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A PROJECT REPORT
ON
STUDY ON DEMAT A/C
&
DEMAT A/C OPEARTION PROCEDURE
BY
K.SUSHANT
SIKKIM MANIPAL UNIVERSITY(DE)
2008-10
1
This is to certify that Mr. K.Sushant(Roll No. 520830352) has successfully
completed his Summer Project titled “A study on DMAT A/c & DMAT A/c Operation Procedure
from 11th May,2009 to 11th July,2009 in partial
fulfilment of the requirements of the
SMU(MBA)
2008-10 Course.
2
Preface
For any management course, summer training is essential and important part of curriculum of MBA
degree. It is an exposure to corporate environment and help MBA aspirants to get acquainted with
organizational norms, procedures and practices, ethics & culture. It also gives an insight of actual
functioning of the organization. It helps the student to understand and to correlate with theoretical
aspect with practical reality.
It was the great experience to work with Religare Securities Ltd. During my summer project which has
helped me to improve my communication and interpersonal skills and also give me the better
understanding if the subject Demat Account.
3
Acknowledgement
I am grateful to make this report under my summer project for duration of two months in course of
“Master In e-Business Administration”. I have done my project work in “Religare Securities Ltd.” At
‘Aundh-Pune’.
I would like to express my gratitude toward “Religare” company for giving me this opportunity to
work on a project at one of the prestigious and professional organization.
I would like to thank all the people who directly or indirectly helped me during my summer project
and helped me in making this report. Mr. Avinash Kumar Singh, Branch Manager, Religare :- He has
given me valuable information about stock market and depositories. Mr. Prem Prakash Trivedi,
Relationship Manager, Religare :- He helped me in my marketing research and other part of project.
At last, I would thank to all my colleagues in Religare, College who has helped in making this report.
4
Synopsis
According to the curriculum of management study, I was required to do my project for two months in
any company to get practical knowledge what I had learnt theoretically and also to know the corporate
world. My area of interest is stock market, so I had taken my summer internship in Religare Securities
Ltd., which is a stock broking company.
Stock market is a face of any economy. Status of stock market shows the condition economy. Indian
stock market is very hot and preferred destination for the investors. In my point of view, this area is
critical area to study because it deals with finance that is blood of economy.
In stock exchange a lot of trading takes place. Share ownership has to transfer from seller’s demat
account to buyer’s demat account. In this process depository plays an important role. I have selected
“Depository” as my summer project topic. Depository is an organization which facilitates deposit of
securities. I have covered most part of depository i.e. rule, regulation and working of depository. I
have covered about depository participant and different aspect of demat account.
This report is concentrated on demat account and its operation. What are procedure and documents
required to open a demat account. It will give information on depository function and their operation. I
have done research on demat account.
This report give you information about Religare Securities Ltd. Services offered by Religare and their
fees for services and comparison with another broking companies.
5
Contents…………………………………… Page No
Chapter1.INDUSTRY PROFILE ……………………. 8-12
Indian stock broking industry …………………………………. 9
Merge between brokers ………………………………………… 10
Non banking financial institution ……………………………. 10
Non banking financial companies …………………………… 11
Chapter2.COMPANY PROFILE ……………………. 13-24
Vision and Mission …………………………………. 14
Retail spectrum ……………………………………… 15
Wealth Management ………………………………… 19
Protfolio Management……………………………….. 20
Chapter 3.BUSINESS DIVISIONS - RELIGARE ….. 25-36
Mutual Fund ………………………………………...... 26
Life Insurance ………………………………………… 26
Private Equity fund ………………………………….. 27
6
Chapter 4.PROJECT :
PROCEDURE OF DEMAT ACCOUNT ……………….. 37-63
Stock Market Business -what and how? ……………… 40
Risks involved in Stock Markets ……………………… 44
Documents required for Demat Account ………………. 47
Dematerialization ……………………………………… 52
Findings ……………………………………………….. 63
Suggestions ……………………………………………. 63
Chapter 5. CONCLUSION ……………………….. 65
QUESTIONNAIRE………………………………. 66
GLOSSARY ……………………………………… 67
BIBLIOGRAPHY ………………………………….. 6
7
Chapter-1
8
1.INDUSTRY PROFILE
INDIAN STOCK BROKING INDUSTRY
The financial services sector today is characterized by globalization, consolidation and
convergence. In this scenario, technology is a major driving force for achieving competitive advantage
through cost reductions and creations of new business opportunities. Technology is creating more
efficient enterprises, enabling new ways of reaching customers through new delivery channels and
smoothly links once-disparate business practices. Changing international scenario in the stock broking
industry, and its likely effects on the Indian stock broking industry.
Over the last several decades, the decline in the trade barriers resulting from the GATT
agreements, the emergence of large trading blocks such as the European Union (EU), NAFTA,
ASEAN, etc and substantial reduction in transporting costs have significantly altered the international
competitive environment. The securities markets worldwide have gone through a dramatic structural
change, reflecting the above trend. Now, economics are not only affected by domestic changes but
also the changes taking place all over the world either directly or indirectly. Changes in the major
markets around the world, either causes changes in other securities markets directly or gives a cue to
the other markets of the changes to come in the near future.
Indian markets are slowly coming in line with the international markets, due to the efforts of
SEBI and individual exchanges. The starting of rolling settlement, internet trading, increasing circuit
filters, huge increase in volumes are all signs of the Indian market coming in line with the more
developed markets such as those of the US, UK, Japan, Germany and many of the Asian giants.
9
So it is important that Indian brokers also keep in tune with and take signals from the international
markets because that’s the only way they can brace themselves for the future.
Here are some of the more recent and more important changes that may give an indication of
the times to come in the Indian market.
Mergers between brokers: with stock exchanges, banks and firms at it, i.e. merging to form bigger
and better corporations can the stock broking industry cannot be far behind.
Malaysian securities commission, for instance, has ordered the 63-stockbroking firms in
Malaysia to merge into 15 or fewer firms. The commission has given the firms till yearend to merge,
with each merged entity to be formed by at least 4 brokerage firms. Those who fail to do so will not
have their licenses renewed. The merged entities will be called "Universal brokers". The universal
brokers must have a share capital of $250 million and capital adequacy ratio of 1.5 times. Starting
2002 they will be able to open branches through out the country. These steps are designed to make
Malaysia ready for foreign competition. As the name suggests, ‘universal brokers’, are aimed at
making the Malaysian firms truly global. This change has a serious impact on the brokers of any
developing market like India where the brokerage houses are small and fragmented. With international
competition coming in, and infrastructure requirements increasing, mergers could be the only way to
survive and thrive in the future.
Non-Banking Financial Institution:
Non –banking Financial Institutions carry out financing activities but their resources are
not directly obtained from the savers as debt. Instead, these Institutions mobilize the public savings for
rendering other financial services including investment. All such Institutions are financial
intermediaries and when they are known as Non-Banking Financial Intermediaries (NBFC’s) or
Investment Institutions.
10
UNIT TRUST OF INDIA
LIFE INSURANCE CORPORATION (LIC)
GENERAL INSURANCE CORPORATION (GIC)
Apart from these NBFC’s, another part of Indian financial system consists of a large number of
privately owned, decentralized, and relatively small-sized financial intermediaries. Most work in
different, miniscule niches and make the market more broad-based and competitive. While some of
them restrict themselves to fund-based business, many others provide financial services of various
types. The entities of the former type are termed as “Non-Banking Financial Companies (NBFC’s)”.
The latter type are called “Non-Bank financial services Companies (NBFC’s)”.
Post 1996, Reserve Bank Of India has set in place additional regulatory and supervisory
measure that demand more financial discipline and transparency of decision making on the part of
NBFC’s. NBFC’s regulations are being reviewed by the RBI from time to time keeping in view the
emerging situations. Further, one can expect that some areas of co-operation between the Banks and
NBFC”s may emerge in the coming era of E-commerce and Internet banking.
The Task Force on NBFC’s appointed by the Government of India submitted its report in
October, 1998, which recommended rationalization of regulations for, NBFC’s, improvement of the
legislative framework for protecting the interests of depositors and development of NBFC’s on sound
and healthy lines On January 2, 1998 the RBI issued detailed guidelines regarding norms of deposit
acceptance, prudential norms, etc. for various categories of the NBFC’s. These were later reconsidered
and revised guidelines were issued on January 31, 1998; deposit entitlement limits were raised in
certain cases to minimize hardship without endangering the interests of depositors.
According to these guidelines an NBFC will have to obtain the minimum prescribed investment
rating before accepting public deposits. The limit of acceptance of public deposits has been linked to
the NOF of NBFC’s and its rating. While equipment leasing companies having NOF of Rs.25.00 lakh
11
and above and having a credit rating of AAA, AA, A and A- can accept public deposits up to 4 times,
2.5 times, 1.5 times and 0.5 times respectively, of their NOF, a loan company having NOF of Rs.25
lakh and above having credit rating of AAA, AA, A will be allowed to accept deposit from public up
to 2 times, 1 time and 0.5 time, respectively of NOF. Furthermore, NBFC’s with NOF of less than Rs.
25 lakh have been prohibited from accepting public deposits with immediate effect.
Non-bank financial companies (NBFC’s) also known as a non-bank or a non-bank bank, are
financial institutions that provide banking services without meeting the legal definition of a bank, i.e.
one that does not hold a banking license. Operations are, regardless of this, still exercised under bank
regulation. However this depends on the jurisdiction, as in some jurisdictions, such as New Zealand,
any company can do the business of banking, and there no banking licenses issued.
Non-bank institutions frequently acts as suppliers of loans and credit facilities,
however they are typically not allowed to take deposits from the general public and have to find other
means of funding their operations such as issuing debt instruments. In India, most NBFC’s raise
capital through chit Funds.
Activities of NBFC’s:
Mutual Funds
Consumer loan/Credit Card
Insurance
Leasing
Hire purchase
12
Factoring
Credit Rating
Securitization
Venture capital
Stock Broking
Primary Leadership
13
Chapter-2
COMPANY PROFILE:
14
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 anagement,
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 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 has a pan India presence, 1837* locations across 498* cities and towns. It also currently
operates from nine international locations following its acquisition of London's brokerage &
investment firm, Hichens, Harrison & Co. plc. (Now Religare Hichens, Harrison Plc).
The vision is to build Religare as a globally trusted brand in the financial services domain and present
it as the 'Investment Gateway of India'.
Vision & Mission
15
V ision - To build Religare as a globally trusted brand in the financial services domain and present it as
the ‘Investment Gateway of India'.
Mission - Providing complete financial care driven by the core values of diligence and transparency.
Brand Essence - Core brand essence is Diligence and Religare is driven by ethical and dynamic
processes for wealth creation.
Group Sructure
Religare Securities Limited
Equity Broking
Online Investment Portal
Portfolio Management Services
Depository Services
Religare Commodities Limited
Commodity Broking
Religare Capital Markets Limited
Investment Banking
Proposed Institutional Broking
Religare Realty Limited
In house Real Estate Management Company
Religare Hichens Harrison**
Religare Finvest Limited
Lending and Distribution business
Proposed Custodial business
Religare Insurance Broking Limited
Life Insurance
General Insurance
Reinsurance
Religare Arts Initiative Limited
Business of Art
Gallery launched - arts-i
Religare Venture Capital Limited
Private Equity and Investment Manager
16
Corporate Broking
Institutional Broking
Derivatives Sales
Retail Spectrum
EQUITY TRADING - Trading in Equities with Religare truly empowers you for your investment
needs. We ensure you have a superlative trading experience through -
A highly process driven, diligent approach
Powerful Research & Analytics and
One of the "best-in-class" dealing rooms
Further, Religare also has one of the largest retail networks, with its presence in 1837* locations
across 498* cities & towns. This means, you can walk into any of these branches and connect to our
highly skilled and dedicated relationship managers to get the best services.
The Religare Edge
Pan India footprint
Powerful research and analytics supported by a pool of highly skilled research analysts
Ethical business practices
Offline/Online delivery models
Single window for all investments needs through you unique Customer Relationship Number
Commodity Trading- Religare Commodities Limited (RCL), a wholly owned subsidiary of
Religare Enterprises Limited was initiated to spearhead Exchange based Commodity Trading. As a
member of NCDEX, MCX and NMCE, RCL, present in 529 locations provides options in both agri
17
and non-agri commodities for Exchange based commodity trading backed by incisive dedicated
research.
RCL also provides
Dedicated Corporate Desk - The Corporate Desk educates the producers and consumers about
the available opportunities and the benefits of hedging. We already have more than 100
corporate clients registered with us.
Dedicated Arbitrage Desk - The concept of Commodity Spot-Futures Arbitrage is based on the
price discrepancies of a particular commodity in two different markets. One needs to take
delivery of the commodity from one market (Spot/Mandis) and then deliver it to the other
market (Futures market) as and when the prices are sufficiently less in Spot compared to the
Futures platform. Religare Arbitrage Desk has its eye every second on the movement of the
different markets. As soon as the Desk notices any opportunity, we disseminate the same
suitably to capitalize.
Nationwide presence in Mandi Locations - Aims at getting the actual producer (farmer)
directly to the market by taking the market to him and enables him to hedge his risk. Religare's
presence in all the Mandis is helping give practical solutions and platforms to manage price-
risk. Presently, Religare has more than 50 operational Mandi branches (essentially in market
areas) across India and going forward it looks at expanding this presence aggressively.
The Religare Edge
Pan India footprint
Ethical business practices
Nationwide presence including Mandi Locations for in-depth and firsthand information
Offline/Online delivery models
Powerful research and analytics supported by a pool of highly skilled research analysts
18
Single window for all investments needs through you unique Customer Relationship Number.
Online Investment Portal - Religare Online is your single gateway for all your financial needs. Now
you not just trade online in Equities, Commodities, apply for IPOs, invest in Mutual Funds, buy
Insurance, but also get Trade Rewards each time you invest online with our 360 degree portal
www.religareonline.com.
With us you also enjoy a host of other revolutionary features such as Zero percent brokerage, Interest
on cash margin, exposure up to 20 times on your cash margin, etc. on our select product schemes
available through our highly sophisticated and customized platform
R-ACE (Religare Advanced Client Engine).
So get empowered, enrich your experience of investing online and open yourself to a whole new world
of possibilities for Religare Online will become Your World Online, beyond investments!
Insurance Solutions- Religare with one of the largest retail networks in the country offers a complete
range of insurance solutions though its 100% subsidiary company, Religare Insurance Broking
Limited (RIBL). The company holds a composite broker's license operating in the Life, General and
Reinsurance domains.
An insurance portfolio is designed from a choice of more than 3000 life and general insurance
products & plans from more than 30 companies. This one easy window for any brand of insurance,
any kind of cover, offers tailor made insurance solutions with not just the right kind of cover but also
the right of cover.
Offerings include:
Life Insurance
19
o Pure Insurance Solutions
o Investment Linked Plans
o Guaranteed Saving Plans
General Insurance
o Motor Insurance
o Health Insurance Program
o Travel Protection Schemes
o Package Policies for SMEs
Loans- Structurally all business are operated through various subsidiaries held through the holding
company Religare Enterprises Limited. One such wholly owned subsidiary of REL is Religare Finvest
Limited registered with the Reserve Bank of India as a Non-Banking Finance Company (NBFC) and is
a Member of CDSL.
Religare Finvest Limited offers loans for all your needs.
Commercial Vehicle Loans - Transportation is an essential part of any business and its growth, hence
now with Religare Consumer Finance you can avail Commercial Vehicle loans for both new and used
three-wheeler, multi utility vehicle, light and heavy commercial vehicles and high end cranes which
includes LCV's, Tractor Trailers, Buses etc.
Construction Equipment finance - India is growing at a fast pace, to develop it's infrastructure with
the same pace Religare Consumer Finance offers loans for purchase of new and used Construction
Equipments and all earth moving machinery which includes JCB, Excavators, Backhoe/wheel Loaders
etc.
20
Loan Against Property - You may be a Manufacturer, a Wholesaler, a Retailer, or an Exporter /
Importer or a Self Employed Professional; Religare Consumer Finance offers the best and hassle free
way to en-cash the value of your Residential or Commercial property to finance your personal or
business requirements.
The Religare Edge
Tailor made solutions to meet your requirement
Quick & hassle free services
Easy documentation
Competitive rates of Interest
Wealth Management-
Religare operates its wealth management business in partnership with Macquarie
through the joint venture - Religare Macquarie Wealth Management Limited (a 50:50 joint venture).
The JV is a combination of strengths - Macquarie's strong global expertise with Religare's strong local
insights.
The new brand - Religare Macquarie Private Wealth shall strive to manage, grow and preserve the
wealth of discerning Indian HNIs.
Religare Macquarie Private Wealth draws strength and its core essence from the values of
Religare's "Diligence" and Macquarie's "Forward Thinking". 21
Portfolio management services
Religare offers PMS to address varying investment preferences. As a focused service, PMS pays
attention to details, and portfolios are customized to suit the unique requirements of investors.
Religare PMS currently extends six portfolio management schemes, viz Monarque, Panther, Tortoise,
Elephant, Caterpillar and Leo. Each scheme is designed keeping in mind the varying tastes, objectives
and risk tolerance of our investors.
Our Schemes
Monarque
The portfolio aims at the ultra HNI category and is structured to provide higher returns by taking
aggressive positions across sectors and market capitalizations.
Panther
The Panther is suitable for the "High Risk High Return" investor with a strategy to invest across
sectors.
Tortoise
The Tortoise is suitable for the "Medium Risk Medium Return" investor with a strategy to invest in
companies which have consistency in earnings, growth and financial performance.
Elephant
22
The is suitable for the "Low Risk Low Return" investor with a strategy to invest in blue chip
companies, as these companies have steady performance and reduce liquidity risk in the market.
Caterpillar
The Caterpillar is suitable for investors with a high risk appetite.
The Religare Edge
We serve you with a diligent, transparent & process driven approach and ensure that your money gets
the care it deserves.
No experts, only expertise.
No hidden profits.
Daily disclosures.
No charge till you profit*.
* Except fixed administrative charges.
Institutional Broking Services
With the mission to institutionalize and implement a process driven approach, the Institutional
Broking Services at Religare cater to the investment needs of leading corporate houses and
institutions. Backed by incisive research, this division would like to be seen as a one stop investment
gateway and knowledge repository for its clients, servicing their unique and sophisticated needs.
Our Institutional Broking desk is currently dealing with almost all the leading client groups, like
Mutual Funds, FIIs, Banks and Insurance Companies.
The Religare Edge:
23
Highly skilled, dedicated dealing, research and sales teams
Dealing capabilities on the NSE, BSE and in the cash and derivatives segment
In-depth, detailed and insightful coverage across 16 diverse sectors and 153 companies that
extends to
o Economic Research
o Result Expectations
o Derivative Strategies
o IPO Research
o Mutual Fund Research
o Special reports like impact of credit policy, budget, etc.
The sectors covered are FMCG, Hotels, Media, Pharma, Auto, Cement, Steel pipes, Logistics,
Telecom, Construction and much more
Access to international expertise and global practices established in mature financial markets.
Investment Banking
Our Investment Banking business offered through Religare Capital Markets Limited (RCML), a
wholly owned subsidiary of the holding company, Religare Enterprises Limited, deals in merchant
banking, transaction advisory and corporate finance servicing the Corporate, Entrepreneurs and
Investors.
Supported by a dynamic team of professionals with proven track record, our Investment Banking
division is backed by in-depth understanding of the regulatory systems. With our expertise, we create
customized capital structures that are aligned to the customers, business plan and stakeholder
objectives.
Through its diligent processes in Investment Banking, Religare wishes to partner with the midcaps, be
it for Transaction Advisory services, Private Equity placements, Debt Syndication or even entering the
24
Primary Market, ECB, FCCB, GDR/ADR, etc. Religare's Investment Banking is a one-stop shop for
all these services.
At Religare, our constant endeavour is to forge strong relationships and our innovation and
uncompromising ethical standards that have enabled us to develop global distribution & execution
capabilities.
The Religare Edge
Excellent track record in deal closing and capital raising
End-to-End solution delivery capability and in-depth understanding of the regulatory systems.
Global presence with offices operating in nine countries besides India.
Pan India presence in 1550 locations across more than 460 cities & towns.
Powerful research and analytics supported by a pool of highly skilled Research Analysts
Ethical business practices
Part of a large diversified Indian trans-national promoter group.
Insurance Advisory
Religare Insurance Broking Limited (RIBL), a Religare Enterprises Limited venture is one of India's
leading insurance broking firms, with one of the largest retail networks in the country. The company
holds a composite broker's license operating in the Life, General and Reinsurance domains.
RIBL not only provides customized solutions to individual clients but also to some of the leading
corporate houses and institutions across the country.
Our team across the country is driven by the core philosophy of creating and delivering value to its
customers. Our strengths are a team of passionate professionals, a robust IT infrastructure and strong
25
risk analysis teams adept at identifying & analyzing your risks and providing you with tailor made
solutions.
Value Proposition
Presence Pan India foot print
Strong Domain Expertise Rich domain knowledge and Industry experts
Comprehensive Risk Portfolio
Management
Expertise to meet all your Insurance needs
Flexibility Market understanding, proactive and customer centric
Stability Part of a large diversified Indian trans-national group
with presence in over 1550 locations across more than
460 cities & towns in India and globally across 10
countries.
Infrastructure Human, technical, physical presence, CRM
Quality Best business practices and highest quality service
Strategic Partnerships Alliance with global and national players to get you the
best deals
26
Chapter-3
Our Service Offerings
27
Asset Management
Life Insurance
28
Religare in partnership with Aegon, one of the world's largest life insurance and pension groups,
operates its Life Insurance business in India under a Joint venture, Aegon Religare Life Insurance
Company Limited.
This venture is dedicated to build a firm future, both for customers and employees and will continue to
balance a local approach with the power of an expanding global operation.
AEGON Religare Life Insurance launched its pan-India multi-channel operations in July, 2008 with
over 30 branches spread across India. The business philosophy is to help people plan their life better
and also provide high quality advice to customers and offer a superlative overall service experience.
True to its stance of being "Refreshingly Different", powered by innovation, and bringing industry
"firsts", AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice
Response System (IVR) by issuing the customer a T-Pin for authentication. It is also the first company
to include the customer's medical report in the policy kit.
Private Equity Fund
Milestone, one of India's premier independent fund houses and Religare have come together and
through the JV have formed an entity, Milestone Religare Investment Advisors Private Limited. The
JV entity aims at making growth stage private equity investment primarily in Education & Healthcare
sectors in India.
Milestone, one of India’s premier independent fund houses and Religare, one of the leading integrated
financial services groups of India have come together and through the JV have formed an entity,
Milestone Religare Investment Advisors Private Limited. The JV entity aims at making growth stage
29
private equity investment primarily in Education & Healthcare sectors in India, which, according to
erstwhile finance minister Mr. P Chidambaram, are “the twin pillars on which rests the edifice of
social sector reforms."
Both education and healthcare are growth sectors and are price inelastic. They are relatively less
affected by the current market downturn, and to that extent have emerged as fairly recession proof.
With rising population and low level of government expenditure, there exists a large opportunity for
private sector participation.
The new venture brings the right team structure to generate superior returns by complimenting the
strengths of Milestone and Religare. Both institutions are established players in their respective
domains – Private Equity and Financial Services. The team has extensive full life cycle deal
experience of generating attractive returns across various industries and market conditions.
This venture aims at providing operational synergies to the fund as people with the domain expertise
in education and healthcare will assist in deal sourcing, evaluation and investment decisions.
Management Team
Central Leadership Team
Mr. Sunil Godhwani
CEO & Managing Director,
Religare Enterprises Limited
30
Mr. Sunil Godhwani is the driving force behind the company. A man with a vision to create a global
business of excellence, he is the inspiration as he spearheads the company’s management and global
operations; strategizing and directing it through its next phase of growth. He oversees the service
brands of the promoters which include Religare Enterprises (integrated financial services) along with
Religare Technova (IT), Religare Wellness (formerly Fortis Healthworld), Super Religare
Laboratories (formerly SRL Ranbaxy; Path Labs) and Religare Voyages (private air charter and travels
business).
Mr. Godhwani brings to the company strong leadership skills, vigor & a passion for excellence. He
believes in nurturing a culture that is entrepreneurial, result oriented, customer focused and based on
team-work. He has a diverse and wide-ranging experience of over two decades in managing large
scale businesses.
Mr. Godhwani has given strategic direction to Religare’s growth since his joining in 2001. He has
been instrumental in establishing Religare’s vast network and shaping the Company’s strategies in
India and abroad. He is on a constant lookout for taking the Company to new heights by managing
various acquisitions, finding new partners for joint ventures and scouting new avenues for the
business.
Mr. Godhwani is a Director in Religare Enterprises Limited, Religare Securities Limited, Religare
Finvest Limited, Religare Commodities Limited, Religare General Insurance Company Limited,
Religare Technova Limited, Religare Venture Capital Limited, Super Religare Laboratories Limited,
Religare Macquarie Wealth Management Limited, AEGON Religare Life Insurance Company
Limited, Vistaar Religare Capital Advisors Limited, Religare Voyages Limited and Fortis Healthcare
Limited.
31
Mr. Shachindra Nath
Group Chief Operating Officer,
Religare Enterprises Limited
Mr. Shachindra Nath is responsible for managing all key operations of the group. His expertise and in-
depth understanding of the business is the core to all group business and development plans. Mr Nath
is a strong motivator and strategist in all the action plans of the group. His competence in tapping the
right opportunities and creating the perfect blueprint for growing the business is greatly valued and
respected.
Mr Nath received a Bachelor’s degree in Law from the Banaras Hindu University, Varanasi, and a
Post Graduate diploma in Intellectual Property Rights from the Amity Law College, Delhi.
Prior to joining Religare in the year 2000, Mr. Nath held various key positions across industries and
sectors. He has over 15 years of experience in the financial services industry.
32
Mr. Anil Saxena
Group Chief Finance Officer,
Religare Enterprises Limited
Mr Anil Saxena plays a crucial role as the preserver of assets, cost competitiveness and value-adding
growth as he takes the final call in managing prosperity, funding the group’s aggressive growth plans
and keeping the faith of the stakeholders, our biggest asset.
He is responsible for ensuring that investments give stable growth, good corporate affairs and risk
management.
He received a Bachelor’s degree in Commerce from the University of Delhi. He is a member of the
Institute of Chartered Accountants of India as well as the Institute of the Cost and Works Accountants
of India. He has over 16 years of experience in the financial services industry
33
Board Of Directors
Mr. Malvinder Mohan Singh
Chairman (Non Executive)
Malvinder Mohan Singh, Group Chairman, Religare & Fortis Healthcare, is an entrepreneur known
for his aggressive style of management who has set a scorching pace of growth and diversification for
the group companies.
Prior to this, Malvinder was the Chairman, Managing Director and CEO of Ranbaxy Laboratories Ltd.
Malvinder put Ranbaxy in a position of leadership and consummated over 14 inorganic deals across
geographies in less than two years. He unlocked value in Ranbaxy’s business model and focused the
company on future growth drivers by monetizing large on-going patent challenges, investing resources
in high growth emerging markets and forging strategic research alliances with global big pharma.
Malvinder is credited of have having successfully led the company through a cultural transformation
initiating a series of enterprise wide people centric initiatives. Most recently, in a landmark deal,
Malvinder spearheaded the coming together of Ranbaxy and Daiichi Sankyo, a leading Japanese
innovator, to create a pharmaceutical powerhouse. This deal is widely acknowledged as a game
changer by the global pharma industry with other companies now trying to replicate Malvinder’s
success.
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Malvinder is a member of the Young Global Leaders Forum (YGL), an initiative of the World
Economic Forum (WEF). He is also a member of the board of visitors at the Fuqua School of
Business, Duke University and serves on the board of the INSEAD Global India Council. A member
of the Board of Trade, constituted by the Ministry of Commerce & Industry, Government of India,
Malvinder advises the Government on critical Policy issues relating to the country’s Foreign Trade,
with the objective of significantly advancing
India’s exports. Malvinder is also a member of the Board of the Indian Council for Research on
International Economic Relations (ICRIER)
Malvinder earned his MBA from the Fuqua School of Business, Duke University, USA, after
graduating in Economics from the St Stephen’s College, New Delhi, India.
Mr. Shivinder Mohan Singh
Non Executive Director
Mr. Shivinder Mohan Singh joined the REL Board on December 13, 2004.
Mr. Shivinder Mohan Singh is the Managing Director of Fortis Healthcare Limited and Escorts Heart
Institute & Research Centre. He is also one of the principal promoters and Director on the Board of
Super Religare Laboratories Limited.
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Mr. Singh began his career as a Management Trainee with Ranbaxy Laboratories Limited in 1996. He
progressively advanced his professional expertise and through exposure in several assignments at
Fortis Healthcare Limited, commencing with Executive Assistant to the Chairman in 2000 and
working through as Project Leader, Chief Operating Officer, Director – Projects and Joint Managing
Director, before becoming the Group Managing Director in 2006. He is a fellow of Aspens India
Leadership Initiative and on the Board of visitors of Fuqua School of Business, Duke University, U.S.
He held the position of Chief Operating Officer of the Fortis Hospital, Mohali for two years, during
which he led his team in developing a strong work culture. He also led the acquisition of Escorts Heart
Institute & Research Center (EHIRC), the largest acquisition in the history of healthcare in India, to
make Fortis the second largest Healthcare network in India and the biggest cardiac program in the
world.
He is the Chairperson of Health Services Committee of FICCI and Member of the Indo British
Partnership (IBP)Board of FICCI. He is also the Chairman of Delhi State Council of Confederation of
Indian Industry (CII).
An alumnus of Doon School, Mr Singh graduated with a B.A. (Hons.) degree in Mathematics from St.
Stephen’s College, Delhi and holds an MBA degree with specialization in health sector management
from the Fuqua School of Business, Duke University, U.S.A.
Mr. Harpal Singh
Non Executive Director
Mr Harpal Singh joined Board of REL on April 9, 2007.Mr. Singh has had a diverse and wide
ranging experience of over 33 years in the corporate sector and has held senior positions in various
TATA group companies, Hindustan Motors Limited, Mahindra and Mahindra Limited and Shaw
Wallace. Further, Mr. Harpal Singh is and has been on the Board of many premier educational
36
institutions, including Doon School and Shriram School, and an Advisory Board Member of the SRM
University of Chennai. He is also a Member of the Punjab Education Board.
Mr. Harpal Singh has also been a member of several Government Committees and is presently a
member of the Punjab Chief Minister’s Advisory Committee on Industrial Growth and Development
of Relevant Infrastructure. Mr. Harpal Singh is National Chairman of the CII Committee on Public
Health, a member of the CII National Committee on Healthcare and the National Committee on
Primary and Secondary Education. Mr. Singh is a Member of the Resource Persons Group for Delhi
on Healthcare, appointed by the Lt. Governor of Delhi.
Mr. Singh is also a member of the India-UK Round Table and is an invitee speaker in many spheres.
He has chaired the 2nd and 3rd India Health Summit in New Delhi and was invited to speak at the
Royal Institute of Great Britain on Integrating Global Healthcare. As a member of the US – India
Strategic Dialogue in December 2005, he presented a strategic opportunity position for collaboration
between the U.S and Indian healthcare systems.
Mr. Harpal Singh, graduated with a B.A. (Hons.) degree in Economics from St. Stephen’s College,
Delhi and holds a B.S degree in Economics and a Master’s Degree in public affairs from California
State University at Hayward (C.S.C.H), California, U.S.A.
Mr.Deepak Ramchand Sabnani
Independent Director
Mr. Sabnani joined the Board of REL on April 9, 2007.Having received training in business from the
Caritas Adult Education Centre, Hong Kong, Mr. Sabnani has been engaged in the business of export
and import of goods and has more than 30 years of work experience.
Mr.Padam Bahl
Independent Director
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Mr Padam Bahl joined the Board of REL on April 9, 2007.Mr. Padam Bahl has been practicing as a
Chartered Accountant and an Income Tax Advisor since 1979 and has more than 27 years of work
experience. He was the Chairman of the Northern India Regional Council, Institute of Chartered
Accountants of India, Amritsar Branch for the year 1998-99. He was also a member of the Income Tax
Advisory Committee, Amritsar Chapter during the years 2002-03 and 2003-04.
Mr. Bahl holds a Bachelor’s degree in Commerce from the Kurukshetra University and a Bachelor’s
degree in Law from Guru Nanak Dev University, Amritsar. He is a fellow member of the Institute of
Chartered Accountants of India. He has also received a Diploma in Information System Audit from
SSI, Amritsar.
Mr.J.W.Balani
Independent Director
Mr. Balani joined the Board of REL on April 9, 2007.Mr. Balani is engaged in the business of export
and import of white goods. Mr. Balani is currently associated with Atari S. L. and Time Concepts S.L.
He has more than 39 years of work experience. Mr. J. W. Balani has undertaken studies at
Broadhembury College, Somerset, U.K.
Ms.SunitaNaidoo
Independent Director
Ms. Naidoo joined the Board of REL on June 26, 2008.Ms. Naidoo specializes in orthodontics. She
has been practicing in the UK for past 13 years. She has helped set up and run a reputable practice at
Clapham, Bedford 7 years ago.
Mr.R.K.Shetty
Alternate to Mr. J. W. Balani
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Mr. Shetty joined the Board of REL on April 9, 2007 as an alternate director to Mr. J. W. Balani.
Mr. Shetty has received the National Productivity Award in the year 1992 and is presently the
President of Karnataka State Hockey Association, Vice-President of Karnataka Olympic Association
and Chairman of the Development Panel, Indian Hockey Federation and Confederation and has more
than 31 years of work experience.
Holds a Bachelor’s degree in Engineering from the Basaveshwara College, Bagalkot and has
completed an Executive Development program from the Jamunalal Bajaj Institute of Management in
Product Management Control and Financial Management.
Capt.G.P.S.Bhalla
Alternate to Mr. Deepak Sabnani
Capt. Bhalla joined the Board of REL on April 9, 2007 as an alternate director to Mr. Deepak
Ramchand Sabnani.
He is a qualified master mariner certified by the Ministry of Transport, Government of India, New
Delhi. Mr. Bhalla has more than 57 years of work experience. Mr. Bhalla has been successful in
making the W. German Finance Minister accept guarantee by the Government of India instead of a
guarantee by a commercial bank.
39
Chapter-4
40
PROJECT
During my project, I had to study of Demat account and its operation, except this I also learned online
trading. After understanding the operation of Demat account, I had to find out client of Demat account
as many as possible. For searching these clients, I had to make cold call, tale calling, group activities,
conducting meeting etc.
During these activities I find out cold, warm & hot client. After differentiating them I had to convert
them from cold client to warm client and warm client to hot client. I had to target many segments like
software company, real state company and different consultancy.
Objective of SIP(summer internship programme)
To understand the company.
To understand Demat account and its operation.
To learn online trading.
Project work
Understanding the company
During my summer project, I got the opportunity of understanding the company profile, company
business, company products, distribution network, customer of the company, organization chart,
market share, market structure and pricing promotion strategy.
Understanding Demat account and its operation
As in my SIP, I have allotted the work of study of Demat account and its operation, so many lectures
were delivered to us. In which we learned what is Demat account, why it is necessary for online
trading, different schemes of Demat and trading account, what document are require for opening
Demat account.
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Online Trading
As online trading is apart of my SIP, I learned how to trade online which is all about of purchasing and
selling shares of different companies. During these activities, I came to know the market fluctuate,
short selling, intraday trading and delivery trading etc.
Project work
As a project work, I had to study of Demat account so after getting deep knowledge about Demat
account, I have to find those clients who are interested in online trading and want to open their Demat
account in “Religare Securities Company”.
Limitation of SIP
When we used to make a call to our client, we faced the following difficulties.
Non availability of time
Lack of knowledge
Lack of affordability
Lack of knowledge about share market
Language
STOCK MARKET
A stock market (also known as a stock exchange) has two main functions. The first function is to
provide companies with a way of issuing shares to people who want to invest in the company. This can
be illustrated by an example:
Suppose a company has a mining lease over an area with some rich ore deposits. It wants to exploit
these deposits, but it doesn’t have any equipment. To buy the equipment it needs money. One way to
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raise money is through the stock market. The company issues a prospectus, which is a sort of
advertisement informing people about the prospectus of the company and inviting them to invest some
money in it. When the company is ‘floated’ (established) on the stock market, interested investors can
become part-owners of the company by buying ‘shares’. If the company operates at a profit,
shareholders benefit in two ways- through the issue of dividends in the form of cash or more shares,
and through growth in the value of shares. On the other hand, if the company does not operate at a
profit (e.g., if the price of the product dips), the share holders will probably lose the money. The
second function of the stock market, related to the first, is to provide a venue for buying and selling of
shares.
STOCK MARKETS ARE BIG BUSINESS
The buying and selling of shares on the world’s stock markets is big business, which is why we hear
so much about it in the news. In 1994, the annual turnover in shares at the world’s largest stock
market, the New York Stock Exchange (also known as ‘Wall Street’), was $US 2.5 trillion (that is
about Rs. 125 trillion). Even the Australian Stock Exchange (the world’s twelfth largest) will turn
about a billion dollars worth of shares on a quiet day. Shares actually constitute a relatively small
proportion of stock markets turnover, with vast sums of money being channeled through other
financial instruments such as derivatives, futures, options and bonds. It isn’t possible here to describe
what these are, but one example will show the sorts of numbers involved. In one unremarkable month
in 1995, the world financial markets are report to have traded $US 1.3 trillion worth of currency. By
comparison, Australia’s gross domestic product ( which is the estimated total value of all goods and
services produced in the country) for the whole year in 1995 was $US 348 billion- or less than third of
a single month’s currency trading.
Many Indians have investments in shares listed on the Bombay Stock Exchange:
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Some make a living by trading shares on a daily basis, while many others keep the same shares for
years, hoping they will grow in value over time. But how to do these investors know what stocks to
buy, and when? Making good investments decisions depends on obtaining as much information about
the market as possible. Cracking the codes used by the stock market would be good start.
HOW STOCK MARKET WORKS?
In order to understand what stocks are and how stock markets work, we need to dive in to history-
specifically, the history of what has come to be known as the corporation, or sometimes the limited
liability company (LLC). Corporations in one form or another have been around ever since one guy
convinced a few others to pool their resources for mutual benefit.
The first corporate charters were created in Britain as early as the sixteenth century, but these were
generally what we mighty think of today as a public corporation owned by the government, like the
postal service.
Privately owned corporations came in to being gradually during the early 19th century in the United
States, United Kingdom and Western Europe as the governments of those countries started allowing
anyone to create corporations.
In order for a corporation to do business, it needs to get money from somewhere. Typically, one or
more people contribute an initial investment to get the company off the ground. These entrepreneurs
may commit some of their own money, but if they don’t have enough, they will need to persuade other
people, such as venture capital investors or banks, to invest in their business.
They can do this in two ways: by issuing bonds, which are basically a way of selling debt( or taking
out a loan, depending on your perspective), or by issuing stock, that is, shares in the ownership of the
company.
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Long ago stock owners realized that it would be convenient if thTere were a central place they could
go to trade stock with one another, and the public stock exchange was born. Eventually, today’s stock
markets grew out of these public places.
PRIMARY AND SECONDARY MARKETS
There are two ways for investors to get shares from the primary and secondary markets. In primary
markets, securities are bought by way of public issue directly from the company. In secondary market
share are traded between two investors.
1.PRIMARY MARKET
Market for new issues of securities, as distinguished from the secondary market, where previously
issued securities are bought and sold. A market is primary if the proceeds of sales go to the issuer of
the securities sold.
2.SECONDARY MARKET
The market where securities are traded after they are initially offered in the primary market is known
as secondary market. Most trading is done in the secondary market. Generally, most shares have a face
value (i.e. the value as in a balance sheet) of Rs.10 though not always offered to the public at this
price.
Companies can offer a share with a face value of Rs.10 to the public at a higher price. The difference
between the offer price and the face value is called the premium. As per the SEBI guidelines, new
companies can offer shares to the public at a premium provided:
1. The promoter company has a 3 years consistent record of profitable working.
2. The promoter takes up at least 50 percent of the shares in the issue.
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3. All parties applying to the issue should be offered the same instrument at the same
terms, especially regarding the premium.
4. The prospectus should provide justification for the propose premium. On the other
hand, existing companies can make a premium issue without the above restrictions. A
company’s aim is to raise money and simultaneously serve the equity capital. As far
as accounting is concerned, premium is credited to reserves and surplus and it does not
increase the equity. Thus the companies seek to make premium issues. In a buoyant
stock market when good shares trade at very high prices, companies realize that it’s
easy to command a high premium. The biggest difference between them is the length
of time that you hold on to the assets.
An investor is more interested in the long-term appreciation of his assets, counting on that historical
rise in market equity. He’s not generally concerned about short-term fluctuation in prices, because he
will ride them out over the long haul.
An investor relies mostly on fundamental analysis, which is the analytical method of predicting long-
term prospects of particular asset. Most investors adopt a “buy and hold” approach to assets, which
simply means they buy shares of some company and hold on to them for long time. This approach can
be dangerous, even devastating, in an extremely volatile market such as today’s BSE or NSE Indexes
show. What most investors need to remember is this: investing is not about eathering storms with your
“beloved” company- it’s about making money.
Traders, on the other hand, are attempting to profit on just those short-time price fluctuations. The
amount of time an active trader holds on to an asset is very short: in many cases minutes, or sometimes
seconds. If you can catch just two index points on an average day, you can make comfortable living as
a trader.
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Stock market (stock exchange) is a place where buying and selling of securities takes place. Person
buys or sells shares to each other. We also call it ‘Secondary Market’. This market is regulated by
SEBI. All the stock exchange has to get permission of SEBI for trading purpose.
An individual investor cannot participate directly in stock market. He has to buy/sell shares through
an ‘Exchange Member’. This member is known as stock broker i.e. Religare, Karvy and Indiabulls etc.
this broker is registered with SEBI. SEBI gives unique registration and trading number for each
segment.
Broking Company makes agreement with depositories NSDL/CDSL. This broker becomes depository
participant. Securities are kept with this depositories. These works just like banks which accept money
on behalf of a client. This facilities transfer of securities from one account to another. Client who open
a demat with any of the depository gets unique client ID. His all buying and selling are shown in his
demat account.
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RISKS INVOLVED IN THE STOCK MARKET
1. To make money in the stock market, you must assume high risks.
Tips on lower your risks:
Do not put more than 10% of your money in to anyone stock.
Do not own more than 2-3 stocks in any industry.
Buy your stocks overtime, not all at once.
Buy stocks with consistent and predictable earnings growth.
Buy stocks with grow rates greater than the total of inflation and interest rates.
Use stop-loss orders to limit your risk.
2. Buy stocks on the Way Down and Sell on the Way Up.
False: People believe that a falling stock is cheap and a rising stock is cheap and rising stock is too
expensive. But on the way down, you have no idea how much further it may fall. If a stock is rising,
especially if it has broken previous highs, there are no unhappy owners who want to dump it. If the
stock is fairly valued, it should continue to rise.
3. You can hedge inflation with stocks.
When interest rates rise, people start to pull money out of the market and in to bonds, so that
pushes prices down. Plus the cost of business goes up, so corporate earnings go down, along
with the stock prices.
4. Young people can afford to take high risks.
False: The only thing true about this that young people have time on their side if they lose all
their money. But young people have little disposable income to risk losing. If they follow the
tipsabove,theycan make money over many years. Young people have the time to be patient.
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Technical Analysis
It is a method of evaluating future security prices and market directions based on statistical analysis of
variables such as trading volume, price changes etc., to identify patterns. It is a stock market term
meaning- the attempt to look for numerical trends in a random function. The stock market used to be
filled with technical analysts deciding what to buy and sell, until it was decided that their success rate
is no better than chance. Now technical stock analysis is virtually non-existent. There are many
instances of investors successfully trading a security using only their knowledge of the security’s
chart, without even understanding what the company does.
Fundamental Analysis
Fundamental analysis looks at a share’s market price in light of the company’s underlying business
proposition and financial situation. Iot involves making both quantitative and qualitative judgments
about a company. Fundamental analysis can be contrasted with ‘ technical analysis’, which seeks to
make judgments about the performance of a share based solely on its historic price behavior and
without reference to the underlying business, the sector it’s in, or the economy as a whole.
What is a share?
In finance a share is unit of account for various financial instruments including stocks, bonds, mutual
funds, limited partnerships. In simple words, a share or stock is a document solely to stocks is so
common that it almost replaces the word stock itself. It is issued by a company, which entitles, its
holders to be the one of the owners of the company. A share is issued by a company or can be
purchased from the stock market. Bu owning a share you can earn a portion in the firm and by selling
the shares you get capital gain. So, your return is the dividend plus in 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.
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Broker
Every transaction in the stock exchanges is carried out through licensed members called broker. To
take 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 sub-brokers for regular trading in shares and place his order for
purchase and sale through the sub-broker. The sub/broker is a person or a firm that trades on its clients
behalf, you tell them what you want to invest in and they will issue the buy or sell order. Some stock
brokers also give out financial advices that you are charged for.
It wasn’t too long ago and investing was very expensive because you had to go through a full service
broker which would give you advice on what to so and would charge you a hefty for it.
Types of stock broker
Full Service Broker
A full-service broker can provide a bunch of services such as investment research advice, tax planning,
retirement planning etc.
Discount Broker
A discount broker let’s you buy and sell stocks at a low rate but doesn’t provide any investment
advice.
Direct-Access Broker
A direct access broker lets you trade directly with the electronic communication network (ECN’s) so
you can trade faster. Active traders such as day traders tend to use Direct-Access brokers.
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So as you can tell there a few options for stock broker and you really need to pick which one suits you
need.
PORTFOLIO MANAGEMENT SERVICES
Pro-Prime:- Research and Fundamental Analysis
Pro-Tech:- Technical Analysis
- Thrifty Nifty
- Beta Portfolio
Pro- Arbitrage:- Exploit Price Analysis
IPO ON-LINE
You can apply all the forthcoming IPO online hassle free, paperless and time saving work.
Depository Charges
Annual Maintenance Charges Rs. NIL first year, Rs. 180/= p.a.
Exposure
4 TIMES (ON MARGIN MONEY)
Tie-UP
We have tie up with eleven banks for online fund transferring i.e. ICICI BANK, HDFC, IDBI, Yes
Bank, UTI Bank, INDUSIND and Bank Of India for online money transfer.
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Following Documents Required Opening An A/C With Religare Ltd.
Photo ID proof
PAN Card (Mandatory)
Passport
Driving License
Voter’s ID
MAPIN UIN CARD
Residence Proof (Permanent)
Passport (Valid)
Voter’s ID
Driving License (Valid)
Bank Statement (Latest)
Telephone Bill (Latest)
Electricity Bill (Latest)
Ration Card
Flat Maintenance Bill (Latest)
Insurance Policy (Latest)
Leave-License/Purchase Agreement
2 Photographs (Passport Size & Front Face)
Cheque for classic a/c and for speed trade in the favour of Religar.
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NSE
The National Stock Exchange of India Ltd. was created one of the bases of the report of the High
Power Study Group on establishment of New Stock Exchange, which recommended promotion of
national stock exchange by financial institution to provide excess to investor from all across the
country on an equal footing.
In 1992, NSE was incorporated as a tax paying company unlike another stock exchange in the country.
In April 1993, NSE was recognized as a stock exchange under the security contract (Regulation) Act,
1956 and it commenced operation in the wholesale debt market segment in June 1994, the capital
market segment commenced operation in Nov.1994, and operations in derivative segment were
started in June 2000.
In Oct.1995, NSE became the largest stock exchange in the country. NSE launched S&P CNX Nifty in
April 1996.
NSE is one of the largest interactive VSAT based stock exchanges in the world. Presently, it supports
more than 3000 VSATs. The NSE network is the largest private wide area network in the India and the
first extended C-Band VSAT network in the world.
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BSE
The Bombay Stock Exchange Ltd. is the oldest stock exchange in Asia. It is also the biggest stock
exchange in the world in terms of listed co. with 4800 listed companies as of Aug. 2007. It is located
at Dalal Street, Mumbai, India. In Oct.2007, the equity capitalization of the companies listed on the
BSE was US dollar 1.61 trillion, making it the largest stock exchange in South Asia and tenth largest
in the World.
Bombay Stock Exchange was established in 1875. Around 4800 companies are listed on the exchange,
and it has a significant trading volume. The BSE SENSEX (SENSITIVE INDEX), also called the
“BSE 30”, is a widely used market index in India and Asia. Though many other exchanges exist, BSE
and NSE account for most of the trading in shares in India.
Bombay Stock Exchange Limited is popularly known as BSE. It was established “the native share and
stock brokers association” in 1875. It is the first stock exchange in India to obtain permanent
recognition in 1956 from the Govt. of India SC(R) act 1956.
BSE played a vital role in the development of the Indian Capital market and its index, SENSEX is
tracked worldwide. The exchange was nationwide reach with a presence in 417 cities and towns of
India. BSE provides efficient and transparent market for trading in equity, debt and derivative
instruments.
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NSDL
Although India had a vibrant capital market which is more than a century old, the paper based
settlement of trades caused substantial problems like, bad delivery and delayed transfer of title till
recently. The enactment of depositories Act in Aug 1996 paved the way for establishment of NSDL,
the first depository. This depository was promoted by institution of national stature responsible for
economic development of the country, has since established a national infrastructure of international
standards that handles most of the securities and settled in dematerialized form in the Indian capital
market.
Using innovative and flexible technology systems, NSDL works to support the investors and brokers
in the capital market of the country, NSDL aims at ensuring the safety and soundness of Indian Market
places by developing settlement solutions that increase efficiency minimize risk and reduce cost.
Promoters
NSDL is promoted by IDBI-the largest development bank of India, UTI- the largest mutual fund in
India and NSE- the largest stock exchange in India. Some of the prominent banks in the country have
taken a stack in NSDL.
Depository System- Business Partners
NSDL carries out its activity through functionaries called “Business Partner” who include DPs, issuing
companies and their registrars, Share Transfer Agents, Clearing Corporations/Clearing Houses of
Stock Exchanges. NSDL is electronically linked to each of these business partners via a satellite link
through VSATs or through leased landlines. The entire integrated system (including the electronic
links and the software at NSDL and each business partner’s end) is called the “NEST” (national
electronic settlement and transfer system).
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CDSL
CDSL was promoted by Bombay Stock Exchange Limited jointly with leading banks such as SBI,
Bank Of India, Bank Of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank Of India,
Centurion Bank Of Punjab.
CDSL was set up with the objective of providing convenient, dependable and secured depository
services at affordable cost to all the market participants. Some of the important milestones of CDSL
system are:
CDSL received the certificate of commencement of business from SEBI in February, 1999. Honorable
Union Finance Minister, Shri Yashwant Sinha flagged of the operation of CDSL on July 15th 1999.
Settlements of trades in the demat mode through BOI shareholding limited, the clearing house of BSE,
started in July 1999. All leading stock exchanges like National Stock Exchange, Calcutta Stock
Exchange, Delhi Stock Exchange, The Stock Exchange of Ahmedabad etc. have established
connectivity with CDSL.
As the end of Dec.2007, over 5000 issuers have admitted their securities(Equities, Bonds, Debentures,
CP, units of Mutual Funds, and certificates of deposits etc.) in to the CDSL system.
Depository
A depository facilitates holding of securities in the electronic form and enables securities transactions
to be processed by a depository participant (DP), who as an agent of the depository, offers depository
services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stock
brokers etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to
open a demat account through any DP for dematerialization of his holdings and transferring securities.
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The balance in the investors account recorded and maintained with NSDL/CDSL can be obtained
through the DP. The DP is required to provide the investor, at regular intervals, a statement of account
which gives the detail of securities holdings and transactions. The depository system has effectively
eliminated paper based certificates, which were prone to be fake, forged, counterfeit resulting in bad
deliveries.
Dematerialization
‘Dematerialization’ is a process by which a physical certificates are converted in to electronic form.
Securities are kept stored with the depository in the electronic form on the behalf of BO.
Beneficial owner is a person on whose name a demat account is opened with NSDL/CDSL for the
purpose of holding securities in the electronic form and whose name is recorded as such with
NSDL/CDSL through DP.
Company which issue shares to the public is called as issuer. The company is listed on any of stock
exchange. ISIN is given to a security of an issuer at the of admitting such security in the depository
system. This number can be identified internationally. Different securities issued by the same issuer
will have different ISINs.
Services Provided by a DP
Following services can be availed of through a DP:
Dematerialization, i.e. getting physical securities converted in to electronic form.
Rematerialization, i.e. getting electronic securities held in a BO account converted in to physical
form.
To maintain record of holding in the electronic form.
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Settlement of trades by delivering/receiving underlying securities form in BO account.
Settlement of off-market trades i.e. transaction between BOs entered outside the stock exchange.
Providing electronic credit in respect of securities allotted by issuer under IPO or otherwise.
Receiving on behalf of demat account holders non cash corporate benefits, such as, allotment of bonus
and right shares in electronic form or securities resulting upon consolidation, stock split or
merger/amalgamation of companies.
Pledging of dematerialization of securities and facilitating loans against shares.
Freezing of demat account for debit, credit or both.
Benefits of Opening a Demat Account
A demats account has become necessity for all categories of investors for following reasons:
SEBI has made it mandatory for trades in all listed scrip to be settled in demat mode. Although, trades
up to 500 shares can be settled in physical form. Physical settlement virtually not taking place for
apprehension of bad delivery on account of mismatch of signatures, forgery of signature, fake
certificates etc.
It is a safe and convenient way to hold securities compared to holdind in physical form.
No stamp duty is levied on transfer of securities held in demat form.
Instantaneous transfer of securities enhances liquidity.
It eliminates delays, thefts, interceptions and subsequent misuse of certificates.
Change of address, registration of power of attorney-can be effected across companies by one single
instruction tom the DP.
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Each Share is a market lot for the purpose of the transaction, so odd lot is not a problem. Any number
of securities can be transferred /delivered with one delivery order.
Immediate credit in case of any allotment in bonus, right issues and IPOs. SEBI has directed that no
investor should pay account opening charges, besides the statutory charges.
Any number of securities admitted with CDCL can be dematerialized and held in one demat account.
An investor has do to open an account with a DP.
The process of opening a demat account through a DP of CDSL is very simple and easy. It is similar to
the opening of an bank account. Investor has to first choose a DP based on his convenience and the
DP’s charges. Besides submitting an application in the prescribed form, the investor should submit a
photocopy of the PAN card along with the original as proof of identify and address proof such as
passport, ration card, etc to the DP.
Before opening the demat account, the investor will have to execute and agreement on a stamp paper
to be provided by DP, which define the rights and the obligations of both, the investor and the DP. On
opening a demat account, a unique BO ID (Beneficial Owner Identification). Number is allotted,
which should be quoted in all future transactions.
Restriction to have demat account with only in one DP
Under the depository system, there is no restriction on opening a BO account with the same or other
DPs subject to the condition that all account opening requirements are complied with. A investor can
open any number of demat with depositories. Investor is not required to open his demat account with
the same DP as that of his broken. Investor can open account with the DP of his choice and can carry
on his trading activity through a broken of his choice.
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Nomination Facility in Demat Account
An can nominate any person for claims in case of any miss happening. A minor can also be nominated
by an investor only if he is represented by a court appointed/natural guardian. Both resident Indians as
well as NRIs. Similarly, an NRI can nominate a resident Indian or another NRI. Only on e person is
nominated by BO.
It is advisable for all individual BOs to avail of his facility. It gives convenience to related person to
claim fast. If nomination is not done they have to prove their relationship with investor.
Who can nominate?
Individual, having/opening demat accounts, either, singly or jointly with one or two persons can make
nomination. If the shares are held jointly, all the joint holders are required to sign the nomination form.
Who cannot nominate?
Non-individuals including societies, trusts, body corporate, kartas of Hindu Undivided Family, holders
of power of attorney cannot make a nomination.
Who cannot be appointed as nominee?
Trusts, societies, body corporate, kartas of Hindu Undivided Family, holders of power of attorney
cannot make a nominee.
Sole holder of share certificate and add/delete any name as a joint holder, at the time of
dematerializing the share certificate.
It is not possible toad or delete any name while dematerializing share certificate. If the shares are held
in single name are intended to be held in any joint account, they have to be transferred to such names
before they are dematerialized. Alternatively, such shares can he dematerialized first in the demat
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account in the single name and then transferred to demat account in the joint names, or vice-versa,
through an off-market transaction.
Securities of different companies held in one demat account
Different securities, even if of the same issuer, are given a separate ISIN to identify each one of them
and each ISIN is maintained and accounted for separately within an account. Therefore, there is no
question of any mix up. However, BOs are advised to indicate the correct ISIN while issuing any
instruction.
Updated information after each transaction
DP sends to BO, a statement of transactions and balances at least once every month, even where single
transaction has taken place during the month. The statement can be sent more frequently, if so desired
by BO against payment of additional charges.
With the launch of EASI ( Electronic Access to Securities Information), the internet facility to access
CDSL demat account details, a BO can know up to the moment status of the account anywhere (which
is currently updated every 15 minutes), if the BO has registered under EASI through his DP.
Mandatory submission of PAN card details
SEBI has made it mandatory for all existing and new account holder to submit a copy of their PAN
card, along with original for verification.
Loses of statement of holdings
The BO should inform the DP about the loss of the statement of holdings and request for the issue of
the duplicate statement. DP will issue the duplicate statement of holdings. Demat account can be
opened only through a DP registered with CDSL.
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Transposition
Change in the order of names in which certificates are issued in termed as transposition. Sometimes, a
titleholder of securities holds them jointly with one/two/three persons in different order of names.
Since, dematerializations can take place through a demat account only in the identical order names,
such investor would have to open multiple demat accounts as per the order of name. To avoid such a
situation, the investor could consider using the transportation-cum-demat facility.
Transportation-cum-demat
Transportation-cum-demat facility enables an investor to transpose names of the joint holders in
desired order along with the process of dematerialization of certificates. Transportation-cum-
dematerialization facilities dematerialization of certificates held in different order of names through
one demats account, provided the securities to be transposed are held in the same name joint names,
but, in a different order. Illustratively if A owns a security. Which held in the joint names if ABC,
ACB etc.
He can first transpose them in the name of, say, ABC in which order demat account might have been
opened. No new name can be added through transposition process. Similarly, existing names cannot be
deleted.
Procedure for transportation-cum-dematerialization request
The BO should submit his application in Transposition Request Form(TRPF) along with the Demat
Request Form(DRF) and the share/securities certificates to his DP. Separate TRPF is required to filled
for each ISIN. Different combination of names can be listed in separate boxes in section (c) of the
TRPF.
Requirements for availing of the transposition-cum-demat facility
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The application for transposition should contain only those names in which the BO account has been
opened. Signatures of all the holders affixed on TRPF should tally with the DPs records.
Procedure for delivery of securities in demat form in case of sale of securities
The procedure for selling dematerialized securities through any stock exchange is similar to the
procedure for selling physical shares. However the
procedure for delivery of securities is much simpler when compared to the delivery of securities in
physical segment in case of sale of demat security.
Procedure for receipt of securities in demat form in case of purchase of securities
A purchase of securities can give on-time standing instruction to his DP for receiving securities in his
account. This standing instruction can be given at the time of opening of account or later.
Alternatively, a BO may chose to issue separate receipt instruction to his DP every time he makes any
purchase of securities.
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On market and off market transaction
Any transaction for sale and purchase of securities through a broker on the stock exchange to be
settled through clearing corporation/ clearing house i.e. NSCCL, is generally termed on market
transaction.
Off market transaction is one which is settled directly between two BOs with or without using the
broker and where no Clearing Corporation/ Clearing House is involved.
Inter depository transfer
Any transfer of securities between two BOs not having demat accounts with the same depository is
termed as an “inter depository” transfer. Inter depository transfers can be executed through the same
instruction slips used,
for on market and off market transactions. Securities can be bought and sold only through a stock
broker. DP facilitates delivery of securities against a sell transaction or receipt of securities for a buy
transaction.
Transaction charge in respect of transfer of demat securities
Transaction charges for each debit in a BO account is levied by CDSL and collected by DPs. DPs after
adding their markup, if any, fix a compositecharge which is intimated by them to their clients.
Settlement no. is indicated by seven digits, the first four digits represent the year and remaining three
digits represent the settlement no. of the exchange on which the transaction has been executed.
Client level pay-in benefits
Facility to deliver securities to Clearing Corporation/ Clearing House directly from the demat account
of investor is termed as client level pay-in, benefits of client level pay-in are:
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In the present market environment of T+2 pay-in settlement cycle, faster settlement of securities can
be facilitated.
Client level pay-in avoids issuance of multiple instructions i.e. first from client to CM and then from
CM to Clearing Corporation/ Clearing House. Last minute pay-in is possible through the client level
pay-in.
Client level pay-in avoids counter party risks associated with the delivery of securities through an
intermediary. Last minutes credits received in a BO accounts before pay-in time can be used for pay-
in. part pay-in of securities is possible, thereby, reducing losses due to auction.
Debt instruments available for demat at CDSL/NSDL
All types of debt instrument viz. bonds, debentures, CPs, CDs, government securities etc. irrespective
of whether these instruments are listed/unlisted/privately placed can be dematerialized with CDSL, if
they had been admitted with CDSL/NSDL. CDSL/NSDL has also provide the facility of
maintaining warehouse receipts pertaining to commodities in dematerialized form. Debt instruments,
mutual funds units and govt. securities can also be dematerialized in the same demat account where
equities are held.
Commodity warehouse receipts be dematerialized in the same demat account
Investors and brokers are required to open separate demat accounts for holding warehouse receipts.
These accounts can be used only for holding warehouse receipts.
Corporate action
Distribution of dividend or interest payment, issue of rights of bonus securities, consolidations of
holdings or issue of another security on account of merger or demerger, calling money on partly paid
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securities, buy back or open offer, etc. are normally the purpose for which issuer sets up corporate
action to consider benefits or entitlement of holder.
Initial Public Offer (IPO)
When a company issues securities to the public through a prospectus it is popularly known as IPO.
Credit of securities allotted in IPOs can directly effected in the investor demat accounts.
TERMS OF REFRENCE
This report has been prepared as ‘Summer Internship’ report. It is prepared at ending of summer
project as the part of MeBA curriculum. It has been prepared while I am in 3rd Semester of 2nd year of
MeBA and has been prepared by me.
This report has certain limitations :
The time period allotted to us for submission of this report was two and a half months. I have to cover
the report in Indian reference only. I was required to restrict my report with him 60 to 80 pages. The
information I have collected for writing this report is from the internet, some books and our summer
project guide. All the expenses in preparing this report were incurred by me. According to company
policy confidential data was not provided/ shown to me.
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REASONS TO CHOOSE RELIGARE
EXPERIENCE: SSKI has more than eight decades of trust and credibility in the Indian Stock Market.
In the Asia money broker’s poll held recently. SSKI won the India’s best broking house for 2004
award. Ever since it launched Religare as it retail broking division in Feb 00, it has been providing
institutional level research and broking services to individual investors.
TECHNOLOGY: With our online trading A/c you can buy and sell shares in an instant from any PC
with an internet connection. You will get access to our powerful online trading tools that will help you
take complete control over your invest in shares.
ACCESIBILITY: Religare provides advice, education, tools and execution services for investors.
These services are accessible through our centers across the country (over 588 locations in 148 cities)
over the internet ( through the website www. Religare.in) as well as over the voice tool.
KNOWLEDGE: In a business where the right information at the right time can translate in to direct
profits, you get access to a wide range of information on our content rich portal religare. You will also
get a useful set of knowledge based tools that will empower you to take informed decisions.
CUSTOMER SERVICE: Our customer service team will assist you for any help that you need relating
to transactions, billing, demat and other queries. Our customer service can be contracted via a toll free
no. email or live chat on www.religare.in
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ANALYSIS ABOUT RELIGARE
OUR BUSINESS FOCUS; Their main focus is our customer service, customer education, customer
support, customer relations and last but not the least customer acquisitions.
STRONG PRODUCT BASKET: Specific products catering to each customer segment.
TRAINING SESSIONS: Comprehensive day training program and dedicated online platform or
ongoing training requirements.
MULTICHANNEL ACCESS: Serve your customers better via multiple channels.
CUSTOMIZED RETAIL DESIGN: Assistance in making your office premises get a new invigorating
look, synonymous with our corporate identify.
RESEARCH –BASED INVESTMENT ADVICE: Access to all fundamental and technical research at
a real time basis.
TECHNOLOGY INFRASTRUCTURE SUPPORT: Comprehensive and robust technology
infrastructure to runa fully automated back-office.
PIONEERING ONLINE TRADING SYSTEMS: The customers can trade online, get news research
and access to special reports through our web portal http:// www.religare.in
SUPPORT: Dedicated support for various aspects of business including equity sales, risk
management, business development and operations.
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FINDINGS AND SUGGESTIONS
FINDINGS
The Company charges Rs 750 to open a demat Account & Rs 5000 to trade
Brokerage charges are 0.10paise for every 100Rs & 0.50paise for Delivery
Tips provided by Religare are rated as good and excellent by customers
Customers those who trade on a daily basis follows short sell procedure to earn profit
In cases of mergers and acquisition customers buy shares of acquiring company and follow tips
of broker.
Majority of the investors are from private sectors
Many of the customer is facing any problem in trading with Religare ltd
SUGGESTIONS
1) The Religare limited should imply various other means of advertisements to make aware of
the various products and services to investors which are being provided by Religare ltd.
2) The Religare ltd should reduce its transaction cost. Because as compared to others, it seems
to be high.
3) Religare should increase its staff to serve its clients effectively.
4) The account opening process includes a rigid form filling and number of signature with
domcumentation, therefore I suggest Religare to relax the account opening norms so that
they can attract potential customers.
5) Religare should not give up the process of quick service as it is competing with other
broking services.
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Chapter-5
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CONCLUSION
In a service organization like Religare Ltd innovation and customer orientation will be the key
to sustain its position in the market. Customer orientation here refers to every activity, considering
the customers benefit. The new unique services should be rendered to make the “customer
delight”.
Thus a service organization like Religare Ltd will find path towards success only through
innovation, customer’s orientation and value addition in its services.
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QUESTIONNAIRE
Sir/Madam I am K.Sushant student of IIeBM College, Pune. I am pursuing MeBA and doing project in
Religare Securities Ltd. This questionnaire is a part of my summer project activity purpose of this
research is to know the investment behavior of people in stock market.
1. Which kind of investment you are doing or prefer to do?
A) Mutual Fund B) Bank fix deposit C) Share D) Gold E) Any other please
specify……………….
2. By which medium you investment in shares?
IPO- That shares issued by company
Stock Exchange- That shares purchased from other investors
3. Through which broker you have invested?
A) Sharekhan B) Reliance Money C) India Bulls D) Religare E) ICICI Direct F) HDFC Securities
G) Any other please specify…………….
4. How do you trade?
A) On-line B) Off-line C)Dial n trade
5. What is your source of marketing information?
A) Broker B) Friends C) TV Channels D) Newspapers E) Any other please
specify………………..
6. Basis on which analysis you invest in stocks?
A) Fundamental analysis- Study of co, industry and economy.
B) Technical Analysis- Study of market trend.
7. Why do not you invest in shares?
A) Fear of loosing money B) No time C) Not having knowledge D) Not getting information
on time D) It is speculation E) Any other please specify……………….
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8. If religare tell you about trading and give tips, information would like to invest through
Religare Securities Ltd.
A) Yes B) No
YOUR PROFILE
NAME-
OCCUPATION-
CONTACT NO-
ANY REFRENCE-
INCOME:- 2-3 lac
3-5 lac
5- 10 lac
More than 10 lac
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GLOSSARY
BO Beneficial Owner
BSE Bombay Stock Exchange
CDSL Central Depository Services Ltd.
DEMAT Dematerialization
DIS Debit Instruction Slip
DP Depository Participant
DRF Dematerialization Request Form
F & O Future and Option
ISIN International Security Identification no.
NSCCL National Security Clearing Corporation Ltd.
NSDL National Securities Depository Ltd.
NSE National Stock Exchange
NRI Non Resident Indian
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Bibliography
1. www.religare.in
2. www.goejit.com
3. www.cnbc.com
4. www.businessonline.com
5. www.citeman.com
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