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Summer training Project Report On
“Comparative Analysis of Stock Brokers In CHANDIGARH Region”
CHITKARA BUSINESS SCHOOL
Master of Business Administration (Session 2009-2011) Of CHITKARA UNIVERSITY
Submitted by: Manjit Gogoi M090700041
Preservation, inspiration and motivation have always played a key role in the success of any venture. In the present world of competition and success, training is like a bridge between theoretical and practical working; willingly I prepared this particular project. First of all I would like to thank the supreme power, the almighty God, who is the one who has always guided me to work on the right path of my life. I would like to thank Mr. Rahul Gupta (CBM), IndiaBulls Securities Ltd for granting me permission to undertake the training in their esteemed organization. I express my sincere thanks to Ms. Hitakshi Dutta (Project Guide) & others faculty members, for their valuable suggestion and making this project a real success. I also thank the other staff of INDIABULLS SECURITIES LTD who devoted their valuable time by helping me to complete my project and sharing their knowledge with me. Last but not least, my sincere thanks to my parents and friends directly or indirectly who helped me to bring this project into the final shape.
MANJIT GOGOI Date: 26/July/2010
3 TABLE OF CONTENTS 1. Executive Summary…………………………………………………….6 2. Introduction……………………………………………………………8-9 • • • • Growth of IndiaBulls……………………………………….10-11 Company Profile……………………………………………….12 An overview of company people……………………………..13 Vision……………………………………………………………14
3. Introduction to particular firm……………………………………..16-19 4. The Competitors……………………………………………………21-25 5. Competitive Analysis………………………………………………27-29 6. Organization Structure………………………………………………..31 7. Functioning of departments……………………………………….33-34 8. Sources of finance……...………………………………………….36-37 9. SWOT analysis………………………………………………………...39 10. Financial Statement analysis……………………………………..41-45 11. Marketing Strategy…………………………………………………47-51 12. Balance Sheet, Profit and loss account and Cash Flow………52-54 13. Future plans……………………………………………………………55 14. Title of the project……………………………………………………...56 15. Critical literature review……………………………………………58-59 16. Research Methodology……………………………………………61-62 • • Sample design…………………………………………………63 Data collection……………………………………………........64
4 17. Details of actual work undertaken………………………………..66-68 • • Documents required for demat account…………………69-73 Demat process…………………………………………………74
18. Interpretation and analysis………………………………………..76-84 19. Findings of the study…………………………………………………..86 20. Recommendations…………………………………………………….88 21. Benefit to the company………………………………………………..90 22. Limitations………………………………………………………………92 23. Suggestions…………………………………………………………….93 24. Bibliography…………………………………………………………….95 25. Annexure……………………………………………………………97-99
India is a large and growing economy with rapidly expanding financial services sector. The sector has witnessed a transformation over the last decade as a result of the economic liberalization which started in 1991.The Indian capital markets have undergone a substantial change over the last decade. India is now placed among the mature markets of the world. With over 20 million shareholders, India has the third largest investor base in the world after USA and Japan. IndiaBulls is India’s leading Financial Services and Real Estate Company having over 640 branches all over India. IndiaBulls serves the financial needs of more than 4,50,000 customers with its wide range of financial services and products from securities, derivatives trading, depositary services, research & advisory services, consumer secured & unsecured credit, loan against shares and mortgage & housing finance. My summer internship was at IndiaBulls Securities Ltd, Sector 9 branch, Chandigarh for a period of 13 weeks. I also had to meet the clients personally when required. I was involved in online trading as well. I have been given a project titled “Comparative Analysis of Stock Brokers”, where in I had to analyze the different stock brokers present in Chandigarh. I had to do a competitive analysis for IndiaBulls Securities Ltd to know where it currently stands in the Indian Retail Securities Market. I did a thorough analysis on IndiaBulls competitors to know its competitive advantage. I have done a SWOT analysis for IndiaBulls and have come up with few suggestion and recommendations for the company.
7 IndiaBulls Group is one of the top business houses in the country with business interests in Real Estate, Infrastructure, Financial Services and Power sectors. IndiaBulls Group companies are listed in Indian and overseas financial markets. The Networth of the Group exceeds USD 3 billion. IndiaBulls has been conferred the status of a “Business Superbrand” by The Brand Council, Superbrands India. IndiaBulls and its group companies have attracted USD 800 million of equity capital in foreign direct investment (FDI) since March 2000. Some of the large shareholders of IndiaBulls are the largest financial institutions of the world such as Fidelity Funds, Capital International, Goldman Sachs, Merrill Lyinch, George and Farallon Capital. The Group Companies IndiaBulls Financial Services IndiaBulls Financial Services is an integrated financial services powerhouse providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance, Asset Management and Advisory services. IndiaBulls Financial Services Ltd is amongst 68 companies constituting MSCI - Morgan Stanley India Index. IndiaBulls Financial is also part of CLSA’s model portfolio of 30 Best Companies in Asia. IndiaBulls Financial Services in partnership with MMTC Limited, the largest commodity trading company in India, has set up India’s 4th Multi-Commodities Exchange. IndiaBulls Real Estate Limited IndiaBulls Real Estate Limited is India’s third largest property company with development projects spread across residential projects, commercial offices, hotels, malls, and Special Economic Zones (SEZs) infrastructure development. IndiaBulls Real Estate partnered with Farallon Capital Management LLC of USA to bring the first FDI into real estate. IndiaBulls Real Estate is transforming 14 million sqft in 16 cities into premium quality, high-end commercial, residential and retail spaces. IndiaBulls Real Estate has diversified significantly in the following
8 business verticals within the real estate space: Real Estate Development, Project Advisory & Facilities Management: Residential, Commercial (Office and Malls) and SEZ Development. Power: Thermal and Hydro Power Generation.
IndiaBulls Securities Limited IndiaBulls Securities Limited is India’s leading capital markets company with AllIndia Presence and an extensive client base. IndiaBulls Securities possesses state of the art trading platform, best broking practices and is the pioneer in trading product innovations. Power IndiaBulls, in-house trading platform, is one of the fastest and most efficient trading platforms in the country. IndiaBulls Securities Limited is the first brokerage house to be assigned the highest rating BQ – 1 by CRISIL.
9 Growth of IndiaBulls Year 2000-01:
One of India’s first trading platforms was set up by IndiaBulls Financial Services Ltd. with the development of an in-house team.
The service offered by IndiaBulls was increased to include Equity, F&O, Wholesale Debt, Mutual fund, IPO Financing/Distribution and Equity Research.
In this particular year IndiaBulls ventured into Distribution and Commodities Trading business.
This was one of the most important years in the history of IndiaBulls. In this year:
• • • •
IndiaBulls came out with its initial public offer (IPO) in September 2004. IndiaBulls started its Consumer Finance business. IndiaBulls entered the Indian Real Estate market and became the first company to bring FDI in Indian Real Estate. IndiaBulls won bids for landmark properties in Mumbai.
In this year the company acquired over 115 acres of land in Sonepat for residential home site development. The world renowned investment banks like Merrill Lynch and Goldman Sachs increased their shareholding in IndiaBulls. It also became a market leader in securities brokerage industry, with around 31% share in Online Trading. The world’s largest hedge fund, Farallon Capital and its affiliates committed ` 2000 million for IndiaBulls subsidiaries Viz. IndiaBulls Credit Services Ltd. and IndiaBulls Housing
Finance Ltd. In the same year, the Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd. acquired 8.2% stake in IndiaBulls Credit Services Ltd.
In this year, IndiaBulls Financial Services Ltd. was included in the prestigious Morgan Stanley Capital International Index (MSCI). IndiaBulls Financial Services Ltd. was benefited with the Farallon Capital agreeing to invest ` 6,440 million in it. The company also received an “in principle approval” from Government of India for development of multi product SEZ in the state of Maharashtra. IndiaBulls Financial Services Ltd acquired 100% of the equity share capital of Noble Realtors Pvt Ltd. Noble Realtors is a Company engaged in the business of construction and development of real estate projects. IndiaBulls Real Estate Business was demerged to become a separate entity called IndiaBulls Real Estate Ltd. The Board of IndiaBulls Financial Services Ltd. Resolved to Amalgamate IndiaBulls Credit Services Ltd and demerge IndiaBulls Securities Limited.
IndiaBulls Financial Services Ltd. The Board of Directors
• • • • • • • • • Sameer Gehlaut Gagan Banga Rajiv Rattan Saurabh K Mittal Shamsher Singh Aishwarya Katoch Karan Singh Prem Prakash Mirdha Amit Jain CH and CFO Exec. Director CEO Director Director Director Director Director Co. Secretary
11 COMPANY PEOPLE PRODUCTS AND SERVICES OFFERED BY INDIABULLS
Securities Equity Research Commoditie s
Consumer Finance SME Loans
Mortgage Home Loans
Organised Retail Commercia l
Internet Trading Online IPO
Vehicle Loans Insurance
Loans Against Property
12 An overview of company people
The company was established by three engineers from IIT Delhi, and has attracted significant amount of investments from venture, private equity and institutional investors. The details are as follows:
Mr. Sameer Gehlaut Chairman, CEO, Whole-time Director Mechanical Engineer, IIT Delhi Worked for Halliburton in the United States. Acquired Inorbit Securities in 2000 to establish IndiaBulls.
Mr. Rajiv Rattan President, CFO, Whole-time Director Electrical Engineer, IIT Delhi Worked in Schlumberger
Mr. Saurabh Mittal Co-Founder, Director Electrical Engineer IIT, Delhi Worked in Schlumberger MBA from Harvard Business School
13 VISION To achieve and retain leadership, India Bulls shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, India bulls will strive to exceed Customer’s expectations. QUALITY OBJECTIVES:As per the Quality Policy, IndiaBulls will: Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services. Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer’s needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. Strive to be reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of same.
15 INDIABULLS SECURITIES LIMITED:The Company's primary business activity is to carry on business of stock and share broker on National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Company also provides depository services, mutual fund and initial public offering (IPO) distribution to its clients. The Company is a depositary participant with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for settlement of dematerialized shares. It performs clearing services for all securities and commodities transactions. Clients of the brokerage business are able to use the depositary services to execute trades through the Company and settle transactions. ISL is a corporate member of capital market & derivative segment of The National Stock Exchange of India Ltd. IndiaBulls Commodities Private Limited (ICPL), a 100% subsidiary of IndiaBulls Securities Limited, offers commodity brokerage services to its customers. ICPL is a registered Trading-cum-Clearing member of Multi Commodity Exchange of India Ltd. (MCX) and National Commodity and Derivatives Exchange Ltd (NCDEX). .
16 INDIABULLS OFFERS • • • • Broker Assisted trade execution Automated online investing Access to all IPO’s [Initial Public offer] Sales of Equity, Derivatives and commodities instruments listed on NSE, BSE, NCDEX and MCX BROKERAGE OFFERING:- IndiaBulls retail equity business primarily covers secondary market equity broking. It caters to the needs of individual Indian and Non-resident Indian (NRI) investors. They offer broker assisted trade execution and automated online investing and trading facilities to the customers. Automated online investing and trading includes automated order placement and execution of market and limit equity orders; and advanced trading platforms for active traders. All investors have full access to real -time quotes, personalized portfolio tracking, charting and quote applications, real-time market commentary, real-time quotes and news.
ONLINE AUTOMATED CHANNEL:-Automated Online Business contributes more than 34.6% of their overall revenues. They control more than 20% market share in the online business. Clients are able to obtain financial information and execute trades on an automated basis through their online channel using product offerings like Power IndiaBulls and IndiaBulls Market Trader. This channel is designed to provide added convenience for clients and minimize our costs of responding to and processing routine client transactions. Online channels include the IndiaBulls Group Professional Network that provides access via our web-site www.indiabulls.com to information and trading service on the Internet. Additionally, Power IndiaBulls online trading system is designed for the high volume trader and provides enhanced trade information and order execution integrated software-based trading platform
17 There are 3 mediums of using / accessing their Trading Services. • • • Power IndiaBulls (PIB) IndiaBulls Signature Account Relationship manager(RM)
Power IndiaBulls:- The Power IndiaBulls software is ideally suited for the active trader. This software gets installed on the client machine and is similar to a Dealer Terminal over the Internet. The terminal has a lot of features that makes it extremely usable from the point of view of a trader who is active in the market. Some of the product features are • • • • • • • • Integrated market watches for cash and derivatives Multiple tick by tick charting Advanced Technical Analysis Single key stroke order entry Multiple customizable market watches Easy to use risk management reports Secured Socket Layer connectivity with server Two second order confirmation turnaround time even during peak hours.
INDIABULLS SIGNATURE ACCOUNT:- A multitude of ways to access the account either through priority access to Relationship Manager over phone or online access to the Account & Research Tools FEATURE:• • Priority Service — Enjoy priority telephone access that gives direct access to the Relationship Manager. Premium Research — Benefit from full access to IndiaBulls Equity Analysis , our objective, fact-based approach to rating stocks. • Online Accounting — Stay on the top of your investments with a snapshot of your Account Statements. Get access to Portfolio statement and access to digital contract notes.
Control — Stay on top of your investments with convenient access to your account online or by phone. Confidence — Support your investing decisions with premium in-depth research - IndiaBulls Equity Analysis. Value — Enjoy competitive commissions and get the service and support you need at a fair price It offers the unique feature of relationship manager.
RELATIONSHIP MANAGER:- Relationship Manager driven sales model, provide high quality service and exploit cross-sell opportunities. Company’s clients benefit from the personal attention and advice of the trained and motivated relationship managers. All our relationship managers are qualified and educated professionals, who have been extensively trained in-house to provide the products and services to the clients. These relationship managers are encouraged to develop long-term relationships with the clients and can access a variety of resources within our Company, such as insurance specialists, research services and others to add value to our clients. Most of our clients have dedicated relationship managers irrespective of the channel they use. IndiaBulls Securities And Derivatives Broking:- ISL is engaged in the business of Internet based trading and is registered with SEBI as a stockbroker, trading and clearing member of NSE, member of BSE and as a depositary participant with National Securities Depository Limited (“NSDL”) and Central Depository Services (India) Limited (“CDSL”). ISL is also a member of the National Securities Clearing Corporation Limited.
20 India Infoline: Strengths of the 5paisa or infoline are: 1. Very fast execution speed. 2. Rates are very competitive then other providers. 3. Easy online fund transfer facility from leading Banks including ICICI, HDFC, CITI and UTI banks. 4. Free facility of subscribing to mutual funds, equity IPOs and other investment products.
ICICI Direct: Strengths of the ICICI direct are: 1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. This feature makes ICICI the most interesting player in online trading facility. There is absolutely no manual interfere require. This is truly online trading environment. 2. Unlike most of the online trading companies in India which require transferring money to the broker's pool or towards deposits, at ICICIDirect you can manage your own demat and bank accounts through ICICIdirect.com. Money from selling stock is available in ICICI bank account as soon as the ICICIDirect receive it. 3. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website. General Insurance is also available from ICICI Lombard. 4. Trading is available in both BSE and NSE .
21 Religare: Strengths of the Religare are: 1. Religare gives interest on unutilized cash when investor is waiting to make next trade or online investment. 2. Religare Allow their investor to trade without having to worry about cash margin. Investor can get exposure (on cash segment) as high as 20 times for intraday trades. 3. They provide intraday reports and historical charting. 4. Lifetime free DP account. 5. Varity of fee structure to fulfill need of different type of investors.
ShareKhan: Strengths of the Sharekhan are: 1. Online trading is very user friendly and one doesn't need any software to access. 2. They provides good quality of services like daily SMS alerts, mail alerts, stock recommendations etc. 3. Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc., so investor not really needs to open an account with a particular bank as it can establish link with most modern banks.
22 HDFC SECURITY HDFC security is the subsidiary of HDFC (Housing Development Financial Corporation). www.hdfcsec.com would have an exclusive discretion to decide the customers who would be entitled to its online investing services. www.hdfcsec.com also reserves the right to decide on the criteria based on which customers would be chosen to participate in these services .The present web site (www.hdfcsec.com) contains features of services that they offer/propose to offer in due course. The launch of new services is subject to the clearance of the regulators, i.e, SEBI, NSE and BSE.
PRODUCT OFFERED BY HDFC SECURITY
• • • • • •
Online trading for Resident & Non Resident Indians. Cash-n-Carry on both NSE and BSE. Day trading on both NSE and BSE. Trade on Futures & Options on the NSE. Online IPO's. Telephone-based Broking (Equity & Derivatives).
23 COMPARATIVE ANALYSIS BETWEEN DIFFERENT STOCK BROKERS
After the whole study I found out the following results:There are the two type of the transaction: - 1.Intrabased 2. Delivery based
24 Indiabulls security ltd: Charge a 0.05 % on intra based and 0.25 % on delivery based transactions per 100 rupees. ICICI Direct: charge a 0.75 % on delivery based and 0.15 % on intra based transactions per 100 rupees. Indiainfoline security ltd: Charges a 0.01 % brokerage for intraday
transactions. For trades that do result in delivery which is less than 20% of total trades, statistically speaking there is a nominal charge of 0.5 % for securities handling. Religare Securities Limited:. Religare security ltd charges a 0.3 % on delivery based and 0.03 % on non delivery based transaction. Service charges and other charges are separately Sharekhan: Sharekhan charges a 0.10 % on non delivery based and 0.50 % on delivery based transactions.
HDFC Securities: HDFC charges 0.15 % on intraday transactions and 0.50 % on delivery transactions.
26 The Indian retail brokerage industry consists of companies that primarily act as agents for the buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on a commission or transaction fee basis. It has two main interdependent segments: Primary market and the Secondary market Objective: • Analyze retail brokerage industry taking into account the health of the capital markets, Derivative Market and the intensity of competition among the brokerage companies. • Doing Competitive Analysis for IndiaBulls.
The major growth drivers for brokerage revenue and trading volume are: • Adoption of technology — screen-based trading, electronic matching, and paperless securities • Centralized operations, effective risk management, and control on large interconnected operations spanning multiple locations, which is enabled by telecom connectivity and low costs • Increasing access to capital and the ability to provide margin finance
Parameter Assessment for Doing Competitive analysis A differentiating aspect is a comparative assessment of the top retail brokerages on various value indicators, comprising of • • • • Product Pricing Service delivery model Unique selling proposition.
Customers need to analyze the Brokerage Firms Based on these 5 Parameters. • • • • • Brokerage & Miscellaneous charges Quote Software Execution Platform Demat Account Back office Support.
Brokerage & Miscellaneous charges: This accounts for all the charges that you incur for your trading/investing. A few examples would be: Demat Account maintenance, Brokerage, Annual account Fee, Telephone based trading charges, trading software usage charges, etc. We should understand what all charges we are bound to incur from our broker.
Quote Software: This is used mainly for technical study and for live quotes. Many people don’t evaluate quote software. We typically use software that have stumbled upon and stick with it just because we have eventually grown comfortable using it. Does it allow us to back test our strategy? Does it allow customizing technical signals/parameters? Does it allow adding new indicators? Does it allow us to see historic data? For, what period is intraday data available? We might need all this information. We should be clear on what we need and ensure our quote software provides it all. Execution Platform: It’s nothing but a platform that allows us to execute our trade fast. It should automate trade management and execution, and should give protection against human errors.
Demat Account: Demat account should only be opened with a well known and established brokerage firm in the market.
28 Back office Support: People while trading face lots of problem because of lack of good back office support. Relationship Managers trading without their client’s knowledge, funds not being transferred, trades not being executed, slow execution etc are a few examples.
IndiaBulls Securities Trading Products They provide three products for trading. They are • • • Cash account Intraday account Margin trading
Cash account provides the client to buy 4 times of cash balance in his trading account. Intraday product provides the client to buy 8 times of his cash balance in the trading account. Mantra account – called as margin trading, is a special account to buy on leverage for a longer duration.
Senior Vice President
Branch Manager Senior Sales Manager
Back Office Executive
Local Compliance Officer
32 1. SALES KEY ASPECTS OF RM’S ROLE a) CLIENT ACQUISITION • • • • • Primary responsibility is to register clients who have the potential of generating high brokerage annually Focus not only on account opening but also on margin money from clients Educate the customers on Indiabulls Trading platform so that he can trade on his own Ensure smooth handling of the clients in terms of margin collection and relationship management Achieve monthly targets as given by the Vice President(VP) / Assistant Vice President (AVP) or above. b) REVENUE GENERATION • Primary responsibility is to generate revenue in excess of 3/4/5 times of own salary on a monthly basis from the allocated/acquired base of clients • • Prepare the plan of action; maintain the daily activity report and daily revenue plan so that you can meet your brokerage targets. Identify and acquire high net worth individuals (HNI) clients.
c) CLIENT SERVICING • • • • Guide clients in terms of investment and trading Rigorous follow up with the allocated clients. Explain ledgers, contract notes and charges . This maintains complete transparency with the clients . Ensure that clients are receiving all relevant documents on time.
33 • • • Visit the top revenue generating clients at least once a week. Call up clients for trading, margin calls and for margin collection. Develop and maintain relation with the Clients. Ask for references.
2. OPERATIONS All work related to: • • • • • Punching – in kits Punching – in cheques Checking client account status Maintaining vouchers of expenses Payment of various bills
3. Local Compliance • • • To check whether the dealer is putting correct order or not. Issuing warning letters. Verifying the signatures of clients.
35 INCOME FOR 3 YEARS THROUGH DIFFERENT SEGMENTS OF INDIABULLS SECURITIES
38 POSITIVE STRENGTHS I N T E R N A L • • • • • Integrated technology platform Pan India distribution network Relationship manager facility Power IndiaBulls has developed into brand Strong sales and marketing teams that deliver market leading product innovation NEGATIVE WEAKNESSES • Lack of banking arm
Loss of relationship manager leads to loss of clients
OPPORTUNITIES • Changing demographics with higher disposable income Rapid penetration of internet and computers Market size and characteristics
THREATS • • Economic slowdown Political instability Volatile movement in market indices Competition Substitutes Low product differentiation
• • • •
E X T E R N A L
40 Profitability Ratios: March 2008 Operating Profit Margin 67.86 March 2009 8.01 March 2010 37.51
Net Profit Margin
41 Return on Net Worth 73.29 -3.99 24.17
Dividend Payout Ratio
42 Price Earnings Ratio 11.43 -0.90 10.57
Liquidity Ratios: Current Ratio March 2008 3 March 2009 2.84 March 2010 2.72
43 Quick Ratio 3.20 2.91 2.99
Debt Equity Ratio
44 Activity Ratios: March 2008 65.44 March 2009 24.10 March 2010 107.3
Debtor Turnover Ratio
Fixed Asset Turnover Ratio
IndiaBulls offers two products: 1. 2. “Get More At IndiaBulls.” NIB - Normal IndiaBulls PIB - Power IndiaBulls
NIB – Normal IndiaBulls: “A multitude of ways to access your account either through priority access to Relationship Manager over phone OR online access to your Account & Research Tools.” Enjoy priority telephone access that gives you direct access to your Relationship Manager. Stay on the top of your investments with a snapshot of your Account Statements. Get access to Portfolio statement and access to digital contract notes.
PIB – Power IndiaBulls: “Trading just got faster” Features of PIB:
• • • • •
Live Streaming Quotes Fast Order Entry Tic by Tic Live Charts Technical Analysis Live News and Alerts
47 IndiaBulls: “A Cut Above The Rest” Service Industry is base on differentiation of the product and service IndiaBulls is different from its competitors because of following reason – Internal Marketing: The main aim of internal marketing is to train and motivate employees to serve customers. The selection, training and motivation of the employees will make a huge difference in customer satisfaction. In IndiaBulls the employees are well trained and motivated to work and they work delicately. Because IndiaBulls know that employee’s attitude will promote stronger customer loyalty. IndiaBulls designed a sound training programme and support and rewards for good performance. They can use Internet, internal newsletters, daily remainders, and employee roundtables to reinforce customer-centered attitude. External Marketing: Describe the normal work to prepare, price, distribute and promote the service to customers. It is mainly for customers to provide better service for this purpose IndiaBulls is providing following unique services to his customers: 1. Relationship Managers who are dedicated to supporting
customers trading and investing needs. They always keep in touch with client and they give various tips to client by which he can invest in good stocks. 2. Dealers’ everyday gives confirmations of the client’s whole day trading in the evening after signing out from the Market.
Interactive Marketing Customers
IndiaBulls is providing Funding for trading to its client on nominal rates of interest i.e. on 18% limit of funding is as follow Delivery- for delivery trading IndiaBulls providing 2 times funding Intraday- for this type of trading IndiaBulls is proving 8 times funding without charging any interest. Risk management team of IndiaBulls taking care of client portfolio and whenever the value of his portfolio will go decrease by 30% client always informed by his Relationship Manager. IndiaBulls is providing a software called “Power IndiaBulls” as describe above if a client have his own PC and Internet then he can trade from his home or office.
Depository Services: IndiaBulls is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. IndiaBulls performs clearing services for all securities transactions through its accounts. Company offer depository services to create a seamless transaction platform – execute trades through IndiaBulls Securities and settle these transactions through the IndiaBulls Depository Services. NRI Account You can now enjoy the convenience of hassle-free and fast way of trading in the Indian Equity Markets through IndiaBulls NRI Investor Services Our unique integrated service creates one window for all your trading, depository and banking needs. You can buy and sell on your computer using our NRI Trading Account Services, which have been seamlessly integrated with your IndiaBulls Depository Account and with the HDFC NRE/NRO Bank Account.
IndiaBulls NRI Trading Account - Provides access to comprehensive trading tools for independent NRI investors
IndiaBulls Depository Services - Integrated services for seamless delivery HDFC Bank Account - NRE/NRO Accounts with built in tax management solutions and facility to source all regulatory approvals IndiaBulls Equity Analysis - Premium Research on 540+ companies updated daily
50 Promotion: IndiaBulls is turning to marketing public relations to directly support corporate and product promotion and image making. Because public is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objective. IndiaBulls has its team relationship manager that monitors the attitudes of organization’s publics and distributes information and communications to built goodwill. They are performing following five functions: 1. Press Relations: - They present news about the organization in the most positive light. 2. Product Publicity: - All Relationship managers are sponsoring efforts to publicize product offerings by IndiaBulls i.e. NIB and PIB. 3. Corporate Communication: - They promoting understanding of the organization through internal and external communications. 4. Counseling: - All RMs advise management about public issues and company positions and image during good and crises. IndiaBulls is promoting its product by advertising by following medium: • Electronic media: - By advertise its product via Television • Print media: - By various newspapers, brochures, etc. From above campaign we had good result we have come to know that public is interested to know about IndiaBulls and shares trading. Infrastructure: - IndiaBulls also try to demonstrate its service quality through physical evidence and presentation. Because if we talk about online security trading then we have to say that physical evidence is important for the company in IndiaBulls office all client come every day and they trade but with the time
51 passing IndiaBulls is growing and number of client increasing day by day so space of office is not sufficient for both staff members and clients also.
52 BALANCE SHEET OF INDIABULLS SECURITIES LIMITED
Balance Sheet ------------------- in ` Cr. ------------------Mar '08 Mar '09 Mar '10
12 mths Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 55.28 50.69 0.00 4.59 308.74 0.00 364.02 45.04 335.00 380.04 744.06
12 mths 55.28 50.69 0.00 4.59 236.02 0.00 291.30 42.50 69.50 112.00 403.30
12 mths 45.99 45.99 0.00 0.00 173.94 0.00 219.93 165.52 152.68 318.20 538.13
12 mths Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 155.33 48.14 107.19 0.92 48.32 0.00 112.62 655.77 768.39 67.21 416.90 1,252.50 0.00 430.99 233.89 664.88 587.62 0.00 744.05 1.87 14.18
12 mths 161.32 71.23 90.09 0.18 51.77 0.00 26.24 27.63 53.87 126.54 434.56 614.97 0.00 288.37 65.35 353.72 261.25 0.00 403.29 0.29 11.31
12 mths 162.25 91.39 70.86 1.44 51.82 0.00 101.35 570.69 672.04 179.99 0.00 852.03 0.00 373.21 64.80 438.01 414.02 0.00 538.14 1.28 9.56
53 PROFIT AND LOSS ACCOUNT OF INDIABULLS SECURITIES LIMITED
Profit & Loss account
------------------- in ` Cr. ------------------Mar '08 Mar '09 Mar '10
12 mths Sales Turnover Excise Duty Net Sales 617.35 0.00 617.35
12 mths 391.74 0.00 391.74
12 mths 336.89 0.00 336.89
Other Income Stock Adjustments Total Income Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 10.74 0.00 628.09 0.00 0.00 105.41 15.71 45.49 31.76 0.00 198.37
5.58 0.00 397.32 0.00 0.00 111.61 9.57 214.12 25.03 0.00 360.33
7.86 0.00 344.75 0.00 0.00 133.57 27.81 0.00 49.13 0.00 210.51
Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)
12 mths 418.98 429.72 37.08 392.64 21.21 0.00 371.43 0.35 371.78 123.11 248.66 198.37 0.27 190.07 32.35 2,534.27 9.80 375.00 14.18
12 mths 31.41 36.99 35.26 1.73 24.22 0.00 -22.49 1.24 -21.25 -8.37 -12.88 360.32 0.46 50.69 8.69 2,534.27 -0.53 100.00 11.31
12 mths 126.38 134.24 19.08 115.16 21.22 0.00 93.94 -1.16 92.78 31.56 61.22 210.51 0.15 45.99 7.66 2,299.41 2.66 100.00 9.56
55 CASH FOLW OF INDIABULLS SECURITIES LIMITED
Cash Flow ------------------- in ` Cr. ------------------Mar '08 Mar '09 Mar '10
12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 371.77 318.90 -30.73
12 mths -19.48 31.21 39.83
12 mths 93.94 24.06 -3.13
56 FUTURE PLANS OF INDIABULLS SECURITIES LTD IndiaBulls is now looking at standardizing on Linux and is also considering migrating to Red Hat Enterprise Linux v.3 to further increase performance. With growing popularity of Linux on the desktop, IndiaBulls is considering to port its client application to Linux. In doing so, it hopes to meet the needs of investors who prefer to use Linux desktops from their home or office in connecting to their services network.
57 TITLE OF THE PROJECT Project Profile: “COMPARITIVE ANALYSIS OF STOCK BROKERS IN CHANDIGARH REGION” Each research study has its own specific purpose. It is like to discover to question through the application of scientific procedure. But the main aim of my research is to find out th e truth that is hidden and which has not been discovered as yet. My research study has two objectives:-
OBJECTIVE OF THE PROJECT: PRIMARY OBJECTIVE: - How IndiaBulls Securities Ltd is best service provider as a stock broker in the Tri-city region. SECONDARY OBJECTIVE: 1. To know about the awareness towards stock brokers and share market. 2. To study about the competitive position of IndiaBulls Securities Ltd in competitive market. 3. To know the perception and psychology of investors towards share trading. 4. To study about the effectiveness & efficiency of IndiaBulls Securities Ltd in relation to its competitors. 5. To know the perception and psychology of investors towards share trading. 6. To study about whether people are satisfied with IndiaBulls Securities Services & Management System or not. 7. To study about the difficulties faced by clients while Trading in IndiaBulls Securities Ltd. 8. To study about the need of improvement in existing Trading system.
59 According to SEBI, Professional Rating of market intermediaries, as a concept, is a matter of debate and discussions. The need for rating is felt not only from the point of view of greater disclosure requirements for investor’s interests, considering the important role such intermediaries play, being an interface between investors and exchanges but also from the point of view of measuring the adequacy of systems and controls to meet internal as well as external compliance requirements. So that need for Intermediaries Rating services (Brokers), in view of the developments that are taking place in the capital markets, the need to constantly upgrade and improve systems and procedures in operation as well as skill sets has gained considerable importance. Besides compliance with regulatory requirements both in letter and spirit has assumed significance so as to mitigate risk and ensure adequate protection of investors’ interest. And Rating objectives / benefits are rated entity would be in a position to brand its image and capitalize the same for generating more business. In a nutshell, the product may accrue significant benefits to all stakeholders including the investors, stock brokers themselves, the regulator and others who will benefit from the transparency and the consequential focus on efficiency. According to SEBI and Intermediaries Regulation and Supervision Department, different factors are consider for rating process Organization structure, Policy on Investors interest, Risk Management Policy and System, Organization process and procedures, Management policy on compliance, Financials, History/Background, Firm’s positioning.
Trading the Trend: The Only Way to Make Money in the Market If you don’t know this already, “Trend Trading” means trading trends based on human emotions. Not lagging indicators. Not complex statistical analysis and not Ph.D. level mathematical equations. With trend trading, you look for market movement. That could mean stocks that are going to move up or down during the course of a day (intraday). You’ll play the gaps up and down, often several days a week. The “Trend trading” means being aware and taking advantage of trends like the run-ups that happen around earning sessions. These are trends that have worked time and time again in the market. They consistently yield results.
62 Research Methodology refers to the search for Knowledge. It is a way to systematically solve the research problem. In it we study the various steps that are generally adopted by the researcher in studying his research problem along with logic behind them. TYPES OF RESEARCH On the basis of theoretical study a research has many types. All of these are distributed on the nature of research. Some of these are like 1. Descriptive and Analytical 2. Qualitative and Quantitative 3. Conceptual and empirical 4. Applied and fundamental 5. One time research My research is based on Descriptive, Qualitative and Quantitative research.
Descriptive Research:- Descriptive research includes surveys and fact finding enquires of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. Researcher has no control over the variables of this type of research.
Qualitative Research:- In our research we need comparison between different stock brokers. So this based on all qualitative data. In short, Qualitative research is especially important in the behavioral sciences where the aim is to discover the underline motives of human behavior. Through such research we can analyses various factors which motivate to people to behave in a particular manner or which make people like or dislike a particular thing.
Quantitative research:- Quantitative research is based on the measurement of quantity or amount. It is applicable to phenomena that can be expressed in terms of quantity. So we can use it in our research for collection of all the numerical data.
64 SAMPLE DESIGN “A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting item for the sample” Generally Sample designs are two types 1. PROBABILITY RESEARCH DESIGN 2. NON PROBABILITY RESEARCH DESIGN I used the probability research design. SAMPLING UNITS Sampling unit may be a geographical one, such as state, district, village etc. The researcher will have to decide one or more of such units that he has to select for his study. In my research study Chandigarh as a sampling unit.
SIZE OF SAMPLE “This refers to the number of items to be selected from the universe to constitute a sample” In my research sample size is 70. But I also studied the 5 stock broker companies related to security market like India infoline, ICICI direct, HDFC securities, Karvy consultant ltd. for the appropriate collection of the information.
65 DATA COLLECTION While deciding about the method of data collection to be used for the study the researcher should keep two types of data. 1. Primary Data: - which is collected by new research called primary data.
Personal Interview Close observation Survey conduction
2. Secondary Data: - already existing data is called secondary data. I collected them by following method
Survey Method: - Survey refers to the method of securing information concerning phenomena under study from all or selected number of respondents of the concerned area. In a survey the investigator examines those phenomena which exist in the universe independent of his action. We used the Scheduling Method.
Scheduling: - In this method the enumerators along with schedules, go to respondents, put to them the questions from the Performa in the order the questions are listed and recorded the replies in the space meant for the same in the performa.
67 As per my project which is “Comparative Analysis of Stock Brokers in Chandigarh Region” I have to compare the different stock brokers present in the Chandigarh region and I have to find out how many people know about the stock market and whether they are interested in investing. I have also learned how demat accounts are opened and what all documents are required to open an account.
ACCOUNT OPENING “To avail the services of a depository an investor is required to open an account with a depository participant of any depository.” PROCEDURE FOR OPENING AN ACCOUNT A demat account are opened on the same lines as that of a Bank Account. Prescribed Account opening forms are available with the DP, needs to be filled in. Standard Agreements are to be signed by the Client and the DP, which details the rights and obligations of both parties • The DP officials will make available the relevant account opening form (depending on whether the client is a retail investor or corporate client/clearing member) and specify the list of documents regarding references that should be submitted along with the form. It will also give a copy of the relevant agreement to be entered with the client, in duplicate. • The client will submit the duly filled in account opening form and client has to visit personally for opening the account in DP. The DP officials have to do in person verification and affix the “IN PERSON VERIFICATION” stamp on the account opening form. It should also furnish such documents regarding references, as specified by the DP, along with the account
68 opening form. After executing the agreement the client has to forward it to the DP. • The DP officials will verify that the account opening form is duly filled in. It will also verify the enclosed documents, if any. Incomplete forms will be forwarded to the client for rectification. • For Corporate Clients, the DP officials will verify if the board resolution for the authorized signatories is enclosed. • • In case the documents are not proper, the DP officials will reject the form and intimate the client of the same, stating the reasons for doing so. If the form is in order; the DP officials will accept the same and affix the stamp “verified with original” on each and every proof after seeing the original proofs. • After completion of all documentation, the DP officials will verify the pan from income tax website. And affix the stamp “PAN VERIFIED” with date and sign on the stamp. • The DP officials will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL & CDSL to the Participant) screen provided for the purpose. In case of NSDL A/c opening the SR. Assist will capture all the details in the DPM and record the client’s signature (on the form) as specimen for authorizations in the future. • After entering client details in the system, a client account number will be generated by the DPM. The DP officials will enter this in the account opening form. After that the officers will verify the details in the DPM captured by the SR. Assist. and activate the account.
69 • The DP officials are not allowed to give the demat a/c no to the clients until the a/c is activate, this is applicable for both NSDL & CDSL. • When the demat a/c is activated the DP officials have to send the client master and the copy of agreement between DP and client at the client’s address The account holder is called 'beneficial owner' in a depository system and the account is known as 'beneficiary account'.
70 DOCUMENTS REQUIRED FOR DEMAT ACCOUNT . Proof of Identity (POI): • • • • • Passport Voter ID card Driving license PAN card with photograph Identity card with applicant’s photograph issued by 1. Central or state government and its department 2. Statutory/regulatory authorities 3. Public sector undertakings 4. Scheduled commercial banks 5. Public financial institutions 6. College affiliated to universities
Proof of Address (POA): • • • • • • Ration card Passport Voter ID card Driving License Bank passbook Verified copies of :
1. Electricity bills (not more than 2 months old) 2. Residence landline telephone bill (not more than 2 months old) 3. Leave & license agreement/agreement to sell (duly attested) 4. Self declaration by supreme court/high court judges, giving the new address in respect of their own accounts.
71 • Identity card with applicants photograph issued by 1. Central or state government and its department 2. Statutory/regulatory authorities 3. Public sector undertakings 4. Scheduled commercial banks 5. Public financial institutions 6. College affiliated to universities. • • Passport-size photograph Copy of PAN card along with original PAN card for verification
Bank details: • • Copy of cancelled cheque with printed name from the bank. Copy of bank passbook with name and address and copy of cancelled cheque. • Bank statement with name and address (duly authorized by the bank, if statement is on plain paper) not more than 4 months old and copy of cancelled cheque of MICR & bank detail verification. In case of minor • • • Date of birth certificate duly notarized Proof of address and identity documents of the guardian both minor and guardian’s photograph and guardian to sign across both photographs PAN card of minor as well guardian is mandatory
72 In case of NRI • • • Foreign address and RBI approval date attested copy of RBI approval NRO-Indian address alonwith proofs Bank account details
In case of joint holdings In case of joint holdings, POI and POA documents alongwith PAN card must be submitted in respect of all account holders. Original documents must be taken to the DP for verification. The DP will also provide a copy of the DP-Client agreement. Account opening form require the applicants to give the following details: (a) Name(s) of account holder(s) -The investor should ensure that the name is identical to that which appears on the certificate(s) to be dematerialised. In case of joint holdings, account may be opened in any one combination, irrespective of the sequence in which names are appearing on share certificates. Investors are advised to open their account in their fully expanded name, i.e., to spell to the first name as well as the middle name. This would obviate any doubts about the veracity of the information. (b) Mailing and communication address(es) - The veracity of the applicant's address is determined through the documents submitted for verification like ration card, passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI accounts, proof is required for both addresses - that of the account holder as well as the constituted attorney. For corporate accounts, a copy of Memorandum of Association, Articles of Association, Board resolution permitting opening of account, the registered address of the company have to be furnished.
73 (c) Details of guardian in case account holder is a minor -Only a guardian can open a depository account for a minor. The guardian is required to sign the application form, and details of his name and address need to be given in addition to the details of the minor. (d) Foreign Address and RBI approval details for NRI, FII or OCB accounts -For foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish original or attested copies of the power of attorney and the approval letter from RBI permitting them to invest, as the case may be.If the account holder is an FII or an OCB, SEBI registration details along with attested copy of registration certificate issued by SEBI and authorisation letter is required. (e) Details of bank account -Details of bank account of the account holder, including the nine digit code number of the bank and branch appearing on the MICR cheques issued by the bank have to be filled in the application form. Companies use this information for printing them on dividend/interest warrants etc. (f) Nomination declaration - A beneficial owner can make a nomination of his account in favour of any person by filing the nomination form with his DP. Such nomination is considered to be conclusive evidence of the account holder'(s) disposition in respect of all the securities in the account for which the nomination is made. (g) Standing Instruction - a facility of standing instruction is provided to the investors for receiving securities to the credit of their accounts without giving a separate receipt instruction.
The demat account cannot be operated on "either or survivor" basis like the bank account. In case of the joint account for the beneficial owners, all the joint holders have to sign the account opening form.
The investor will submit to his DP the duly filled in account opening form & DP-client agreement along with the documents.
The DP will verify whether the account opening form has been duly filled in or not. He will also verify the submitted documents. For corporate investors, the DP will also verify whether the board resolution for the authorized signatories has been enclosed. The DP will ensure that client's signature is recorded on the form which will serve as specimen for authorizations in future.
If the application form and documents are in order, then the DP will accept them and give an acknowledgement slip duly signed and stamped to the client. The DP will execute the agreement and give a copy of it to the client.
After completion of all documentation, the DP will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL to the DP) screen provided for the purpose. After entering client details in the system, a client account number will be generated by the DPM. The DP will enter this in the account opening form.
On successful opening of the account, the DP will give:
Client Id - an eight digit number to be used along with DP Id for any future transactions. Delivery Instruction slip book.
D em at Process: Shareholders W ith P hysical C ertificate
D epository Participants
Shareholder goes to DP with his physical share certificates
Account O pening
Shareholder opens his account with D P.
Dem at R equest Form (DR F )
Shareholder fills D RF in duplicate, defaces the shares and hands over to DP
The DP sends Share certificates to R &T agent for dem aterialisation
R &T Agent
DP sends inform ation electronically to D epository
Upon confirm ation of Dem at by R&T Agent, the Depository confirm s Dem aterialisation.
C redit to the B O A/c. of the Investor
77 Research is conducted for finding the solution of the problem. So to find the solution of the problem data analysis and interpretation is must. There are some questions related to this research to interpret the result. The sample size in this study consisted of 70 individuals and data analyzed from the response of these 70 individuals. 1. Are you aware of the stock market? The basic purpose of this question is to know about how many people are aware of the stock market and its activities.
NUMBER OF RESPONSES
% OF RESPONSES
YES NO TOTAL
70 0 70
100 0 100
Interpretation:This graph shows that all the 70 individuals were aware of stock market. So it can also be possible that investors will rise in near future.
78 2. Do you know about investment options available?
Knowledge Yes No TOTAL
%age 80 20 100
Interpretation:Only 80% people know the exact meaning of investment. Because of remaining 20% take his/her residential property as an investment. According to law purpose this is not an investment because of it is not create any profit for the owner.
79 3. Are you aware of DeMat acaount? The basic purpose of this question is to know about awareness of demat account among respondents. Response YES NO TOTAL Number of response 60 10 70 %age of response 86 14 100
Interpretation:The above table clearly shows that from a sample size of 70 respondents, 60 individuals were aware of demat account.
80 4. Most preferable investment scenario. Investment Scenario Banks Derivatives & securities market Insurance Bonds Real estate Others TOTAL %age 24 28 4 20 20 4 100
Interpretation:Today scenario is changed so that most area covered by the derivative and securities market. It is 28% of the total population.
81 5. What is the basic purpose of your investment? INVESTMENT PURPOSE Liquidity Returns Capital appreciation Tax benefits Risk covering Others TOTAL PERCENTAGE
30% 25% 10% 20% 5% 10% 100
Interpretation:- 75% people are interested in liquidity, returns and tax benefits. And remaining 25% are interested in capital appreciations, risk covering, and others.
6. Most important things you take into your mind while making investments? Factor Risk Returns Both TOTAL %age 8 17 75 100
Interpretation:75% people are considered the both factors risk as well as returns but, only 25% considered the risk or returns factor.
7. Do you have any demat & trading account? Account Yes No TOTAL %age 60 40 100
Interpretation:Only 75% respondents have de-mat and trading account and remaining 25% says no because they don’t know why shares move up and down.
84 8. Specify the reason of satisfaction with the current broking house. Satisfaction Operating expenses Services Brokerage TOTAL %age 18 25 57 100
Interpretation:We can see that most of the clients are satisfied with their broking houses because of the lower brokerage charges which is followed by services they provide.
85 9. In which company you have demat and trading account? Company INDIABULLS INDIAINFOLINE ICICI DIRECT SHAREKHAN KARVY Others TOTAL %age 38 20 14 12 9 7 100
Interpretation:In IndiaBulls Securities Ltd 38% respondents have de-mat & trading account because of better services and no annual maintenance and other charges except for brokerage charges.
87 • According to the survey most of the clients of “IndiaBulls Securities Ltd” says that it is pocket friendly.
Coming to faith 70% say IndiaBulls Securities Ltd is better than others stock brokers due to customers satisfaction.
Lack of promotional activities undertaken by IndiaBulls Securities Ltd. in Chandigarh Region.
Main purposes of investments are returns & liquidity.
Investors take risk as well as returns into their mind while making the investment.
Businessmen are more interested in the stock market than the others.
Commodity market is less preferred by the investors.
People want to invest their money in the security market but they haven’t the proper knowledge.
People are not aware of hedging in stock market.
People pay more emphasis on brokerage than service provided by brokerage houses.
Commitment should be equalized for every person.
Provide the facility of free demonstrations for all.
Improvement in the opening of De-mat & contract notice procedure is required.
There should be a limited number of clients under the relationship manger. So that he can handle new as well as old customer properly.
Some promotional activities are required for the awareness of the customer.
People at young age should be encouraged to invest in stock market.
Seminars should be held for providing information to prospective and present clients.
91 Research, as a general concept, is the process of gathering information to learn about something that is not fully known. Nearly everyone engages in some form of research. 1) Will help you better communicate: By conducting the research Indiabulls Securities Limited will be able to communicate to its clients easily. If the company has proper information regarding the market then they will be able to provide the required services to its clients on time. 2) Will help identify opportunities: By conducting research the company can check the competition. They will also be able to know that are they missing something they can capitalize on. What can they do better than they can? Are their clients in need of something nobody else is offering? 3) Will minimize risk: Just like any situation, if the company is well prepared then they will be less likely to loose and more likely to win. If the research is conducted on timely basis then they can also retain their clients for longer period of time. 4) Will create benchmarks to help you measure progress: If the research is conducted then they will come to know how well they are doing. By setting the standard high from the start, the company will be in a better position for sustained growth. 5) Will help to set competitive price: The research will also help to set better price as against its competitors in the market, like, many stock broking houses have low account opening charges as compared to Indiabulls Securities Limited.
93 • As only CHANDIGARH dealt in survey so it does not represent the view of the total Indian market.
Size of the research may not be substantial.
There was lack of time on the part of respondents.
The survey was carried through questionnaire and the questions were based on perception.
There may be biasness in information by market participant.
Complete data was not available due to company privacy and secrecy.
95 Aggressive Promotions: Indiabulls Securities compared to its competitors concentrates less on advertising and promotions, especially through electronic media. Its competitors like Sharekhan, ICICI and Kotak are advertising aggressively through media. Hence Indiabulls should concentrate more on advertising through print and electronic media. Tapping Rural Market: The Indian rural investors markets are relatively untapped, with only small firms meeting the current demand. Indiabulls Securities can gain the “First Mover Advantage” over its competitors, especially in areas were commercial crops are grown and the standard of living is high. These people do not have much option to invest other than banks and post offices. Reduce the initial account opening charges: The charge for opening a trading and demat account in Indiabulls securities is high compared to its competitors. This influences the potential investors to open their account with another company which provides the same at lower prices. Thus it acts as a mental barrier for potential customers, who tend to overlook all other benefits offered by Indiabulls. Hence Indiabulls should consider reducing their account opening charges. Bring in more product differentiation: Product differentiation here means that Indiabulls securities should bring in more customized services and more value proposition for large investors. It can reduce the brokerage charges for large investors which will encourage them to invest more in the company. Invest more on R&D: Indiabulls should concentrate on its research and development since most of its competitors are investing on R&D. This will help the company to read the market better and will also be in a better position to understand the needs of the customers.
96 BIBLIOGRAPHY • Websites Visited www.sebi.gov.in www.nseindia.com www.bseindia.com www.nseindia.com www.indiabulls.com www.icicidirect.com www.sharekhan.com www.hdfcsec.com www.religareonline.com
Q1.Do you invest in shares? О Yes О No In case “yes” start filling from Q2, but in case of “NO” reply switch on to Q12 Q2. Through which Brokerage firm you are dealing? _________________________________________________________________ Q3. How do you come to know about the firm? О Newspaper О Friends О Executive О others (Please specify) ______________ Q4.You are more interested in? О Intraday О Short term О Long term
Q5. How do you trade? О through phone О Through Internet О by visiting broker firm yourself Q6. On what basis do you buy a scrip? О on the recommendation of the broker О Fundamental Analysis О on the recommendation of your friend О with your own research. О on the basis of news Q7.What is the basic purpose of your investment? Ο Capital Appreciation Ο High Returns Ο Liquidity Ο Diversification Q8.What is your trading exchange preference? Ο NSE Ο BSE Q9.How would you like to trade? Ο as a speculator/trader Ο as an investor Q10.Do you invest in futures and options? Yes/No Q11.To what extent do you agree or disagree with the following statements about share trading?
Strongl y disagre e
(a)I am satisfied with the services of my broker (b)I am ready to shift to other brokerage house if he promises me to provide better services (c) Trading software of my brokerage house keeps me update about scrip prices In case of “NO” option start filling the Q12 Q12.If you do not invest in shares then in which other mode of investments do you invest your savings? (You can tick more than one) Ο saving account Ο Fixed deposits Ο Insurance Ο Real Estate Ο Mutual Funds Q13. If a professional guides you to invest in equity, are you ready to make investments? Ο Yes Ο No Q14. Which of the following names of brokerage Houses have you heard? (Can tick more than one) Ο Motilal Oswal Securities Ltd Ο Kotak Securities Ltd. Ο ICICI Direct Ο IndiaBulls Ο India Info line Ο Religare securities Ltd. Ο Karvy
100 Personal Information Name: Contact No: Age Group: Ο 20-25 years Occupation: Ο Businessman Ο Housewife Income: Ο up to 1.5lacs Ο 1.5lacs to 3lacs Ο More than 3lacs Ο Professional Ο Student Ο Service Ο 25-30 years Ο 30-50 Years Ο >50 years
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