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`Project on

A study of service expectation of

the investors from the terminal

operators.

Dissertation in Financial Management

submitted to

RASHTRA SANT TUKADOJI MAHARAJ NAGPUR UNIVERSITY

in partial fulfillment of the MASTER OF BUSINESSADMINISTRATION

SUBMITTED BY

Neha Somani (A-29)

Nilesh Dixit (B-29)

GUIDED BY

Dr. VIVEK PIMPLAPURE

2008-2009

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CERTIFICATE

This is to certify that Neha Somani and Nilesh Dixit have

completed their project work titled A study of service expectations of

investors from terminal operatorsunder my supervision and it is of

sufficiently high standard to warrant its presentation for the award of

Master of Business Administration Degree,RTM University,Nagpur.

This work is the own work of the candidates, complete in all

respects and has not been submitted for the same or any other degree in

this or any other University.

The assistance and the help rendered to the candidate during thecourse of work in the form of basic source material and information has

been duly acknowledged.

(Dr. Sudhir Fulzele) Dr. VIVEK PIMPLAPURE

DIRECTOR SUPERVISOR

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CHAPTER 1

EXECUTIVE SUMMARY

Chapter 1:

EXECUTIVE SUMMARY :

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CHAPTER 2

INTRODUCTION

Chapter 2:

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based trading, compression of settlement cycles,dematerialization and electronic transfer of securities,securities lending and borrowing, professionalisation oftrading members, fine-tuned risk management systems,emergence of clearing corporations to assume counterpartyrisks, market of debt and derivative instruments and

intensive use of information technology.

BSE:

Bombay Stock Exchange is the oldest stock exchange in Asia

with a rich heritage, now spanning three centuries in its 133years of existence. What is now popularly known as BSE was

established as "The Native Share & Stock Brokers'

Association" in 1875.

BSE is the first stock exchange in the country which obtained

permanent recognition (in 1956) from the Government of

India under the Securities Contracts (Regulation) Act 1956.

BSE's pivotal and pre-eminent role in the development of theIndian capital market is widely recognized. It migrated from

the open outcry system to an online screen-based order

driven trading system in 1995. Earlier an Association Of

Persons (AOP), BSE is now a corporatised and demutualised

entity incorporated under the provisions of the Companies

Act, 1956, pursuant to the BSE (Corporatisation and

Demutualisation) Scheme, 2005 notified by the Securities

and Exchange Board of India (SEBI). With demutualisation,

BSE has two of world's best exchanges, Deutsche Brse and

Singapore Exchange, as its strategic partners.

Today, BSE is the world's number 1 exchange in terms of

the number of listed companies and the world's 5th in

transaction numbers. The market capitalization as on

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December 31, 2007 stood at USD 1.79 trillion . An investor

can choose from more than 4,700 listed companies, which

for easy reference, are classified into A, B, S, T and Z groups.

The BSE Index, SENSEX, is India's first stock market index

that enjoys an iconic stature , and is tracked worldwide. It isan index of 30 stocks representing 12 major sectors. The

SENSEX is constructed on a 'free-float' methodology, and is

sensitive to market sentiments and market realities. Apart

from the SENSEX, BSE offers 21 indices, including 12

sectoral indices. BSE has entered into an index cooperation

agreement with Deutsche Brse. This agreement has made

SENSEX and other BSE indices available to investors in

Europe and America. Moreover, Barclays Global Investors(BGI), the global leader in ETFs through its iShares brand,

has created the 'iShares BSE SENSEX India Tracker' which

tracks the SENSEX. The ETF enables investors in Hong Kong

to take an exposure to the Indian equity market.

BSE has tied up with U.S. Futures Exchange (USFE) for U.S.

dollar-denominated futures trading of SENSEX in the U.S.

The tie-up enables eligible U.S. investors to directly

participate in India's equity markets for the first time,

without requiring American Depository Receipt (ADR)

authorization. The first Exchange Traded Fund (ETF) on

SENSEX, called "SPIcE" is listed on BSE. It brings to the

investors a trading tool that can be easily used for the

purposes of investment, trading, hedging and arbitrage.

SPIcE allows small investors to take a long-term view of the

market.

BSE provides an efficient and transparent market for trading

in equity, debt instruments and derivatives. It has a nation-

wide reach with a presence in more than 450 cities and

towns of India. BSE has always been at par with the

international standards. The systems and processes are

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designed to safeguard market integrity and enhance

transparency in operations. BSE is the first exchange in India

and the second in the world to obtain an ISO 9001:2000

certification. It is also the first exchange in the country and

second in the world to receive Information Security

Management System Standard BS 7799-2-2002 certificationfor its BSE On-line Trading System (BOLT).

BSE continues to innovate. In recent times, it has become

the first national level stock exchange to launch its website

in Gujarati and Hindi to reach out to a larger number of

investors. It has successfully launched a reporting platform

for corporate bonds in India christened the ICDM or Indian

Corporate Debt Market and a unique ticker-cum-screen aptlynamed 'BSE Broadcast' which enables information

dissemination to the common man on the street.

Who are the participants?

The stock market is comprised of people. People who run thestock exchanges, people who serve as market makers,people who run stock brokerages and, of course, people whobuy and sell stocks. While every stock market participant isimportant, the following groups are key players in makingthe stock market function properly:

- The companies who issue shares of stock

- The stock exchanges who list the shares of stock

- The stock brokerages who give the buyers and sellersaccess to the exchanges

- The market makers who line up the buyers with the sellers

- The buyers and the sellers who trade the stock

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The securities market essentially has three categories ofparticipants, namely, the issuers of securities, investors insecurities and the intermediaries, such as merchant bankers,brokers etc. While the corporates and government raise

resources from the securities market to meet theirobligations, it is households that invest their savings in thesecurities market.

Many years ago, worldwide, buyers and sellers wereindividual investors, such as wealthy businessmen, with longfamily histories (and emotional ties) to particularcorporations. Over time, markets have become more"institutionalized"; buyers and sellers are largely institutions(e.g., pension funds, insurance companies, mutual funds,index funds, exchange traded funds, hedge funds, investorgroups, banks and various other financial institutions). Therise of the institutional investor has brought with it someimprovements in market operations. Thus, the governmentwas responsible for "fixed" (and exorbitant) fees beingmarkedly reduced for the 'small' investor, but only after thelarge institutions had managed to break the brokers' solidfront on fees.

13
http://en.wikipedia.org/wiki/Pension_fundhttp://en.wikipedia.org/wiki/Insurance_companieshttp://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Index_fundshttp://en.wikipedia.org/wiki/Exchange_traded_fundshttp://en.wikipedia.org/wiki/Hedge_fundshttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Financial_institutionshttp://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Insurance_companieshttp://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Index_fundshttp://en.wikipedia.org/wiki/Exchange_traded_fundshttp://en.wikipedia.org/wiki/Hedge_fundshttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Financial_institutionshttp://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Pension_fund


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CHAPTER 3

RESEARCH METHODOLOGY

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Chapter 3:

RESEARCH METHODOLOGY

Generally research is considered as an endeavor to arrive atthe answer to intellectual and practical problem through theapplication of scientific method to the acknowledgeuniverse. It is movement from know to unknown.

According to Clifford Woody, Research comprises definingand redefining problems, formulating hypothesis orsuggestion, organizing and evaluating data. Makingdeduction and reaching conclusion, and at last carefullytesting the conclusions to determine whether fit the

formulating hypothesis.

APPLIED RESEARCH is conducted when a decision must bemade about a specific real life problem. Applied researchencompasses those studies undertaken to answer questionsabout specific problems or to make decisions about aparticular course of action or policy.

Thus in our research, we are dealing with applied research toget into the reality of the situation.

OBJECTIVE OF THE STUDY:

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To study the service expectation of the investors from

the terminal operators.

To identify the factors that influences the investors

decisions while investing in the share market.

To identify the information sources influencing theinvestors.

To identify the after service expectation of the

investors.

Rationale for study:

In this slow-down period many closed their account .So to

know whether they come to this decision voluntarily or therewas problem with the service provided to them.

RESEARCH PROCESS:

Exploratory research is usually conducted during theinitial stage of research process. The preliminary activities

undertaken to define the problem into a researchable oneneed not be formal or precise. The purpose of the

exploratory research process is to progressively narrow

down the scope of the research topic and to transform

discovered problems into defined ones, incorporating

specific research objectives.By analysing any existing

studies on the subject, by talking to with knowledgeable

individuals, and by informally investigating the situation , the

researchers can progressively sharpen the concepts. Aftersuch exploration the researchers should know what the data

to collect during the formal project will be conducted.

In our research we have made use of exploratory research to

explore the problem so to come out with better solution.

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RESEARCH DESIGN

A survey is a research technique in which information is

gathered from a sample of people using a questionnaire. The

task of writing a list of questions and designing the exact

format of the printed or written questionnaire is an essentialaspect of the development of a survey research design.

In this project we made use of questionnaire method to

support our queries.

Sources of Data Collection:

We filled the questionnaire from major four broking housesin Nagpur. The investors in these broking houses formed our

major source for data collection.

The broking house from which we collected the data are:

Motilal Oswal Securities Ltd.

Religare Securities

Anand Rathi

Karvy

Sample Size:

We surveyed 50 respondents for our study.

Limitation of the study:

This study is restricted to Nagpur city only.

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CHAPTER 4

PROFILE OF FINANCIAL

INSTITUTIONS

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Chapter 4:

Profile of Financial Institutions

Motilal Oswal Securities Ltd.Motilal Oswal Securities Ltd. was founded in 1987 as a small

sub-broking unit, with just two people running the show.

Focus on customer-first-attitude, ethical and transparent

business practices, respect for professionalism, research-

based value investing and implementation of cutting-edge

technology has enabled us to blossom into an almost 2000member team.

Today they are a well diversified financial services firm

offering a range of financial products and services such as

Wealth Management

Broking & Distribution

Commodity Broking

Portfolio Management Services

Institutional Equities

Private Equity

Investment Banking Services and

Principal Strategies

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It have a diversified client base that includes retail customers(including High Net worth Individuals), mutual funds, foreigninstitutional investors, financial institutions and corporateclients. They are headquartered in Mumbai and as of December31st, 2008, had a network spread over 512 cities and townscomprising 1,428 Business Locations operated by our Business

Partners and us. As at December 31st, 2008, they had 5,27,368registered customers.

In 2006, the Company placed 9.48% of its equity with twoleading private equity investors based out of the US NewVernon Private Equity Limited and Bessemer Venture Partners.

The company got listed on BSE and NSE on September 9, 2007.The issue which was priced at Rs.825 per share (face value

Rs.5 per share) got a overwhelming response and wassubscribed 27.18 times in turbulent market conditions. Theissue gave a return of 21% on the date of listing.

As of end of financial year 2008, the group networth was Rs.7bn and market capitalization as of March 31, 2008 was Rs.19bn.

For year ended March 2008, the company showed a strong topline growth of 91% to Rs.7 bn as compared to Rs.3.68 bn, lastyear. New businesses like investment banking, assetmanagement and fund based activities have contributed to thisgrowth.

Motilal Oswal Financial Services has received many accoladesin the year gone by. Some of them are:

Rated Best Overall Country Research for a LocalBrokerage in the 2007 AsiaMoney Brokers poll

Rated Indias top broking house in terms of total numberof trading terminals by the Dun & Bradstreet survey

Rated Outstanding Commodity Broking House-2007 byGloboil India

Ranked second best for Customer Responsiveness in theFinancial Sector at the Avaya GlobalConnect CustomerResponsiveness awards.

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http://openpopupwindow%28%27/india_map.html','NewWin',0,0,'yes','yes',592,700)http://www.newvernonassociates.com/http://www.newvernonassociates.com/http://www.bvp.com/http://openpopupwindow%28%27/india_map.html','NewWin',0,0,'yes','yes',592,700)http://www.newvernonassociates.com/http://www.newvernonassociates.com/http://www.bvp.com/


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Religare

Religare Securities Limited (RSL), a 100% subsidiary ofReligare Enterprises Limited is a leading equity andsecurities firm in India. The company currently handlessizeable volumes traded on NSE and in the realm of onlinetrading and investments; it currently holds a reasonableshare of the market. The major activities and offerings of thecompany today are Equity Broking, Depository ParticipantServices, Portfolio Management Services, InternationalAdvisory Fund Management Services, Institutional Brokingand Research Services. To broaden the gamut of servicesoffered to its investors, the company offers an onlineinvestment portal armed with a host of revolutionaryfeatures.

RSL is a member of the National Stock Exchange of India,Bombay Stock Exchange of India, Depository Participant withNational Securities Depository Limited and CentralDepository Services (I) Limited, and is a SEBI approvedPortfolio Manager.

Religare has been constantly innovating in terms of productand services and to offer such incisive services to specific usersegments it has also started the NRI, FII, HNI and CorporateServicing groups. These groups take all the portfolioinvestment decisions depending upon a clients risk / returnparameter.

Religare has a very credible Research and Analysis division,which not only caters to the need of our Institutional clientele,

but also gives their valuable inputs to investment dealers.

AnandRathi

AnandRathi is a leading full service securities firm providing theentire gamut of financial services. The firm, founded in 1994 by

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Mr. Anand Rathi, today has a pan India presence as well as aninternational presence through offices in Dubai and Bangkok.AR provides a breadth of financial and advisory servicesincluding wealth management, investment banking, corporateadvisory, brokerage & distribution of equities, commodities,mutual funds and insurance, structured products - all of which

are supported by powerful research teams.

The firm's philosophy is entirely client centric, with a clearfocus on providing long term value addition to clients, whilemaintaining the highest standards of excellence, ethics andprofessionalism. The entire firm activities are divided acrossdistinct client groups: Individuals, Private Clients, Corporatesand Institutions and was recently ranked by Asia Money 2006poll amongst South Asia's top 5 wealth managers for the ultra-

rich.

In year 2007 Citigroup Venture Capital International joined thegroup as a financial partner.

In line with its client-centric philosophy, the firm offers to itsclients the entire spectrum of financial services ranging frombrokerage services in equities and commodities, distribution ofmutual funds, IPOs and insurance products, real estate,investment banking, merger and acquisitions, corporate

finance and corporate advisory.

Clients deal with a relationship manager who leverages andbrings together the product specialists from across the firm tocreate an optimum solution to the client needs.

AR brings together a highly professional core managementteam that comprises of individuals with extensive business aswell as industry experience.

There research expertise is at the core of the value propositionthat we offer to our clients. Research teams across the firmcontinuously track various markets and products. The aim ishowever common - to go far deeper than others, to deliverincisive insights and ideas and be accountable for results.

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Karvy

The Karvy group was formed in 1983 at Hyderabad, India.Karvy ranks among the top player in almost all the fields itoperates. Karvy Computershare Limited is Indias largest

Registrar and Transfer Agent with a client base of nearly 500blue chip corporates, managing over 2 crore accounts. KarvyStock Brokers Limited, member of National Stock Exchange ofIndia and the Bombay Stock Exchange, ranks among the top 5stock brokers in India. With over 6,00,000 active accounts, itranks among the top 5 Depositary Participant in India,registered with NSDL and CDSL. Karvy Comtrade, Member ofNCDEX and MCX ranks among the top 3 commodity brokers inthe country. Karvy Insurance Brokers is registered as a Brokerwith IRDA and ranks among the top 5 insurance agent in the

country. Registered with AMFI as a corporate Agent, Karvy isalso among the top Mutual Fund mobilizer with over Rs. 5,000crores under management. Karvy Realty Services, whichstarted in 2006, has quickly established itself as a broker whoadds value, in the realty sector. Karvy Global offers niche offshoring services to clients in the US.

Karvy has 575 offices over 375 locations across India andoverseas at Dubai and New York. Over 9,000 highly qualifiedpeople staff Karvy.

Karvy was started by a group of five chartered accountants in1979. The partners decided to offer, other than the auditservices, value added services like corporate advisory servicesto their clients. The first firm in the group, Karvy ConsultantsLimited was incorporated on 23rd July, 1983. In a very shortperiod, it became the largest Registrar and Transfer Agent inIndia. This business was spun off to form a separate jointventure with Computershare of Australia, in 2005. Karvys forayinto stock broking began with marketing IPOs, in 1993. Within afew years, Karvy began topping the IPO procurement leaguetables and it has consistently maintained its position amongthe top 5. Karvy was among the first few members of NationalStock Exchange, in 1994 and became a member of The Stock

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Exchange, Mumbai in 2001. Dematerialization of sharesgathered pace in mid-90s and Karvy was in the forefronteducating investors on the advantages of dematerializing theirshares. Today Karvy is among the top 5 Depositary Participantin India.

While the registry business is a 50:50 Joint Venture withComputershare of Australia, we have equity participation byICICI Ventures Limited and Barings Asia Limited, in Karvy StockBroking Limited. For a snapshot of our organization structure,please click here.

Karvy has always believed in adding value to services it offersto clients. A top-notch research team based in Mumbai andHyderabad supports its employees to advise clients on their

investment needs. With the information overload today,Karvys team of analysts help investors make the right calls, beit equities, mf, insurance. On a typical working day Karvy:

Has more than 25,000 investors visiting our 575 offices

Publishes / broadcasts at least 50 buy / sell calls

Attends to 10,000+ telephone calls

Mails 25,000 envelopes, containing Annual Reports,dividend cheques / advises, allotment / refund advises

Executes 150,000+ trades on NSE / BSE

Executes 50,000 debit / credit in the depositary accounts

Advises 3,000+ clients on the investments in mutualfunds

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CHAPTER 5

DATA COLLECTION & ANALYSIS

Chapter 5:

Data Collection & Analysis

Data Collection:

ATTRIBUTE RESPONSE RANKING

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No of accounts 1

2

3

40

7

3

Account anywhere

else

Yes

No

10

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Proper response

over telephone

provided

Yes

No

36

14

Telephone

conversation

satisfactory

Yes

No

33

17

Tips follow Firms

News Channel

Your own

Any other

17

19

36

07

Fundamental

/technical analysis

provided

Yes

No

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Are tips relevant Yes

No

34

16

Satisfied with

operators

software system

Yes

No

41

09

Portfolio

management

Yourself

Broker

32

24

Satisfied with

portfolio

management

Yes

No

43

07

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How is service of

delivery of

statements

Satisfactory

Unsatisfactory

42

08

Satisfied with

time of returning

cheque

Yes

No

38

12

Brokerage

charged is

Excessive

Nominal

Equivalent with

market

07

22

21

Atmosphere of

organisation

Very good

Good

Satisfactory

06

24

20

Rating of service 5

4

3

2

1

-

17

24

07

02

Data Analysis:

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proper telephone res ponse provid

72%

28%

yes

no

28

no of accoun

80%

14%

6%

1

2

3


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telephone response satiafactory

66%

34%

yes

no

whose tips do u follow?

22%

24%45%

9%

firm news channel your own any other

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fundame ntal/technical analysis provided

52%48%

yes

no

are t ips re leva

68%

32%

yes

no

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Rating of service

34%

48%

14%

4%

1

2

3

4

32

brokerage charged is

14%

44%

42%

excessive

nominal

equivalent with

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atmosphere of organisation

12%

48%

40%very good

good

satisfactory

Most of the people had only one account .They also doesnt

have their account anywhere else also. Thus here comes the

role of these terminal operators to provide them with properservices and retain their customer.

It is been found that the investors receive proper response

during telephonic conversation and also its satisfactory. This

makes investors to deal in the stocks very comfortably without

any hindrances.

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These brokerage houses are well established in there

operations and make optimal use of technology. With the best

available software in the market, they facilitate the investors

with best of the technology available. This helps the brokerage

houses to handle the back office work very efficiently. These all

entails in the proper delivery of statements to the investors,proper return of the cheque in due time.

It helps the broker in cutting the cost. Thus broker charges

nominal from their clients. This makes the investors very

comfortable with the broking houses.

The tips that are provided by these firms are very beneficial to

the investors. These are relevant with the market scenario also

but the investors rely on their own analysis about the market.Thus they are in return satisfied with their own portfolio

management.

In general it had been found that the atmosphere is very

congenial services provided by these terminal operators are

satisfactory.

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CHAPTER 6

CONCLUSION

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Chapter 6:

CONCLUSION

It was found that the service provided by the terminal

operators was in best of the favor of the investors.

The investors follow their own analysis while dealing in the

market.

The after service provided is timely and efficient.

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Chapter 7

SUGGESTIONS

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Chapter 7:

SUGGESTIONS

Brokers have a great scope to provide their clients with

portfolio analysis. This will attract even more clients to

them.

The service provided by them does not prove beneficial

then there is great scope for the investors to switch

their account.

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CHAPTER 8:

BIBILIOGRAPHY

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CHAPTER 8:

BIBLIOGRAPHY

Books:

1) Zikmund, Business Research Methods, Thomson Learning Books.

INTERNET:

2) www.google.com

3) www.wekipedia.com

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CHAPTER 9:

ANNEXURE

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QUESTIONNAIRE FOR THE PROJECT

Dr. AMBEDKAR INSTITUTE OF MANAGEMENT STUDIES AND

RESEARCH.

RESPECTED SIR/MADAM

As part of educational requirement in MBA Semester II , we

have designed

this questionnaire for collecting data to support our research.

We would be very thankful if you give your few minutes to help us complete

this.

All the collected information will prove to be very beneficial for our

academic study.

Thanking you in advance for sparing your valuable time

Neha Somani & Nilesh Dixit

----------------------------------------------------------------------------------------------------

------------

1} Name :- ..................................................

2} Age :- ..................................................

3} Qualification :- ...............................................

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4} Occupation :- ...............................................

5} Gender :- ..........................................

6} Account since :- ...............................................................

7} How many account :- ..............................................................

8} Have you got account anywhere also?

YES NO

9} Is proper response over telephone provided?

YES NO

10} I s telephonic conversation satisfactory?

YES NO

11} Whose tips do you follow?

The Firm's News channel your own analysis

Any other

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12} Are you provided with fundamental or technical analysis?

YES NO

13} Do you find tips relevant?

YES NO

14} Are you satisfied with the operators software system?

YES NO

15} Who manages your portfolio?

YOURSELF BROKER

16} Are you satisfied with your portfolio management?

YES NO

17} How do you find the service of delivery of statements?

Satisfactory Unsatisfactory

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18} Are you satisfied with the time of returning cheque?

YES NO

19} Brokerage charged is

Excessive Nominal Equivalent with market

20} How do you find the atmosphere of the organisation?

Very good Good Satisfactory

21} Overall rating of the service provided to you

5 4 3 2 1

22} What do you expect more from the terminal as a part of

your service

....................................................................................................................

......................................................................................................................

.....

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...........................................................................................................................

.

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