially or fully transfer price risks by locking in assets price .as instruments of risk management; these generally do not influence the fluctuation in the underlying asset prices. However, by locking in asset prices, derivative products minimize the impact of fluctuation in asset prices on the profitability and cash flow situation of risk adverse investors.

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Derivative Products: Derivative contracts have several variants. The most common variants are forwards, futures, options, and swaps. Take a brief look at various derivative contracts that have come to be used. Forward: A forward contact is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price. Future: A future contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Future contracts are special type of forward contracting the sense that the former are standardized exchange traded contracts. Option: Option is two types calls and puts. Calls given the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date .puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Warrants: Option generally have lives of up to one year. Majority of the option traded on options exchanges having a maximum maturity of nine months. Longerdated options are called warrants and are generally traded over the counter. Leaps: The acronym leaps means long-term equity anticipation securities .these are options having a maturity of up to three years. Baskets: Baskets option is option on portfolio of underlying assets. The underlying asset is usually a moving average of a basket of asset .equity index options are a form of basket option. Swaps: Swaps are private agreement between two parties to exchange cash flows in the future according to pre arranged formula. They can be regarded as portfolios of forward contracts. The two commodity use swaps are: Swaptions: Swaptions are option to buy or sell a swap that will become operative at the expiry of the option .thus a swaption is an option on a forward swap. Rather than have calls and puts, the swaption market has receiver swaptions and payer swaption. A receiver swaption is an option to receive fixed and pay floating. a payer swaption is an option to pay fixed and receive floating.

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2.17. The Depository system


The principal function of a depository is to dematerialize securities and enable their transaction in book-entry form. The securities are transferred by debiting the transferors depository account and crediting the transferees depository account.

2.17.1. Functions of Depository


Dematerialization: one of the primary functions of depository is to eliminate or minimize the movement of physical securities in the market. This is achieved through dematerialization of securities. Dematerialization is the process of converting securities held in physical form into holdings in book entry form. Account transfer: the depository gives effects to all transfers resulting from the settlement of trades and other transactions between various beneficial owners by recording entries in the accounts of such beneficial owners. Transfer and Registration: A transfer is the legal change of ownership of a security in the records of the issuer. For affecting a transfer, certain legal steps have to be taken like endorsement, execution of a transfer instrument and payment of stamp duty. Core Services of Demat Account 3-IN-1 ACCOUNT Accounting Opening: Any investor who wishes to avail depository services must first open an account with a depository participant of NSDL. The process of opening a demat account is very similar to a bank account. The investor can open an account with any depository participant of NSDL. An investor may open an account with several DPs or he may open several accounts with a single DP is free to fix its own fee structure. Investors have the freedom to choose a DP based on criteria like convenience, comfort, service levels, safety, reputation and charges. After exercising this choice, the investor has to enter into an agreement with the DP the form and contents of this agreement are specified by the Business Rules of NSDL. In this chapter we deal with the procedure for account opening under the NSDL system.
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2.17.2. TYPES OF ACCOUNTS:


Type of depository account depends on the operations to be performed. There are three types of demat accounts which can be opened with a depository participant viz. (a) Beneficiary Account (b) Clearing Member Account and (c) Intermediary Account. 2.17.2.1. Beneficiary Accounts This is an account opened by investors to hold their securities in dematerialized form with a depository and to carry out the transaction of sale and purchase of such securities in book-entry form through the depository system. A beneficiary account holder is legally entitled for all rights and liabilities attached to the securities (i.e. equity shares, debentures, government securities, etc.) held in that accounts. Therefore, the account is called beneficial owner account. Documents for Verification 1. Non-body Corporate Investors: For the purpose of verification, all mom-body corporate investors have to submit the following documents, as prescribed by SEBI, along with the stipulated account opening form. A beneficiary account must be opened only after obtaining a proof of identity and address of the applicant. An authorized official of the participant should verify the photocopies of any of following documents submitted with their corresponding originals and put his/her signature on them with remarks verified with original proceeding to open the account. A) Proof of Identity (POI) Passport Voter ID Card PAN card with photograph MAPIN card Identity card/document with applicants Photo, issued by

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Central/State Government and its Departments Statutory/Regulatory Authorities Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, College affiliated to Universities (this can be treated as valid only till the time applicant is a students), Professional Bodies such as ICAI, ICWAI, Bar Council etc. to their Members Credit cards/Debit cards issued by Banks. B) Proof of address (POA) Ration card Passport Voter ID card Driving License Bank Passbook Verified Copies of Electricity Bills (not more than two month old) Telephone Bills (not more than two month old) Leave and License Agreement / Agreement for sale. Self declaration by High court & Supreme Court Judges, giving the new address in respect of their own accounts. 2. For Corporate Investor: For the purpose of verification, all corporate investors have to submit the following documents as prescribes by SEBI along with the stipulated account opening form. 1. Memorandum & Articles of Association (MOA & AOA) Board resolution for opening demat account and the list of authorized signatories along with their specimen signatures and photographs 2. Introduction by an existing account holder of by the applicants bank.

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3. Proof of address of the corporate, evidenced by the document registered with Registrar of companies or acknowledged copy of income tax return or Bank Statement or Leave and License Agreement/Agreement for sale. An authorized official of the participant shall verify the proof of address with the original documents and affix his/her signature on the documents submitted by the Client, while exercising such due diligence. Common Information The processes of opening an account with a depository, nature of such an account, and various factors to be considered for opening a depository account are explained below. Some details are common to all types of account. These are: Name of the holder Date of Birth (for individual account) Occupation Address & phone number Bank details like name of bank, type of account (current/savings) account number, branch address, MICR etc. PAN number Details of nomination (for individual account ) Specimen signatures MAPIN UIN (s) E-mail address Mobile number Address for communication Beneficiary Account- Procedure for Opening Account Investors have the choice of selecting a DP based on their convenience, comfort, service levels, safety, reputation, charges etc. they have the flexibility to have more than one account with the same DP or any other DPs. No minimum balance required for opening a depository account. Investors also have the freedom to close an account with one DP and open another one with any other DP.

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The type of the account opening form to be filled by an investor and the list of documents required depend on the type of beneficiary account to be opened whether it is for NRIs or corporate or individual. Further, the individual account can be in a single name or joint names. Clearing members a broker have to open a beneficiary account if they have to deal with their own holdings. There are several client types in the depository system and different codes are allotted to them. These are below: Resident Ordinary Hindu Undivided Family (HUF) Financial Institutions (FI)

Government-sponsored State Financial Corporation Others

Foreign Institutional Investors


Mauritius-based Others

Non-resident Indian (NRI)


Repatriable Non-Repatriable Depository Receipt

Body Corporate

Domestic Company Overseas Corporate Body Government Company Central Government State Government
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Broker Foreign Bodies Group Companies Depository

Clearing Member Foreign National Foreign National / Depository Receipt Mutual Fund Trust Bank

Foreign Bank Co-operative Bank National Bank

Check List for Account Opening

Proof of Identity: An authorized official of the Participant should verify the photocopies of the any of the prescribed documents submitted with their corresponding originals.

Proof of address (POS): An authorized official of the Participant should verify the photocopies of the any of the prescribed documents submitted with their corresponding originals

Ensure that all compulsory fields in the account opening form are filled (except nomination which is optional.)

In case of corporate, ensure a copy of Board resolution of authorized signatories. Ensure proper authorization in case of power of attorney holder.

DP should give a copy of agreement to the client, including the charge. Inform clients regarding standing instruction facility. Branches of DP to co-ordinate & follow up with Head Office for account opening.

Ensure account is activated before forwarding Client ID to client. Inform settlement deadlines to clients

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2.17.2.2. Intermediary Account: As per SEBI Regulations on Stock Lending and Borrowing only an approved intermediary can lend borrow stocks from clients. This intermediary borrows from lenders and lends to borrowers. Intermediaries registered with SEBI as approved intermediary account with a DP of its choice for executing stock lending and borrowing transaction made through them. An intermediary account may be opened only after obtaining registration from SEBI under an approved Stock Lending Scheme and getting the approval of the depository for opening the account. Operation of demat accounts based of power of attorney A demat account can be operated by a power of attorney holder. In this regard, it may be noted that:i. A power of Attorney executed to the promulgation of the Depositories Act is valid and enforceable. ii. It is the responsibility of the Depository Participant to verify whether the Power of Attorney is adequate and sufficiently authorizing the holder of the Power of Attorney the done to operate the account of the beneficial owner. iii. A sample clause is given hereunder which if it forms a part of the Power of Attorney could suffice. However it may be mentioned that a DP shall not obtain Power of Attorney (POA) from its clients as a requirement for opening a demat account. Further the POA shall not contain the following clauses: I. POA Holder Done has the sole authority to operate the account and the account folder is/are restrained from operating the account. II. Delivery Instruction Slip (DIS) books are denied to the account holders who have executed a POA III. DPs are authorized to mere the securities kept under various accounts of the clients. IV. DPs will have a lien on the securities of the clients.

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DPs are therefore required to review the POA document and if the POA contains any clause similar to what has been stated above the POA should be modified suitably. DPs must inform all those clients who have executed POA about such changes and obtain a written confirmation from the clients that they have taken note of the changes in the POA. It may also be mentioned that where a client has executed a POA such depository accounts can be operated both by the clients as well as by the POA holder. Therefore DPs should ensure that the signatures of the accounts holders and the POA holder are captured in the DPM system and DPs are required to provide DIS books to the clients who have executed a POA and allow the clients to operate their accounts as well. Further DPs are required to maintain separate accounts of the clients in conformity with regulation 42 of Security and Exchange Board of India (Depositories and Participants) Regulations 1996. Lien on the securities can be only as per Regulation 58 of SEBI Regulation and as per the procedure laid down in the bye Laws and business Rules of NSDL. Closure of Account Closure on Clients Request: - DP can close a depository account on receipt of an application in the prescribed format. The application should be made by the account holder or by the entire joint holder. An account can be closed only when there is no balance in the account. In case there is any balance in the account sought to be closed, the following steps are necessary. a. Dematerialization of all securities to the credit of the account at the time of making the application for closure b. Transferring the balance to the credit of another account opened by the same account holders either with the same participant or with a different participant. However, where demat request are pending for disposal for a long tine in a demat account and the client desires to close such an account the following procedure maybe adopted by the client

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Write a letter in the prescribed format to the issuer, requesting for rejection of the pending dematerialization requests and send fresh physical security to the client directly

Enclose a copy of the dematerialization request generated from DPM system duly signed & stamped by the participant along with the aforesaid letter to the issuer.

Before closing the account the DP should ensure that all pending transaction has been settled. The request for closure should be processed only after ensuring that there is no balance lying in the account. If a client makes a request for closure of account, DPs should provide the Statement of Transaction (SOT) to the client for the period from the beginning of the quarter in which the account is closed till the date of closure. Further the SOT should bear the words Account Closed and should be prominent. For this purpose, DP can affix a rubber stamp or create a suitable system that will clearly show on the SOT that the account has been closed. Consolidation of Account Some clients could have opened multiple accounts to dematerialize their shares held in multiple combinations an sequence of names. However they may not need so many accounts after they have dematerialized their shares and may want to bring all their share holdings into one of fewer accounts. This can be achieved by using normal off market transfer instruction. Closure by DP The DP may also initiate closure of a clients if the client has defaulted in performing its obligations laid out in the client-participant agreement. The participant should give sufficient notice to the client before initiating closure of his account. The notice should clearly state the reasons of closure of account. The process of closing account in such a case is the same that of client-initiated closure.

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Closure/Shifting of Clearing Account: - a clearing member may transfer its clearing account from one DP to another DP. For this simultaneously applications have to be made of closure of account to the earlier DP and for opening of new clearing member account to the new DP forwards the application to the depository for approval and allotment of a new CM-BP-ID. Once the new CM-BP-ID is allotted the new DP opens a new clearing account and intimates the depository advises the old DP to close the account. The old DP then closes the account and intimates the clearing member. All pay-out of securities, subsequent to closure of old clearing account takes place in the new account. 2.17.2.3. Freezing Accounts Account freezing means suspending any further transaction from a depository account till the account is unfrozen If a written instruction is received from the client by the DP, requesting freezing of account. If an electronic request is made by a client to his DP or to the Depository in the form and manner as may be prescribed the depository. If orders are received by the DP depository from the Central of State Government, SEBI or any order by court, tribunal, or statutory authority. If a request is received by the depository from a DP client. If orders are passed by Disciplinary Action Committee (DAC) or if DP becomes insolvent. By freezing an account for debits only (preventing transfer of securities out of the account) the client can receive securities in his account. An account can also be frozen for debits as well as credits (preventing any movement of balances out of the account). No transaction can take place in such an account until it is reactivated.A frozen account may be unfrozen or reactivated by taking the reverse steps. On the valid written request of the account holder where he had requested freezing. On directions of depository made in pursuance of the order of the appropriate authority Changes in Client Details
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A client may change any of the following particulars in the depository system. All he has to do is to submit the change in writing to the DP. Fathers/Husbands Name (change from fathers name to husbands name may be necessary on account of marriage). Standing instruction facility (an investor can activate/deactivate it). Address (both local as well as correspondence), telephone number, mobile number, clients have to provide proof of new address while submitting application for change address. Occupation details Nominee details (the DP has to obtain the required form from the client duly filled and effect the changes). Bank details (clients may revise the bank details given by him before record date to ensure that the dividend/interest warrants bear the correct bank details). PAN number details In case of NRIs the Reserve Bank of India reference number and approval date. E-mail addresses. Change of address for individual clients 1. While processing requests for change of address receive from client, DP should obtain the following documents. A written application for change of address from the client. Proof of identity Latest transaction statement of the account received from the participant. Proof of new address along with the original documents of the new address. 2. The client should personally visit the office of the DP where the client maintains and operates his/her account and submit the application for change of address. However in case the client expresses inability to personally visit the participant, the application for change of address along with other documents can be submitted though an authorized representative.
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3. The client or its authorized representative should sign the application once again in the presence of the officials of the DP. 4. The DP should verify the signature of the client on the application and the identity documents with the documents maintained with the DP. Further the documents pertaining to new address should be verified with the original. After due verification an authorized official of the DP should put his/her signature on the application with remarks verified with original and thereafter record the change of address in the DPM system. 5. However in case DP could not verify the documents because the records of the documents submitted by the client are kept at a different place, then the participant must verify the same within a period of seven working days and only then effect the change. Change of signature 1. The client should make a request in writing specifying reasons for change in signature. 2. New signature should be duly attested by clients banker. 3. Client should visit DPs office personally and produce valid proof of identity as well as the latest transaction statement of its account. 4. In the presence of officials of DP client should affix his/her new signature. A holder of eligible securities in the depository system may get his physical holdings converted into electronic form by making a request through the DP with

whom he has his beneficiary account. Prerequisites for Dematerialization Request 1. The registered holder of the securities should make the request 2. Securities to be dematerialized must be recognized by NDDL as eligible. In other word only those securities whos ISIN has been activated by NSDL can be dematerialized in the NSDL system. 3. The company/issuer should have established connectivity with NSDL. Only after such connectivity is established the securities of that company are recognized to be available for dematerialization in the NSDL system.
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4. The holder of securities should have a beneficiary account in the same name as it appears on the security certificates to be dematerialized. 5. The request should be made in the prescribed dematerialization request form. Dematerialization Process: Steps 1. Client/investor submits the DRF (Demat Request Form) and physical certificates to DP. DP checks whether the securities are available for demat. 2. DP enters the demat request in his system to be sent to NSDL. 3. DP dispatches the physical certificates along with the DRF to the R&T agent. 4. NSDL records the details of the electronic request the system and forwards the request to the R&T agent. 5. R&T agent on receiving the physical document and the electronic request verifies and checks them. Once the R&T agent is satisfied, dematerialization of the concerned securities is electronically confirmed to NSDL. 6. NSDL credits the dematerialized securities to the beneficiary account of the investor and intimates the DP electronically. The DP issues a statement of transaction to the client

2.18. Trading and Settlement


One of the basic services provided by NSDL is to facilitate transfer of securities from one account to another at the instruction of the account holder. In NSDL depository system both transferor and transferee have to give instruction to its depository participants (DPs) for delivering (transferring out) and receiving of securities. Transfer of securities from one account to another may be done for any of the following purposes. a. Transfer due to a transaction done on a person to person basis is called offmarket transaction b. Transfer arising out of a transaction done on a stock exchange c. Transfer arising out of transmission and account closure.
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The ID for an off-market trade or for a market trade has to be clearly indicated in the form by marking appropriately. The form should be complete in all respects. All the holders of the account have to sign the form. If the debit has to be effected on a particular date in future, account holder may mention such date in the space provided for execution date in the form.

2.18.1. Settlement of off-market Transactions:


Off-Market Trade Seller gives delivery instructions to his DP to move securities from his account to the buyers account. Buyer automatically receives the credit of the securities in to his account on the basis of standing instruction for credits. Buyer receives credit of securities in to his account only if he gives receipt instructions if standing instructions have not been given. DP needs to be extra careful in verifying the signature of the client if large quantities of securities are being debited to the account. Funds move from buyer to seller outside the NSDL system.

2.18.2. Settlement of Market-Transaction


Market Settlement-Demat Share A market trade is one that is settled though participation of a clearing Corporation. In the depository environment, the securities move through account transfer. Once the trade is executed by the broker on the stock exchange, the seller given a delivery instruction to his DP to transfer securities to his brokers account. The broker has to then complete the pay-in before the deadline prescribed by the stock exchange. The broker removes securities from his account to (Clearing Corporation / Clearing House) CC/CH of the stock exchange concerned, before the deadline given by exchange.

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The CC/CH gives pay-out and securities are transferred to the buying brokers account. The broker then gives delivery instructions to his DP to transfer securities to the buyers account. 1. Seller gives delivery instructions to his DP to move securities from his account to his brokers account. 2. Securities are transferred from brokers account to CC on the basis of a delivery out instruction. 3. On pay-out, securities are moved from CC to buying brokers account. 4. Buying broker gives instruction and securities move to the buyers account. Market type Stock exchanges offer different market segments in which trades can be done. The segmentation is done by the type of settlement or type of trade. Each of the segments is denoted ad Market Type in NSDL depository system. The stock exchange which offers these market types, generally, recognize these settlements with a two character code, the DI slip should contain the market type for which securities are being transferred to the clearing member. The contract note/trade confirmation slip given by the broker/sub-broker will indicate the market type. Settlement Number Trading periods of each of the market segments is identified by a settlement number. Every settlement number has a trade beginning day, trade-ending day, settlement pay-in day and settlement pay-out day. Stock exchanges divide a period of one year in to several settlement periods and allocate settlement number for each settlement-period. All these days collectively are called settlement calendar. DPM system will give complete details of settlement calendar for each stock exchange. Delivery Deadline Stock exchange set a deadline time by which clearing member are expected to deliver securities. Clearing member can deliver securities within the deadline time only if they have received securities from their clients.
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In order to ensure that clients give securities in time to the clearing member, SEBI has prescribed deadline time by which clients have to give securities to clearing members. SEBI has advised DPs to instruct their clients to submit the settlement instructions on T+1 (in physical form up to 4.00p.m. and 6 p.m. in case of electronic instructions) for pay-in of securities viz.; instruction, CM Pool to CM Pool account transfers and Delivery-out instruction, etc. For example, pay-in for trades executed on Monday will be on Wednesday. Hence, Client will have to submit instructions to their Participants (up to 4 p.m. in case of physical and up to 6 p.m. in case of electronic instructions) on Tuesday. The client must submit the delivery instruction slip to its Depository Participant before the DPs acceptance deadline, Automatic Delivery-out Delivery-out instructions for moving securities from CM settlement account to CM delivery account can be generated automatically by the respective clearing corporations based on the net delivery obligation of its clearing members. The clearing corporation can generate auto Dos will be generated around the time of download of the delivery obligations to the clearing members. Such clearing members will not be required to give delivery out instruction forms to the participants for pay-in to the clearing corporation in respect of the automatically generate Dos. Auto DOs will not be generated in the following cases and the clearing members will have to give delivery-out instruction forms to their participants as usual: Non pari-passu shares or multiple ISINs Irreversible delivery-out (IDO) Shifting of CM settlement account from one participant to another participant Clearing members will be required to give inter-settlement instructions to the participants for securities lying in another settlement as usual. Participants can generate separate reports from the DPM both for auto DOs and manual Dos.

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2.19. Trading
Trading is the process of buying or selling different type of security in stock market. In these stock markets daily there are many transaction held on the basis of trading. When investors buys any kind of security, his main motive is to make profit out of that by selling it on the high prices .this all process of selling and buying is called trading. In India there is two type of trading available. These two types are:

2.19.1. Online share trading:


Realizing there is untapped market of investors who want to be able to execute their own trades when its suits them, broker have taken their trading rooms to the internet known as online broker, they allow you to buy and sell shares via internet. Investors can have complete control of their stocks investing action, now that they have the convenience of buying and selling share on the NSE online and in real time. Each individual has access to the latest information and tools to analysis any stock investment decision. Plus the power to execute the sale or purchase right before them on their personal computer screen.

2.19.2. TRADING IN SECURITY MARKET:


2.19.2.1. 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: Customers can also do an intra-settlement trading up to 3 to 4 times, with available funds, wherein customers take long buy/ short sell positions in stocks with the intention of squaring off the position within the same day settlement cycle. Margin PLUS Trading: Through Margin PLUS customers can do an intrasettlement trading up to 25 times with available funds, wherein customer take long buy/ short sell positions in stocks with the intention of squaring off the position within the same day settlement cycle. Margin PLUS will give a much higher leverage in the customer account against their limits. Spot Trading: This facility can be used only for selling demats stocks which already exist in demat account.

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When customer are looking at an immediate liquidity option, 'Cash on Spot' may work the best for them, On selling shares through "cash on spot", money is credited to customer bank a/c the same evening & not on the exchange payout date. This money can then be withdrawn from any of the ICICIBank ATMs. BTST : Buy Today Sell Tomorrow (BTST) is a facility that allows customers to sell shares even on 1st and 2nd day after the buy order date, without this customer have to wait for the receipt of shares into customers demat account. Call Trade: Call Trade allows customer to call on a local number in customer city & trade on the telephone through our Customer Service Executives. This facility is currently available in over 11 major states across India. Trading on NSE/BSE: Through ICICIdirect.com, customer can trade on NSE as well as BSE. Market Order: Customer 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: It Allows Customer to place a buy/sell order at a price defined. The execution can happen at a price more favorable than the price, which is defined by the Customer, limit orders can be placed by Customer during holidays & non market hours too.

2.19.2.2. Trading in Derivatives FUTURES Through ICICIdirect.com, customer can now trade in index and stock futures on the NSE. In futures trading, customer takes 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 Customer favor (i.e. rises in case Customer have a buy position or falls in case Customer have a sell position), Customer make a profit.

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Calculate Index and Know Customer Margin is tools to help in calculating margin requirements and also the index & stock price movements. The ICICIDIRECT UNIVERSITY on the HOME page is a comprehensive guide on futures and options 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, Customer has to place certain % of order value as margin. With options trading, Customer can leverage on trading limit by taking buy/sell positions much more than what Customer 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.

2.19.3. Electronic trading


Electronic trading eliminates the need for physical trading floors. Brokers can trade from their offices, using fully automated serene-based processes. Their workstations are connected to a Stock Exchanges central computer via satellite using very small aperture terminus (VSATs). The orders placed by brokers reach the Exchanges central computer and are matched electronically. The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the countrys two leading Exchange. There is 20 other regional Exchange, connected via the Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via their VSAT system.

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3. RESEARCH METHODOLOGY

3.1. Title of the Study


Title: Investment and Securities Analysis.

3.2. Duration of the Project


Project duration: 45 DAYS training in Motilal oswal securities limited. From 21st JUNE to 5th AUG

3.3. Objective of Study


The stock exchange of the country is the important part of the capital market. It provides the investors a platform to invest in different securities. The well regulated stock exchange is in the interest of both the companys as well as the investors. In India the stock exchange provide a good leverage to the capital market, but it is not very easy to get profit out of this market, for this knowledge is must about the market. the knowledge can be obtained by knowing the security market . Knowledge of security market is very important to a management student. As I have done my project training in Motilal Oswal Securities Limited ,the following are the objective, which I kept in my mind while doing summer training: To know practical concept about the security market To study the general operation of the Motilal Oswal Securities Limited. Analyzing the market survey and thereby finding out the investment pattern of the consumer. To impart knowledge about the general working of the stock exchange Fundamental analysis of securities To gain in depth knowledge about up gradation made due to computer in stock exchange.

3.4. Type of Research


Research type is EXPLORATORY

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3.5. Sample Size and method of selecting sample


Sample size is 100 people, and sample method is STRATIFIED SAMPLING

3.6. Scope of Study


After conducting the research at Motilal Oswal Securities Limited at sumerpur on equity research , many stages are undertaken as guidance towards appearing at conclusion like interaction with staff ,questionnaire survey and percentage analysis. As the questionnaire are targeted to get filled by general public who keeps interest in investment and have an idea about equity .so I got the opportunity to know certain facts about this securities market . Whatever conclusions I have drawn from this research part are mentioned below: Presently in India, securities market is not so much established and popular, there is only a small portion of people who are being an active part of this market as an investor. Most of the people invest only 20% to 40% of their saving in this market and their basic criteria to invest in this market is achieving higher returns. Most of the investors want to enjoy higher returns by investing in this market. Most of the investors, who are investing in this securities market, are choosing the securities on the basic of goodwill of the company although they prefer and believe that technical analysis produces good and accurate result but still as these technical analysis is not so easy to understand they choose their securities on the basis of the reputation of the company. If we look upon those people who are using technical analysis then we will find that most of the people who choose the securities by doing technical analysis are using moving average as the most easy and suitable tool. Riskier long-term saving requires that an individual possess the ability to manage the associated increased risks. Stock prices fluctuate widely, in marked contrast to the stability of (government insured) bank deposits or bonds. This is something that could affect not only the individual investor or household, but also the economy on a large scale.

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The following deals with some of the risks of the financial sector in general and the stock market in particular. This is certainly more important now that so many newcomers have entered the stock market, or have acquired other 'risky' investments (such as 'investment' property, i.e., real estate and collectables). With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all over talking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly. INDIA THE LAND OF OPPORTUNITY India is no longer the country of Taj Mahal, elephants & snake charmers only but has become the land of opportunities. The old age tag line of Bird of Gold is slowly getting prominence and acceptance in this modern competitive environment. We as a country have seen it all Ruled by the outsiders, Gaining Independence, Green Revolution, and Political Coalitions but above all, the growth of our economy from US$ 10 billion USD to over US$ 1.2 trillion since independence. This is just the beginning of the growth that we have embarked upon and will cross many more milestones in the journey towards US$ 2 trillion to 3 to 4 and so on and so forth. What is driving growth in our country, when the world is struggling to keep their head above water? What are the businesses that will provide the much needed impetus to our economy which will make the world sit and notice? What will make the world believe that Ignore India at its own peril?

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Our GDP contributors have been changing from dominance by Agriculture to Services & Manufacturing. 30 years back agriculture used to contribute over 30% to our GDP but the same has dropped to under 15% whereas Service sector has increased from over 30% to over 50%. The entrepreneur spirit couple with the service mindset has helped us in reaching such high growth in services sector. The manufacturing sector contribution has increased from 19% to over 28% during the same period. Indian opportunity so exciting from an investment destination Expanding per capita: The 1 billion plus population is the most promising opportunity that any business can look at. The below the poverty line population has fallen from 93% in 1985 to less than 50% currently and is expected to come down further to below 25% by 2025. This will bring a large part of deprived population under the consumption net. What doubles the excitement is that fact that over 60% of the population is below the age of 35. This demographic change will present a huge opportunity for the companies catering to consumption. Fiscal Discipline: The ministry of finance has been working overtime to control and bring down the fiscal deficit. The fiscal discipline will improve the quality of finance of the country and will allow the government to make money available for growth. The current 3G and BWA auction has just helped the cause. Government, the big spender: The biggest challenge for the government is to impart fiscal discipline but at the same time do not compromise on the growth story across key sectors like Infrastructure. To bridge the gap and execute large projects, government is seeking private participation in projects like Airport modernization, Metro railways etc. We are currently spending 6.50% of GDP on infrastructure and the same is expected to go up to 9% by 2013. This will give a huge boost to the economy

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and will create large employment opportunities thereby increasing the purchasing power of people. Savings boom: By nature and culture, we are savers and do not believe in leveraging ourselves as individuals. The Indian savings rate is between 35 to 40% thereby giving a huge opportunity to BFSI sector to be instrumental in such large savings. With GDP all set to grow to 2 trillion USD, our savings will be close to 1 trillion USD. There are also some people who are investing in securities market by using market calls and tips as the base to choose the securities, but they are not so much about the result of these market calls and tips, they didnt believe that these calls and tips are so much fruitful but as they are not very much aware regarding the technical tools, they have to use market calls and tips. It is the believe of investor that technical analysis is not very easy to understand, but as the securities market is growing day by day so investors are trying to understand these technical tools we can say now people are being interested to learn about technical analysis. It is a good indication that people are now interested and excited to know about technical analysis of securities and they want to choose the securities on the basis of technical analysis so all the companies related to securities market like Bonanza should encourage and motivate their know investors and clients to use of most easy technical tools to them.

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3.7. Limitation of Study


The various limitations which are found by me in market are: Lack of awareness of stock market: - Since the area is not known before it takes lot of time in convincing people to start investing in share primarily in IPOs. Mostly people comfortable with traditional brokers: - As people are doing trading from their respective broker, they are quite comfortable to trade via phone. Some respondents are unwilling to talk: - Some respondents either do not have time or willing does not respond, as they are quite annoyed with the phone call. Lake of techno savvy people and poor internet penetration:-Since most of the people are quite experienced and also they are not techno savvy. Also internet penetration is poor in India. Inaccurate leads: - Sometimes leads are provided which had error in it which varies from only 5 digit phone number to wrong phone number. Misleading concepts: - Some people think that shares are too risky and just another name of gamble but they dont know its not at all that risky for long investors.

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4. Facts and Findings


FINDINGS
Fundamental Analysis helps us understand in which stock we should invest In equity market there is continuous growth in number of contracts but fewer understand on what basis they are investing. The findings for the above research are as follows: Mostly of investors which lies in 1 lac category like to invest more, and less than 10000 or 10000 is not take initiative to invest in security market. 40 to 60 age of investor are more interested in investment, Rather than investors who are in 20 age group. In the above survey only 3% of investors are interested in 20 age group. 40% of investors invest 20% to 40% of their total income. Among 100 people and only 20% of people like to invest above 60% of their total income. There are mostly investor invest in security market because of higher return. In above diagram 47% investors only invest in security market for higher return. mostly investor like to invest in equity rather than other market. it is about 40% and in case commodity market it is only 5% , in bank fds which is prefer in second option is 25% , in bonds it is 10% and in mutual fund it is about 20%. Most of the investors only invest in stock because of goodwill of the company. only 8% of people invest in stock because of popularity of security , it means that most of the people dont have the knowledge of security market On the basis of analysis, we can conclude that mostly investor prefers technical analysis rather than market calls. We can analyze that 50% or above investor believe on technical analysis; it is about 62%.where as 8% of investors dont believe in technical analysis. About 65% of investor does not easily understand the technical analysis of stock. Means they believe on technical analysis but they dont have so much of knowledge of it. Those investors who believe on market calls / tips, mostly based on stock broker. It is about 47% and 8% on mobile and 45% on TV channels.

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5. Analysis and Interpretation


Knowing the awareness and perception of the customers is very important in any industry. This provides insight into the customer behaviour and his expectation from the industry players. A proper understanding of the awareness and perception would definitely benefit the players. This survey attempt to know the investor better. It examines some interesting choices of the investor including the reasons behind investing in stock market and the risk tolerance levels of the investors. The investor knowledge about the stock market and company. This sumerpur city survey was conducted to know the investor awareness and perception about company. It is hoped that this survey in sumerpur city would go a long way in benefiting for Motilal Oswal securities Limited.

Do you know about MOSL? (a) 32% of the respondent is Have heard about them (b) 56% of the respondent is Aware (c) 12% of the respondent is Unaware

Have heard about them , 32, 32% Aware, 56, 56% Completely Unaware, 12, 12%

Aware Completely Unaware Have heard about them

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How often do you trade ? (a) 25% of the respondent is Daily (b) 30% of the respondent is weekly (c) 19% of the respondent is monthly (d) 26% of the respondent is sometime

30 25 20 15 10 5 0 Daily Daily , 25

Weekly, 30 Sometime , 26 Monthly, 19

Weekly

Monthly Series1

Sometime

Which of these products apart from equity your company is providing? (a) 18% of the respondent is Mutual fund (b) 15% of the respondent is Investment (c) 10% of the respondent is Insurance (d) 22% of the respondent is Trading (e) 35% of the respondent is All of the

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40 35 30 25 20 15 10 5 0 Mutual Fund Investment advisory Insurance Trading 18 15 10 22

35

All of the above

Financial Products Series1

Does your company provide online trading? (a) 11% of the respondent is No (b) 89% of the respondent is Yes

No, 6, 11%

Yes No

Yes , 50, 89%

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Investors income level? (A) 2% of respondent invest in security market that lies in 10000 (b) 15% of the respondent invests in security market that lies in 10000-50000 (c) 30% of the respondent invests in security market that lies in 50000100000 (d) 53% of the respondent invests in security market that lies in above 100000
60%

50%

40% below 10000 30% 10000-50000 50000-100000 20% above 100000

10%

0% Category 1

Interpretations: Mostly of investors which lies in 1 lac category like to invest more, and less than 10000 or 10000 is not take initiative to invest in security market.

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age of investors :(a) 3% of the respondent is below 20 (b) 42% of the respondent is 20-40 (c) 48%of the respondent is 40-60 (D) 7% age of investors above 60

above60, 7%

below 20, 3%

20-40, 42%

40-60, 48%

Interpretation: 40 to 60 age of investor are more interested in investment, Rather than investors who are in 20 age group. In the above survey only 3% of investors are interested in 20 age group

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How much portion of your saving do you invest / would invests in share market? (a) 25% of the respondents go with up to 20% (b) 40% of the respondents go with up to 20% to 40% (c) 15% of the respondents go with up to 40% to 60% (d) 20% of the respondents go with above 60%
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% below 20% 20%-40% 40%-60% above60% Series 1

Interpretations:40% of investors invest 20% to 40% of their total income. Among 100 people and only 20% of people like to invest above 60% of their total income.

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you invest in stock market because (a) 47% of the respondents go with higher return (b) 10% of the respondents go with faster return (c) 25% of the respondents go with easy liquidity (d) 18% of the respondents go with depends on market

18%

higher return 47% faster return easy liqidity 25% depend on market

10%

Interpretation: Above diagram explain that mostly investor invest in security market because of higher return. In above diagram 47% investors only invest in security market for higher return.

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Taking the factors like security, rate of return and time in consideration which among the Following you rate as per the best option? (a) 25% of the respondents go with Bank FDs (b) 5% of the respondents go with small savings in commodity market (c) 10% of the respondent goes with Bonds (d) 40% of the respondent goes with equity/ derivative (e) 20% of the respondent goes with Mutual funds

20% 25% bank FD's commdity market Bonds 5% Equity/ Derivative Mutual funds 10% 40%

Interpretation: We can analyze by this diagram that mostly investor like to invest in equity rather than other market. it is about 40% and in case commodity market it is only 5% , in bank FDs which is prefer in second option is 25% , in bonds it is 10% and in mutual fund it is about 20%..

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What are the bases upon which people decide to invest in stock market? (a) 32% of the respondent goes with technical analysis / fundamental analysis (b) 13% of the respondent goes with Market call / tips (c) 8% of the respondent goes with popularity of security (d) 47% of the respondent goes with goodwill of the company
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% technical analysis Market call / tips / fundamental analysis popularity of security goodwill of the company Series 1

Interpretation: Most of the investors only invest in stock because of goodwill of the company. Only 8% of people invest in stock because of popularity of security , it means that most of the people dont have the knowledge of security market

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Which one you prefer most? (a) 60% of the respondent goes with technical analysis (b) 40% of the respondent goes with market tips / calls

70% 60% 50% 40% technical analysis 30% 20% 10% 0% Category 1 market tips / calls

Interpretation: On the basis of above diagram, we can conclude that mostly investor prefers technical analysis rather than market calls.

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How much you believe on technical analysis of stock or how much right result can be acquired by doing the technical analysis of any scrip? (a) 13% of the respondent goes with up to 40% (b) 17% of the respondent goes with 40-50% (c) 62% of the respondent goes with more than 50% (d) 8% of the respondent go with dose not believe at all

up to 40%

40-50%

more than 50%

not believe at all

8%

13%

17%

62%

Interpretation: We can analyze that 50% or above investor believe on technical analysis; it is about 62%.where as 8% of investors dont believe in technical analysis.

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Is the technical analysis easy to understand even by a simple investor? (a) 35 respondents go with yes (b) 65 respondents go with no

yes no

Interpretation: About 65% of investor does not easily understand the technical analysis of stock. Means they believe on technical analysis but they dont have so much of knowledge of it.

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If your base to choose the scrip is market calls / market tips, and than what are the sources you trust upon most? (a) 8% of the respondent go with market tips by security based company on mobile. (b) 45% of the respondent goes with T.V channel like CNBC (c) 47% of the respondent goes with stock brokers
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% market tips by security based company on mobile. T.V channel like CNBC stock brokers Series 1

Interpretation: Those investors who believe on market calls / tips, mostly based on stock broker. It is about 47% and 8% on mobile and 45% on TV channels.

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Up to what percent market tips are correct according to you? (a) 65% of the respondent goes with 30% or less (b) 10% of the respondent goes with 30%-50% (c) 10% of the respondent goes with 50%-60% (d) 15% of the respondent goes with more than 60%

70% 60% 50% 40% Series 1 30% 20% 10% 0% 30% or less 30%-50% 50%-60% more than 60%

Interpretation: In the above analysis we can interpret that about 65% of investors believe that only 30% or less market calls are correct. And 15% investors believe that market calls are wrong about 60% and above.

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Do you think will securities market grows? (a) 80% of respondent go with Yes (b) 20% of respondent go with no

yes no

Interpretation: Above interpretation explain that 80% of investors believe that security market is grows and 20% believe that it does not grow because of recession and many more reasons.

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6. SWOT
Strengths
Large and diverse distribution network Solid research and solid advice Strong research and sales teams Brand recognition and Strong financial results Experienced top management

Weaknesses
Charges are high compare to other companies in industry

Opportunities
Growing Financial Services industry's share of wallet for disposable income Huge market opportunity for wealth management service providers as Indian wealth management business is transforming from mere wealth safeguarding to growing wealth. Regulatory reforms would aid greater participation by all class of investors Leveraging technology to enable best practices and processes Increased appetite (need) of Indian corporate for growth capital

Threats
Execution risk and Unfavorable economic conditions Slowdown in global liquidity flows Increased intensity of competition from local and global players

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7. Conclusion
This securities market is about to grow in future very much with the growth of equity research. There is very high competition in this market , there are many companies which are providing different type of services to their clients and, this market is centre of attraction to new entrepreneur because it is already successful market and it is for sure that it will grow further, and there are many opportunities lying ahead in the way. Motilal Oswal Securities Limited is an active and well known participant of this securities market, this is achieving great success by working very hard with dedication. There is very good staff in this organization so it may facilitate its clients in many ways, although there is competition but still it is doing its own work and providing services to their clients up to the best extent. Solid research and analysis is very important service of Motilal Oswal Securities Limited that it is providing to its client .It provides the suggestion that which security is good for the purpose of investment. For this project purpose, i have been gone through with a research that has been conducted in sumerpur with a sample size of 160 investors and on the basis of this research; I can conclude that most of the people believe that technical analysis can provide more suitable and desirable results to them .People are interested to know about this technical analysis part, for this we just need to aware and encourage them. There should be more awareness made about the portfolio management services by giving more advertisement. The MOSL should go for tie-ups with the corporate to increase business. Motilal Oswal Securities Limited should organize some events to build its Brand Image in the minds of the people towards MOSL. As per customers point of view, they feel that Motilal Oswal Securities Limited should open more number of branches for the convenience of people.

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8. Recommendation and Suggestions


As said earlier investment in equity market is growing fast, but still there are certain things that need to be considered while & after investing. Thus this section deals with a certain recommendations which would help in better development in investment and securities. Information about investment and securities analysis must be given to all the investors & training should be conducted. A monthly analysis of the companys market movement should be sent to the clients. Reduction in the cost of the brokerage that would help in increasing the investment as well as small investors would be able to invest more freely. A seminar should be arranged for the investors for giving them information about various factors to be considered before & after investing. Company (MOSL) should try to improve its services delivered to the customers. Bad service is one serious hinder in its growth. It should try to speed up the response given to the customers. MOSL is facing stiff competition from different companies like Bajaj Allianz, ICICI Prudential etc. In keeping track with them MOSL have to bring out products & services with attractive schemes. Highly Focus on Financial Planning Segment. Try to maintain efficient and updated employees in most actionable department. Those are very aware with practical problem from franchise end. Maintain Micro Level Highly Accurate Research Work by R-Department.

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9. QUESTIONNAIRE
Questionnaire based on awareness of company and consumer behaviour while taking decisions related to his investment in Equities and Derivative market

Name:-..... Age:-. Mobile no:- Landline no:-. Address:-....... Occupation:-.....


Please select the appropriate option:

Investors income level? (A) 10000 (d) above 100000 (b) 10000-50000 (c) 50000-100000

age of investors :(a) 20 (b) 20-40 (c) 40-60 (d) 60 above

How much portion of yours saving do you invest/would invest in share market? (a) 20% (d) Above 60% (b) 20%-40% (c) 40%-60%

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you invest in stock market because :(a) high return ( b) faster return ( c ) easily liquidity

(d) depends on market

Taking the factors like security, rate of return and time in consideration which among the Following you rate as per the best option? (a) Bank FDs (d) Equity/ derivative (b) commodity market (e) Mutual funds (c) Bonds

What are the bases upon which people decide to invest in stock market? (a) Technical analysis / fundamental analysis (b)Market call / tips (c) Popularity of security (d) Goodwill of the company

Which one you prefer most? (a) Technical analysis (b) Market tips / calls

How much you believe on technical analysis of stock or how much right result can be acquired by doing the technical analysis of any scrip? (a)40% ( b ) 40-50% ( c ) more than 50%

(d) Does not believe at all

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Is the technical analysis easy to understand even by a simple investor? (a) Yes (b) no

If your base to choose the scrip is market calls / market tips, and then what are the sources you trust upon most? (a) market tips by security based company on mobile . (b) T.V channel like CNBC (c) stock brokers

Up to what percent market tips are correct according to you? (a) 30% or less (d) More than 60% (b) 30%-50% (c) 50%-60%

Do you think will securities market grows? (a) Yes (b) no .

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Bibliography

C. R. Kothari: Research Methodology Dr. Sonal Jain: Security Analysis and Portfolio Management

Library of company and college www.motilaloswal.com/home www.google.com and other search engine www.wikipedia.com The website of National Stock Exchange, jvirahyas@gmail.com, Bombay Stock Exchange, Security Exchange Board Of India and also other supporting webpages of Motilal Oswal Securities Limited.

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