BUSINESS

ENVIRONMENT
PRESENTATION BY
P
BY

SAMIKSHA NAIK B-59

AMAN PATEL B-12
KARAN JOSHI B-21
VISHAL PATIL B-15
TUSHAR BHOIR B-26
SURAJ PANDEY B-6
DENIL SHAH B-30
INTRODUCTION
• What is a financial market ?
The financial market is a broad term describing any marketplace where
trading of securities including equities, bonds, currencies and
derivatives occur.
Types of financial market
1. Capital market
2. Money market
3. Foreign exchange market
4. Commodity market
History of Capital market
• The Amsterdam stock exchange is considered the oldest
“modern” securities market in the world. It was shortly after the
establishment of the Dutch East India Company (VOC) in 1602 when
equities began trading on a regular basis as a secondary market to
trade its shares.
• The BSE has been in existence since 1875. The NSE, on the other
hand, was founded in 1992 and started trading in 1994.
Constituents of Capital market
Types of Capital markets
 Primary market
Primary market is the segment of capital market with
deals with new securities.
Example
1. Ipo(initial public offering)
2. Fpo( follow on public issue)
 SECONDARY MARKET
Secondary market is place where securities are
traded between investor after issue in public market.
 PRIMARY MARKET SECONDARY MARKET
MEANING Securities are issued for first time to Already issued securities are traded
investor by company between buyer an seller

COMPANY Directly involve in the transaction No involvement of company

DEALS WITH New securities Previously issued securities

FUNCTION Raise long term funds for company Provide continuous and ready market for
trading securities between investor

LISTING There is no listing requirement Only those securities are traded which
are listed in secondary market
GAIN Company investor

PRICE Determined by management Determined by demand and supply

SALE Stock is sold only once by company Stock traded between buyer and seller is
multiple time
Instruments of Capital market

Equity Instruments Hybrid instruments Debt Instruments

• Shares • Convertible bonds • Debentures
• Ipo • Preferred stocks • Treasury bills
• Mutual fund • Equity default swaps • Commercial papers
• Certificate of deposits
• Repurchase agreements
• Bankers acceptance
Share’s
• A Share is the share in the share capital of the company
• Types of share
1. Ordinary shares
2. Preference Shares
3. Redeemable Shares
INDICES
• Large Cap Equity Funds
• Mid-Cap Equity Funds
• Small Cap Equity Funds
BSE INDEXES
• BSE SENSEX
• BSE MID CAP
• BSE SMALL CAP
• BSE 500
NSE INDEX
• NIFTY 100
• NIFTY MID CAP 150
• NIFTY SMALL CAP 250
• NIFTY 500
Large cap funds are those funds which invest a
larger proportion of their corpus in companies with
large market capitalization. Trustworthy, reputable and strong
are three adjectives that are often used to describe a large-
cap company.
Mid-cap segment is defined by contains the stocks that are ranked from 101 to
250 by market capitalization. The value of the 100th ranked stock in terms of
market capitalization is worth INR 30,0000 crores.
Small Cap Stock. The “cap” in small cap stocks refers to a company's
capitalization as determined by the total market value of its publicly traded
shares. Small cap stocks are generally defined as the stock of publicly traded
companies that have a market capitalization ranging from $300 million to
about $2 billion.
Categories of share
• A group
• T group
• Z group
• B group
Listing of companies.
IPO process
Intermediaries
An investor is any person or other entity (such as a firm or mutual
fund) who commits capital with the expectation of receiving
financial returns. Investors utilize investments in order to grow
their money and/or provide an income during retirement, such as
with an annuity.
Stock brokers
A stockbroker or share broker is a regulated professional individual, usually
associated with a brokerage firm or broker-dealer, who buys and sells stocks and
other securities for both retail and institutional clients through a stock exchange or
over the counter in return for a fee or commission.
Clearing process
Depositories
• NSDL
• CDSL
Regulatory
• SEBI: The Securities and Exchange Board of India (SEBI) is the
regulator for the securities market in India. It was established in 1988
and given statutory powers on 30 January 1992 through the SEBI Act,
1992.
What is an Issuer
An issuer is a legal entity that develops, registers and sells securities to finance its operations. Issuers
may be corporations, investment trusts, or domestic or foreign governments. Issuers are legally
responsible for the obligations of the issue and for reporting financial conditions, material
developments and any other operational activities as required by the regulations of their
jurisdictions.
Stock Exchanges
• NSE :National stock Exchange was founded by R. H. Patil
• NIFTY 50
• BSE : Bombay stock Exchange was founded by Premchand Roychand
• SENSEX 30
International stock market
• International capital market .
• Effect on Indian stock market
Players of capital market
• Investors
• Fii/Fpi
• Corporates
• Mutual funds
• Venture capital
• Portfolio managers
• Credit rating agencies
CRISIL Credit Rating Symbols
AAA : Highest Safety

AA : High Safety

A: Adequate Safety

BBB : Moderate Safety

BB : Inadequate Safety

B: High Risk

C: Substantial Risk

D: Default

NM:Not Meaningful
Rating Process: Indian Scenario
Initial Contact

Meeting Company Executives

Meeting the Management

Assignment to Analyst Team

Preparation of Rating Profile (Depends of Business

Type/Detailed Analysis)

Presentation Before The Committee

Rating Decision

Notification of Rating

Issue’s Representation in the Market

Periodical Review By Rating Committee

India’s credit rating agency
How stock trading process works
Account opening process
• Script
• Script code
• Hold
• Release
• Order type
• Order book / Trade book
• Disclosed quantity
• Shortfall message
• Brokers reference number
• Market depth
• Volume of shares
• Short selling
Bull vs bear market :
A bull market is the condition of a financial market of a group of securities in which prices
are rising or are expected to rise. The term "bull market" is most often used to refer to
the stock market but can be applied to anything that is traded, such as bonds, real estate,
currencies and commodities.
• Delivery –based
• Intraday
• E-margin
• Cover
• Encash
Order types in stock trading
Validity of stocking trading
Circuit levels / price band

• Upper circuit
• Lower circuit