FINAL PROJECT(vishesh)

8/7/2019 FINAL PROJECT(vishesh)

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1

SUMMER TRAINING REPORT

ON

A STUDY OF ONLINE TRADING ANDSTOCK BROKING

AT

SHAREKHAN PVT LTD

(412, AGARWAL CYBER PLAZA, NETAJI SUBHASH PALACE, PITAMPURA,NEW DELHI

110034)

Submitted in the partial fulfillment for the award of thedegree of

BACHELOR OF BUSINESS ADMINISTRATION

SESSION: 2010 ± 2011

Under the Supervision

Guidance of

Vishesh Gupta

Dr. Ajay Kumar Rathore th

Semester(M)

Enroll No.0171701708

TECNIA INSTITUTE OF ADVANCED STUDIESApproved by AICTE, Ministry of HRD, Govt. of India Affiliated To Guru Gobind Singh Indraprastha University, Delhi

INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085E-Mail: [email protected], Website: www.tecnia.in

Fax No: 27555120, Tel: 27555121-24



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TECNIA INSTITUTE OF ADVANCEDSTUDIES

(Approved by AICTE, Ministry of HRD, Govt. of India Affiliated To Guru Gobind Singh Indraprastha University, Delhi)

INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085E-Mail : director.tecniaindia@ gmail.com, Website: www.tecniaindia.org

Fax No: 27555120, Tel: 27555121-24

DECLARATION I , Vishesh Gupta , Enrolment No 0171701708 , Class BBA Semester 5th of the

Tecnia Institute of Advanced Studies, Delhi hereby declare that the Summer Training

Project Report entitled A STUDY OF ONLINE TRADING AND STOCK BROKING isan original work and the same has not been submitted to any other Institute for the

award of any other degree .

Signature of Student

CountersignedSignature of faculty Guide



3

T C I I TIT T V C T IAppr

v ¡ d by AICTE, Minis ¢ ry of HR £ , Gov ¢ ¤ of India Affiliated To G ¥ r ¥ Gobind Sing ¦ Indraprastha Universit y, Delhi

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§ ( $ 27555120

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& # $ 27555121-24

Ref. No. Dated

CE T F CATE

This is to certify that the project work entitled ³A ST Y OF ONLINE T ADING AND

STOCK B OKING´ Has been done by Vishesh Gupta In the partial fulfillment of the requirements for the award of the degree of B l of B i Admi i ion from

TECNIA INSTITUTE OF ADVANCED STUDIES, affiliated to GURU GOBIND SINGH

INDRAPRASTHA UNIVERSITY is a record of bonafide work carried out by him under my

guidance and supervision. The result embodied in this has not been submitted to any other

university or institute for the award of any degree.

Internal Guide: |

Dr Ajay Kumar Rathore

(Director)

Tecnia Institute of Advanced Studies





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CONTENTSS O PAR IC LAR S PAG O

1 X C IVE SUMMARY 6

2 OBJEC IVE 7

3 R EVIEW OF LITERATUR E 8-18

4 PROFILE OF THE COMPA Y 19-29

5 COMPETITIVE A ALYSIS 30-34

6 SWOT A ALYSIS 35-37

7 DATA A ALYSIS 38-53

8 FINANCIAL ANALYSIS 54-62

9 R ECOMMENDATIONS AND CONCLUSIONS 62-64

10 PER SONAL EXPER IENCE 65

11 BIBLIOGRAPHY 66

12 ANNEXUR E 67-72



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EXECUTIVE SUMMAR

Conceptuall the mechanism of stock market is ery simple. People who are exposed to the

same r isk come together and agree that if anyone of the person suffers a loss the other will

share the loss and make good to the person who lost.

The initial par t of the project focuses on the job and responsibilities I was allotted as a summer trainee. It also makes the readers aware about the techni ues and methodology used

to br ing this repor t ali e. It also descr ibe about the objecti e of this study.

It also enlightens the readers about Sharekhan Limited¶s strategies to acquire new customers.

Fur ther the project tells us about the prof ile of the company (Sharekhan Ltd.). It provides

knowledge to the readers regarding the company¶s history, mission, vision, customer base

and the reasons to be associated with the company.The next par t of the project throws light

upon my f indings and analysis about the company and the suggestions for the company for

better performance.



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OBJECTIVE

The main objectives of my SIP in Sharekhan Ltd can be categor ized into the following

points:

y To project Sharekhan as an author ity in the retail stock trading business.

y To study the var ious products of the company.

y To know how to open and close the calls.

y To learn the online terminal used for trading.

y To know the var ious policies of the company.

y To know how to handle var ious types of customers.

y To know var ious reasons for market f luctuations.

y To learn to manage time.

y To gain practical knowledge of the market.

y To have a practical exper ience of work ing in a reputed organization.

y To understand the impact of online trading and its awareness among people.



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REVIEW OLITERATURE



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EVOLUTION O TRADING IN INDIA

Indian Stock Markets are one of the oldest in Asia. Its history dates back to near ly 200 years ago. The ear liest records of secur ity dealings in India are meagre and obscure. The East India

Company was the dominant institution in those days and business in its loan secur ities used

to be transacted towards the close of the eighteenth century.By 1830's business on corporate

stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading listwas broader in 1839, there were only half a dozen brokers recognized by banks and

merchants dur ing 1840 and 1850.The 1850's witnessed a rapid development of commercial

enterpr ise and brokerage business attracted many men into the f ield and by 1860 the number

of brokers increased into 60.In 1860-61 the Amer ican Civil War broke out and cotton supply

from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The

number of brokers increased to about 200 to 250. However, at the end of the Amer ican Civil

War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had

touched R s 2850 could only be sold at R s. 87).

At the end of the Amer ican Civil War, the brokers who thr ived out of Civil War in 1874,

found a place in a street (now appropr iately called as Dalal Street) where they would

conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as " The

Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and itwas inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.

Other leading cities in stock market operations

Ahmedabad gained impor tance next to Bombay with respect to cotton textile industry. Af ter

1880, many mills or iginated from Ahmedabad and rapidly forged ahead. As new mills were

f loated, the need for a Stock Exchange at Ahmedabad was realised and in 1894 the brokers

formed "The Ahmedabad Share and Stock Brokers' Association".What the cotton textile

industry was to Bombay and Ahmedabad, the jute industry was to Calcutta. Also tea and coalindustr ies were the other major industr ial groups in Calcutta. Af ter the Share Mania in 1861-

65, in the 1870's there was a sharp boom in jute shares, which was followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between 1904 and 1908. On June 1908,

some leading brokers formed "The Calcutta Stock Exchange Association".In the beginning of the twentieth century, the industr ial revolution was on the way in India with the Swadeshi

Movement; and with the inauguration of the Tata Iron and Steel Company Limited in 1907, an impor tant stage in industr ial advancement under Indian enterpr ise was reached.Indian

cotton and jute textiles, steel, sugar, paper and f lour mills and all companies generally

enjoyed phenomenal prosper ity, due to the First Wor ld War.In 1920, the then demure city of

Madras had the maiden thr ill of a stock exchange functioning in its midst, under the name

and style of "The Madras Stock Exchange" with 100 members. However, when boom faded,

the number of members stood reduced from 100 to 3, by 1923, and so it went out of existence.In 1935, the stock market activity improved, especially in South India where there

was a rapid increase in the number of textile mills and many plantation companies were

f loated. In 1937, a stock exchange was once again organized in Madras - Madras Stock

Exchange Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock

Exchange Limited).



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Indian Stock Exchanges - An Umbrella Growth

The Second Wor ld War broke out in 1939. It gave a sharp boom which was followed by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a

supply base. On account of the restr ictive controls on cotton, bullion, seeds and other

commodities, those dealing in them found in the stock market as the only outlet for their

activities. They were anxious to join the trade and their number was swelled by numerous others. Many new associations were constituted for the purpose and Stock Exchanges in all

par ts of the country were f loated. The Uttar Pradesh Stock Exchange Limited (1940), Nagpur

Stock Exchange Limited (1940) and Hyderabad Stock Exchange Limited (1944) were

incorporated.In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association

Limited and the Delhi Stocks and Shares Exchange Limited - were f loated and later in June

1947, amalgamated into the Delhi Stock Exchnage Association Limited.

History of the Indian Stock Market - The Origin One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old

history.

18th

Century

East India Company was the dominant institution and by end of the century,

busuness in its loan secur ities gained full momentum

1830's Business on corporate stocks and shares in Bank and Cotton presses star ted in

Bombay. Trading list by the end of 1839 got broader

1840's R ecognition from banks and merchants to about half a dozen brokers

1850's R apid development of commercial enterpr ise saw brokerage business

attracting more people into the business

1860's The number of brokers increased to 60

1860-61 The Amer ican Civil War broke out which caused a stoppage of cotton supply from United States of Amer ica; mark ing the beginning of the "Share Mania"

in India

1862-63

The number of brokers increased to about 200 to 250

1865 A disastrous slump began at the end of the Amer ican Civil War (as an

example, Bank of Bombay Share which had touched R s. 2850 could only be

sold at R s. 87)

Pre-Independence Scenario - Establishment of Different Stock Exchanges

1874 With the rapidly developing share trading business, brokers used to gather at a

street (now well known as "Dalal Street") for the purpose of transacting

business.

1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay

1880's Development of cotton mills industry and set up of many others



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1894

Establishment of "The Ahmedabad Share and Stock Brokers' Association"

1880 -

90's

Sharp increase in share pr ices of jute industr ies in 1870's was followed by a

boom in tea stocks and coal

1908 "The Calcutta Stock Exchange Association" was formed

1920 Madras witnessed boom and business at "The Madras Stock Exchange" was

transacted with 100 brokers.

1923 When recession followed, number of brokers came down to 3 and the

Exchange was closed down

1934 Establishment of the Lahore Stock Exchange

1936 Merger of the Lahoe Stock Exchange with the Punjab Stock Exchange

1937 R e-organisation and set up of the Madras Stock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India with

establishment of new textile mills and plantation companies

1940 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established

1944 Establishment of "The Hyderabad Stock Exchange Limited"

1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks

and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited"

Post-independence Scenario

Most of the exchanges suffered almost a total eclipse dur ing depression. Lahore Exchange

was closed dur ing par tition of the country and later migrated to Delhi and merged with Delhi

Stock Exchange.Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963.Most of the other exchanges languished till 1957 when they applied to the Central

Government for recognition under the Secur ities Contracts (R egulation) Act, 1956. Only

Bombay, Calcutta, Madras, Ahmedabad, Delhi, Hyderabad and Indore, the well established

exchanges, were recognized under the Act. Some of the members of the other Associations

were required to be admitted by the recognized stock exchanges on a concessional basis, but

acting on the pr inciple of unitary control, all these pseudo stock exchanges were refused

recognition by the Government of India and they thereupon ceased to function.

Thus, dur ing ear ly sixties there were eight recognized stock exchanges in India (mentioned

above). The number vir tually remained unchanged, for near ly two decades. Dur ing eighties,

however, many stock exchanges were established: Cochin Stock Exchange (1980), Uttar

Pradesh Stock Exchange Association Limited (at K anpur, 1982), and Pune Stock Exchange Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock

Exchange Limited (1984), K anara Stock Exchange Limited (at Mangalore, 1985), Magadh

Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989),

Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra K utch Stock Exchange

Limited (at R ajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990) and recently

established exchanges - Coimbatore and Meerut. Thus, at present, there are totally twenty one recognized stock exchanges in India excluding the Over The Counter Exchange of India



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Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL). The Table given below por trays the overall growth pattern of Indian stock markets since independence.

It is quite evident from the Table that Indian stock markets have not only grown just in number of exchanges, but also in number of listed companies and in capital of listed

companies. The remarkable growth af ter 1985 can be clear ly seen from the Table, and this

was due to the favour ing government policies towards secur ity market industry.

Sl.No. As on 31st

December

1946 1961 1971 1975 1980 1985 1991 1995

1 No. of

Stock Exchanges

7 7 8 8 9 14 20 22

2 No. of

Listed Cos.

1125 1203 1599 1552 2265 4344 6229 8593

3 No. of Stock Issues of

Listed Cos.

1506 2111 2838 3230 3697 6174 8967 11784

4 Capital of Listed

Cos. (Cr. R s.)

270 753 1812 2614 3973 9723 32041 59583

5

Market value of

Capital of Listed

Cos. (Cr. R s.)

971 1292 2675 3273 6750 25302 110279 478121

6

Capital per

Listed Cos. (4/2)

(Lakh R s.)

24 63 113 168 175 224 514 693

7

Market Value of Capital per Listed

Cos. (Lakh R s.) (5/2)

86 107 167 211 298 582 1770 5564

8

Appreciated value

of Capital per

Listed Cos. (Lak R s.)

358 170 148 126 170 260 344 803

Fig 1. Growth Pattern of the Indian Stock Market

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges are limited to listed secur ities of public limited companies. They are broadly divided into two categor ies, namely, specif ied secur ities (forward list) and

non-specif ied secur ities (cash list). Equity shares of dividend paying, growth-or iented

companies with a paid-up capital of atleast R s.50 million and a market capitalization of

atleast R s.100 million and having more than 20,000 shareholders are, normally, put in the

specif ied group and the balance in non-specif ied group.



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Two types of transactions can be carr ied out on the Indian stock exchanges: (a) spot delivery transactions "for delivery and payment within the time or on the date stipulated when

enter ing into the contract which shall not be more than 14 days following the date of the contract" : and (b) forward transactions "delivery and payment can be extended by fur ther

per iod of 14 days each so that the overall per iod does not exceed 90 days from the date of the

contract". The latter is permitted only in the case of specif ied shares. The brokers who carry

over the outstandings pay carry over charges (cantango or backwardation) which are usually determined by the rates of interest prevailing.A member broker in an Indian stock exchange

can act as an agent, buy and sell secur ities for his clients on a commission basis and also can

act as a trader or dealer as a pr incipal, buy and sell secur ities on his own account and r isk, in

contrast with the practice prevailing on New York and London Stock Exchanges, where a

member can act as a jobber or a broker only.The nature of trading on Indian Stock Exchanges

are that of age old conventional style of face-to-face trading with bids and offers being made

by open outcry. However, there is a great amount of effor t to modernize the Indian stock

exchanges in the very recent times.

Fig 2.Listed secur ities

Fig 3.Types of transactions



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Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to many functional ineff iciencies, such as, absence of liquidity, lack of transparency, unduly long

settlement per iods and benami transactions, which affected the small investors to a great

extent. To provide improved services to investors, the country's f irst r ingless, scr ipless,

electronic stock exchange - OTCEI - was created in 1992 by country's premier f inancialinstitutions - Unit Trust of India, Industr ial Credit and Investment Corporation of India,

Industr ial Development Bank of India, SBI Capital Markets, Industr ial Finance Corporation

of India, General Insurance Corporation and its subsidiar ies and CanBank Financial Services.

OTC has a unique feature of trading compared to other traditional exchanges. That is,

cer tif icates of listed secur ities and initiated debentures are not traded at OTC. The or iginal

cer tif icate will be safely with the custodian. But, a counter receipt is generated out at the

counter which substitutes the share cer tif icate and is used for all transactions.In the case of

permitted secur ities, the system is similar to a traditional stock exchange. The difference is

that the delivery and payment procedure will be completed within 14 days.Compared to the

traditional Exchanges, OTC Exchange network has the following advantages:

y OTCEI has widely dispersed trading mechanism across the country which provides

greater liquidity and lesser r isk of intermediary charges.

y Greater transparency and accuracy of pr ices is obtained due to the screen-based

scr ipless trading.

y Since the exact pr ice of the transaction is shown on the computer screen, the investor

gets to know the exact pr ice at which s/he is trading.

y Faster settlement and transfer process compared to other exchanges.

y In the case of an OTC issue (new issue), the allotment procedure is completed in a

month and trading commences af ter a month of the issue closure, whereas it takes a

longer per iod for the same with respect to other exchanges.

National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found inevitable to lif t the Indian stock

market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was

incorporated in 1992 by Industr ial Development Bank of India, Industr ial Credit and Investment Corporation of India, Industr ial Finance Corporation of India, all Insurance

Corporations, selected commercial banks and others.

Trading at NSE can be classif ied under two broad categor ies:

(a) Wholesale debt market and

(b) Capital market.



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Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in f inancial instruments such as

government secur ities, treasury bills, public sector unit bonds, commercial paper, cer tif icate of deposit, etc.

There are two k inds of players in NSE:

(a) trading members and (b) par ticipants.

R ecognized members of NSE are called trading members who trade on behalf of themselves

and their clients. Par ticipants include trading members and large players like banks who take

direct settlement responsibility. Trading at NSE takes place through a fully automated screen-

based trading mechanism which adopts the pr inciple of an order -dr iven market. Trading

members can stay at their off ices and execute the trading, since they are linked through a

communication network. The pr ices at which the buyer and seller are willing to transact will

appear on the screen. When the pr ices match the transaction will be completed and a

conf irmation slip will be pr inted at the off ice of the trading member.

NSE has several advantages over the traditional trading exchanges. They are as follows:

y NSE br ings an integrated stock market trading network across the nation.

y Investors can trade at the same pr ice from anywhere in the country since inter -market

operations are streamlined coupled with the countrywide access to the secur ities.

y Delays in communication, late payments and the malpractice¶s prevailing in the

traditional trading mechanism can be done away with greater operational eff iciency and informational transparency in the stock market operations, with the suppor t of

total computer ized network.

Unless stock markets provide professionalised service, small investors and foreign investors

will not be interested in capital market operations. And capital market being one of the major

source of long-term f inance for industr ial projects, India cannot afford to damage the capital

market path. In this regard NSE gains vital impor tance in the Indian capital market system.

Bse (Bombay Stock Exchange)

The Stock Exchange, Mumbai, popular ly known as "BSE" was established in 1875 as "The

Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the

Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-prof it mak ing

Association of Persons (AOP) and is currently engaged in the process of conver ting itself into

demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the f irst Stock Exchange in the Country to have

obtained permanent recognition in 1956 from the Govt. of India under the Secur ities

Contracts (R egulation) Act, 1956.The Exchange, while providing an eff icient and transparent

market for trading in secur ities, debt and der ivatives upholds the interests of the investors and

ensures redressal of their gr ievances whether against the companies or its own member -

brokers. It also str ives to educate and enlighten the investors by conducting investor

education program and mak ing available to them necessary informative inputs.



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EMERGENCE O ONLINE TRADING

The emergence of online exchanges has facilitated faster transactions by providing online trading por tals and brokerage houses ease and f lexibility. The Internet has indeed opened up

new oppor tunities for conducting the business. The wor ldwide stock exchanges has made a

major shif t from the traditional method of trading and now conduct a bulk of its business

online through its brokers and par tners.In the developed countr ies major ly all the exchange transactions are conducted online.The trend took off slowly in India and the National Stock

Exchange (NSE) and the Bombay Stock Exchange (BSE) two of the largest exchanges in

India have been conducting online trade successfully for some time.

WH ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and broker ing houses have been very slow in moving their transactions

online and the major reason has been the lot government regulations. The initial delay was

due to laying down the specif ications for creating Closed User Groups (CUGs). This issue was resolved between the Depar tment of Telecommunications (DoT) and the Finance

Ministry around 1998 and af ter that soon came the online trading por tals like IL&FS investsmar t, ICICIDirect.com, motilaloswal.com, sharekhan.com etc. Connectivity related

issue was perhaps the most impor tant technological factor.RBI made regulation that it is mandatory for company to store at least 7 year f inancial and transactional data.Even many

years af ter the launch of the f irst online brokerage f irm, there remain a large contingent of individual investors who still pick up the phone and call their stock broker to buy and sell

investments. However, every year a growing number of investors are placing their trades

using online brokers.

DEVELOPMENT O ONLINE TRADING

Ear lier the organization¶s which provided the facility of online trading was not safe enough to

invest but some of the changes in the past years in the Indian share market have created the

interest of trading in the shares by the people. Broadly we can classify three impor tant factors

which have contr ibuted to the development of online trading in India-

Firstly the major step was taken by the National Stock Exchange (NSE) in the year 1994

which allowed the electronic trading and seeing to this var ious other stock exchanges in India followed soon. This helped in mak ing the fast, accurate and transparent transactions saving a

lot of time then the traditional method of trading. The investors were also saved by the clutches of the fraud brokers at the times when the clients were not aware of the true pr ices of

the shares.

Secondly, in the year 1996 the demater ialization of the shares came (also known as DEMAT) which avoided the online presence of shares in an electronic form avoiding them from thef t,

pilferage or from other losses like counterfeiting and frauds regarding share transfer.

The third step was the rapid growth of computer education and learning of internet by the

people. With the evolving of internet the online trading became a hit and the investors

became conf ident in investing just with a click of a mouse.



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With the happening of such events the ratio of trading has improved a lot. As it takes less

time people praise this technology for trading purposes. Some people who traded rarely now even trades 2-3 times every day as it provides edge of researching about companies on the

internet. The number of small investors is increasing on the daily basis that trades on the

internet.If a person invests or trades in equities, der ivatives, commodities etc through the use

Internet it is known as online trading enabling the investor to connect electronically to buy or sell stocks, der ivatives etc with the other investors. This can be done with the help of online

service providers like investsmar t, indiaInfoline etc. A person can access a stockbroker 's

website through an PC connected to Internet and can place his orders.

The benef its are-

A person can see the latest market movement through streaming quotes.

R educes time lag due to self -execution and instant conf irmation.

Empowers traders to have a complete control over their trading decisions.

A person can access his accounts and related information on the Website. Provides greater convenience of trade as a person can trade from home .

It is cheap in terms of cost associated and offers reduction in overheads A trader can view the histor ical char ts on his computer.

The Internet revolution has changed the way to communicate and the way to do business in today¶s society br inging us closer and closer to vital sources of information. It provides us

with means to directly interact with service-or iented computer systems tailored to our specif ic

needs; therefore, we can serve ourselves better by mak ing our own decisions. This new

access by the online trading customers to low-cost transactions and cutting-edge, real-time

market information that former ly belonged only to brokers has opened up extraordinary new

investment oppor tunities as well as a crucial need for state-of -the-ar t information. Today the

investors use the Internet Client-Server technology to buy and sell the secur ities at

an instant at any point of time. People investing online have reached the propor tions. Online

trading allows an investor to buy and sell shares on the exchange through Internet and helps

in the direct control of his investments.

GROWTH O ONLINE TRADING According to an ar ticle by K r ishnamur thy B in 2005 af ter inception of online trading in India

in the year 2000 online trading is gained momentum with trading volumes growing by 150

per cent per annum in the years 2003-2005 and it was more than approx. 200% in the year

2008 The volume of all trades executed through the Internet on the National Stock Exchange

had grown from less than R s 100 crore (R s 1 billion) in June 2003 to over R s 700 crore (R s 7billion) in July 2005 which was a handsome growth in the year 2005in the star ting of 2008

the growth of online share was good but at the mid of the year when subpr ime cr isis affected

India including all over the wor ld, market of online trading got shrunk by more than 50%

Now the growth of online trading is on its r ight track ,Indian stock market has been

announced the one of the Safe and stable market of the wor ld, so here in India the online

trading is growing like anything in compar ison to the whole wor ld.



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At the end of July 2008, there were more than 168 registered brokers on the NSE and the number of Internet trading subscr ibers to about 2.024 million. In the year 2007 India has 8

crore (80 million) internet user , the % of internet user is growing in each year At the same time the number of subscr ibers trading through the por tal of K otak Secur ities had gone up

signif icantly by 150 per cent and the number of online trading customers had grown from

30,000 to 75,000. And the company expected to have at least 130,000 customers by the end

of that f iscal. In the recent past years of 2005 ICICIDirect and Indiabulls recorded an annualvolume growth of 100 per cent and Indiabulls had about 30 per cent of India's online trading

volumes.Today the total volume of online trade in India is about 29-31% of total trades.

According to brokers the better broadband connectivity across the country and wider

awareness of equity as an asset class will raise the online trade volumes to over 50% of total

trade.In India the demography is such that 75% of the population is under the age of 36 and

more than 50% of the 75% is under age of 25 and this is another suppor ting factor

Fig 4.Contr ibution of E brok ing

The Chief Executive of R eliance Money Ltd says that online investing is still at a nascentstage in India and expects that Internet-based trading will eventually take about half of the

total stock market trading as like with developed markets such as the US. Philippines has the highest online trade with about 55-60% execution of trade is online. The reason is because

they had wider Internet connectivity years before India. The biggest challenge in India

remains better Internet connectivity. The ear lier Web-based technology used for Internet

trading has been replaced by specialized sof tware which gives real-time global data streaming

rates to trader helping investors to analyze the market trends and helps in faster execution of

trades. Ear lier the investors made trade calls over the phone which sometimes led to the

delays. Online share trading in India was at a boom in the end of 2006 with daily-traded volumes more than tr ipling from R s 1,500 crore to R s 5,000 crore in the last one year and

terminals was set up in small towns such as R ajkot, Hubli and Vijayawada .In that year the

share of online trading rose dramatically from 7% last year to 20% as a percentage of overall

traded volumes. Due to this factor the top f ive US brokerage f irms decided to make a foray

into India in the next year dr iven by strategic interest. Also at that time non-metros accounted for half of the daily turnover of online trading.



19

PRO ILE O THE

COMPAN



20

ABOUT SHAREKHAN LIMITED

Sharekhan Ltd. Is one of the leading retail stock brok ing house of SSK I Group which is

running successfully since 1922 in the country. It is the retail brok ing arm of the Mumbai-

based SSK I Group, which has over eight decades of exper ience in the stock brok ing business.

Sharekhan offers its customers a wide range of equity related services including trade

execution on BSE, NSE, Der ivatives, depository services, online trading, investment advice

etc. The f irm¶s online trading and investment site - www.sharekhan.com - was launched on

Feb 8, 2000. The site gives access to super ior content and transaction facility to retailcustomers across the country. K nown for its jargon-free, investor fr iendly language and high

quality research, the site has a registered base of over one lakh customers. The content-r ich and research or iented por tal has stood out among its contemporar ies because of its steadfast

dedication to offer ing customers best-of -breed technology any super ior market information. The objective has been to let customers make informed decisions and to simplify the process

of investing in stocks.

On Apr il 17, 2002 Sharekhan launched Speed Trade, a net-based executable

application that emulates the broker terminals along with host of other information

relevant to the Day Traders. This was for the f irst time that a net-based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto

standard for the Day Trading community over the net. Share khan¶s ground network includes over 1288 centers in 325 cities in India which

provide a host of trading related services. Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in

the IT industry, like Sun Microsystems, Oracle, Microsof t, Cambr idge Technologies, Nexgenix, Vignette, Ver isign Financial Technologies India Ltd, Spider Sof tware Pvt Ltd. to

build its trading engine and content. The Morakhiya family holds a major ity stake in the company. HSBC, Intel & Car lyle are the other investors.With a legacy of more than 80 years

in the stock markets, the SSK I group ventured into institutional brok ing and corporate f inance

18 years ago. Presently SSK I is one of the leading players in institutional brok ing and

corporate f inance activities. SSK I holds a sizeable por tion of the market in each of these segments. SSK I¶s institutional brok ing arm accounts for 7% of the market for Foreign

Institutional por tfolio investment and 5% of all Domestic Institutional por tfolio investment in

the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign

Institutional Investors generate about 65% of the organization¶s revenue, with a daily

turnover of over US$ 2 million.



21

The Corporate Finance section has a list of very prestigious clients and has many µf irsts¶ to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion

in pr ivate equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper¶s Stop.

Fig 5.Sharekhans Impact On The Brok ing Sector

PRO ILE O THE COMPAN

Name of the company: Share khan ltd.

Year of Establishment: 1925

Headquar ter: Share khan SSK I A-206 Phoenix House Phoenix Mills Compound Lower Par le

Mumbai - Maharashtra, INDIA- 400013

Nature of Business: Service Provider

Services: Depository Services, Online Services and

Technical R esearch.

Number of Employees: Over 3500

R evenue: Data Not Available

Website: www.sharekhan.com



22

Slogan: Your Guide to The Financial Jungle.

VISION

To empower the investor with quality advice and super ior service to help him take better

investment decisions. We believe that our growth depends on client satisfaction.

MISSION

To provide the best customer service and product innovation tuned to diverse needs of clientele

Continuous up-gradation with changing technology, while maintaining human values.

R espond to progressive globalization and achieving international standard.

Eff iciency and effectiveness built on ethical practices.

COR E VALUE

Customer satisfaction through Providing quality service effectively and eff iciently

³Smile, it enhances your face value ´ is a service quality stressed on per iodic customer service Audits

Maximization of stakeholder value

Success through Teamwork, integr ity and People

Share khan is infact-

� Among the top 3 branded retail service providers � No. 1 player in online business

� Largest network of branded brok ing outlets in the country serving more than

7,00,000 clients.

SHAR EK HAN LIMITED¶S MANAGEMENT TEAM

DINESH MUR IKYA : OWNER OF THE COMPANY

TAR UN SHAH : CEO OF THE COMPANY

SHANKAR VAILAYA : DIR ECTOR (OPERATIONS)

JAIDEEP ARORA : DIR ECTOR (PRODUCTS & TECHNOLOGY)

PATHIK GANDOTRA : HEAD OF R ESEARCH R ISHI KOHLI : VICE PR ESIDENT OF EQUITY DER IVATIVES

NIK HIL VORA : VICE PR ESIDENT OF R ESEARCH



23

Fig 6.Sharekhan Ownership structure

PRODUCTS AND SERVICES O SHAREKHANLIMITED

The different types of products and services offered by Sharekhan Ltd. are as follows:

Equity and der ivatives trading

Depository services Online services

Commodities trading Dial-n-trade

Por tfolio management Share shops

Fundamental research Technical research

Owns 50.5% of

SSKI Corporate Finance Pvt. Ltd.

Investment Banking arm of thegroup

Shareholding pattern

� 50.5% SSKI Securities Pvt.Ltd.

� 49.5 % Morakhia family

SSKI Investor Services Pvt. Ltd.

Retail broking arm of the group

Shareholding pattern

� 56% Morakhia family (promoters)

� 18.5% HSBC Private EquityManagement, Mauritius

� 18.5% First Carlyle Ventures,Mauritius

SSKI Securities Pvt. Ltd.

Morakhia Family & Associates

Owns 56%



24

Fig 7.Sharekhan Products And Services

T PES O ACCOUNT IN SHAREKHANLIMITED

Sharekhan offers two types of trading account for its clients

Classic Account (which include a feature known as Fast Trade Advanced Classic Account for the online users) and

Speed Trade Account

CLASSIC ACCOUNT

This is a User Fr iendly Product which allows the client to trade through website

www.sharekhan.com and is suitable for the retail investor who is r isk -averse and

hence prefers to invest in stocks or who does not trade too frequently. This

account allow investors to buy and sell stocks online along with the following features like multiple watch lists, Integrated Bank ing, Demat and digital contracts,

R eal-time por tfolio track ing with pr ice aler ts and Instant credit & transfer.

This account comes with the following features: a. Online trading account for investing in Equities and Der ivatives

b. Free trading through Phone (Dial-n-Trade) I. Two dedicated numbers(1800-22-7500 and 39707500) for placing

the orders using cell phones or landline phones

II. Automatic funds transfer with phone bank ing facilities (for Citibank



25

and HDFC bank customers) III. Simple and Secure Interactive Voice R esponse based system for

authentication IV. get the trusted, professional advice of Sharekhan limited¶s Tele Brokers

V. Af ter hours order placement facility between 8.00 am and 9.30 am

c. Integration of: Online Trading +Saving Bank + Demat Account.

d. Instant cash transfer facility against purchase & sale of shares. e. IPO investments.

f. Instant order and trade conf irmations by e-mail.

g. Single screen interface for cash and der ivatives.

SPEED TRADE ACCOUNTThis is an internet-based sof tware application, which enables one to buy and sell in an

Instant. It is ideal for active traders and jobbers who transact frequently dur ing days session to capitalize on intra-day pr ice movement.

This account comes with the following features:

a. Instant order Execution and Conf irmation. b. Single screen trading terminal for NSE Cash, NSE F&O & BSE.

c. Technical Studies.

d. Multiple Char ting.

e. R eal-time streaming quotes, tic-by-tic char ts.

f. Market summary (Cost traded scr ip, highest value etc.)

g. Hot keys similar to broker¶s terminal.

h. Aler ts and reminder

CHARGE STRUCTURE

Fee structure for General Individual:

Charge Classic Account Speed Trade Account

Account Opening R s. 750/= R s. 1000/=

Brokerage

Intra-day ± 0.10 %

Delivery - 0.50 %

Intra-day - 0.10%

Delivery - 0.50%

Depository Charges:

Account Opening Charges R s. NIL

Annual Maintenance Charges R s. NIL f irst year R s. 300/= p.a. from

second calendar year onward



26

HOW TO OPEN AN ACCOUNT WITH SHARE KHAN LIMITED?

For online trading with Sharekhan Ltd., investor has to open an account. Following are the

ways to open an account with Sharekhan Ltd.:

y One need to call them at phone number provided below and asks that he want to open

an account with them. a. One can call on the Toll Free Number: 1-800-22-7500 to speak to a Customer

Service executive

b. Or If one stays in Mumbai, he can call on 022-66621111

y One can visit any one of Sharekhan Limited¶s nearest branches. Sharekhan has a

huge network all over India (640 centers in 280 cities). One can also log on to

³http://sharekhan.com/Locateus.aspx´ link to f ind out the nearest branch.

y One can send them an email at [email protected] to know about their products and services.

y One can also visit the site www.sharekhan.com and click on the option ³Open an

Account´ to f ill a small query form which will ask the individual to give details

regarding his name, city he lives in, his email address, phone number, pin code of the

city, his nearest Sharekhan Ltd. shop and his preferences regarding the type of

account he wants.

These information are compiled in the headquar ter of the company that is in Mumbai

from where it is distr ibuted through out the country¶s branches in the form of leads on

the basis of cities and nearest share shops. Af ter that the executives of the respective branches contact the prospective clients over phone or through email and give them

information regarding the var ious types of accounts and the documents they need to

open an account and then f ix appointment with the prospective clients to give them demonstration and mak ing them undergo the formalities to open the account. Af ter that the forms that has collected from the clients, is scrutinized in the branch and then

it is sent to Mumbai for fur ther processing where af ter a few days the clients¶ accountare generated and activated. Af ter the accounts are activated, a Welcome Kit is

dispatched from Mumbai to the clients¶ address mentioned in the documents provided

by them. As soon as the clients receive the Welcome Kit, which contains the clients¶

Trading ID and Trading Password, they can star t trading and investing in shares.



27

Apar t from two passpor t size photographs, one needs to provide with the following

documents in order to open an account with Sharekhan Limited.:

y Photocopy of the clients¶ PAN Card which should be duly attached

y Photo copy of any of the following documents duly attached which will serve as correspondence address proof:

a. Passpor t (valid)

b. Voter¶s ID Card

c. R ation Card

d. Dr iving License (valid)

e. Electr icity Bill (should be latest and should be in the name of the client)

f. Telephone Bill (should be latest and should be in the name of the client)

g. Flat Maintenance Bill (should be latest and should be in the name of the client) h. Insurance Policy (should be latest and should be in the name of the client)

i. Lease or R ent Agreement. j. Saving Bank Statement** (should be latest)

y Two cheques drawn in favour of Sharkhan Limited, one for the Account Opening

Fees and the other for the Margin Money (the minimum margin money is R s. 5000).

** A cancelled cheque should be given by the client if he provides Saving Bank

Statement as a proof for correspondence address.

NOTE: Only Saving Bank Account cheques are accepted for the purpose of

opening an account.

RESEARCH SECTION IN SHAREKHAN LIMITED

Sharekhan Limited has its own in-house R esearch Organisation which is known as Valueline. It compr ises a team of exper ts who constantly keep an eye on the share market and do

research on the var ious aspects of the share market. Generally the research is based on the Fundamentals and Technical analysis of different companies and also tak ing into account

var ious factors relating to the economy. Sharekhan Limited¶s research on the volatile markethas been found accurate most of the time. Sharekhan's trading calls in the month of

November 2007 has given 89% str ike rate. Out of 37 trading calls given by Sharekhan in the month of November 2007, 33 hit the prof it target. These exclusive trading picks come only to

Sharekhan Online Trading Customer and are based on in-depth technical analysis. As a

customer of Sharekhan Limited, one receives daily 5-6 R esearch R epor ts on their emails

which they can use as tips for investing in the market.



28

COMPARATIVE ANALYSIS

POLL RESULTS: BROKER PRE ERENCE

5paise 119 13.45%

Sharekhan 194 21.92%

Motilal oswal 38 4.29%

ICICI Direct 192 21.69%

HDFC 46 5.20%

Indiabulls 121 13.67%

K otak 59 6.67%

Others 116 13.11%

Fig 8.Broker preference as per an internet poll

AWARDS AND ACHIEVEMENTS

y SSK I has been voted as the Top Domestic Brokerage House in the research category,

twice by Euromoney Survey and four times by Asiamoney Survey.

Sharekhan Limited won the CNBC AWARD for the year 2004

Fig 9.Award For Sharekhan

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29

REASON TO CHOOSE SHAREKHAN LIMITED

Experience

SSK I has more than eight decades of trust and credibility in the Indian stock market. In the

Asia Money broker 's poll held recently, SSK I won the 'India's Best Brok ing House for 2004'

award. Ever since it launched Sharekhan as its retail brok ing division in February 2000, it has been providing institutional-level research and brok ing services to individual investors.

Technology

With its online trading account one can buy and sell shares in an instant from any PC with an

internet connection. One can get access to its powerful online trading tools that will help him take complete control over his investment in shares.

Accessibility

Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for

investors. These services are accessible through its centers across the country over the internet (through the website www.sharekhan.com) as well as over the Voice Tool.

Knowledge

In a business where the r ight information at the r ight time can translate into direct prof its, one

can get access to a wide range of information on Sharekhan limited¶s content-r ich por tal. One

can also get a useful set of knowledge-based tools that will empower him to take informed decisions.

Convenience

One can call its Dial-N-Trade number to get investment advice and execute his transactions.

Sharekhan ltd. have a dedicated call-centre to provide this service via a Toll Free Number

1800-22-7500 & 1800-22-7050 from anywhere in India.

Customer Service

Sharekhan limited¶s customer service team will assist one for any help that one may require

relating to transactions, billing, demat and other quer ies. Its customer service can be

contacted via a toll-free number, email or live chat on www.sharekhan.com.



30

COMPETITIVE ANALYSIS

OLLOWER:

The followers are those who just blindly follow the other player which are leader and challenges.

The players like 5 paisa, Motilal Oswal, HDFC Secur ities, K otakstreet are the

followers.

LEADER:

ICICIdirect.com is a leader in the online account which is having 1, 24,000

accounts in the country.

While in off line account Sharekhan is leading with 64,000 off line accounts.

NICHER:

ICICIdirect.com and K otakstreet.com are the two stock brok ing houses which are

focusing only on online investors.

CHALLENGER: Sharekhan, K otakstreet and Indiabulls come under this head.

Sharekhan challenges competitors by providing quality services and research based advice.

Indiabulls is also challenging with low brokerage rates and class one services.

SEVEN P¶S O SHAREKHAN

PRODUCT

Product VarietyShare khan offers 3 types of online trading accounts for its customers specially designed

according to their volume in share trading. Those 3 var ieties are:

y Classic- for retail investors y Speed Trade: for high net wor th investors with large and active equity por tfolio

who need to monitor and action swif tly

y Speed trade Plus- for high net wor th investors dealing in der ivative market.

QualityUser Fr iendly, attractive & colorful Website.

DesignThe website of Share khan namely www.sharekhan.com has been specially designed to

facilitate its users to buy and sell shares in an instant at anytime and from anywhere they like.

The site is user fr iendly allowing even a layman to easily operate without any hassles.

Brand Name

The company as a whole in its off line business has named itself as SSK I Secur ities Pvt. Ltd -Sevak lal Sevantilal K antilal and Ishwar lal Secur ities Pvt. Ltd. The company has preferred to

name themselves under a Blanket Family Name.But in its online division star ted since 1997,

the company preferred to name itself as ³SHAR E K HAN´. The Brand Name ³SHAR E



31

K HAN´ itself suggests the business in which the company is dealing so that the consumer could easily identify the product or service category.

Services

Share khan offers its customers, depository services and trade execution facilities for equities,

der ivatives and commodities backed with investment advice tempered by decades of brok ing

exper ience. The teams of its dedicated analysts are constantly at work to track performance and trends.

Dial-n-trade is also an exclusive service available to all Sharekhan customers for trading in

shares via the telephone. On dialing the toll free number 1600-22-7050 and on enter ing the

customers TPIN number, the customer will be directed to a telebroker who will buy or sell

shares for him.

PRICE

y List Price

CLASSIC SPEEDTRADE

SPEEDTRADE

PLUS One time registration fee

750 1000 1500

Minimum brokerage Charges

± Quar ter ly

Nil 1000 1500

y Brokerage

Share khan in its online business charges brokerage as follows:

- In equity Market: On Trading: 0.1% On Delivery: 0.5%

- In Der ivative Market

On Trading: 0.12% (Total brokerage) On Delivery: 0.1%

y Service Tax-8% on Brokerage.

y Turnover tax + Stamp duty-0.015% (R s. 15 on every turnover of R s. 100000)

y Custody ChargeR e. 1 per scr ipt held per month.

y Discounts

For investors with High Net wor th, there are slabs in brokerage rates. y Payment Period

The transaction settlement date in the secur ities market is T+ 2 days i.e. the payment

of the transaction taken place has to be made within two days of its occurrence.

y Credit terms

Share khan allows its customers to trade up to 4 times i.e. by keeping 1/4th margin with them.



32

PROMOTION

Online share trading is totally a new concept in Indian Market. Generally investor doesn¶t

like to come out from conventional way of share trading. Share khan has introduced this

product in. The concept and Product are still new in the market. Therefore the company has

under taken extensive promotion campaign to create awareness about the product. Share khan

adopts the following tools for promoting the product

y Advertising

Company adver tises its product through TV media on channels like CNBC, Pr intMedia-in leading dailies and outdoors media. It adver tises itself as an innovative

Brand with a car toon of tiger -called SHER U. Besides attractive and colorful

brochures as well as posters are used giving full details about the product.Mails are

sent to people logging on to sites like moneycontrol.com and rediff.com.Also, stalls

are opened up now and then at places where prospective customers can be

approached.

y Sales Promotion

The Company offers R s.500 instead of R s.750 for corporate accounts (more than 20accounts).Also, it provides online trading accounts for just R s.300 for IIM students.

y Sales orceThe Company has an aggressive sales force, which is given incentives, based on their

sales. The sales force is given intensive training continuously.

y SeminarThe Company also arranges seminar in corporate wor ld for creating awareness about

the product. R ecently, it had organized for a seminar in ONGC, IIM.

y Direct MarketingCompany emphasizes more on direct marketing, as many people are still not aware of

this new way of smar t trading. For this, the company recruits and trains sales representatives so as to explain the product and solve customer quer ies related to the

product. This is the most effective way to communicate the three-in-one conceptwhich company offers.

y TelemarketingThis is another promotional tool company is using to boost up its sales. For this, the

company collects the database of the people belonging to different professional

segments.

PLACEy ChannelsS

hare khan uses var ious channel alternatives to reach to its customers through Internet

Tele Marketing

R etail Share Shops

Franchisee Owners

Power Brokers

Sales Force



33

y CoverageAccess to the website from any par t of the globe.

y Locations

Share khan has the largest chain of retail share shops in India. It has 180 share shops

located in 90 cities all over India like Pune, Thane, Chennai, K olkata, Banglore,

Luckhnow, Dar jleeng, K anpur, Baroda, Midnapore, Surat, Delhi, Gaziabad,

Hydrabad, Allahbad, etc

PEOPLE

y Employees

Selection: Employees are selected on the basis of their exper ience and

qualif ication as applicable to the job.

Training: Intensive training is provided to the employees till a week once

they join and even at times required af ter that.

Motivation: The employees are motivated through incentives they are

provided.

y Research Team

Share khan has a team of dedicated analysts who have years of work ing exper ience in

the industr ies that they track, and a proven track record in using their knowledge of the investment science to deliver results.

Customers,

The hear t of sharekhan are really treated loyally like the k ings. The customer care,

which compr ises of highly trained executives operating from 9:30 to 8:00 p.m.

PHYSICAL EVIDENCEy Locality of the office:

In Delhi, two franchise outlets are located in posh areas like Connaught place and

pitampura.

y Office Environment: The ambience within the off ice is what can make the customer feel comfor table in

trading. The cordial and fr iendly atmosphere at off ice is like a full time motivation for the employees.

y Interiors and Infrastructure: The off ice is well furnished and has 24 computer terminals on which tick -by-tick

pr ice movements of the secur ities are displayed.

PROCESS y In this service organization, the ways in which the customers receive delivery of the

service constitutes the process. Here, the process involves adding µvalue¶ or µutility¶

so that the customers get full satisfaction for the money spent by them.

y Here the process begins from the step when customer wants to open e-invest account

and ends when his account is actually activated.

y All Indian residents and NR I are eligible to avail this service.



34

SHAREKHAN¶S STOCK CLUSTER

We categor ize all the scr ip¶s that are under coverage into six clusters. Each cluster represents

a cer tain prof ile in terms of business fundamentals as well as the k ind of returns you can

expect over a cer tain time hor izons and return objectives best.

Evergreen

Dominant players with strong brands, robust management credentials,

supernormal shareholder returns. Will steadily compound 18-20% per year for

next f ive to ten years.

Applegreen

Potentially steady compounders, but f ive to ten years graph bit unclear. Could

gallop at 25-30 per year over the next two to three years.

Emerging Star

Young companies likely to rule chosen niches. Even better, the niches could

balloon into full-blow markets. Potentially ten-baggers if you¶re patient.

Ugly Duckling

Trading below fair value or at huge discount to peer group. But somtehing¶s

cook ing.Could double in two to three years time.

Vulture¶s Pick

Companies with valueable assets at throwaway pr ices.Buy & await

predators.Stratlingly high returns possible.

Cannonball

Season¶s favour ites. Typically fast gainers in r ising markets, could return 30-

50% within six months. Get in, cash in, get out.



35

SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,

Oppor tunities, and Threats involved in a project or in a business venture. It involves

specifying the objective of the business venture or project and identifying the internal and

external factors that are favorable and unfavorable to achieve that objective. The technique is

credited to Alber t Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from For tune 500 companies.

A SWOT analysis must f irst star t with def ining a desired end state or objective. A SWOT

analysis may be incorporated into the strategic planning model. Strategic Planning, has been

the subject of much research.

y Strengths: character istics of the business or team that give it an advantage over others in the industry.

y Weaknesses: are character istics that place the f irm at a disadvantage relative to others.

y Oppor tunities: external chances to make greater sales or prof its in the

environment. y Threats: external elements in the environment that could cause trouble for the

business.

Identif ication of SWOTs are essential because subsequent steps in the process of planning for

achievement of the selected objective may be der ived from the SWOTs.

Simple rules for successful Swot analysis.

y Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis.

y SWOT analysis should distinguish between where your organization is today, and

where it could be in the future.

y SWOT should always be specif ic. Avoid grey areas.

y Always apply SWOT in relation to your competition i.e. better than or worse than

your competition.

y K eep your SWOT shor t and simple. Avoid complexity and over analysis

y SWOT is subjective.



36

Dur ing this training at sharekhan, we had come to know the Strengths-Weaknesses-Oppor tunities-Threats for the company and it is very useful for a company to analyze them.

Therefore, the SWOT analysis is presented here and the suggestions for maintaining strengths and removing weaknesses are explained.

STRENGTHS:

� Well-maintained infrastructure.

� Dedicated, Intelligent and Loyal staff.

� On-line Trading products.

� Lowest brokerage and other charges w.r.t. Competitors.

� The best investment advice correct up to 70-90 % through dedicated

research and repor ts.

� Wide product range to enable the clients to choose the best alternative.

� One of the best DPs in India.

� A positive image in the existing clients.

� Strong credibility among investors because of its her itage.

� Excellent reputation among the business society.

� Capability of providing super ior customer service.

� Quality research team.

� Easier access to the customer due to largest ground network of 280 branded

share shops in 120 cities.

� Abundant information about economy and companies.

� Ability to attract and retain super ior and quality personnel.

� Highly sophisticated infrastructure.

� Eff icient research and analysis team, which by interpreting the economy and

� company¶s performance accurately is enhancing the prof itability of the clients.

WEAKNESSES:

� Time consuming process for account opening, resolving the problems of the

customers, etc.

� Service quality is not maintained accordingly how they are promoted.

� Inadequate product awareness among the retail investors. � Limited customer appeal as the company does not have access to the BSE online

space.

� Brand awareness is low in the f inancial market.

� Promotional activities conducted by the company are not at par with the other

f irms.



37

OPPORTUNITIES:

� Slope of stock market towards delivery based transaction.

� Large potential market for delivery and intra-day transactions.

� Open interest of the people to enter in stock market for investing. � Attract the customers who are dissatisf ied with other broker & DPs.

� An indirect oppor tunity generated by the market from its bullishness.

� Bullish phase of the market attracts investing public.

� Access to the BSE online space for the retail investors creates oppor tunity to increase clientele base.

� Awareness campaigns about online trading create new market.

THREATS:

� Decreasing rates of brokerage in the market.

� Increasing competition against other brokers & DPs � Poor marketing activities for mak ing the company known among the customers.

� A threat of loosing clients for any k ind of weakness of the company.

� Loosing the untapped market with the entry of the competitors.



38

DATA ANALYSIS



39

Sources of data There are two main sources of data 1. Pr imary Data 2. Secondary Data Primary Data

The data, which is collected directly from the respondent to the base of knowledge and belief of the research, is called pr imary data.The most preferred way is to interview the individuals to get a sense of how they feel

Secondary DataWhen the data is collected and compiled from the published nature or any other¶s pr imary data is called secondary data.So far as our research is concerned, we have not collected any information from any sources. So, we have not used secondary data for our research.

RESEARCH DESIGN

Non probability

The non ± probability respondents have been researched by selecting the persons who do the

stock trading. Those persons who do not trade in stocks have not been interviewed.

Exploratory and descriptive research

The research is pr imar ily both exploratory and descr iptive in nature. The sources of information are both pr imary and secondary. The secondary data has been taken by referr ing

to var ious magazines, newspapers, internal sources and internet to get the f igures required for the researchpurposes. The objective of the exploratory research is to gain insights and ideas.A

well structured questionnaire was prepared for the pr imary research and personal interviews were conducted to collect the responses of the target population.

SAMPLING METHODOLOGY

Sampling TechniqueInitially, a rough draf t was prepared a pilot study was done to check the accuracy of the

Questionnaire and cer tain changes were done to prepare the f inal questionnaire to make it

more judgmental.

Sampling Unit

The respondents who were asked to f ill out the questionnaire in the Nor thern region of Delhiare the sampling units. These respondents compr ise of the persons dealing in stock trading.

The people have been interviewed in the open market.

Sample SizeThe sample size was restr icted to only 40 respondents.



40

Sampling AreaThe area of the research was Ashok Vihar and Lawrence R oad in the Nor thern region of

Delhi. LIMITATION O THE STUDY

The var ious limitations of the study are:

y People were not willing to f ill the entire questionnaire due to the less time available to them

y Some respondents might be hesitant to divulge personal and f inancial information which can affect the validity of all responses

y There is lack of awareness among people about investing in stock market. So the people who are aware of such things were found in specif ic areas for survey purposes.

y Most people are comfor table with traditional system in small towns and like to trade from their respective brokers, hence not providing a true opinion of theirs.

y Some of the respondents who did not do online trading were able to respond to only few questions.

y The survey was done in a limited region and may not truly express the opinion of

whole country



41

ANALYSIS O THE DATA COLLECTED

AGE PATTERN O THE RESPONDENTS

Fig10:Age Structure Of The R espondents

INTERPR ETATION

Thus it can be seen that people lying in the age group of 31-45 are most actively involved in

trading accounting for more than 50% of the sample size.Other major group is that of people

between 15-30 years of age which shows their beginning in the wor ld of investment.

35%

52%

10%

3%

15-30 31-45 46-60 60 PLUS



42

OCCUPATION STRUCTURE O THE RESPONDENTS

Fig11:Occupation Structure Of The R espondents

INTERPR ETATION Thus it can be seen that people doing business are most involved intrading.They constitute

for 55% of the sample size.Even pr ivate employees with their f ixed salar ies are investing

their share of income and account for over 30% of the sample population.It was a coincidence

that out of 40 people I found only one govt employee which may suggest that none of the

govt employees are keen on investing just earning.

55%

2%

35%

8%

BUSINESS GOVT EMP PRIVATE EMP OTHERS



43

INCOME STRUCTURE O THE RESPONDENTS

Fig12:Income Structure Of The R espondent

INTERPR ETATION

50% respondents are having the income level of 45000 plus per month.12 people are having

income between 30 to 40K .This suggests that to invest in the stock market minimum 100000

or more than this should be the annual income level of the people. In India the per capita income in also increasing so we can say that there is a good oppor tunity for the online trading

market.

0 2 4 6 8 10 12 14 16

7 EL 8 W 15000

15000-30000

30000-45000

450009

7 8

@

E

A EL B W 15000 15000-30000 30000-45000 45000C

A B

D

E

I E C 8 F E 4 9 12 15



44

EDUCATION LE EL OF T E R ESPONDENTS

Fig G H :Education Level Of The Resondents

INTER RETATION

Out of the people who are dealing with the stock market either online or offline most of them

are graduate. of the total respondent who are dealing with the stock market are graduate,

then 15% are post graduate and 23%people have done high schooling. So here this is showing that qualification up to graduation or more than that is in the favour of the online trading

pattern.

10I

23I

P 2

Q

1 P Q

R S R T U V T S

W T S S X T U V T S

W T S S X V Y ` D

a ` b c d S S

b V Y ` D

a ` b c



45

INVEST ENT CAPACITY OF T E R ESPONDENTS

Fig14:Investment Capacity Of The Respondents

INTER RETATION

According to the data 42% of the total respondent invest less than 5% of their income,32%

respondents are saying that they invest 5%-10% of their monthly income (which is highest)

Whereas the 15% investor do the investment 10%-15% of their total monthly income,11%

invest between 15%-20% of the total income. We can easily understand that people earning

more are investing more because of surplus of funds.

LESSe

f g h 5

i

5-10p

10-15p

15-20i

0 2 4 6 8 10 12 14 16 18

LESSq r s t

5p

5-10p

10-15p

15-20p

u t v ES

q w ENT CAPACITY 17 13 6 4



46

TYPES O INVESTMENT PRE ERRED

Fig15:Types Of Investment Preferred By The R espondents

INTERPR ETATION

Highest number of respondent is having their investment in the equity that is 65% whereas the investment available for the mutual fund accounts for 27%.So the investor for equity is

high as seen clear ly.

65%

27%

0%8%

EQ x ITY

M x T x AL Fx N y

INS x � ANCE

� T � E � S



47

RISK R EACTION OF T E R ESPONDENTS

Fig16:Risk Reaction Of Respondents

INTER RETATION

40% people among the respondents said that they would stop trading for a little while if they

felt that it was risky.Many others said that they would start investing little amount of money

if they faced losses in the stock market.

TRADING PR EFER ENCE OF T E R ESPONDENTS

Fig17.Trading Preference Of The Respondents

INTER PRETATION While 58% people still did trading the old way that is dial n trade 42% people adopted online trading as their reliable way of trading.

0

10

20

TEMPORARY

STOPINVEST LITTLE

S� IFT TO

OTHER

INSTRUMENT

OTHERS

TEMPORARY

STOPINVEST LITTLE

SHIFT TO OTHER

INSTRUMENTOTHERS

RISK REACTION 16 14 1 9

42�

58�

TRADING PREFERENCE

ONLINE TRADING DIAL N TRADE



48

R EACTION TO ONLINE TRADING BEING FAST AND SECUR E

Fig18: Opinion Of The Respondents Regarding Online Trading

INTER PRETATION

30% of the respondents strongly agrees that online trading is a secure way trading whereas

40% of the respondent agrees that online trading is a secure way of trading.27% people who

were doing trading over the phone had a neutral opinion.

Satisfaction about the process, by which they will be going to do a trading that is online

trading, should be there in the mind of the customer. If they believe that their is no risk over

the money which they are going to invest in the market with the help of online trading, there

will be a perception to go for online trading at least one time

30�

40�

27�

3�

0�

STRONG AGREE AGREE CANT SAY DISAGREE STRONG DISAGREE



4�

ATTRACTION STATUS OF ONLINE TRADING

Fig19. Opinion Of The Respondents Regarding Online Trading

INTER PRETATION

Over 50% of people either agrees or strongly agrees that the introduction of online trading helped to attract the new customer became the reason to increase the trading volume of the

market On the other side 40% of the respondent believe that it doesn¶t af fect the trading volume and had no opinion on the matter.

0

2

4

6

8

10

12

14

16

STRONG AGREE AGREE CANT SAY DISAGREE STRONG

DISAGREE



50

BROK ER PR EFERR ED BY T E R ESPONDENTS

Fig20: Broker Selected By The Respondents

INTER PRETATION Though statistics of big firms may prove otherwise but in my research Religare has emerged

as the winner followed by ICICI, Sharekhan and Indiabulls with close margins.

0 2 4 6 8 10 12

ICICI

SHAREKHAN

INDIAB�

LLS

INDIA INFOLINE

RELIGARE

OTHERS



51

ACCOUNT OPENING MET OD PR EFERR ED

Fig 21:Account Opening Method

INTER PRETATION

Most of the clients either opened their accounts by way of personal acquaintance or by way

of referral of clients who have been working with the broker and are satisfied with the

services offered.

PERSONA�

ACQUAINTANCE

REFERRA � C � IENTS

REFERRA�

NON C�

IENTS

CA� �

WA� K IN

PERSONA � PROSPECT VISIT



52

GUIDANCE R ECEIVED BY T E R ESPONDENTS

Fig 22: Guidance Received By The Respondents

MET OD OF R ECEIVING GUIDANCE

Fig 23:Method Of Receiving Guidance

INTER PRETATION 80% people said that they receive investment guidance from their brokers and the most

easiest way to get them is either through mail or by sms.

YES

80�

NO

20�

0

2

4

6

8

� 0

� 2

� 4

� 6

� 8

SMS PHONE CHATTING MAIL

METHOD



53

OPINION R EGARDING T E SUCCESS OF BROK ER

Fig 24:Respondents Opinion On The Broker

FORMAL/INFORMAL INTERACTION WIT YOUR BROK ER

Fig 25: Respondents Opinion On The Broker

INTER PRETATION

People were very happy with the service of their brokers as almost everyone agreed that their

broker was doing well.But when it came to sharing information with them not many came

forward and did that which was quite interesting.

STRONG AGREE

AGREE

MODERATE

DISAGREE

STRONG DISAGREE

0

5

10

15

20

25

NEVERRARE � Y

FRE� �

ENT� Y

VERYFRE� �

ENT



54

FINANCIAL

ANALYSIS



55

Financial statement analysis is a judgmental process. One of the pr imary objectives is identif ication of major changes in trends, and relationships and the investigation of the reasons under lying those changes. The judgment process can be improved by exper ience and the use of analytical tools. Probably the most widely used f inancial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the f inancialstatement. Financial ratios are usually expressed in percentage or times. Generally, f inancialratios are calculated for the purpose of evaluating aspects of a company's operations and fall

into the following categor ies:

y liquidity ratios measure a f irm's ability to meet its current obligations. y prof itability ratios measure management's ability to control expenses and to earn a

return on the resources committed to the business. y leverage ratios measure the degree of protection of suppliers of long-term funds and

can also aid in judging a f irm's ability to raise additional debt and its capacity to pay its liabilities on time.

y eff iciency, activity or turnover ratios provide information about management's ability to control expenses and to earn a return on the resources committed to the business.

A ratio can be computed from any pair of numbers. Given the large quantity of var iables included in f inancial statements, a very long list of meaningful ratios can be der ived. A

standard list of ratios or standard computation of them does not exist. The following ratio presentation includes ratios that are most of ten used when evaluating the credit wor thiness of a customer. R atio analysis becomes a very personal or company dr iven procedure. Analysts are drawn to and use the ones they are comfor table with and understand.

Liquidity Ratios

1. Work ing CapitalWork ing capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncer tainties. A high work ing capital balance is mandated if the entity is unable to borrow on shor t notice. The ratio indicates the shor t-term solvency of a business and in determining if a f irm can pay its current liabilities when due.

Formula Current Assets - Current Liabilities

2. Acid Test or Quick R atio A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The pr imary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio willbe lower than its current ratio. It is a str ingent test of liquidity.

Formula Cash + Marketable Secur ities + Accounts R eceivable

Current Liabilities



56

3. Current R atio Provides an indication of the liquidity of the business by compar ing the amount of currentassets to current liabilities. A business's current assets generally consist of cash, marketable secur ities, accounts receivable, and inventor ies. Current liabilities include accounts payable, current matur ities of long-term debt, accrued income taxes, and other accrued expenses thatare due within one year. In general, businesses prefer to have at least one dollar of currentassets for every dollar of current liabilities. However, the normal current ratio f luctuates from

industry to industry. A current ratio signif icantly higher than the industry average could indicate the existence of redundant assets. Conversely, a current ratio signif icantly lower than the industry average could indicate a lack of liquidity.

Formula Current Assets

Current Liabilities

4. Cash R atio Indicates a conservative view of liquidity such as when a company has pledged its receivables and its inventory, or the analyst suspects severe liquidity problems with inventory and receivables.

Formula Cash Equivalents + Marketable Secur ities

Current Liabilities

Profitability Ratios

1.Net Prof it Margin (R eturn on Sales) A measure of net income dollars generated by each dollar of sales.

Formula Net Income *

Net Sales

* R ef inements to the net income f igure can make it more accurate than this ratio computation. They could include removal of equity earnings from investments, "other income" and "other expense" items as well as minor ity share of earnings and nonrecur ing items.

2.R eturn on Assets Measures the company's ability to utilize its assets to create prof its.


(Beginning + Ending Total Assets) / 2

3.Operating Income Margin A measure of the operating income generated by each dollar of sales.

Formula Operating Income

Net Sales



57

4. R eturn on InvestmentMeasures the income earned on the invested capital.


Long-term Liabilities + Equity

5. R eturn on Equity Measures the income earned on the shareholder 's investment in the business.


Equity

6. Du Pont R eturn on Assets A combination of f inancial ratios in a ser ies to evaluate investment return. The benef it of the method is that it provides an understanding of how the company generates its return.

Formula

Net Income *Sales xSales Assets x Assets Equity

7. Gross Prof it Margin Indicates the relationship between net sales revenue and the cost of goods sold. This ratio should be compared with industry data as it may indicate insuff icient volume and excessive purchasing or labor costs.

Formula Gross Prof itNet Sales

Financial Leverage Ratio

1. Total Debts to Assets Provides information about the company's ability to absorb asset reductions ar ising from losses without jeopardizing the interest of creditors.

Formula Total Liabilities

Total Assets

2. Capitalization R atio Indicates long-term debt usage.

Formula

Long-Term DebtLong-Term Debt + Owners' Equity

3. Debt to Equity Indicates how well creditors are protected in case of the company's insolvency.

Formula Total Debt

Total Equity



58

4. Interest Coverage R atio (Times Interest Earned) Indicates a company's capacity to meet interest payments. Uses EBIT (Earnings Before Interest and Taxes)

Formula EBIT

Interest Expense

5. Long-term Debt to Net Work ing CapitalProvides insight into the ability to pay long term debt from current assets af ter paying currentliabilities.

Formula Long-term Debt

Current Assets - Current Liabilities

Efficiency Ratios

1. Cash Turnover Measures how effective a company is utilizing its cash.

Formula Net Sales

Cash

2. Sales to Work ing Capital (Net Work ing Capital Turnover) Indicates the turnover in work ing capital per year. A low ratio indicates ineff iciency, while a high level implies that the company's work ing capital is work ing too hard.

Formula Net Sales

Average Work ing Capital

3. Total Asset Turnover Measures the activity of the assets and the ability of the business to generate sales through the use of the assets.

Formula Net Sales

Average Total Assets

4. Fixed Asset Turnover Measures the capacity utilization and the quality of f ixed assets.

Formula Net Sales

Net Fixed Assets



59

5. Capital Gear ing R atio: Closely related to solvency ratio is the capital gear ing ratio. Capital gear ing ratio is mainly used to analyze the capital structure of a company.

Formula

[Capital Gear ing R atio = Equity Share Capital / Fixed Interest Bear ing Funds]

6. R etained Earnings to Total Assets R atio This ratio indicates the extent to which assets have been paid for by company prof its.Aretained earnings to total assets ratio near 1:1 (100%) indicates that growth has been f inanced through prof its, not increased debt.A low ratio indicates that growth may not be sustainable as it is f inanced from increasing debt, instead of reinvesting prof its.

R etained Earnings to Total Assets = retained earnings / total assets

Cash Flow Indicator Ratios:

1.Operating Cash Flow/Sales R atio

This ratio, which is expressed as a percentage, compares a company's operating cash f low to its net sales or revenues, which gives investors an idea of the company's ability to turn sales into cash.

Formula:

Operating Cash Flows

Net Sales

2. Cash Turnover R atio The cash turnover ratio indicates the number of times that cash turns over in a year

Formula Cash Turnover = Sales / cash.

3. Cash Flow to Long Term Debt R atio The cash f low to long term debt ratio appraises the adequacy of available funds to pay obligations.

Formula: Cash Flow to Long Term Debt = cash f low / long term debt

4. Operations Cash Flow to Current Liabilities R atio

If the operations cash f low to current liabilities ratio keeps increasing, it may indicate thatcash inf lows are increasing and need to be invested.

Operations Cash Flow to Current Liabilities = cash f low from operations /current liabilities



60

5. Cash Flow for Investing to Cash Flows from Operating and Financing

This ratio compares the funds needed for investment to the funds obtained from f inancing and operations.

Cash Flow from Investing to Operating and Financing = cash f lows

from investing / (cash f lows fro operations + cash f lows from f inancing)

FINANCIAL RATIOS:

1.Current ratio = 1709.81 = 1.36

1258.52

Ideal Quick ratio is 2:1. Company needs to increase its assets or decrease its liabilities.

2.Net profit margin = 152.02 x100 = 22.82%665.99

A higher prof it margin indicates a more prof itable company that has better control over its

costs compared to its competitors. This is compared with the last year¶s prof it margin of company.

3.Quick ratio = 1656.05 = 1.31

1258.52

Ideal Quick ratio is 1:1. Company needs to improve this.

4. Operating profit margin = 246.85x100 = 37.06

665.99

A healthy operating margin is required for a company to be able to pay for its f ixed costs,

such as interest on debt.

5. Total debt/equity ratio = 497.750 = 0.45

1107.71

The normally acceptable debt-equity ratio is 2:1. R atio less than one means equity provides a

major ity of the f inancing.

6. Return on investment = 152.02x100 = 9.47

1605.46

Higher ratio is better. In this case the ratio has increased as compared to the last year¶s

ratio (8.23).



61

7. Return on equity = 152.02 = 13.73

1107.71

It is good that they are getting a good return on their equity invested by the shareholders.

8. Gross profit margin = 271.14 x 100 = 40.72%

665.99

Higher the ratio better it is.

9. Capitalization ratio = 497.75 = 0.31 or 31%

1605.46

Low debt and high equity levels in the capitalization ratio indicate investment quality.

10. Long term debt to net working capital = 497.75 = 1.11

451.29

11. Fixed assets turnover ratio = 665.99 = 0.57

1152.42

A high ratio means a high rate of eff iciency of utilization of f ixed asset and low ratio means

improper use of the assets.

12. Debtor turnover ratio = 665.99 = 1.15

577.50

Higher ratio is better. In this case company¶s net sale is more than the average debtors.

13. Capital gearing ratio = 1107.71 = 2.23

497.75

14. Operating cash flow ratio = 5.120 x 100 = 0.76%

665.99

The greater the amount of operating cash f low, the better.



62

15. Cash flow to long term debt = 131.59 = 0.26

497.75

The higher the percentage ratio, the better the company's ability to carry its total debt. In this

case, their debt load is higher than their operating cash f lows, giving it a ratio of less than

one, however the percentage (being below 40%) is considered low.

6. Cash turnover ratio = 665.99 = 1.18

561.84

17. Operations cash flow to current liabilities = 5.1200 x 100 = 0.49%

1026.21

Any result less than 1 indicates that the company is not able to liquidate its current liabilities

from operating cash f low; the company will probably have to sell assets, borrow money or issue stock in order to meet its shor t term debt obligations.

18. Retained earnings to total assets = 177.54 = 0.111605.46

R etained earnings to total assets ratio near 1:1 (100%) indicates that growth has been

f inanced through prof its, not increased debt. This low ratio indicates that growth is not

sustainable as it is f inanced from increasing debt, instead of reinvesting prof its.

19.Equity multiplier = 1605.46 = 1.44

1107.71

The equity multiplier ratio discloses the amount of investment leverage. A higher equity

multiplier indicates higher f inancial leverage, which means the company is relying more on

debt to f inance its assets.

20. Cash flow for investing to cash flow from operating and financing

= - 265.620

5.12+392.08

= -265.62

397.20

= -0.66



63

RECOMMENDATIONS

� The companies should come up with more and more innovative features in their web

por tals.

� We should also focus upon the value added services. Generally company does claim

that if you will by the product you will get these benef its but company doesn¶tprovide the services here. So services always does matter when we talk of Online

Trading

� Company should also look for the problem which customer generally face when they do trading (like problem of operating proper ly)

� The customer should be educated regular ly regarding the new technologies and

techniques of trading online and also other relevant information.

� The companies should look af ter to develop more safe and secure ways of transacting

business online.

� The companies should make maximum effor ts to detect fraud cases and minimize them



64

CONCLUSION

The online trading is growing with a rapid pace with the r ising level of education among the

customers. The other factors being that the Indian Investor nowadays wants to deal himself in

trading rather than depending upon other middlemen. They also consider the factors like time

saving in doing the online transactions, convenience etc. Although some people feel that

online trading is not secure but the people doing the trading online is happy about the

increasing secur ity concerns among the companies.

The year 2008 has not been so good for the stock market and the Sensex and Nif ty has been dipping and affecting the business negatively for these companies. This is due to the fact that

at these times people do not prefer to open the DMAT and Trading accounts. So the companies have to reduce their account opening fees to attract more and more customers.

Also people trade very less in the bear ish market and the company¶s prof its against brokerage fees soars downwards. It is also a

found fact that dur ing the bear ish market the ratio of online trading becomes very less. Also there is an intense competition among the companies and the companies come up with new

and new promotion schemes such as discounted and negotiable brokerages, Zero balance accounts, waiving a/c opening fee and AMC etc. As the internet penetration is growing in

India this business holds a huge potential for growth.

Now if the existing company will have to capture the market they will have to look for the

innovation in their product as well as service mix The mantra for success in the current

situation will be educating the customers about the benef its of online trading and the amount

of ROI that can be generated through it.



65

PERSONAL EXPERIENCE The two month summer training was a good experience for me to learn the practicalaspects of the corporate life. Some of the things I learnt are:

I improved my communication skills by learning how to talk to different kind of people as it requires the different approach to handle each person.

I learnt how to work in a team to achieve a goal

I learnt to how handle the pressure under difficult situations.

I became aware about various aspects of working of stock exchange

I learnt few things about back office work

I learnt about the consumer perception about the stock market and online trading.

Patience was the thing I learnt the most as I have to approach the clients who

were to be explained same things again and again while approaching or calling themat regular Intervals.

BIBLIOGRAPHY



66

Books:

y K othar i C.R ., R esearch Methodology, New Delhi, Vikas Publishing House Pvt.Ltd.

1978

y Pathak Bhar ti V., Indian Financial System, Delhi, Person Education(Singapore)

Pvt.Ltd.

Newspapers:-

y The Times of India

y The Economic Times

Internet:

y www.economictimes.com

y www.moneycontrol.com

y www.bseindia.com

y www.nseindia.com

y www.sebi.gov.in

y www.investors.com

y www.investopedia.com

y www.scr ibd.com

y www.sharekhan.com



67

ANNEXURE

QUESTIONNAIRE



68

This study is a par t of my internship repor t and the data collected will be used solely for

academic purposes.

(A) PER SONAL INFORMATION

1. Name of the respondent«

2. Age

15 to 30 31 to 45

46 to 60 above 60

3. Occupation

Business Govt Emp

Pr ivate Employee Others

4. Income per month

Below 15000 15001 to 30000

30001 to 45000 above 45000

5. Education level of the respondent

Non-high School High School

Under Graduate Post Graduate

(B) TRADING PRACTICES

6. What percentage of your monthly household income could be available for investment?

Less than 5% 5% to 10%

10% to 15% 15% to 20%

7. Where do you of ten invest your money?

Equity Mutual fund

Insurance Term deposits

Others

8. What will you do , when you face r isks in trading

Temporary stop in trading Invest little Amount

Shif t to Commodity Others

9. Do you agree that online trading is a secure easy and fast way of trading

Strongly agree Agree

can¶t say Disagree

strongly disagree



69

10. Do you think that Introduction of online trading helped to attract the new Investors thus

increasing the trading volumes at Stock Market?

Strongly agree Agree

Can¶t say Disagree

Strongly disagree

(C) BROK ERAGE SER VICES

11 Which of the following brokers you trade with?

y ICICIDIR ECT

y SHAR EK HAN

y INDIABULLS

y INDIA INFOLINNE

y R ELIGAR E

y KOTAK SECUR ITIES

y ANY OTHER _______________________________

12. How was account opened

Personal acquaintance R eferral-Clients

R eferral-Non Clients Call/Walk in

Personal Prospect Visit

13. No. of years of trading exper ience in stocks at this f irm

below 5 yrs 5 to 10

14. Do you receive updated information regarding the stock market from your dealer /broker

Yes No

If yes name the sources,

SMS Phone Call Chatting Mail

15. Do you believe that your trader /broker is very successful in trading

S

trongly Agree Agree Moderate Disagree Strongly Disagree



70

16. Do you share your formal/informal activity regarding trading with your

trader /broker

Never R arely Frequently

Very frequently Unknown

17.R ate your broker on the following parameters from 1 to 5

Var iety of products offered

Time to open an account

Brokerage charged

Customer services

Sof tware

R esearch repor ts

Eff iciency at peak hours

Customer relationship

Compliance system

Infrastructure

Brand

Trading Calls/sms

Effective execution

R egular delivery of contract notes

Market exposure

R ecording conf irmation

Access to back off ice

Comprehensive stock trading por tal

Employees sk ill

Helpline services

18.Would you like to suggest any change in your present trading exper ience.

Balance sheet

Mar ' 10 Mar ' 09

Equity share capital 57.04 56.68



71

Mar ' 10 Mar ' 09

Share application money 0.40 11.37

Preference share capital - -

R eserves & surplus 1,050.67 980.13

Secured loans 1.17 1.70

Unsecured loans 496.58 0.10

Total 1,605.86 1,049.99

Gross block 108.83 143.68

Less : revaluation reserve - -

Less : accumulated depreciation 60.63 44.94

Net block 48.20 98.73

Capital work -in-progress 1.75 4.51

Investments 1,104.22 869.31

Current assets, loans & advances 1,709.81 778.75

Less : current liabilities & provisions 1,258.12 701.31

Total net current assets 451.69 77.43

Miscellaneous expenses not wr itten - -

Total 1,605.86 1,049.99

Book value of unquoted investments 1,101.49 869.28

Market value of quoted investments 3.27 0.03

Contingent liabilities 24.17 20.85

Number of equity sharesoutstanding (Lacs) 2852.15 2834.00

Profit loss account



Mar ' 10 Mar ' 09

Income

Operating income 665.99 542.27

E enses

Material consumed - -

Manufacturing e penses 14.52 93.32

Personnel e penses 162.62 136.91

Selling e penses 137.18 67.38

Adminstrative e penses 104.83 85.81

E penses capitalised - -

Cost of sales 419.14 383.42

Operating profit 246.85 158.85

Other recurring income 24.30 29.37

Adjusted PBDIT 271.14 188.22

Financial e penses 13.88 11.15

Depreciation 31.86 25.56

Other write offs - -

Adjusted PBT 225.40 151.51

Ta charges 77.34 47.88

Adjusted PAT 148.07 103.63

Non recurring items 7.90 -0.03

Other non cash adjustments -3.96 2.23

Reported net profit 152.02 105.83

Earnigs before appropriation 277.22 228.74

Equity dividend 85.20 79.45Preference dividend - -

Dividend ta 14.48 13.50

Retained earnings 177.54 135.79

Cash f low

Mar ' 10 Mar ' 09

Profit before ta 233.31 151.48

Net cash flow-operating activity 5.12 513.70

Net cash used in investing activity -265 62 -18 71

Documents

FINAL PROJECT(vishesh)