SHAREKHAN

Your guide to financial jungle

Project report

On

Awareness of online Trading&

Comparative analysis

Submitted by

Sunil Dhankhar

Roll no.0810155

HSB HISAR (HR)

INDIA

Content

• Acknowledgement• Summary• Project objective• Company profile• Headquarter in india• Service provided by company• Documentary procedure• Comparative analysis• Conclusion• Questionnaire

Acknowledgement

• I express my deepest and most sincere thanks to (Faculty Guide) and all my teachers of INCs who provided me their valuable time and information. The OJT and Project could not be possible without their able support and guidance. It was a great opportunity for me to work with Sharekhan, pioneers in the field of online trading and the retail broking arm of SSKI Investors Pvt. Ltd. I am extremely grateful to those who have shared their expertise and knowledge with us and without whom the completion of this project would have been virtually impossible.

Summary

• This research is based on the awareness of online share trading and comparative analysis of Sharekhan with other broking houses and study of Future of Online Share Trading in India. It’s totally based on realistic approach towards the online share-trading scenario in India.

• In the first phase I covered some other stock broking companies as compared to Sharekhan. I examined thoroughly areas such as number of players, technology they are offering their customer base their products and offerings and how they market their products

Project Objective

• Main objective of this project is to increase the interest rate and knowledge level of people about online share trading. So this course is divided in to two parts:-

• Gathering data about the leading online broking houses and compare the main points and find the strengths of Sharekhan compared to them.

• Conducting Market Research in various parts of the city in order to get response of customer to know that they are willing or not in online share trading. If no, why they are thinking such type thing .contact to the customer by calling or personally if he is agree and invite that customer for share trading

Company profile• COMPANY PROFILE• Sharekhan Ltd.• Share khan is the retail broking arm of SSKI, an organization with more than

eight decades of trust & credibility in the stock market. It is India's leading retail financial Services Company with We have over 250 share shops across 115 cities in India. While our size and strong balance sheet allow us to provide you with varied products and services at very attractive prices, our over 750 Client Relationship Managers are dedicated to serving your unique needs.Sharekhan is lead by a highly regarded management team that has invested crores of rupees into a world class Infrastructure that provides our clients with real-time service & 24/7 access to all information and products.. This powerful technology complemented by our knowledgeable and customer focused Relationship Managers. We are Creating a world of Smart Investor.Sharekhan offers a full range of financial services and products ranging from Equities to Derivatives enhance your wealth and hence, achieve your financial goals.Sharekhan' Client Relationship Managers are available to you to help with your financial planning and investment needs. To provide the highest possible quality of service, Sharekhan provides full access to all our products and services through multi-channels.

Background of company

• Sharekhan is one leading company in retail brokerage,

• The site of sharekhan is launched by 8 feb 2000 by name www.sharekhan.com,

• Site is register 1 lakh customer,

• 17 apr 2002 sharekhan launched speed trade,

Service provided by company

Documentary procedure• DOCUMENTS:-

• (A) 2 Passport size photograph• (B) Copy of Pan Card (mandatory) • (C)For Identification Proof-

VOTER ID CARDORDRIVING LICENCEORPASSPORTORPAN CARD(ANY ONE)

(D) FOR RESIDENCE PROOF-• RATION CARD

OR• LATEST BANK STATEMENT

ORVOTER ID CARDORDRIVING LICENCEORPASSPORTORTELEPHONE BILL STATEMENT (Latest bill within two month)ORELECTRICITY BILL STATEMENT (Latest bill within two month)(ANY ONE)

• (E) A canceled cheque• (F) Bank Statement (if cheque not personalized)• g) Company id

Comparative analysis

• The major players in online trading

•  

• •ShareKhan.

• •5paisa.com

• •KotakStreet.

• •IndiaBulls.

• •Icici Direct.com

5 paisa.com

Indiainfoline was founded in 1995 and was positioned as a research firm. In 2000 e-broking was started under the

brand name of 5 paisa.com. Apart from offering online trading in stock market the company offers mutual funds

online. It also acts as a distributor of various financial services i.e. GOI securities, Company Fixed Deposits,

Insurance. It has a limited ground network, present in 20 Cities • Online Account Types• •Investor Terminal: Investors / Students • •Trader Terminal: Day Traders / HNI’s • PRICING FOR RETAIL CLIENTS• Investor Terminal:-• •Account Opening: Rs 500• •Demat 1st Yr: Rs 250• •Initial Margin: Rs 2500(Compulsory)• •Min Margin Retainable: Rs 1000• •Brokerage: • Trading 0.10% each side + ST• Delivery 0.50% each side +

STPRICING FOR HNI CLIENTS• Trader Terminal• •Account Opening: Rs 500• •Demat 1st Yr: Rs 250• •Initial Margin: Rs 5000(Compulsory)• •Min Margin Retainable: Rs 1000• •Brokerage: • Trading 0.10% each side + ST • Delivery 0.50% each side + ST• (Negotiable to 0.05% each side &

0.25%)• •Account Access Charges• Monthly Rs 800, adjustable against

Brokerage• Yearly Rs 8000, adjustable against

brokerage

• Problems Of 5 Paisa•• •Downtime• Recent past 5 paisa Trader Terminal (T.T) is

experiencing high frequency downtime between 3 – 3:30 p.m due to server load (as their T.T is feature heavy compared to Speedtrade charting)

• •Manual Accounting• The 5 paisa accounting system is manual, Online

fund transfer through bank is not credited instantly. Limit is provided EOD for shares sold from DP, or call Similarly limit released for shares sold under BTST is manual Delay in receiving pay-out of clear funds from trading to Bank Account.

• •Min Account Balance• Concept of Min Rs1,000 is to be maintained in form

of cash / securities to keep account active. This can be withdrawn only on closure of account.

•

IndiaBulls.

• Company Background•• India Bulls is a retail financial services company • present in 70 locations covering 62 cities. It offers a • full range of financial services and products ranging • from Equities to Insurance. 450 + Relationship • Managers who act as personal financial advisors

Online Account Type• •Signature Account: Plain Vanilla Account with focus on

Equity Analysis. The equity analysis is a paid service even for A/c holders

• •Power India bulls: Account with sophisticated trading tools, low commissions and priority access toAccounts

• Signature Account• •Account Opening: Rs 250• •Demat: Rs 200 if POA is signed, No AMC for this DP • •Initial Margin: NIL• •Brokerage: Negotiable• Power IndiaBulls•

• •Account Opening: Rs 750• •Demat: Rs 200 if POA is signed, No AMC for this DP • •Initial Margin: NIL• •Brokerage: Negotiable

• Problems Of India Bulls• POA for Clients DMAT• Charges are levied to move shares from IB pool

Account to client DP account All shares held by client trading with IB are moved to IB Pool Account and the same is shown as a reflection in client DP account.Paid Research Services

• Access to a research even for an IB trading account holder is charged a min of Rs 500 a month.Margin funding hoax

• The interest on funding starts on leveraged delivery trades from T+1 day itself @21% p.a, on a daily basis.

•• The role of Relationship Manager• Each RM is looked upon as a revenue generator

and he gets a % on business generated from client. This can lead to over leveraged (Interest) & high frequency (Brokerage) trading, which may not be in the best interest of the client.

KOTAK SECURITIES

• Company Background •• Kotakstreet is the retail arm of kotak securities. Kotak • Securities limited is a joint venture between Kotak • Mahindra Bank and Goldman Sachs.

• Online Account Types• • Twin Advantage / Green Channel: 2 DP’s,

Limit against shares • • Free Way: Flat Rs 999 Cover Charge p.m,

0.03% per transaction• • High Trader: 6 Times Exposure Cash &

Derivatives, Auto sq off 2:55• Pricing of KOTAK• • Account Opening: Rs 500• • Demat: Rs 225 p.m• • Initial Margin: Rs 5000(Compulsory)• • Min Margin Retainable: Rs 1000• • Brokerage Slab wise: Higher the volume,

lower the brokerage. Even older customers (on 0.25% & 0.40%) have been moved to the slab wise structure.

• Problems of Kotakstreet• Rigid Account Opening Terms• No Flexibility of A/c opening charges (Rs 500) +

Compulsory margin Rs 5000/- Account opening free with Rs 10,000 Margin .

• No Flexibility in Leverage – Dependent on Type of Account ( 4 to 6 times only) No flexibility in Brokerage, driven by slab structure.

• No Customization of commercial Terms.• Restricted Access to Terminal like product• KEAT Desktop restricted distribution on payment of

Rs 500, Non refundable• Many Other Charges:• Rs 225 p.m towards DP AMC charges• DP incoming charges extra, 0.02%• Rs 1,000 as retainable Margin to keep account

active• Rs 25 per call after 20 calls for the month

ICICI Direct.com

• Company Background

•• ICICI Web Trade Limited (IWTL) maintains • ICICIdirect.com. IWTL is an affiliate of ICICI Bank Limited• and the Website is owned by ICICI Bank Limited

• Account Types• ICICI Direct e-invest Account: • Premium trading interface of ICICIDirect Link is given to DBC

partners and HNI’s Plain Vanilla Account with focus on 3 in 1 advantage. Differentiated in services within the account.

• 1. Cash on spot• 2. MarginPlus• Account Opening: Rs 750• Schemes: For short periods Rs 750 is refundable against

brokerage generated in a qtr. These schemes are introduced 3-4 times a year.

• Demat: NIL, 1st year charges included in Account Opening Plus a facility to open additional 4 DP’s without 1st yr AMC.

• Initial Margin: Nil• Brokerage: All brokerage is inclusive of stamp duty and

exclusive of other taxes.• Slab wise brokerage ranges from 0.75% to 0.25% depending

on volume

• Problems Of ICICIDirect• Poor online Interface• Slow website interface with no real-time quotes

creates dissatisfaction among high frequency tradersMargin trading restriction

• The margin trading system is available up to 2:45 p.m, with outstanding net positions under margin segment automatically squared off at any time between 2:45 – 3:30 p.m. Thus no control of square off price.Morning Trades Issue

• Being one of the websites with largest no of after hour orders which are pushed 1st thing in the morning, creates a choking of orders to the exchange, causes delay of confirmations for new order placed during the early morning trades.Restriction of BTST

• The sale of shares purchased is restricted to T+1 day and is not permitted on T+2 Day.

• No leverage for Delivery trades• Delivery is restricted to the total money allocated

into the trading account. No flexibility on leverage on Intra-day trades

• The leverage of 4 times is available for intra- day trades.Restriction of Bank Account

• The choice of bank is restricted to ICICI Bank.Higher Brokerage rates with slabs

• The delivery brokerage is pegged at 0.75% and trading at 0.10% each side, this makes is very unviable for customers dealing in large volumes. Although progressively the delivery and trading brokerage reduce as volumes go up.

Conclusion • Indian economy has been globalized and the capital market has been

linked to the international financial market. Foreign individuals and institutional investors are now encouraged to participate into it. So, there is a need for raising the Indian Capital market in to the international standards in terms of efficiency and transparency. One such measure is the passing out of the Depository Act during the year 1996. Dematerialization of securities and under this system is one of the major steps aimed at improving and modernizing the capital market and enhancing the levels of investor’s protection measures which aims at eliminating the bad deliveries and forgery of shares and expediting the transfer of shares.

• Thus online share trading is gaining its popularity. Though it still has to go a long way but it has established its foothold in the metropolitan cities like Delhi, Mumbai etc. The dematerializing of shares coupled with the huge growth of internet has been the fuel for the online trading which is now a considerable part of the total trading.

• It can therefore be said that online share trading is here to stay and will only grow to bigger proportions and will penetrate deeper into the economy. So online trading would become the order of the day, taking over the traditional norms in the years to come.

QUESTIONNAIRE• Q1. In which of these Financial Instruments do you invest into?• • (i) Shares (ii) Mutual Funds (iii)Bonds (iv) Others • Q2. Which type of trading you prefer?• • (i) Online (ii) Offline (iii) Not Applicable • • Q3. If you prefer Online Trading then the reasons for it?• (i) Privacy (ii) User friendly & Time Saving

• (iii) Convenience (iv) All The Above• Q4. What factors motivates you to invest in securities?• (i) New IPO's (ii) Entry of FII's (iii)

More returns in less time (iv) Others• Q5. Does online trading system motivate you to deal in securities?• (i) Yes (ii) No• Q6. Have you heard about Sharekhan?• • (i) Yes (ii) No• Q7. Which Brokerage Firm do you prefer for Online Trading?• (i) ICICI Direct (ii) ShareKhan (iii) Indiabulls• (iv) Kotak Securities (v) 5paisa (vi) Any other__________

QUESTIONNAIRE• Q8. What differentiates your Share Trading Company from others?• • (i)Brokerage (ii) Research Report (iii) Dial up trade facility • (iv)Magazine (v) Exposure (vi) Account opening charges • Others• • Q9. How often do you trade?• (i) Daily (ii) Weekly (iii) Monthly (iv) Yearly• Q10. In which category does your income fall? (Per month in Rs)• i) 0-15000 ii) 15000 – 35000 iii) 35000 – 60000 iv) Above 60000 • Q11. What percentage of your earnings do you invest in share trading?• (i)Up to 10% (ii) Up to 25% (iii) Up to 50% (iv) Above 50%• • Q12. According to your preference rank the attributes of a share trading company.(1=Most Important, 5= Not Important at all)• • 1. Customer Service ____• 2. Proper Guidance ____ • 3. Regular Updates ____ • 4. Trustworthiness____• 5. Brokerage Charges_____ • • Q13. Rank these share trading companies according to the quality of service they provide.(1=Excellent, 5= Very poor)•

1. 2. 3. a. Sharekhan

• b. ICICI Direct• 4. 5. c. India Bulls • d. Kotak Securities• e. others (specify )•

Q14. What additional features do you wish to have in Online Share Trading?•

Personal Information• • Name:• Age:• Sex: Male Female•• Phone No:• Occupation

• Thanks