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A Project Report On

Religare.in

By

Prachi Gupta
K.P.Engineering College Agra

A report submitted in the partial fulfillment of The requirements of MBA (2010-2012)

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PREFACE
To maintain and cope up with the growing competition from the various online trading providers, Religare needs to find potential clients and also new investors and satisfy there needs.

This project will accomplish to understand how the people interact with technology savvy products and if they are ready for doing all the trading through net. The project also helps in understanding the trend of the particular sector (banking sector) in different market condition.

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ACKNOWLEDGEMENT

Efforts is work and no work is accomplished on this own. It is the achievement of entire human efforts and self work. I would like to acknowledge at those who made this work possible. My whole dissertation report was real exposure of RELIGARE SECURITIES LTD I got the opportunity to study each and every link of this institution. First of all thanks to almightily god without his mercy nothing was possible in my dissertation report. I am especially indebted to Dr. Sandeep Verma who provides me a lot of motivation at every movement of accomplishing this report.

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Declaration

I Prachi Gupta student of M.B.A (Master of Business Administration) IV semester from K.P. Engineering College Agra, Here by I declare that the following report Equity and Online trading is an original piece of work no part of this project is either copied of partially or totally taken from some previous works.

Prachi Gupta M.B.A IV sem K.P.E.C Roll no1033870013

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Contents
S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Topic Page No.

Executive Summary5 Objectives...6 Company Profile.7 Religare Products23 Investment ..33 Securities 35 Regulator.38 Participants..41 Primary Market.. 44 Secondary Market...52 Stock Exchange ..53 Stock Trading..58 Market Research Analysis...63 SWOT Analysis..68 Online Trading Account. 73 Conclusion.......85 Limitations......88 References ...90

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Executive Summary
This project was undertaken to understand the working of Religare Securities Ltd The project reflects information about products and services provided by the Religare.in to their customers. This also includes requirement and ways to acquire client acquisition has been explained and the problems faced to handle the clients.

The information about their account opening charges, products, brokerage, research report, minimum margin requirement, exposure, etc. are shown in competitor analysis.

Also I have compared the mutual funds on different parameters such as risk and returns, facilities, volume of investing money, good promotional schemes, redemption, and investing time

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Objectives

To take an overview of the Indian Stock Market and encapsulate the various investment avenues available. To analyze the Indian Stock Market. How it works. What are the options available in the Capital Market to invest? What is on line trading & how it is different from other trading of stock market? Benefits & Disadvantages of online trading. Also we have compared the equity and online trading on different parameters such as risk and returns, facilities, volume of investing money, good promotional schemes, redemption, and investing time.

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INTRODUCTION

Visionary Late Dr. Parvinder Singh


Religare Securities Limited was promoted by Late Dr. Parvinder Singh with the vision to provide integrated financial care driven by the relationship of trust & confidence.

Dr. Parvinder Singh had also the vision of creating a integrated health delivery system in India and his dream is now converting into realty by Fortis Hospitals and Labs. Dr. Singh also led Ranbaxy and made it to Indias first truly MNC Pharma company.

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GROUP PROFILE

Indias largest pharmaceutical Company -Manufactures & markets Generics Branded generic pharmaceuticals Active pharmaceutical ingredients. Amongst the top ten generic companies worldwide.

-Started by the promoters of Ranbaxy -Vision : To become an integrated caring partner forHEALTH thru Fortis Healthcare Limited&WEALTH Fortis Securities Limited .

-A leading solutions provider in

Screening Diagnosis Monitoring of every illness and disease in the community. -Aim to provide world class services

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HISTORY:

RELIGARE Securities Ltd. (RSL) is a wholly owned subsidiary of RELIGARE Financial Services Ltd. (RFSL), a Company promoted by Dr.Parvinder Singh, Ex-CMD of Ranbaxy Laboratories Ltd. The primary focus of Religare Securities Ltd. is to cater to services in Capital Market Operations to Institutional Investors. The Company is a member of the National Stock Exchange (NSE) and OTCEI. The growing list of financial institutions with whom RSL is empanelled as approved Broker is a reflection of the high levels of services maintained by the Company. REL operates from seven domestic regional offices, 43 sub-regional offices, and has a presence in 498* cities and towns controlling 1,837* business locations all over India. To make a mark in the global arena, REL acquired UK-based Hichens, Harrison & Co. in 2008 which was subsequently re-named as Religare Hichens Harrison PLC ("RHH"). Hichens, Harrison & Co. was incorporated in London in the year 1803 and is believed to be one of the oldest firms of stockbrokers in the City of London.

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Pursuant to expansion of REL's business, the company has grown from largely an equity trading company into a diversified financial services company. With the addition of RHH the REL group now operates out of multiple global locations, other than India, (the UK, the USA, Brazil, South Africa, Dubai and Singapore). RELIGARE was founded with the vision of providing integrated financial care driven by the relationship of trust. The bouquet of services offered by RELIGARE includes Broking (Stocks and Commodities), Depository Participant Service, Advisory on Mutual Fund Investments and Portfolio Management Services. RELIGARE is a pioneer in the concept of partnership to reach multiple locations in order to effectively service its large base of individual clients. Besides the reach of RELIGARE, the clients of the company greatly benefit by its strong research capability, which encompasses fundamentals as well as technical knowledge. Religare is a diversified financial services group of India offering a multitude of investment options. The diverse bouquet of financial services,

which Religare offers, can be broadly clubbed across three key verticals Retail, Institutional and Wealth spectrums. The services extend from asset management, Life Insurance, wealth management to equity broking, commodity broking, investment banking, lending services, private equity and venture capital. Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund. With a view to expand, diversify and introduce offerings

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benchmarked against global best practices, Religare operates in the life insurance space under 'Aegon Religare Life Insurance Company Limited and wealth management under the brand name 'Religare Macquarie Private Wealth'.

RELIGARE GROUP:
RELIGARE in recent years has expanded its reach in health care and financial services wherein it has multiple specialty hospital and labs which provide health care services and multiple financial services such as secondary market equity services, portfolio management services, depository services etc. RELIGARE financial services group comprises of Religare Securities Limited, RELIGARE Comdex Limited and RELIGARE Finvest Limited which provide services in Equity, Commodity and Financial Services business & Religare Insurance Advisory Ltd.

RELIGARE SECURITIES LIMITED


Member of National Stock Exchange of India and Bombay Stock Exchange of India. Depository Participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). A SEBI approved Portfolio Manager.

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RSL provides platform to all segments of the investor to leverage the immense opportunity offered by equity investing in India either on their own or through managed funds in Portfolio Management. The ARN No. of the Religare Securities Ltd. is 33764. The ARN No. is required by to be available with the broker who deals on behalf of investors or sell the mutual funds of the different companies present in the market.

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3.3

GROUP STRUCTURE

Religare AMC Limited Asset Management Business Portfolio Management Religare Finevest Limited Lending and Distribution business AEGON Religare Life Insurance Co. Ltd. Life Insurance Company, JV with Aegon (26%), Religare (44%), and Bennett & Coleman (30%) Religare Insurance Broking Limited Life Insurance Broking Business Non-Life Insurance Broking Business

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Religare Macquarie Wealth Mgmt. Ltd. JVwith Macquarie for Wealth management Business Religare Arts Initiative Limited Business of Art Art Gallery Art Advisory

Religare Securities Limited Retail Equity Broking Online Investment Portal Depository Services Religare Venture Capital Ltd. Private Equity and Investment Manager Vistaar Religare Capital Advisors Ltd. JV with Vistaar Entertainment Ventures for film fund India's first ever film fund Religare Finance Ltd. Capital Market Financing

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Religare Capital Markets Limited PE and M&A Advisory Institutional Broking Investment Banking Religare - Milestone JV with Milestone Capital to manage a healthcare and education fund.

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Infrastructure
Offices
The company has offices located at prime locations in Mumbai, New Delhi, Kolkatta and Chennai. The offices are centrally located to cater to the requirements of institutional and corporate clients and retails clients, and for ease of operations due to proximity to stock exchanges and banks. Today, we have a growing network of 43 sub-regional offices, and has a presence in 498* cities and towns controlling 1,837* business locations all over India.

RSL.Geographical Spread
Corporate Office

Regional Office

Regional Office

Institutional Sales Regd Office

Regional Office

Pioneered the concept of partnership to reach multiple locations


Regional Office

Religare has presence in more than 100 locations across the length and breadth of the country.

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NAME OF THE ORGANIZATION:


RELIGARE SECURITIES LTD. Registered Office Address:Delhi: D3, P3B, District Centre, Saket, New Delhi - 110017, India. Phone: +91-11-3912-5000 Fax: +91-11-3912-6050

Corporate Office Address: Noida: A-3, 4, 5, Sector-125, Noida, Uttar Pradesh - 201 301, India. Phone: +91-0120-339-1000 Mumbai: GYS Infinity, Paranjpe B Scheme, Subhash Road, Near Garware House, Vile Parle (E), Mumbai - 400057 Phone: +91-022-6673-7100

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Management
Religare is led by individuals who are professionals and leaders in every sense of the word.
Mr. Sunil Godhwani, CEO and Managing Director Sunil Godhwani joined the Board of REL in July 2006 and was appointed as CEO and Managing Director of Religare in April 2007. Has more than 21 years experience in business Also the Chairman & Managing Director of RSL since April 2002

Mr. Anil Saxena, Group Chief Finance Officer Anil Saxena joined in August 2001 With over 16 years of experience in the financial services industry has worked at Kotak Securities Ltd. as Vice-President

Mr. Shachindra Nath, Group Chief Operating Officer Shachindra Nath joined in May 2000 With over 15 years of experience in the financial services industry, he has worked at Abhipra Capital Ltd. as a Senior Consultant and Divisional In charge

Mr. Mukesh Manglik, Head, Corporate Affairs More than 30 years of experience in the Corporate Sector Was the Head of Compliance and Company Secretary at JM Financial Assets Management and worked with Escorts Group and Hero Group

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Mr. Ravi Batra, Vice President and Company Secretary Joined REL in January 2007. Has over 11 years of experience as Company Secretary Prior to joining Religare, worked with Varun Beverages Ltd., Himalaya Communications Ltd. and Precision Electronics Ltd.

Mr. Sunil Kumar Garg, Financial Controller Joined REL in April 2004. Has over 15 years of experience in financial services industry Prior to joining Religare, worked with Arvind Construction Company Ltd. Mr. Kamlesh Dangi, Corporate Head Human Resources Has experience of more than 13 years from various organizations of diverse fields Prior to joining Religare, worked with ICICI Bank and was handling Wholesale & International Banking, Compensation at group level, HR systems and other similar portfolios. He has also spent 2 years in ICICIUK, setting up the operations for the bank

Mr. Ashu Madan, National Head, Retail Equity Has over 17 years of industry experience in financial services Holds a Bachelors in Commerce from Delhi University and prior to joining, worked at Western India Group as the Asst. Vice-President Heads sales and dealing team of 3,439 employees Mr. Gurpreet Sidana, Head, Internet Trading More than 9 years of experience Prior to joining RSL, worked as Senior Manager of Business Development at Elite Stock Management Ltd.

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Heads online trading sales team of 1,390 employees

You can view latest Board of Directors of Religare Enterprises Limited:

.No
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Name
Mr. Sunil Godhwani Mr. Shivinder Mohan Singh Mr. Harpal Singh Mr. Deepak Ramchand Sabnani Ms. Sunita Naidoo Mr. Padam Bahl Mr. R. K. Shetty Mr. J. W. Balani Capt. G. P. S. Bhalla Mr. Malvinder Mohan Singh

Designation
CEO & Managing Director Non Executive Director Non Executive Director Independent Director Independent Director Independent Director Alternate to Mr. J. W. Balani Independent Director Alternate to Mr. Deepak Sabnani Non Executive Chairman

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ORGANIZATION STRUCTURE

CEO & MD
CENTRAL LEADERSHIP AND MANAGEMENT TEAM
PRODUCT HEAD PMS

PRODUCT HEAD M.F

PRODUCT HEAD INSURANCE

PRODUCT HEAD INTERNET TRADING

PRODUCT HEAD COMMODITI YSS

PRODUCT HEAD CORPORATE FINANCE

REGIONAL HEAD
REGIONAL PRODUCT HEAD INTERNET BANKING

REGIONAL PRODUCT HEAD PMS

REGIONAL PRODUCT HEAD M.F

PRGIONAL RODUCT HEAD INSURANCE

REGIONAL PRODUCT HEAD COMMODITY

REGIONALPRODU CT HEAD CORPORATE FINANCE

ZONAL HEAD

BRANCH MANAGE R RM EQUITY


RM
MUTUAL FUNDS

RM
INSURANCE

RM
INTERNET TRADING

RM
COMMODITIES

DEALER

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Mission and Vision

MissionTo be India's first Multinational providing complete financial services solution across the globe.

VisionProviding integrated financial care driven by the relationship of trust and confidence.

Business & Operations

RELIGARE facilitates trading in Secondary Market in Equity Trading & Derivative (Future & Options) Trading through its Corporate Membership of the premier exchanges of the country namely National Stock Exchange (NSE), The Stock Exchange, Mumbai (BSE) and Over the Counter Exchange of India (OTCEI). Religare On-Line Terminals are installed in all the major cities of Northern India and its trading clients are categorized as Retail Sub-Brokers and Corporate, NRI's, Bankers & FI's. They provide very competitive brokerage rates and full transparency in operations.

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Business:
Over a period of time Religare has recorded a healthy growth rate both in business volumes and profitability as it is one the major players in this line of business. The business thrust has been mainly in the development of business from Financial Institutions, Mutual Funds and Corporate.

Operations:
The operations of the company are broadly organized along the following functions.

Research & Analysis:


This group is focused on doing daily stock picks and periodical scrip \ segment specific research. It provides the best of analysis in the industry and is valued by both our Institutional and Retail clientele.

Marketing: This group is focused on tracking potential business opportunities and converting them into business relationships. Evaluating the needs of the clients and tailoring products to meet their specific requirements helps the company to build lasting relationships.

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A summary of our competitive advantage (Religare Securities Ltd).


1. Participant on the countrys premier exchange: Religare is a member of the countrys premier stock exchange The National Stock Exchange of India (NSE). 2. Clearing membership on Capital & Derivatives segments: It has clearing memberships on both the Capital Market and Derivatives segment of the exchange. We are also authorized to trade the retail debt market. 3. Depository Participants with NSDL & CDSL: We are depository participants with the countrys premier depository service - National Securities Depository Limited (NSDL), as well as with the only other depository with a countrywide reach - Central Depository Services Limited. 4. Leading private sector bank as partner: Our banking partners are HDFC and ICICI Bank The foremost private sector banks in the country, that have the most technologically advanced infrastructure in the country, with Internet banking allowing access to information 24 X 7. 5. Bloomberg Information Services: The worlds two best information services are Bloomberg LP and Reuters. These are prohibitively expensive for all but mutual funds and financial institutions to own terminals of, and subscribe to. We however have two connections to the Bloomberg Information Service, the premier service; both in Delhi and Mumbai, and these provide us information ahead of the general public, and at par with the financial institutions. We have access to breaking news from across the globe, and across asset classes, and superior research and analysis capabilities.

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6. Prime Office Locations: We have prime office locations in the nations political capital and the business capital Delhi and Mumbai, in the heart of the city.

7. Research Capabilities: We have a dedicated team of analysts in our Bombay office They provide fundamental analysis of stocks and markets, which are fundamentally strong, and provide above market returns to investors, but over a slightly longer time frame Typically 6 months and above.

8. Technical Analysis: A daily technical newsletter is published by our inhouse technical analyst, who is a recognized leading practitioner of the science. He has a success rate of over 73%. He tracks the progress of the calls on a real-time basis, and advises of any change in the profit points or stop loss levels.

9. All Services under one roof: India has moved to a T+2 settlement system, where all trades and settled on a rolling basis. However this gives the clients no time to arrange deliveries to their broker, through a separate depository participant. Religare, being a trading-clearing member, as well as a depository participant, allows seamless transfer of securities under the same roof, with minimum delay, and constant monitoring.

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Religare deals with (Products)

EQUTIES.. MUTUAL FUND DERIVATIVES (F & O) COMODITIES PMS WELTH MANAGEMENT

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Equity (Shares):
We can say that a Share or Stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.

Mutual Fund:
A mutual fund is a type of Investment Company that gathers assets from investors and collectively invests those assets in stocks, bonds, or money market instruments. Individuals and institutions invest in a mutual fund by purchasing shares issued by the fund. It is through these sales of shares that a mutual fund raises the cash used to invest in its portfolio of stocks, bonds, and other securities. Through the collective investments of the mutual fund, each investor shares in the returns from the funds portfolio while benefiting from professional investment management, diversification, liquidity, and other benefits and services.

Derivative (F&O)Derivatives (Futures & Options) are ideal instruments to protect your portfolio against risk. You can trade with index movements, hedge and leverage your portfolio by limiting risk but keeping your upside unlimited

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Commodity
The process of economic liberalization in India began in 1991.

As part of this process, several capital market reforms were carried out by the capital market regulator Securities and Exchange Board of India. One such measure was to allow trading in equities-based derivatives on stock exchanges in 2000. This step proved to be a shot in the arm of the capital market and volumes soared within three years. The success of the capital market reforms motivated the government and the Forward Market Commission (the commodities market regulator) to kick off similar reforms in the commodities market. Thus almost all the commodities were allowed to be traded in the futures market from April 2003. To make trading in commodity futures more transparent and successful, multi-commodity exchanges at national level were also conceived and these next generation exchanges were allowed to start futures trading in commodities on-line. Commodities exchanges have seen a surge in commodity futures volumes in the last few months. This rise in volumes has been led by bullion (gold and silver) trading. Today a whole lot of commodities are available for trading in futures and the list is getting bigger by the day. No wonder then that the commodity futures market is being viewed as a significant business segment by many businessmen, investors, institutions, brokers, banks etc.

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FEATURES OF RELIGARE
Religare.in is the most comprehensive website, which allows you to invest in shares, mutual funds, derivatives (Future and Option) and other financial products.

1. TRADING IN SHARES Religare offers you various options while trading in shares CASH TRADING This is a delivery based trading system, which is generally done with the intention of taking delivery of shares

MARGIN TRADING (Delivery) You can also do a delivery settlement trading up to 4 times the fund available wherein you take long buy / short sell position in stocks with the intention of squaring off the position within the same day settlement cycle. MARGIN TRADING (Intra day) Trough margin you can do an intra settlement trading up to 4 to 10 times your available funds, wherein you take long buy/ short sell position in stock with the intention of squaring off the position within the same day settlement cycle Margin PLUS will give much higher leverage in your account against your limits.

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

CALL TRADE CALL Trade allows you to call on a local number &trade on the telephone through our Customer Service Executive.

TRADING ON BSE/NSE: Through Religare the share can be traded on NSE as well as BSE. 2. TRADE IN DERIVATIVES FUTURE Through Religare you can now trade in index and stock futures on the NSE. In future trading, you take buy/sell index contracts having a longer contract period of up to 3 months. Trading in Future is simple during course of contract life; the price moves in favor, you make profit. Presently only selected stocks, which meet the criteria on liquidity and volume, have been enabled for future trading.

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OPTION 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 options you have to place certain %age of order value as margin. With options trading, you can leverage on your trading limit by taking buy/sell positions much more than what you could have taken in cash segment.

The Buyer of a call option has the right but not obligation to purchase the underlying Asset at the specific strike price by paying a premium where as the seller of the Call has the obligation of selling the Underlying Asset at the specific strike price.

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

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3. INVESTING IN MUTUAL FUND Religare brings you the same convenience while investing in Mutual Funds as hassle free and less paperwork investing. You can now invest in any mutual fund like standard charter MF, Prudential ICICI MF, Alliance MF, Franklin Templeton MF, Sunderam MF, Birla sun life; HDFC MF, Principal MF, etc are the mutual funds available for investment. You can invest in mutual funds without the hassles of identity proof. You need on signature on the mutual fund .You also get on information of performance of your investment through online current NAV.

PURCHASE You may invest / purchase prudential ICICI MF, JM MF, ALLIANCE MF, FRANKLINE TEMPLETON MF, SUNDARAM MF, BIRLA SUN LIFE MF, HDFC MF and STANDARD CHARTERED MF without hassles of identity proof.

REDEMPTION When ever you required your money, you get it easily. For that purpose you put on signature on the redemption form. You get youre your money by on line or by physical process (cheque).

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Systematic investment plan (SIP) SIP allows you to invest a certain sum of money over a period of time periodically. Just fill in the investment amount, the period of investment and the frequency of investing and submit Religare do the rest of your investment automatically for you.

Systematic withdrawal program This allows you to withdraw certain Sum of money over a period of time periodically.

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Investment Basics
Investment
The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.

Why should one invest?


One needs to invest to: earn return on your idle resources generate a specified sum of money for a specific goal in life make a provision for an uncertain future

One of the important reasons why one needs to invest wisely is to meet the cost of Inflation. Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live. Inflation causes money to lose value because it will not buy the same amount of a good or a service in the future as it does now or did in the past. For example, if there was a 6% inflation rate for the next 20 years, a Rs.100 purchase today would cost Rs. 321 in 20 years. This is why it is important to consider inflation as a factor in any long-term investment strategy. Remember to look at an investment's 'real' rate of return, which is the return after inflation. The aim of investments should be to provide a return above the inflation rate to ensure that the investment does not decrease in value. For example, if the annual inflation rate is 6%, then the investment will need to earn more than 6% to ensure it increases in value.

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VARIOUS OPTIONS AVAILABLE FOR INVESTMENT

One may invest in Physical assets like real estate, gold/jewellery, commodities etc. or Financial assets such as fixed deposits with banks, small saving
instruments with post offices, insurance/ provident/ pension fund etc. or securities market related instruments like shares, bonds, debentures etc.

Various Short-term financial options available for investment.


Broadly speaking, savings bank account, money market/liquid funds and fixed deposits with banks may be considered as short-term financial investment options:

Savings Bank Account is often the first banking product people use, which
offers low interest (4%-5% p.a.), making them only marginally better than fixed deposits.

Fixed Deposits with Banks are also referred to as term deposits and
minimum investment period for bank FDs is 30 days. Fixed Deposits with banks are for investors with low risk appetite, and may be considered for 6-12 months investment period as normally interest on less than 6 months bank FDs is likely to be lower than money market fund returns.

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Various Long-term financial options available for Investment.


Post Office Savings: Post Office Monthly Income Scheme is a low risk
saving instrument, which can be availed through any post office. It provides an interest rate of 8% per annum, which is paid monthly. Minimum amount, which can be invested, is Rs. 1,000/- and additional investment in multiples of 1,000/-. Maximum amount is Rs. 3, 00,000/- (if Single) or Rs. 6,00,000/- (if held Jointly) during a year. It has a maturity period of 6 years. A bonus of 10% is paid at the time of maturity. Premature withdrawal is permitted if deposit is more than one year old. A deduction of 5% is levied from the principal amount if withdrawn prematurely; the 10% bonus is also denied.

Public Provident Fund: A long term savings instrument with a maturity of


15 years and interest payable at 8% per annum compounded annually. A PPF account can be opened through a nationalized bank at anytime during the year and is open all through the year for depositing money. Tax benefits can be availed for the amount invested and interest accrued is tax-free. A withdrawal is permissible every year from the seventh financial year of the date of opening of the account and the amount of withdrawal will be limited to 50% of the balance at credit at the end of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year whichever is lower the amount of loan if any.

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Company Fixed Deposits: These are short-term (six months) to mediumterm (three to five years) borrowings by companies at a fixed rate of interest which is payable monthly, quarterly, semi-annually or annually. They can also be cumulative fixed deposits where the entire principal along with the interest is paid at the end of the loan period. The rate of interest varies between 6-9% per annum for company FDs. The interest received is after deduction of taxes .

Bonds: It is a fixed income (debt) instrument issued for a period of more than
one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date.

Mutual Funds: These are funds operated by an investment company which


raises money from the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated set of objectives. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual fund units are issued and redeemed by the Fund Management Company based on the fund's net asset value (NAV), which is determined at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, minus expenses, divided by the number of units issued. Mutual Funds are usually long term investment vehicle though there some categories of mutual funds, such as money market mutual funds which are short term instruments.

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STOCK EXCHANGE
The Securities Contract (Regulation) Act, 1956 [SCRA] defines Stock Exchange as any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. Stock exchange could be a regional stock exchange whose area of operation/jurisdiction is specified at the time of its recognition or national exchanges, which are permitted to have nationwide trading since inception. NSE was incorporated as a national stock exchange.

Equity/Share
Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 20, 00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.

Equity Market
In finance a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage of the word share alone to refer solely to stocks is so common that it almost replaces the word stock itself.

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In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market. By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price

Trade in shares
Every transaction in the stock exchange is carried out through licensed members called brokers. To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders. The general investors should identify a sub-broker for regular trading in shares and place his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it. In equity market SEBI is actively participating without them equity market cant control so it necessary to know about SEBI.

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Index
An Index shows how a specified portfolio of share prices is moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.

Depository
A depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, government securities, units etc.) in electronic form.

Dematerialization
Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investors account with his Depository Participant (DP).

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SECURITIES
Securities:
The definition of Securities as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.

Function of Securities Market:


Securities Markets is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc. Further, it performs an important role of enabling corporate, entrepreneurs to raise resources for their companies and business ventures through public issues. Transfer of resources from those having idle resources (investors) to others who have a need for them (corporate) is most efficiently achieved through the securities market. Stated formally, securities markets provide channels for reallocation of savings to investments and entrepreneurship. Savings are linked to investments by a variety of intermediaries, through a range of financial products, called Securities.

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REGULATOR

Why does Securities Market need Regulators?


The absence of conditions of perfect competition in the securities market makes the role of the Regulator extremely important. The regulator ensures that the market participants behave in a desired manner so that securities market continues to be a major source of finance for corporate and government and the interest of investors are protected.

Who regulates the Securities Market?


The responsibility for regulating the securities market is shared by Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) .

SECURITY AND EXCHANGE BOARD OF INDIA (SEBI)


The Securities and Exchange Board of India (SEBI) is the regulatory authority in India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for establishment of SEBI with statutory powers for

Protecting the interests of investors in securities Promoting the development of the securities market and Registering and regulating the working of stock brokers, sub
brokers etc.

Promoting and regulating self-regulatory organizations Prohibiting fraudulent and unfair trade practices
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SEBI has power for: Regulating the business in stock exchange and other securities market; Registering and regulating the working of stock brokers sub- brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registers to an issue, merchant bankers, underwriters, portfolio manager, investment advisers and such other intermediaries who may be associated with securities markets in any manners; Registering and regulating the working of depositaries, participants, custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as SEBI may by notification, specify in this behalf; Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds; Promoting and regulating self-regulatory organizations; Prohibiting fraudulent and unfair trade practices related to securities markets; Promoting investors education and training of intermediaries securities markets; Prohibiting insider trading in securities; Regulating substantial acquisition of shares and take-over of companies; Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, mutual and other persons associated with the securities market; Conducting research for the above purpose. Calling from or furnishing to any such agencies, as may be specified by SEBI, such information as may be considered necessary by it for the efficient discharge of its functions.

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PARTICIPANTS Participants in the Securities Market:


The securities market essentially has three categories of participants, namely, the issuers of securities, investors in securities and the intermediaries, such as merchant bankers, brokers etc. While the corporate and government raise resources from the securities market to meet their obligations, it is households that invest their savings in the securities market.

Is it necessary to transact through an intermediary?


It is advisable to conduct transactions through an intermediary. For example you need to transact through a trading member of a stock exchange if you intend to buy or sell any security on stock exchanges. You need to maintain an account with a depository if you intend to hold securities in demat form. You need to deposit money with a banker to an issue if you are subscribing to public issues. You get guidance if you are transacting through an intermediary. Chose a SEBI registered intermediary, as he is accountable for its activities. The list of registered intermediaries is available with exchanges, industry associations etc.

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DEPOSITORY PARTICIPATION
A depository is an organization form to provide electronic depository facilities for securities trade. Securities are then held in the electronic form through the medium of participants (DPs). The national Securities Depository Limited (NSDL) is the first Depository in India. The function of NSDL is regulated by the SEBI. The depository is not just another custodian. The depository can legally transfer beneficial ownership. The main objective of depository is to reduce settlement risk by minimizing paperwork involved in trading, settling and transferring securities. To utilize the services offered by a depository, you must open an account with the depository through a DP. The DPs are the link between the shareholders, the company and NSDL. Depending upon the DP. There may or may not be an opening account fees towards transaction and custody. Banks, financial institutions, custodians and stockbrokers can becomeDPs subject to their meeting certain requirements prescribed by NSDL and SEBI. NSDL publishes the list of DPs registered with them, from time to time. The DP will provide you with a passbook or statement of account periodically inform you on your holdings. You can even have a zero balance in your account. If you loose your statement of account inform the DP and obtain a duplicate. If holdings in the statement are incorrect, approach the DP for clarification. If you receive an incorrect dividend amount, contact the company or registrar. Prachi Gupta KPGI

Main depository participants


1. NSDL 2. CSDL 1. NATIONAL SECURITIES DEPOSITORY LTD (NSDL) In order to solve the problems associated with trading securities, NSE joined hand with the Industrial Development Bank of India (IDBI) and the Unit Trust of India (UTI) to promote dematerizalition of securities. NSDL, commenced operations in November 1996 and has since established a national infrastructure of international standard to handle trading and settlement in dematerialized form and thus completely eliminated the risk to investors associated with fake paper.

2. CENTRAL DEPOSITOEY SERVICES LTD (CSDL)

The Kolkata Stock Exchange Association Limited, Bank Of India HDFC Bank Limited CDSL is another Depository after NSDL. Its promoter are Bombay Stock Exchange,, Standard chartered Bank, State Bank of India Bank Of Baroda Union Bank Of India, Bank Of Maharastra Centurion Bank etc.

As on 30 June 2001 CDSL has signed agreement with 3297 companies. Of these 3528 are available for Demat services. CDSL has 160 DPs offering Depository services in 78 cities across 147 locations in the country.

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Segments of Securities Market


The securities market has two interdependent segments: the primary (new issues) market and the secondary market. The primary market provides the channel for sale of new securities while the secondary market deals in securities previously issued.

1. PRIMARY MARKET

2. SECONDARY MARKET

1. PRIMARY MARKET

Role of the Primary Market


The primary market provides the channel for sale of new securities. Primary market provides opportunity to issuers of securities; Government as well as corporate, to raise resources to meet their requirements of investment and/or discharge some obligation. They may issue the securities at face value, or at a discount/premium and these securities may take a variety of forms such as equity, debt etc. They may issue the securities in domestic market and/or international market.

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Face Value of a share/debenture


The nominal or stated amount (in Rs.) assigned to a security by the issuer. For shares, it is the original cost of the stock shown on the certificate; for bonds, it is the amount paid to the holder at maturity. Also known as par value or simply par. For an equity share, the face value is usually a very small amount (Rs. 5, Rs. 10) and does not have much bearing on the price of the share, which may quote higher in the market, at Rs. 100 or Rs. 1000 or any other price. For a debt security, face value is the amount repaid to the investor when the bond matures (usually, Government securities and corporate bonds have a face value of Rs. 100). The price at which the security trades depends on the fluctuations in the interest rates in the economy.

Premium and Discount in a Security Market


Securities are generally issued in denominations of 5, 10 or 100. This is known as the Face Value or Par Value of the security as discussed earlier. When a security is sold above its face value, it is said to be issued at a Premium and if it is sold at less than its face value, then it is said to be issued at a Discount.

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ISSUE OF SHARES Why do companies need to issue shares to the public?


Most companies are usually started privately by their promoter(s). However, the promoters capital and the borrowings from banks and financial institutions may not be sufficient for setting up or running the business over a long term. So companies invite the public to contribute towards the equity and issue shares to individual investors. The way to invite share capital from the public is through a Public Issue. Simply stated, a public issue is an offer to the public to subscribe to the share capital of a company. Once this is done, the company allots shares to the applicants as per the prescribed rules and regulations laid down by SEBI.

Different kinds of issues


Primarily, issues can be classified as a Public, Rights or Preferential issues (also known as private placements). While public and rights issues involve a detailed procedure, private placements or preferential issues are relatively simpler. The classification of issues is illustrated below:

Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuers securities.

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A follow on public offering (Further Issue) is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document.

Rights Issue is when a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue. This route is best suited for companies who would like to raise capital without diluting stake of its existing shareholders.

A Preferential issue is an issue of shares or of convertible securities by listed companies to a select group of persons under Section 81 of the Companies Act, 1956 which is neither a rights issue nor a public issue. This is a faster way for a company to raise equity capital. The issuer company has to comply with the Companies Act and the requirements contained in the Chapter pertaining to preferential allotment in SEBI guidelines which inter-alia include pricing, disclosures in notice etc.

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Issue price
The price at which a company's shares are offered initially in the primary market is called as the Issue price. When they begin to be traded, the market price may be above or below the issue price.

Market Capitalization
The market value of a quoted company, which is calculated by multiplying its current share price (market price) by the number of shares in issue, is called as market capitalization. E.g. Company A has 120 million shares in issue. The current market price is Rs. 100. The market capitalization of company A is Rs. 12000 million.

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Initial Public Offer (IPO)


An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuers securities. The sale of securities can be either through book building or through normal public issue.

Who decides the price of an issue?


Indian primary market ushered in an era of free pricing in 1992. Following this, the guidelines have provided that the issuer in consultation with Merchant Banker shall decide the price. There is no price formula stipulated by SEBI. SEBI does not play any role in price fixation. The company and merchant banker are however required to give full disclosures of the parameters which they had considered while deciding the issue price. There are two types of issues, one where company and Lead Merchant Banker fix a price (called fixed price) and other, where the company and the Lead Manager (LM) stipulate a floor price or a price band and leave it to market forces to determine the final price (price discovery through book building process).

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How does one know if shares are allotted in an IPO/offer for sale? What is the timeframe for getting refund if shares not allotted?
As per SEBI guidelines, the Basis of Allotment should be completed with 15 days from the issue close date. As soon as the basis of allotment is completed, within 2 working days the details of credit to demat account / allotment advice and dispatch of refund order needs to be completed. So an investor should know in about 15 days time from the closure of issue, whether shares are allotted to him or not.

Does NSE provide any facility for IPO?


Yes. NSEs electronic trading network spans across the country providing access to investors in remote areas. NSE decided to offer this infrastructure for conducting online IPOs through the Book Building process. NSE operates a fully automated screen based bidding system called NEAT IPO that enables trading members to enter bids directly from their offices through a sophisticated telecommunication network. Book Building through the NSE system offers several advantages: The NSE system offers a nation wide bidding facility in securities It provide a fair, efficient & transparent method for collecting bids using the latest electronic trading systems Costs involved in the issue are far less than those in a normal IPO The system reduces the time taken for completion of the issue process The IPO market timings are from 10.00 a.m. to 3.00 p.m. On the last day of the IPO, the session timings can be further extended on specific request by the Book Running Lead Manager.

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What is Lock-in?
Lock-in indicates a freeze on the sale of shares for a certain period of time. SEBI guidelines have stipulated lock-in requirements on shares of promoters mainly to ensure that the promoters or main persons, who are controlling the company, shall continue to hold some minimum percentage in the company after the public issue.

SEBIs Role in an Issue


Any company making a public issue or a listed company making a rights issue of value of more than Rs 50 lakes is required to file a draft offer document with SEBI for its observations. The company can proceed further on the issue only after getting observations from SEBI. The validity period of SEBIs observation letter is three months only i.e. the company has to open its issue within three months period.

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SECONDARY MARKET
Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets .

Role of the Secondary Market


For the general investor, the secondary market provides an efficient platform for trading of his securities. For the management of the company, Secondary equity markets serve as a monitoring and control conduitby facilitating value-enhancing control activities, enabling implementation of incentive-based management contracts, and aggregating information (via price discovery) that guides management decisions.

Difference between the Primary Market and the Secondary Market


In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading venue in which already existing/pre-issued securities are traded among investors. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over-the-Counter (OTC) is a part of the dealer market.

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STOCK EXCHANGE
Role of a Stock Exchange in buying and selling shares
The stock exchanges in India, under the overall supervision of the regulatory authority, the Securities and Exchange Board of India (SEBI), provide a trading platform, where buyers and sellers can meet to transact in securities. The trading platform provided by NSE is an electronic one and there is no need for buyers and sellers to meet at a physical location to trade. They can trade through the computerized trading screens available with the NSE trading members or the internet based trading facility provided by the trading members of NSE.

Stock exchanges in India


Currently, two stock exchanges in India, the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

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1.NATIONAL STOCK EXCHANGE (NSE)

The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the largest stock exchange in India and a preferred exchange for trading in equity, debt and derivatives instruments by investors. NSE has set up a sophisticated electronic trading, clearing and settlement platform and its infrastructure serves as a role model for the securities industry. The standards set by NSE in terms of market practices; products and technology have become industry benchmarks and are being replicated by many other market participants. It provides a screen-based automated trading system with a high degree of transparency and equal access to investors irrespective of geographical location.

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The high level of information dissemination through the on-line system has helped in integrating retail investors across the nation. The exchange has a network in more than 43 sub-regional offices, and has a presence in 498* cities and towns controlling 1,837* business locations all over India. telecommunication network comprising of over 2500 VSATs. NSE has around 850 trading members and provides trading in over 1000 equity shares and 2500 debt securities. Besides this, NSE provides trading in various derivatives products such as index futures, index options, stock futures, stock options and interest rate futures.

At NSE, it has always been our endeavor to continuously upgrade the skills and proficiency of the Indian investor. Since, financially literate investors are the backbone of the securities market, knowledge and awareness about the securities market is of the foremost concern to us, starting with the most basic of information being made available as the first step.

This booklet has therefore been prepared for those of you who are keen to acquire some basic but key information about the stock markets as an initial step towards becoming a more informed investor. We hope this booklet will act as a means of satisfying some of your initial queries on the stock markets.

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2.BOMBAY STOCK EXCHANGE (BSE)

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a demutualised and corporatised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI).

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The BSE Sensex or Bombay Stock Exchange Sensitive Index is a valueweighted index composed of 30 stocks with the base April 1979 = 100. It consists of the 30 largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange. These companies account for around one-fifth of the market capitalization of the BSE. The base value of the Sensex is 100 on April 1, 1979 and the base year of BSESENSEX is 1978-79. At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and modify its composition to make sure it reflects current market conditions. The abbreviated form "Sensex" was coined by Deepak Mohoni around 1990 while writing market analysis columns for some of the business newspapers and magazines. It gained popularity over the next year or two. The stock market has grown by over ten times from June 1990 to today. Using information from April 1979 onwards, the long-run rate of return on the BSE Sensex can be estimated to be 0.52% per week (continuously compounded) with a standard deviation of 3.67%. This translates to 27% per annum, which translates to roughly 18% per annum after compensating for inflation.

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STOCK TRADING Screen Based Trading


The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nationwide, on-line, fully automated screen based trading system (SBTS) where a member can punch into the computer the quantities of a security and the price at which he would like to transact, and the transaction is executed as soon as a matching sale or buy order from a counter party is found.

NEAT
NSE is the first exchange in the world to use satellite communication technology for trading. Its trading system, called National Exchange for Automated Trading (NEAT), is a state of-the-art client server based application. At the server end all trading information is stored in an in memory database to achieve minimum response time and maximum system availability for users. It has uptime record of 99.7%. For all trades entered into NEAT system, there is uniform response time of less than one second.

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Place orders with the broker


You may go to the brokers office or place an order on the phone/internet or as defined in the Model Agreement, which every client needs to enter into with his or her broker.

How does an investor get access to internet based trading facility?


There are many brokers of the NSE who provide internet based trading facility to their clients. Internet based trading enables an investor to buy/sell securities through internet which can be accessed from a computer at the investors residence or anywhere else where the client can access the internet. Investors need to get in touch with an NSE broker providing this service to avail of internet based trading facility.

Contract Note
Contract Note is a confirmation of trades done on a particular day on behalf of the client by a trading member. It imposes a legally enforceable relationship between the client and the trading member with respect to purchase/sale and settlement of trades. It also helps to settle disputes/claims between the investor and the trading member. It is a prerequisite for filing a complaint or arbitration proceeding against the trading member in case of a dispute. A valid contract note should be in the prescribed form, contain the details of trades, stamped with requisite value and duly signed by the authorized signatory. Contract notes are kept in duplicate, the trading member and the client should keep one copy each. After verifying the details contained therein, the client keeps one copy and returns the second copy to the trading member duly acknowledged by him. Prachi Gupta KPGI

Contract note issued by the stock broker


A broker has to issue a contract note to clients for all transactions in the form specified by the stock exchange. The contract note inter-alia should have following: Name, address and SEBI Registration number of the Member broker. Name of partner/proprietor/Authorized Signatory. Dealing Office Address/Tel. No./Fax no., Code number of the member given by the Exchange. Contract number, date of issue of contract note, settlement number and time period for settlement. Constituent (Client) name/Code Number. Order number and order time corresponding to the trades. Trade number and Trade time. Quantity and kind of Security bought/sold by the client. Brokerage and Purchase/Sale rate. Service tax rates, Securities Transaction Tax and any other charges levied by the broker. Appropriate stamps have to be affixed on the contract note or it is mentioned that the consolidated stamp duty is paid. Signature of the Stock broker/Authorized Signatory.

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Why should one trade on a recognized stock exchange only for buying/selling shares?
An investor does not get any protection if he trades outside a stock exchange. Trading at the exchange offers investors the best prices prevailing at the time in the market, lack of any counter-party risk which is assumed by the clearing corporation, access to investor grievance and redressed mechanism of stock exchanges, protection up to a prescribed limit, from the Investor Protection Fund etc.

How to know if the broker or sub broker is registered?


One can confirm it by verifying the registration certificate issued by SEBI. A broker's registration number begins with the letters INB and that of a sub broker with the letters INS.

Precautions must one take before investing in the stock markets


Here are some useful pointers to bear in mind before you invest in the markets: Make sure your broker is registered with SEBI and the exchanges and do not deal with unregistered intermediaries. Ensure that you receive contract notes for all your transactions from your broker within one working day of execution of the trades. All investments carry risk of some kind. Investors should always know the risk that they are taking and invest in a manner that matches their risk tolerance. Do not be misled by market rumours, luring advertisement or hot tips of the day. Prachi Gupta KPGI

Take informed decisions by studying the fundamentals of the company. Find out the business the company is into, its future prospects, quality of management, past track record etc Sources of knowing about a company are through annual reports, economic magazines, databases available with vendors or your financial advisor. If youre financial advisor or broker advises you to invest in a company you have never heard of, be cautious. Spend some time checking out about the company before investing. Do not be attracted by announcements of fantastic results/news reports, about a company. Do your own research before investing in any stock. Do not be attracted to stocks based on what an internet website promotes, unless you have done adequate study of the company. Investing in very low priced stocks or what are known as penny stocks does not guarantee high returns. Be cautious about stocks which show a sudden spurt in price or trading activity. Any advice or tip that claims that there are huge returns expected, especially for acting quickly, may be risky and may to lead to losing some, most, or all of your money.

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COMPETATORS OF RELIGARE

ICICI DIRECT

INDIA INFOLOINE SECURITY PVT. LTD.

HDFC SECURITIES

INDIA BULLS

KOTAK SECURITIES

RELIANCE MONEY

SHARE KHAN SECURITIES

MOTILAL OSWAL

ANAND RATHI SECURITIES Prachi Gupta KPGI

HEM SECURITIES

ANGEL BROKING

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COMPARATIVE STUDY BETWEEN RELIGARE & OTHER FIRMS

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MARKET SHARE OF COMPANIES:

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INTRODUCTION TO RESEARCH METHODOLOGY:


Research Methodology comprises defining and redefining the problem, formulating hypothesis or suggesting solution, collecting, organizing and evaluating the data, making deduction and reaching to conclusions and determines whether the formulated hypothesis is right and wrong.

Research Methodology is a way to solve research in study and solving research problems along with logic behind them are defined through research methodology. Thus while talking about research methodologies we are not only talking of research methods but also consider the logic behind the methods. During my project, I collected data through various sources primary & secondary.

OBJECTIVES OF RESEARCH METHODOLOGY:


To analyze the investing behavior towards commodity and equity market. To study the equity and commodity market To compare equity and commodity market, and list advantages and disadvantages List all the implicit and explicit causes divergence towards equity market rather than commodity To recommend how company can increase its clientele base. To correlate amount invested with risk

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4.2

RESEARCH DESIGN:
A research design is the master plan or model for the conduct of formal

investigation and survey. It is a specification of methods and procedures for acquiring the information needs for solving the problem. It decides the source of information and methods for gathering the data. A questionnaire and other forms are tested to use the collection of data. A sampling design is to be selected. Good research design ensures that the information obtained is relevant to the research question and that it was collected by objectives. Since research design is simply the framework of plan for a study, it should be used as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research study. Our approach to research is descriptive. The major objective of the descriptive research is to describe something usually market features or functions. It requires a clear specification of the who, what, when, where, why, & the way (the 6 Ws) of the research. Our 6 Ws are:

Who: Who should be considered for the research? What: What is the investment pattern of the respondent in equity or commodity? When: When should the information be obtained from the respondent?

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Where: Where the respondents should be contacted to obtain the required Information? Why: Why are we obtaining the information from the respondents? Way: In what way we are going to obtain the information from the respondents?

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4.3

SOURCES OF DATA COLLECTION:


In this research, I have used two types of data. Primary Source. Secondary Source. Primary source includes:Discussion with branch manager

Discussion with experts

Discussion with investors of the firm.

Live trading in the market

Data collected from questionnaire.

Secondary source includes:Various books related to stock market

Books related to Financial Management

Web sites were used as the vital information source

References given by Relationship Manager

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4.4

LIMITATIONS OF STUDY: To understand the overall working of share market, the period of 45 days is not enough.

Moreover, very few investor and agents have a detail knowledge of the study. The study was conducted in agra only, which restricted the scope of the study. The data provided by the investor and the agents cant be held true as 100% correct. The study was conducted to understand with respect to Risk involved in broking firm and investors, which is a part of the equity share market.

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Market Research Analysis


Preference of investment

FINANCIAL INSTRUMENTS SHARES MUTUAL FUNDS BONDS DERIVATIVES

NO. OF INVESTORS 74 16 08 02

8% 16%

2%

74%

Interpretation: This shows that although the mutual fund market is on rise
yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased.

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Awareness of online share trading


9%

Yes -- 91% No -- 9%

91%

Interpretation: With the increase in cyber education, the awareness towards


online share trading has increased by leaps and bounds. This awareness is expected to increase further with the increase in internet education.

Awareness of Religare.in as a Brand

37%
Yes -- 63% No -- 37%

63%

Interpretation: This pie-chart shows that Religare has reasonable amount of


Brand awareness in terms of a premier Retail Stock Broking Company. This brand image should be further levered by the company to increase its market share over its competitors.

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Awareness of Religare Facilities


20%

Yes -- 20% No -- 80%

80%

Interpretation: although there is sufficiently high brand equity among the


target audience yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness.

DEMAT Account Market

18%

20% Religare-20% Sharekhan-22% ICICI Direct-15% India Bulls-25% Others-18%

25% 15%

22%

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Interpretation: This shows that even with sufficiently high Brand Equity,
Religare ranks only 3rd amongst the Demat Account providers. This is probably because of two main reasons. 1. Lack of promotion and unfocussed approach towards Product awareness. 2. Non transparent marketing policies of the company. Hence, the company should crystallize its products and should indulge in aggressive marketing and promotion.

Satisfaction Level among Customers with Current Broker

8%

Yes -- 92% No -- 8%

92%

Interpretation: This pie-chart accentuates the fact that Strategic Marketing,


today, has gone beyond only meeting sales targets and generating profit volumes. It shows that all the competitors are striving hard not only to woo the customer but also to make them Brand loyal by generating customer satisfaction.

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FREQUENCY OF TRADING: FREQUENCY OF TRADING


DAILY WEEKLY MONTHLY EVERY SEASON OCCASSIONALY RARELY

INVESTORS
51% 16% 16% 04% 06% 07%

Interpretation: In spite of the huge returns that the share market promises, we see that there is still a dearth of active traders and investors. This is because of the non transparent structure of the Indian share market and the skepticism of the target audience that is generated by the volatility of the stock market. It requires efficient bureaucratic intervention on the part of the Government.

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Percentage of Earning Invested In Share Trading


7% 16%
Upto 10%--71% Upto 25%--19% Upto 50%--7% Above 50%--3%

2%

75%

Interpretation: This shows that people invest only up to 10% of their


earnings in the stock market, again reiterating the volatile and non-transparent structure of the Indian stock market. Hence, effective and efficient steps should be undertaken to woo the customers to investment more in the lucrative stock market.

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SWOT ANALYSIS

A SWOT analysis focuses on the internal and external environments, examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment.

STRENGTHS Services
As products of Religare is a extremely innovative product with very less cost. Services like online trading facility, institutional and domestic broking, customized research reports with almost 80% efficiency etc give Religare an edge over its competitors. Religare provides other support services that make retail investors more confident and assured with their trading. SMS alerts (allowing traders and investors to make the most of the available opportunities), Softer, intangible features like imagery, equity driving preference. Through efficient trading processes Investors can place their orders directly on the Internet, do all the information seeking and basically own the investing process.

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Distribution Network We have a growing network of 150 branches and more than 300 business partners spread across 180 cities in India and a fully operational international office at London OUR target is to have 350 branches and 1000 business partners in 300 cities of India and more than 7 International offices by the end of 2006. Unlike a traditional broking firm, Religare group works on the philosophy of partnering for wealth creation.

Products
Companys product line is quite flexible in the sense that there is a product for every kind of investors. Also all the products cover all the loop holes of all the products offered by the other competitors like low cost, user friendly online trading services etc.

WEAKNESS Branding
Though the company has efficient products but large part of investment interested population does not know the company. The most basic expectation for a trader or investor when one begins trading is that one must get timely delivery of shares and proceeds from sale of shares. Also ones cash balances with the broker must be safe and secure. Though this confidence in the broker comes with time and experience, good and transparent practices also play a major role in imbibing confidence in traders

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Competition from Banks


Most of the banks due to good branding have the faith of the customers of their banking database. So they enjoy the liberty of huge database and customers find it more reliable to trade there rather than with a unknown broker. Also banks like HDFC Bank and ICICI Bank have the advantage of linking the trading accounts of their customers to saving accounts. This makes trading easier, and at the same time a trader withdraws exactly as much money from his account as is needed to complete the trade. Similarly sales proceeds are credited directly to saving account.

OPPORTUNITIES
The external environment analysis may reveal certain new opportunities for profit and growth.

Ever-Increasing Market
After the NSE brought the screen based trading system stock markets are now more secured which has attracted lot of retail investors and the demand is increasing day by day. This has resulted in improved liquidity and heavy volumes on transactions. Religare is one of the early entrants here. As to how much it will roar and how swift it can swoop on the market, the future alone can answer such queries. Religare has been a mega player and is known for being a mover of stocks. It is also known for putting big deals through and enjoys good networking with the FIIs. It has been dynamic enough to move with the times and capture the opportunities that the market throws up from time to time.

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Improving Technology
In country like India technology is always improving which gives the company a chance to keep on improving their product with time whereas for the small players like local brokers it will be difficult to keep the same pace as the changing technology. Also with SEBI lying down some strict guidelines small brokers are finding it harder to retain the customers with no research department and small capital. The traditional business model is highly dependent on a large network of sub-brokers, and many established players may not have systems (technology, customer service, etc.) capable of directly servicing so many retail customers.

Unfulfilled Needs of the Customers


With so many competitors offering their products in the market but no one is able to completely satisfy the customers. Some have the problem of lack of information or some were scared of volatility of the stock markets. Religare has the opportunity to tap this unsatisfied set of customers and to make hold in the market. The Internet serves to break all barriers to information, as it offers an extremely hassle-free investing platform. And, Religare hopes to fully utilize and capitalize on this platform. This original idea by Religare itself was born out of the consumer's need for a more transparent, easy to understand and convenient option of investing in stocks.

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Education Level
The education level in the country is improving year after year as far as technology goes. With that the understanding of the stock market is also increasing and a lot of retail investors are steeping in the markets which are being shown by increasing volumes, transactions and indices.

THREATS
New Competitors
A lot of new competitors are trying to enter the market in this bullish run to taste the flavor of this cherry. This is creating a lot of competition for large players like Religare and it is creating little confusion in the minds of the customers about the services provided by the broker. Also many banking firms are entering into the market with huge investment. Competitors like ICICI, kotuku; HDFC, 5-paisa etc. are posing a lot of threats to the company.

Technology Based Business


Online trading is totally based on the technology which is quite complex. Typically, the technology solution has to start from the Internet front-end (or the screen that you see when you begin trading). Then it needs to get into the 'middle tier' of risk management systems that assess data from banks and depository participants (DP), calculate client risk at that point in time, and give the 'Go/No go' advice to the trade. So technology is a kind of threat because unless until it is working properly it is good but internet is not that safe. Though a lot of cyber laws are being made but not yet executed.

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Online Trading Account


Religare Provides Two types of Accounts 1.
R-ALLY (Software based)

2. R-ACE (Web Based)

For the first time Religare brings investing community the power to be associated with the elite dealing rooms and freedom to execute trade on their own. That is, you may trade from our branches or trade on your own over the net and with that you get our expertise and assistance.

It has been designed to provide world class experience and expertise to investors. R-ALLY as the name suggests is the perfect partner for savvy investors. Clients opting for this service would be provided services managed by a team of dedicated relationship managers and experienced trade dealers. They would not only assist the client in information dissemination but would also take care of all post trade requirements.

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Features of R-ALLY On line trading account for investing in Equities and derivatives via
Religare .com

Integration of Online Trading + Bank + Demat A/c Instant cash transfer facilities against purchase & sale of shares Make IPO booking. You get order and trade confirmation by E-mail Personalized Market scan with your own customized stock ticker. Your very own portfolio tracker. Online Trading Facilities with Odin Terminal.
Odin terminal is wave based software. Client can easily download the terminal through Religare web site. No extra charges are taken for the use of this terminal. Through this terminal/software you execute your order within 2 seconds. In this terminal we get both NSE&BSE On-line at same time. And the clients can do trading in both NSE&BSE at the same time

System requirements:
You will need access to a computer, which has at fallowing configuration. Pentium 3 PC, Minimum 128 MB RAM Windows 2000/XP Internet connection Internet Explorer 6.0 Java enabled

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SHEDULE OF CHARGES FOR DEPOSITORY SERVICES PARTICULARS


ACCOUNT OPERATIONS Account opening Annual maintenance Normal Speed e A/c (Password Users) Documentation Charges (Stamp Paper and other charges) TRANSACTIONJ CHARGES BUY SALE Delivery Given To Religare A/C Delivery Given To Any Other Account

CHARGE STRUCTURE

Dematerialization

Courier charges

Demat rejection charges Rematerialization Pledge creation / closure /


invocation Delivery instruction booklet

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Religare other charges

PARTICULARS Demat + Trading A/c Brokerage


Exposure

CHARGE STRUCTURE
Rs. 500/- (for life time) .02 % (on Intraday) .20 % (on Delivery) 4-6 time (on intraday) 4 time (on Delivery) Rs. 250/- p.a.

A.M.C.

Research report

Free

ODEIN (Software) SMS Alert

1800/- One time

Free

Trading over phone

Free

Transaction Charges

Free

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Table Showing Acceptability of Various Documents As Proof Of Identity, Address And Signatures.
(DEMAT ACCOUNT FOR INDIVIDUALS)

DOCUMENT

IDENTITY PROOF Yes Yes Yes No Yes No No No Yes

ADDRESS PROOF Yes Yes Yes Yes No Yes Yes Yes No

Valid Passport

Driving License Voters identity Card Ration card Pan Card with Photograph Bank Passbook Telephone Bill (latest) Electricity Bill (latest)

Credit Cards / Debit Card

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Terms & Conditions


1. Client will be required to pay Rs. 500/- upfront for each demat account
which will be adjusted towards Depository service charges. Client will be required the balance immediately when it fall below Rs. 200/-

2. DP charges of Broking Clients will be debited to their trading accounts.

3. Any other service, which is not mentioned above, will be charged


separately as per the rates applicable from time to time. Out of pocket expenses including overseas consignment will be charged extra on actual basis.

4. The value of transaction will be in accordance with rates provided by


NSDL.

5. All charges are subject to revision at the discretion of Religare after


giving a notice of 30 days.

6. All charges are payable on monthly basis and delayed payment will be
liable for interest 1.5% PM.

7. Religare may suspend/freeze the depository service of the account holder


on non-payment of outstanding bills.

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Brokerage Offering
Our retail equity business primarily covers secondary market equity broking. It caters to the needs of individual Indian and Non-resident Indian (NRI) investors. We offer broker assisted trade execution and automated online investing and trading facilities to our 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; and real-time market commentary, real-time quotes and news.

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This product comes as RACE, RACElite and RACEpro. It gives you the power of trading from your home, office or while traveling and trade in the market of equity and derivatives. You can log on and get started from your computers or your mobile devices. These products have very exciting features like integrated DP, hot key functions and much more...

Features of R-ACA

A/c opening 500 No up-front cash or stock margin required. Easley accessible on browser NSE cash segment, NSE, F & O, and BSE on single platform. Trade on line and over phone. Access your ledger balances & a/c information our interment, sms and phone. Integrated DP, back office and trading a/c Online transfer of funds through multiple banks. Life time free D.P. Account (250/- A.M.C.) Interest on cash margin deposited with us.

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R-ACE LITE:

A/C opening charge Rs. 500/ Minimum cash Stock Margin Rs. 5,000/- required. Real time streaming quotas. Alert Hot key function Easley accessible on browser no software installation required. NSE cash segment, NSE, F & O, and BSE on single platform Trade on line and over phone. Access your ledger balances & a/c information our interment, sms and phone. Integrating, back office and trading A/c Online transfer of funds through multiple banks. Life time free D.P. Account (250/- A.M.C.) Interest on cash margin deposited with us.

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R-ACEPRO

A/C opening charge Rs. 500/ Minimum cash Stock Margin Rs. 5,000/- required. Trader, terminal on your Desktop. Advance alert. Technical charting (intraday, EOD) Multiple watch lists. Derivatives chains. F & O calculator. Trade online and over phone. Advance Hot key function. NSE cash segment, NSE, F & O, and BSE on single platform Access your ledger balances & a/c information our interment, sms and phone. Integrating, back office and trading A/c Online transfer of funds through multiple banks. Life time free D.P. Account (250/- A.M.C.) Interest on cash margin deposited with us.

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Religare Securities Ltd. (RSL) maintains Religaresecurities.com (hereinafter referred to as the "Website") and owns, has the license to use or otherwise has the right to use, free of any pending or threatened liens, all content, graphics, HTML and CGI or other scripts displayed and used on the Website. THE USE OF THE WEBSITE BY THE CUSTOMER SHALL MEAN THAT HE/SHE AGREES WITH THE FOLLOWING TERMS OF USE.

1. RSL has launched and established an online trading service on the Website (hereinafter referred to as the "Service"). RSL has exclusive and sole discretion to select the Customers who would be entitled to use access and benefit out of the Service. RSL also reserves the absolute right and discretion to decide on the criteria for selecting the Customers to participate in the Service offered hereunder.

2. The offering of the Service is subject to the requisite permissions, approvals, licenses and any other clearance from the appropriate regulatory authority viz., Securities and Exchange Board of India, National Stock Exchange of India Limited, The Stock Exchange, Mumbai and any other relevant authority that may be the regulatory authority of the Service.

3. The Service offered by RSL envisages a Customer opening a Trading account. 4. This Service on the Website does not constitute an offer to sell or a solicitation to any person in any jurisdiction where it is unlawful to make such Prachi Gupta KPGI

an offer or solicitation. This Service is not intended to be any form of an investment advertisement, investment advice or investment information and has not been registered under any securities law of any foreign jurisdiction and is only for the information of any person in any jurisdiction where it may be lawful to provide such information, otherwise the same shall not be considered an information. The distribution of this Service or content in other jurisdictions may be restricted by law and the persons who access the Service should inform themselves about, and observe any such restrictions. By accessing and surfing this Website, the Customer agrees to be bound by the foregoing limitations. 5. No information, market analysis, research report, etc. on the Website is to be construed as a representation with respect to shares, securities or other investment regarding the legality of an investment therein under the respective applicable investment or similar laws or regulations of any person or entity accessing the Website.

6. This Service is provided on an "As Is" basis. RSL and its Affiliates disclaim any warranty of any kind, imputed by the laws of any jurisdiction, whether express or implied, as to any matter whatsoever relating to the Service, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non infringement. RSL and the Service and the Offer are subject to the jurisdiction only of the courts of the Republic of India at Delhi.

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CONCLUSION
In Equity and online trading, Religare have mainly competition with kotakstreet.com, ICICIdirect.com, HDFC sec.com ,5paisa.com comes at no. retail broker. It has an advantage of being in this industry for more than 8 decades. It has launched its website in 2000 and were among the first player in the online share trading. The Religare has decided to spend its advertisement budget through four medias i.e. television, print, web and outlets. From the above analysis we can point out some points:

1. Religare account opening charges are lower than other competitors. Religare is less flexible to cut down its account opening charges on the other side; some of the brokers are offering free account opening to high net worth customers.

2. The charges of demat account are reasonable at Rs. 500/- but India bulls is offering pool account with no annual maintenance charges.

3. Religare provides trading in NSE, BSE and derivatives. It is also about to launch online mutual funds and arbitrage facility is not available to customers

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4. Religare is the only one that does not have any demat transaction charges either on buying or selling

5. Unlimited toll free calls service is provided to customer in Religare.in

6. Religare accept offline payment from other banks also but kotakstreet.com icicidirect.com, hdfcsec.com clients have compulsion to open an online account

7. BTST facility is available on almost all scrips of NSE in Religare, Indiabulls but this facility is mot providing by HDFCsec.com, kotakstreet offers it only for 75% of share value and icicidirect.com gives it only on 127 scrips.

8. Sms alerts facility is mot available at hdfcsec.com, 5paisa.com and India bulls.

9. Religare research reports come in client e-mail at free of cost around 5-6 times in a day. But some brokers charged for it and

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some provide it only at once in a day, while it is paid in indiabulls, icicidirect.com and 5paisa.com.

10.

Lowest Brokerage provider.

To sum up, we can say that computerization and automation are not to be avoided. Technology has been able to make the stock markets accessible to every individual. It has also led to positive developments in terms of reduced costs and fewer errors but as some experience has indicated, it cannot be applied as a panacea for all problems. Regulation and knowledge dissemination are still important; the use of technology should be preceded by a detailed study and assessment of all other alternatives.

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Limitations during the project:


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 shares primarily in ipos

No proper assurance of right information


The main data sources are websites, telephonic information and offices visit. The data on websites might be possible, not get updated. The marketing person might be possible, is not through with all concepts to which I contacted. Sometimes, they try to hide information

Services of competitors
We cannot give proper comment on competitors services till we use it. But I try to collect as accurate information as possible. As we all know services are intangible and we cannot predict its quality, it is a thing a feel not to see.

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Mostly people comfortable with traditional brokers


As people are doing trading from there respective brokers, they are quite comfortable to trade via phone.

Lack 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.

Some respondents are unwilling to talk


Some respondents are unwilling does not respond, as they are quite annoyed with the phone call and some dont have time.

Inaccurate leads
Sometimes leads are provided which had error in it which varies from only 5 digit phone numbers 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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Bibliography

Books and News Paper


The economic times, Business Standard, Business line etc. Intelligent Stock Market Investing. By N. J. Yasaswy The Indian Securities Market by Tadashi Endo.
PROJECT REPORT WRITING Author: - M.K.Rampal & S.L. Gupta

WEBSITES:
http://www.religaresecurities.com http://www.nseindia.com http://www.indiainfoline.com http://www.finsights.com http://www.walletwatch.com http://www.moneycontrol.com http://www.economywatch.com http://www.economictimes.com

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