SUMMER INTERNSHIP PROGRAM A REPORT ON FACTORS AFFECTING INDIAN EQUITY MARKET (BANKING SECTOR) INDIA INFOLINE LIMITED

AResearch Report On

COMPARATIVE analysis of stock market

report submitted in partial fulfillment of the requirement for the award of degree of MASTER OF BUSINESS ADMINISTRATIONSession 2013-14

Submitted By:KM. KHUSHBU MBA IV SEM Roll No- 1208470024

BHAGWANT INSTITUTE OF TECHNOLOGY ,BHAGWANTPURAM, MUZAFFARNAGAR

TABLE OF CONTENT

1. Abstract

2. Company profile

3. Introduction to the Study & Review of Literature

4. Objective of study

5. Research methodology

Research problem & hypothesisResearch variables Research design Research venue

6. Data analysis and interpretations

7. Findings & result

8. Limitations of study

9. Conclusion

10. Suggestions/recommdation

11. References & bibliography12. Annexure

DECLARATION

I Km. Khushbu a student of MBA IVth Sem, Bhagwant Institute of technology, Muzaffarnagar hereby solemnly declare that the research Report titled Comparative ANALYSIS OF STOCK Market. is the outcome of my own research report prepared by me and the same has not been submitted to any university or institute for the award of any degree or diploma.

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Date: Km. KhushbuPlace: Roll No.1208470024

ABSTRACTOff to work so as to bring this organization among the top. to be dynamic in this industry. The Present business scenario is totally consumer oriented. Every company faces stiff competition from its competitors, each provides the best product at competitive rates. As a result customers have lot of choices to get the best with the least cost. To face this competition, it is very important to know customers behavior, their needs, preference and also the motivation factors.India Infoline Securities Limited Provide its Expert service in share market Operations to institutional Investors. Company is a Member of National Stock Exchange as well as Bombay Stock Exchange. India Infoline is slowly but steadily gaining market share and goodwill in the Market. Its strategies for marketing its services as well as developing a good Relationship with its client has given an edge over the other service providers. India Infoline is on expansion path and is looking forward to be in the top. India Infoline is a very flexible organization and it gives equal opportunity to its young and energetic ste comparative analysis done in this project show how India Infoline has built competitive edge on some groundThe research help you understand the strategies of this industry right from De-Mat to Trading, Margin to analysis and risk to return. I hope this project prove to be beneficial for the Company and also give the idea about the industry.I learnt a lot through out the process of undertaking this project report.To fulfill my task I had to visit the client personally who are dealing in share trading with this company or some other broking house.For this I was assign the target of 10 accounts, for which I first generated the database and made appointment with them and convert them in as traders of India Infoline Securities Limited, for this I have to convince them and explain the concept and collect the Trading Form and a cheque of Rs. 10000 only.After going through the exercise I found that IFL is one of the upcoming companies in the Share Market, as the credibility of other companies are going down in the market and it is the right time for the IFL to built its reputation in the market. The Main reason for IFL low market share is because of local brokers in the market which a charging very less Margin as initial investment for Trading in Stock Market.But No doubt it is having lots of scope to grow in the financial Market, and I wish it is having a shining future in the coming years.

INDUSTRY PROFILE

ORIGIN AND DEVELOPMENT OF THE INDUSTRYThe Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It traces its history to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbais Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as The Native Share & Stock Brokers Association. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSEs trading platform. Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition. Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI) accelerated the integration of the second Indian stock exchange called the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India.Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world. In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poors. In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as Best IT Usage Award by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.Since the early 1950s till the early 1990s, Indian policy makers had been nourishing the goal of Socialist pattern of society. They had been following the development planning strategy of the former Soviet Russia in a mixed economic framework. From July 1991, in the face of an unprecedented foreign exchange crisis, Indian economy started experiencing an IMF-World Bank dictated regime of liberalisation.One aspect of this is financial liberalisation. There is a move towards privatisation of nationalised banks these banks are selling their shares in the stock market. Transnational banks are encouraged to operate in the Indian banking sector. Attempts are made to attract foreign direct investment in different sectors. There is an increasing entry of foreign portfolio capital due to stock market liberalisation. People are encouraged to invest in stocks through income tax benefits and abolition of capital gains tax. There is a move to develop a national pension fund which will be invested in different stocks to get returns out of which pension will be provided to retired people. It is expected that boosting up of stock market will accelerate the process of capital accumulation and growth. Stock market development has been an important part of financial liberalisation in the less developed countries (LDCs). In the pro-liberalisation circle, stock market is assigned to play an important role in the capitalist development of LDCs.There are many studies supporting the positive link between stock market development and growth. Let us mention some of the recent studies. One important study was undertaken by Levine and Zervos (1998). Their cross-country study found that the Development of banks and stock markets has a positive effect on growth. In another study Levine (2003) argued that although theory provides ambiguous relationship between stock market liquidity and economic growth, the cross-country data for 49 countries over the period 1976-93 suggest a strong and positive relationship (see also Levine, 2001). Henry (2000) studied a sample of 11 LDCs and observed that stock market liberalisations lead to private investment boom. Recently, Bekaert et al (2005) analyzed data of a large number of countries and observed that the stock market liberalization leads to an approximate 1 % increase in annual real per capita GDP growth.There are some economists who are sceptical. Long time back Keynes (1936) compared the stock market with casino and commented: when the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done.Referring to the study of World Bank (1993) Singh (1997) pointed out that stock markets have played little role in the post-war industrialization of Japan, Korea and Taiwan. He argued that the recent move towards stock market liberalization is unlikely to help in achieving quicker industrialization and faster long-term economic growth in most of the LDCs.In this perspective this study examines the nature of relationship between stock market and growth through capital accumulation in India.

Figure 1: Indias Real Share Prices (log-values), 1950-2004

Figure 2: Indias Annual Growth Rate of Real Industrial Output, 1961-2003

Figure3 : Indias Annual Growth Rate of Real GDP, 1951-2003

INTRODUCTION TOWARDS THE TOPIC

STOCK MARKET IN INDIA

The Indian security market has become one of the most dynamic and efficient security markets in Asia today. The Indian market now conforms to International Standards in terms of operating efficiency. During the latter half of 19th century, shares of companies used to be floated in India Occasionally. There were share brokers in Bombay who assisted in the floatation of shares of companies. A small group of stock brokers in Bombay joined together in 1875 to form an association called Native Share & Stockbrokers Association. The association drew up codes of conduct for brokerage business and mobilizes private funds for investment in the corporate sector. It was this association which later became the Bombay Stock Exchange, Mumbai or BSE.Later on in 1894 the brokers of Ahmedabad formed the Ahmedabad Stock Exchange, the second stock exchange of the country. During the 1900s Kolkata became another major center of share trading and as a result Kolkata Stock Exchange was form in 1908. Later on Chennai Stock Exchange was started in 1920. However, by 1923, it ceased to exist.Then the Madras Stock Exchange was started in 1937. Three more stock exchanges were established before independence, at Indore in 1930, at Hyderabad in 1943.Thus along with the increase in number of stock exchanges, the number of listed companies and the capital of listed companies grown tremendously after 1985 which results into growth and development of stock market in India.

Indian Stock MarketShare or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.Share market where dealing of securities is done is known as share market. There are two ways in which investors gets share from market:Primary market: markets in which new securities are issued are known as primary market. This is part of the financial market where enterprises issue their new shares and bonds. It is characterized by being the only moment when the enterprise received money in exchange for selling its financial assets.Secondary Market: Market in which existing securities are dealt is known as secondary market. The market where securities are traded after, they are initially offered in the primary market. Most trading is done in the secondary market. The Stock Market is an invisible market that trades in stocks of various companies belonging to both the public and private sectors. The Indian Stock Market is often referred to as the Share Market since it deals primarily with shares of various companies. A Stock Exchange is a place where the stocks are listed and traded. Such exchanges may be a corporation or mutual organization which specializes in the business of introducing the sellers with the buyers of stocks and securities. The Indian Stock Market in India comprises of two stock exchanges: Bombay Stock Exchange (BSE) National Stock Exchange (NSE)BSEThe Bombay Stock Exchange (BSE) was established in 1875.The BSE India Stock Exchange serves as the most important for companies to raise money. The chief function of the Stock Market of India is to help raise money as capital for the growth and expansion of various private and public sector enterprises. Besides, the Stock Market of India provides able assistance to the individual investors through daily updates on current position of the stocks of the respective companies that are enlisted in the Stock Index in which the movement of prices in a section of the market are captured in price indices. The popular acronym for Stock Index is Sensitive index or sensex. Moreover, the liquidity provided by the exchange enables the investors to sell securities owned by them easily and quickly. Hence a person, who is subjected to sudden dearth of funds, can immediately sell his shares for cash in India Stock Market. The BSE Sensex, also known as BSE 30 is a widely used market index not only in India but across Asia. In terms of volume of transactions, it is ranked among the top five stock exchanges in the world.

ABOUT BSE SENSEX

BSE SENSEX or Bombay Stock Exchange Sensitive Index is a value-weighted index composed of 30 stocks started in 01 of January, 1986. It consists of the 30 largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange. These companies account for around one-fifth of the market capitalization of the BSE. The base value of the SENSEX is 100 on April 1, 1979, and the base year of BSE-SENSEX is 1978-79. At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and modify its composition to make sure it reflects current market conditions. The index is calculated based on a free-float capitalization method; a variation of the market cap method. Instead of using a company's outstanding shares it uses its float, or shares that are readily available for trading. The free-float method, therefore, does not include restricted stocks, such as those held by company insiders.The index has increased by over ten times from June 1990 to the present. Using information from April 1979 onwards, the long-run rate of return on the BSE SENSEX works out to be 18.6% per annum, which translates to roughly 9% per annum after compensating for inflation. There are five major indices in BSE, thirteen sector specific indices and a BSE Dollex Index for dollar prices and movements.

NSEThe National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the largest stock exchange in India and a preferred exchange for trading in equity, debt and derivatives instruments by investors. NSE has set up a sophisticated electronic trading, clearing and settlement platform and its infrastructure serves as a role model for the securities industry. The standards set by NSE in terms of market practices; products and technology have become industry benchmarks and are being replicated by many other market participants. NSE provides a screen-based automated trading system with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through the on-line system has helped in integrating retail investors across the nation. The exchange has a network in more than 350 cities and its trading members are connected to the central servers of the exchange in Mumbai through a sophisticated telecommunication network comprising of over 2500 VSATs. NSE has around 850 trading members and provides trading in equity shares and debt securities. Besides this, NSE provides trading in various derivative products such as index futures, index options, stock futures, stock options and interest rate futures.In addition to these organizations there are other organizations highlighting on the share trading in the Indian Stock Market are: Securities and Exchange Board of India (SEBI) NSDL CDSL The Nifty and the Senses are the indicators which are the parameters denoting the prices of the stocks of the major companies of the NSE and the BSE respectively.

ABOUT NSE AND NIFTY 50

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalization. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euro next and Goldman Sachs who have taken a stake in the NSE. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India. In October 2007, the equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%. The Standard & Poor's CRISIL NSE Index 50 or S&P CNX Nifty nicknamed Nifty 50 or simply Nifty is the leading index for large companies on the National Stock Exchange of India. The Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. There are seven major Indices in NSE and fifteen sector specific Indices. CNX BANK INDEX or BANK NIFTY is the index which has 17 banks listed on it and is a separate index to look upon price movements of banks share P.

Listed companies As indicated in the above chart, the BSE has the largest number of listed companies (4,921), followed by the TSX Group (3,841). The number of companies listed on the NSE increased by 21.6% to 1,406 in 2008 as compared with the 2006 figure.

The London Stock Exchange had the highest number of foreign companies liste on its exchange (681), which constituted 22% of the total number of companies listed on it; followed by the NYSE Group with 415 foreign companies, which represented close to 14% of the total listed companies on it. In terms of percentage share, Luxemburg Stock Exchange had the highest percentage of foreign companies at 87%, followed by Singapore Exchange at 41%. The two main exchanges in the US, Nasdaq, and NYSE Group, had a combined total of 5,963 companies, out of which, 751 were foreign companies.

GROWTH AND PRESENT STATUS OF THE INDUSTRYThe ever-growing and fast-maturing 'India Market' is a lucrative business destination for developed countries. With 7-8% of GDP growth, huge analytical, young and English speaking work forces the pull for opportunities are luring. The bandwidth of 'India Market' is enviably wide and very deep. 'Markets in India' are well protected by legal guidelines and efficient administrators. With a liberal and proactive government at the center the road ahead for 'Markets of India' is very rosy. 'Market India' has witnessed exponential growth over past one and half decade. Liberal and transparent financial policies have effected free-in-flow of FII and as a result of which 'India Market' has grown to a colossal monster in the international market. Foreseeing sure and substantial returns on investments (ROI) companies are pro- actively listing on the stock market indexes. Government agencies once much hated for red tape and bribes has shed its image. Professionalism is their new mantra. Public Enterprises like IOC, ONGC, BHEL, NTPC, SAIL, MTNL, BPCL, HPCL and GAIL, SBI, LIC, Hindustan Antibiotics Limited, Air India etc. to name a few, are giving Private Indian companies a good run for their money. Private giants like Reliance Industries Limited, Infosys, Tata, Birla Corporation, Jet Airways, Ranbaxy, Biocon, Bajaj Auto, ICICI are breaking their own records every financial years. 'Markets in India' has witnessed meteorite rise of the Indian Software, Telecommunication and Banking Industry. This has propelled growth of Urban Indian class which, in turn has increased consumerism. Today, each and every type of industry of 'Market India' like Infrastructure, Pharmaceutical & Biotechnology, Banking & Insurance, Electronics, FMCG etc. has tremendous growth potential. Retail Industry along with Agriculture & Food industry are yet to contribute their share to the growth story of 'Market India'.Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and medium-term investors, but also the position traders, short-term swing traders and also very short term intra-day traders. In terms of market capitalization, there are over 2500 companies in the BSE chart list with the Reliance Industries Limited at the top. The SENSEX today has rose from 1000 levels to 8000 levels providing a profitable business to all those who had been investing in the Indian Equity Market. There are about 22 stock exchanges in India which regulates the market trends of different stocks. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies. There is the SEBI or the Securities and Exchange Board of India which supervises the functioning of the stock markets in India.Thus, the growing financial capital markets of India being encouraged by domestic and foreign investments is becoming a profitable business more with each day. If all the economic parameters are unchanged Indian Equity Market will be conducive for the growth of private equities and this will lead to an overall improvement in the Indian economy.Indian Stock Market including both NSE-National Stock Exchange and the BSE-Bombay Stock Exchange have certainly taken a tremendous beating in the past few weeks. We are sure most of us here knew that the correction in the trading curve was round the corner which would be healthy, and the markets would bounce back from 18k levels with the help of mutual fund investments & buying of Indian stocks again. However the anticipation went wrong, and the US recession story along with global and Indian commodity prices have added fuel to the global equity market turmoil on a whole.

Future of the industryThe stock market is booming in spite of the low agriculture output. The monsoon is good in an overall sense but still the question remains who takes the credit? The answer is the karma of the people. I appreciate the Indian politicians and the industrialists who being pawns of destiny are doing things positive and productive. India, as a country is running a very good period and the position of planets in the transit are giving wonderful results.Less than one percent of population own stocks and less than 1000 individuals control the market, the majority being the FIIS, the promoters of the company. The credit should go to media for making stock market headlines.The question many people in the market ask:Will the Bull Run continue? What heights we can reach?First of all, mark my words Indian bourses in the future will be one of the best investments in the world. There will be a time when it can even reach 3000 points in the nifty. India will begin one of the best dasas of the Sun, which will work in its favor. So before 2009 Indian bourses should see an all time high.Now this Bull Run will continue.There can be some correction in the BSE sensex in the 7500 points level.The market will hover between the 6000- 7000 till mid august.There will be huge fluctuations. Investors and new entrants to the market to cool down a bit and come well below 7000. In any case if you are long terms players then step-in and buy now and forget for another 10 years. You will make a killing in the Indian markets.Most of the tech companies and the main index will do well but slightly in the lower side of expectations.

FINANCIAL SECTOR

The financial sector is in a process of rapid transformation. Reforms are continuing as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy. The role of an integrated financial infrastructure is to stimulate and sustain economic growth.The US$ 28 billion Indian financial sector has grown at around 15 per cent and has displayed stability for the last several years, even when other markets in the Asian region were facing a crisis. This stability was ensured through the resilience that has been built into the system over time. The financial sector has kept pace with the growing needs of corporate and other borrowers. Banks, capital market participants and insurers have developed a wide range of products and services to suit varied customer requirements. The Reserve Bank of India (RBI) has successfully introduced a regime where interest rates are more in line with market forces.Financial institutions have combated the reduction in interest rates and pressure on their margins by constantly innovating and targeting attractive consumer segments. Banks and trade financiers have also played an important role in promoting foreign trade of the country.

BanksThe Indian banking system has a large geographic and functional coverage. Presently the total asset size of the Indian banking sector is US$ 270 billion while the total deposits amount to US$ 220 billion with a branch network exceeding 66,000 branches across the country. Revenues of the banking sector have grown at 6 per cent CAGR over the past few years to reach a size of US$ 15 billion. While commercial banks cater to short and medium term financing requirements, national level and state level financial institutions meet longer-term requirements. This distinction is getting blurred with commercial banks extending project finance. The total disbursements of the financial institutions in 2001 were US$ 14 billion.Banking today has transformed into a technology intensive and customer friendly model with a focus on convenience. The sector is set to witness the emergence of financial supermarkets in the form of universal banks providing a suite of services from retail to corporate banking and industrial lending to investment banking. While corporate banking is clearly the largest segment, personal financial services is the highest growth segment.The recent favorable government policies for enhancing limits of foreign investments to 49 per cent among other key initiatives have encouraged such activity. Larger banks will be able to mobilize sufficient capital to finance asset expansion and fund investments in technology.

Capital MarketThe Indian capital markets have witnessed a transformation over the last decade. India is now placed among the mature markets of the world. Key progressive initiatives in recent years include: The depository and share dematerialization systems that have enhanced the efficiency of the transaction cycle Replacing the flexible, but often exploited, forward trading mechanism with rolling settlement, to bring about transparency The infotech-driven National Stock Exchange (NSE) with a national presence (for the benefit of investors across locations) and other initiatives to enhance the quality of financial disclosures. Corporatization of stock exchanges. The Securities and Exchange Board of India (SEBI) has effectively been functioning as an independent regulator with statutory powers. Indian capital markets have rewarded Foreign Institutional Investors (FIIs) with attractive valuations and increasing returns. The Mumbai Stock Exchange continues to be the premier exchange in the country with an increase in market capitalization from US$ 40 billion in 1990-1991 to US$ 203 billion in 1999-2000. The stock exchange has about 6,000 listed companies and an average daily volume of about a billion dollars Many new instruments have been introduced in the markets, including index futures, index options, derivatives and options and futures in select stocks.

InsuranceWith the opening of the market, foreign and private Indian players are keen to convert untapped market potential into opportunities by providing tailor-made products: The presence of a host of new players in the sector has resulted in a shift in approach and the launch of innovative products, services and value-added benefits. Foreign majors have entered the country and announced joint ventures in both life and non-life areas. Major foreign players include New York Life, Aviva, Tokio Marine, Allianz, Standard Life, Lombard General, AIG, AMP and Sun Life among others. With competition, the erstwhile state sector companies have become aggressive in terms of product offerings, marketing and distribution. The Insurance Regulatory and Development Authority (IRDA) has played a proactive role as a regulator and a facilitator in the sectors development. The size of the market presents immense opportunities to new players with only 20 per cent of the countrys insurable population currently insured. The state sector Life Insurance Corporation (LIC), the largest life insurer in 2000, sold close to 20 million new policies with a turnover of US$ 5 billion. The gross premia for the insurance sector was US$ 13 billion for 2001-02. There are four public sector and nine private sector insurance companies operating in general/non-life insurance business with a premium income of over US$ 2.58 billion. The markets potential has been estimated to have a premium income of US$ 80 billion with a potential size of over 300 million people. The General Insurance Corporation (GIC) (which covers the non-life sector) had a total premium income of US$ 2 billion in 2001-02. This has the potential to reach US$ 9 billion in the next five years.Venture CapitalTechnology and knowledge have been and continue to drive the global economy. Given the inherent strength by way of its human capital, technical skills, cost competitive workforce, research and entrepreneurship, India is positioned for rapid economic growth in a sustainable manner. To realise the potential, there is a need for risk finance and venture capital (VC) funding to leverage innovation, promote technology and harness knowledge based ideas. The Indian venture capital sector has been active despite facing a challenging external environment in 2001 and a competitive market scenario. There were 34 VCFs and 2 Foreign VCFs registered with SEBI in March 2002. According to a survey conducted by Thomson Financial and Prime Database, India ranked as the third most active venture capital market in Asia Pacific (excluding Japan). It recorded 115 deals in 2001 with average investment per deal amounting to US$ 7.9 million. 57 VCFs invested US$ 908 million in 101 Indian companies during 2001. Disbursements for 2002 are expected to be US$ 2 billion and are estimated to reach US$ 10 billion by 2007. There is an increased interest in India: 70 VC funds operate in India with the total assets under management worth about US$ 6 billion. The amount has grown nearly twenty fold in the past five years. Most VCs believe that 2002-03 will be driven by a relatively stable economy and new initiatives that will boost the e-commerce sector, particularly on-line trading and e-banking sectors.

STOCK BROKING SECTOR IN INDIAThe Indian broking industry is one of the oldest trading industries that has been around even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth. In this section our purpose will be of gaining a deeper understanding about the role of the Indian stock broking industry in the countrys economy.

What is meant by a Stock Exchange?The Securities Contract (Regulation) Act, 1956 [SCRA] defines Stock Exchange as anybody of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. Stock exchange could be a regional stock exchange whose area of operation/jurisdiction is specified at the time of its recognition or national exchanges, which are permitted to have nationwide trading since inception. NSE was incorporated as a national stock exchange.

What is an Equity/Share?Total equity capital of a company is divided into equal units of small denominations, each called a share. The holders of such shares are members of the company and have voting rights.What is a Debt Instrument?Debt instrument represents a contract whereby one party lends money to another on pre-determined terms with regards to rate and periodicity of interest, repayment of principal amount by the borrower to the lender. In the Indian securities markets, the term bond is used for debt instruments issued by the Central and State governments and public sector organizations and the term debenture is used for instruments issued by private corporate sector.

What is a Derivative?Derivative is a product whose value is derived from the value of one or more basic variables, called underlying. The underlying asset can be equity, index, foreign exchange (forex), commodity or any other asset. Derivative products initially emerged as hedging devices against fluctuations in commodity prices and commodity-linked derivatives remained the sole form of such products for almost three hundred years. The financial derivatives came into spotlight in post-1970 period due to growing instability in the financial markets.

What is a Mutual Fund?A Mutual Fund is a body corporate registered with SEBI (Securities Exchange Board of India) that pools money from individuals/corporate investors and invests the same in a variety of different financial instruments or securities such as equity shares, Government securities, Bonds, debentures etc. Mutual funds can thus be considered as financial intermediaries in the investment business that collect funds from the public and invest on behalf of the investors. Mutual funds issue units to the investors. The appreciation of the portfolio or securities in which the mutual fund has invested the money leads to an appreciation in the value of the units held by investors. The investment objectives outlined by a Mutual Fund in its prospectus are binding on the Mutual Fund scheme. The investment objectives specify the class of securities a Mutual Fund can invest in. Mutual Funds invest in various asset classes like equity, bonds, debentures, commercial paper and government securities. The schemes offered by mutual funds vary from fund to fund. Some are pure equity schemes; others are a mix of equity and bonds. Investors are also given the option of getting dividends, which are declared periodically by the mutual fund, or to participate only in the capital appreciation of the scheme.What is an Index? An Index shows how a specified portfolio of share prices is moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.

What is a Depository?A depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, government securities, units etc.) in electronic form.What is Dematerialization?Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investors account with his Depository Participant (DP)What is meant by Securities?The definition of Securities as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.What is the function of Securities Market?Securities Markets is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc. Further, it performs an important role of enabling corporate, entrepreneurs to raise resources for their companies and business ventures through public issues. Transfer of resources from those having idle resources (investors) to others who have a need for them (corporate) is most efficiently achieved through the securities market. Stated formally, securities markets provide channels for reallocation of savings to investments and entrepreneurship. Savings are linked to investments by a variety of intermediaries, through a range of financial products, called Securities.

Which are the securities one can invest in? Shares Government Securities Derivative products Units of Mutual Funds etc.Why does Securities Market need Regulators?The absence of conditions of perfect competition in the securities market makes the role of the Regulator extremely important. The regulator ensures that the market participants behave in a desired manner so that securities market continues to be a major source of finance for corporate and government and the interest of investors are protected.Who regulates the Securities Market?The responsibility for regulating the securities market is shared by Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI).

What is SEBI and what is its role?The Securities and Exchange Board of India (SEBI) is the regulatory authority in India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992 provides for establishment of Securities and Exchange Board of India (SEBI) with statutory powers for (a) protecting the interests of investors in securities (b) promoting the development of the securities market and (c ) regulating the securities market. Its regulatory jurisdiction extends over corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market. SEBI has been obligated to perform the aforesaid functions by such measures as it thinks fit. In particular, it has powers for: Regulating the business in stock exchanges and any other securities markets Registering and regulating the working of stock brokers, subbrokers etc. Promoting and regulating self-regulatory organizations Prohibiting fraudulent and unfair trade practice. Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, intermediaries, self- regulatory organizations, mutual funds and other persons associated with the securities market.

Broking houses in IndiaIndia is a country having a big list of Broking Houses. The Equity Broking Industry in India has several unique features like it is more than a century old, dynamic, forward looking, and good service providers, well conversant, highly innovative and even adaptable. The regulations and reforms been laid down in the Equity Market has resulted in rapid growth and development. Basically, the growth in the equity market is largely due to the effective intermediaries. The Broking Houses not only act as an intermediate link for the Equity Market but also for the Commodity Market, Foreign Currency Exchange Market, and many more. The Broking Houses has also made an impact on the Foreign Investors to invest in India to certain extent.In the last decade, the Indian brokerage industry has undergone a dramatic transformation. From being made of close groups, the broking industry today is one of the most transparent and compliance oriented businesses. Long settlement cycles and large scale bad deliveries are a thing of the past with the advent of T+2 settlement cycle and dematerialization. Large and fixed commissions have been replaced by wafer thin margins, with competition driving down the brokerage fee, in some cases, to a few basis points.There have also been major changes in the way business is conducted. Technology has emerged as the key driver of business and investment advice has become research based. At the same time, adherence to regulation and compliance has vastly increased. The scope of services have enhanced from being equity products to a wide range of financial services. Investor protection has assumed significance,.

SOME BASICS OF STOCK AND CAPITAL MARKETThe money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.Why should one invest? Earn return on your idle resources Generate a specified sum of money for a specific goal in life Make a provision for an uncertain futureOne of the important reasons why one needs to invest wisely is to meet the cost of Inflation. Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live. Inflation causes money to lose value because it will not buy the same amount of a good or a service in the future as it does now or did in the past.

What care should one take while investing? explaining the Obtain written documents investment Read and understand such documents Verify the legitimacy of the investment Find out the costs and benefits associated with the investment Assess the risk-return profile of the investment Know the liquidity and safety aspects of the investment Ascertain if it is appropriate for your specific goals Compare these details with other investment opportunities available Examine if it fits in with other investments you are considering Deal only through an authorized intermediary Seek all clarifications about the intermediary and the investment Explore the options available What is meant by Interest? When we borrow money, we are expected to pay for using it this is known as Interest. Interest is an amount charged to the borrower for the privilege of using the lenders money. Interest is usually calculated as a percentage of the principal balance (the amount of money borrowed). The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan.What factors determine interest rates?When we talk of interest rates, there are different types of interest rates - rates that banks offer to their depositors, rates that they lend to their borrowers, the rate at which the Government borrows in the Bond/Government Securities market, rates offered to investors in small savings schemes like NSC, PPF, rates at which companies issue fixed deposits etc. The factors which govern these interest rates are mostly economy related and are commonly referred to as macroeconomic factors. Some of these factors are: Demand for money Level of Government borrowings Supply of money Inflation rate The Reserve Bank of India and the Government policiesWhat are various options available for investment?One may invest in:Physical assets like real estate, gold/jewellery, commodities etc. Financial assets such as fixed deposits with banks, small saving instruments with post offices, insurance/provident/pension fund etc. or securities market related instruments like shares, bonds, debentures etc.

What are various Short-term financial options available for investment?Broadly speaking, savings bank account, money market/liquid funds and fixed deposits with banks may be considered as short-term financial investment options:Savings Bank Account is often the first banking product people use, which offers low interest (4%-5% p.a.), making them only marginally better than fixed deposits.Money Market or Liquid Funds are a specialized form of mutual funds that invest in extremely short-term fixed income instruments and thereby provide easy liquidity. Unlike most mutual funds, money market funds are primarily oriented towards protecting your capital and then, aim to maximize returnsFixed Deposits with Banks are also referred to as term deposits and minimum investment period for bank FDs is 30 days. Fixed Deposits with banks are for investors with low risk appetite, and may be considered for 6-12 months investment period as normallyWhat are various Long-term financial options available for investment?Post Office Savings Schemes, Public Provident Fund, Company Fixed Deposits, Bonds and Debentures, Mutual Funds etc.Post Office Savings: Post Office Monthly Income Scheme is a low risk saving instrument, which can be availed through any post office. Public Provident Fund: A long term savings instrument with a maturity of 15 years and interest payable at 8% per annum compounded annually. A PPF account can be opened through a nationalized bank at anytime during the year and is open all through the year for depositing money. Tax benefits can be availed for the amount invested and interest accrued is tax-free. A withdrawal is permissible every year from the seventh financial year of the date of opening of the account and the amount of withdrawal will be limited to 50% of the balance at credit at the end of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year whichever is lower the amount of loan if any.Company Fixed Deposits: These are short-term (six months) to medium-term (three to five years) borrowings by companies at a fixed rate of interest which is payable monthly, quarterly, semi10 annually or annually. They can also be cumulative fixed deposits where the entire principal along with the interest is paid at the end of the loan period. Bonds: It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date.Mutual Funds: These are funds operated by an investment company which raises money from the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated set of objectives. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints

INTERNATIONAL STOCK EXCHANGE AND TRADINGInternational Online Trading Scenario. In this chapter we will have a comprehensive look taking the international share-trading scenario as a whole. We have considered those particular continents, nations; those usually have major influence in the various economic aspects of India. So, the United States of America, United Kingdom and the entire European Union, Australia, New Zealand and African countries as a whole.

UNITED STATES OF AMERICALet us start with the United States. A brief set of information consisting of Stock Exchanges functioning, online share broking firms, and the latest technology they are offering for hassle free service for their customers etc. The prominent online share broking firms are The Wall Street Journal, DxDollars, Power Pointers Page, Xdrive, Saxo Bank etc. These firms are providing online as well as offline facilities to their customers. The salient features the organizations are offering are as:1. Online Broker List - This section contains a comprehensive list of brokers that will allow you to trade online. Make sure to investigate them thoroughly before choosing an online share-trading firm. 2. Broker Ranking Resources - These sites have their own broker performance data and rankings, if you're looking for info on a single specific broker, or just want another opinion.3. After Hours Resources - Use the sites in this section to get information about how and where to trade stocks after the markets have closed for the day.4. After hours online trading - This listing contain sites that will allow you to trade stocks after hours.5. Exchanges - This section contains a listing of stock exchanges throughout the US and around the world. The sites can often be used to investigate stocks that are traded on a given exchange. This can be especially useful for international stocks that may be difficult to research due to a lack of readily available information.6. International Online Trading - Thanks to the Internet, it has become much simpler to analyze and participate in international investment opportunities. Once you have thoroughly researched global opportunities, use the sites in this section to trade stocks around the world.7. ECNs - Electronic Communications Networks (ECNs) represent orders in Nasdaq stocks, internally matching buy and sell orders or representing the highest bid prices and lowest ask prices on the open market. The benefits of trading with an ECN include after hours trading, avoiding market makers (which charge a spread), and anonymity (which is often important for large trades). This section contains a listing of ECNs that are available for your trading needs.8. Scripophily - This section contain links to sites that specialize in old stock certificates and Broking houses in IndiaIndia is a country having a big list of Broking Houses. The Equity Broking Industry in India has several unique features like it is more than a century old, dynamic, forward looking, and good service providers, well conversant, highly innovative and even adaptable. The regulations and reforms been laid down in the Equity Market has resulted in rapid growth and development. Basically, the growth in the equity market is largely due to the effective intermediaries. The Broking Houses not only act as an intermediate link for the Equity Market but also for the Commodity Market, Foreign Currency Exchange Market, and many more. The Broking Houses has also made an impact on the Foreign Investors to invest in India to certain extent.In the last decade, the Indian brokerage industry has undergone a dramatic transformation. From being made of close groups, the broking industry today is one of the most transparent and compliance oriented businesses. Long settlement cycles and large scale bad deliveries are a thing of the past with the advent of T+2 settlement cycle and dematerialization. Large and fixed commissions have been replaced by wafer thin margins, with competition driving down the brokerage fee, in some cases, to a few basis points.There have also been major changes in the way business is conducted. Technology has emergedas the key driver of business and investment advice has become research based. At the same time, adherence to regulation and compliance has vastly increased. The scope of services have enhanced from being equity products to a wide range of financial services. Investor protection has assumed significance,. 9. Traders World - Offers articles, software, and newsletters on the financial markets for subscribers.10. Domestic Securities ATTAIN System - An order display alternative to the traditional market making price quote system on the Nasdaq. The ATTAIN ECN allows its subscribers immediate and direct posting of orders to the ATTN book.11. Day Trader - Brings insight, ideas, trading techniques, and innovative thinking to investors looking to trade the financial markets. This is all shown to you via the actual trading journals, diaries, or so-called "trade blotters" of an experienced Day Trader.12. Day Traders Online - Fee-based site offering a morning stock market report, access to their real-time trading room, and access to their news desk. free trial is available.13. Daytradingstocks.com - A virtual community for day traders that offer message boards, book reviews, and brokerage reviews. Free registration is required for some of the site's features.Over the last two decades the constant upward translocation in the trends of online share trading in The USA has been perfectly described below.

COMPANY PROFILE

COMPANY PROFILE

India Info line Securities Pvt. Ltd.

Knowledge is power and power brings security. Risk is a very relative term and changes with every individual and situation. Financial management is not just about managing risk but also managing knowledge and finally deriving answers that generate wealth, security and trust.

VISION

Vision is to be the most respected company in the financial services space.To be the premier provider of investment advisory and financial planning services in India.

PUNCH LINE: ITS ALL ABOUT MONEY, HONEY!

HISTORY IN BRIEF

India Info line originally incorporated on October 18, 1995 as PROBITY RESEARCH AND SERVICES PVT LTD. at Mumbai under the Companies Act, 1956 with Registration No.1193797, became a public limited company on April 28, 2000. The name of the Company was changed to India Infoline.com Limited on May 23, 2000 and later to India Info line Limited on March 23, 2001. The objective was to provide unbiased and independent information to market intermediaries and investors. The quality of research was so good that soon it caught the imagination of all major participants in the financial marketing. In a very short period they started providing research report to consulting firms like Mckinsey, companies like HUL, banks like Citibank etc.In 1999, the company made all the research report free on the web and as a result the number of user increases from mere a thousand to lacks in a very short period of time. The company got the financial support from venture capitalists and private equity investors. They raised US $ 1 million in first round and in March 2000 again US $5 Million.In 2001, the company faced the worst situation. The dot com suffix, which was sexiest to them suddenly, became the worst stigma. The company was planning to set up a TV channel but circumstances forced them to jettison the plan. IIL decided to narrow its focus on businesses where it could leverage its core competencies to the maximum. The key business lines that emerged were mutual funds, life insurance and E-broking. The company became heavily dependent on its e-broking businesses for survival. The odds were against them. There was no money available from the private equity investor at any valuation. All competitors were backed by institution or had abundant capital. The core promoters of the company had little experience of broking. To add to it, the market was hit by a scam. They also had their share of price to pay and lessons to learn. It was difficult to retain people. Although devastating for morale but not surprising, the most market observers had written them off.There was a core group who never lost hope. They cut all possible costs and worked on a bare bones structure. They survived against all odds started capturing market share. Not broking alone but mutual fund life insurance business also grew strongly. The company rose from strength to become the leading corporate agent in life insurance and among top retail players in mutual fund and broking space. It is the first Company in India to foray into the online distribution of Mutual Funds.It is a one-stop financial services shop, most respected for qualityof its advice, personalized service and cutting-edge technology. The No.1Corporate agent for ICICI Prudential Life Insurance Company, Research acknowledged by Forbes as Must Read for investor in South Asia.

Listed on Bombay and National Stock Exchange with a net worthof INR 200 Crore and a market cap of over INR 1970 Crore.

In 2005, IIL came with an IPO and raised Rs. 75 Crores from the market. The issue price was Rs. 76.The IPO was 7.22 times oversubscribed. The company after that never looked back and started entire gamut of investments products from risk free RBI bonds to high-risk, high rewards equities and also mutual funds and life insurance. They also forayed into portfolio management services and commodities broking, again leveraging upon their core competencies in research and technology. In the last ten years, India Info line has faced numerous ups and downs, but has never compromised on integrity. They continue to ensure highest standards of corporate governance.

BUSINESS DESCRIPTION

The India Info line group, comprising the holding company, India Info line Limited and its wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, Gold, Bonds and other small savings instruments to loan products and Investment banking. India Info line also owns and manages the websites www.indiainfoline.com and www.5paisa.com. The company has a network of 976 business locations .BRANCHES AND SUB-BROKERS

Spread across 365 cities and towns. It has more than 800,000 customers. It is registered with NSDL as well as CDSL as a depository participant.

PILLARS OF THE ORGANIZATION

unlike others, India Info line has the concept of an Investment Team.

The brains behind all the investment strategies and decisions regarding Wealth Management Services are:

Advisor Executive director

Mr. Nirmal Jain Mr.R Venkataraman

PRODUCT OFFERINGS

Providing in house research based advice on selected stocks

Advise on portfolio management services

Products that offer our clients unique risk -reward equation that are customized their investment objectives

Research based recommendation on top picks in mutual fund

Life & General insurance advisory

Advise on investment in art through fund structure

Bullion buying and selling

Advising and facilitating financing select IPO based on our in- hours research

Provide overdraft facility against collateral of shares/ MF units

Provide term loan facility against collateral of shares/ MF units

Background of India Infoline Ltd

India Infoline Securities Limited, axy Promoter Group Company, was founded by late Dr. Parvinder Singh (CMD Ranbaxy Laboratories Limited), with the vision of providing integrated financial care driven by the relationship of trust & confidence. To realize its vision the India Infoline group provides various financial services which include broking (stocks & commodities), depository participant services, portfolio management services, advisory on mutual fund investments and many more. Working on the philosophy of being Financial Care Partner, India Infoline unlike other traditional broking firms not only executes the trades for the clients but also provides them critical and timely investment advice. The growing list of financial institutions with which India Infoline is empanelled as an approved broker is a reflection of the high levels of service standard maintained by the company. India Infoline is a truly professional financial service provider managed by a team of highly skilled professionals who have proven track record in their respective domains. India Infoline has the widest reach through its Regional, Zonal and Branch Offices spread across the length & breadth of the country. Now days India Infoline is driven by ethical and dynamic process for wealth creation. Based on this, the company started its endeavor in the financial market. An ISO 9001 : 2000 company Member of National Stock Exchange (NSE) since November 1994, first deposit based Member of BSE.

Depository Participant with - National Securities Depository Limited (NSDL) since July 2000- - Central Depository Services (India) Limited (CDS) since February 2003 SEBI Approved Portfolio Manager Working on the Philosophy of being Financial Care Partner In a span of less than five years of its retail operations, FSL recorded a healthy growth rate both in business volumes and profitability. India Infoline is among the very few stock market intermediaries to having very sound based capital and healthy net worth.. India Infoline aims to have its footprint all across the country by the end of year so that it may add value to the investing community in the country. India Infoline Limited (A Ranbaxy Promoter Group Company) through India Infoline Limited, Religare Finevest Limited, India Infoline Commodities Limited and India Infoline Services Limited provides integrated financial solutions to its corporate, retail and wealth management clients. Today, we provide various financial services which include Investment Banking, Corporate Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance and Mutual Funds. Plus, theres a lot more to come your way.

PRESENCE

India Infoline is present in more than 150 branches all over India and the target is to cross 350 branches very soon. Our branches are fully equipped with high bandwidth internet lines and high end computers i.e. the latest IT tools. There are efficient branch managers and dealers to give you tips of highest quality and accuracy with support from our analysts. Our branches would make you feel like doing business in Dalal Street however, in a more sophisticated manner. You get to work with more traders and learn more and also trade more.

INFRASTRUCTUREOfficesThe company has offices located at prime locations in Mumbai, New Delhi, Kolkatta and Chennai. The offices are centrally located to cater to the requirements of institutional and corporate clients and retails clients, and for ease of operations due to proximity to stock exchanges and banks. Today, we have a growing network of 150 branches and more than 300 business partners spread across 180 cities in India and a fully operational international office at London. However, our target is to have 350 branches and 1000 business partners in 300 cities of India and more than 7 International offices by the end of 2011.

OBJECTIVE OF THE STUDY

The objective of the project is to identify, understand and analyze the comparison of stock market. The main focus will be on understanding, analyzing and providing a valid explanation both theoretically and technically, that how various comparisons in between the Indian stock market and foreign stock market. By undertaking this study I would like to keep my step in the field of research. This project will help me in enhancing my analytical skills and will give me a better understanding of how things move on and are to be studied. At the same time with this study I will be providing the organization a list of factors that affect the market, so that they can keep a watch on the same and use the same for the benefit of clients and company and also increase their accuracy and profits. This will be my contribution to this huge company.

SCOPE OF STUDY

It gave me an opportunity to study the stock market in a detailed manner. I got knowledge of prevailing Market Scenario. It helped me in learning the market dynamics, study the movement of share prices and to give a proper justification for the same, theoretically and technically. It helped me in understanding and learning the corporate culture And above all, the concerned organization can get some valuable recommendations, which can definitely improve the performance of the organization

LITERATURE REVIEWIn most industrialized countries, a substantial part of financial wealth is not managed directly by savers, but through a financial intermediary, which implies the existence of an agency contract between the investor (the principal) and a broker or portfolio manager (the agent). Therefore, delegated brokerage management is arguably one of the most important agency relationships intervening in the economy, with a possible impact on financial market and economic developments at a macro level. As the per-capita-income of the city is on the higher side, so it is quite obvious that they want to invest their money in profitable ventures. On the other hand, a number of brokerage houses make sure the hassle free investment in stocks. Asset management firms allow investors to estimate both the expected risks and returns, as measured statistically. There are mainly two types of Portfolio management strategies. Passive Portfolio Strategy Active Portfolio Strategy1. Passive Portfolio Strategy: A strategy that involves minimal expectation input, and instead relies on diversification to match the performance of some market index. A passive strategy assumes that the marketplace will reflect all available information in the price paid for securities2. Active Portfolio Strategy: A strategy that uses available information and forecasting techniques to seek a better performance than a portfolio that is simply diversified broadly.

IMPORTANCE OF STUDY

The PURPOSE of the report is to analyze the comparative study of stock market. It is of great importance to understand, learn and analyze the same. Thus, this report is a move in path of understanding those factors and analyzing the impact of the same. Journals, diaries, or so-called "trade blotters" of an experienced Day Trader.

RESEARCHMETHODOLOGYUSED.

Research methodology is a systematic way, which consists of series of action steps, necessary to effectively carry out research and the desired sequencing to these steps. The marketing research is a process of involves a no. of inter-related activities, which overlap and do rigidly follow a particular sequence. It consists of the following steps:- Formulating the objective of the study Designing the methods of data collection Selecting the sample plan Collecting the data Processing and analyzing the data Reporting the findings

Objective of Study

Research Design

Sample Design

Data Collection

Data Analysis

Report of findings

DATA COLLECTIONPrimary data collection:- primary data are those which are collected a fresh & for the first time. Personal unstructured interview of the employee of the bank. Distribution of the questionnaires among the bank employee to gather information.Secondary data collection:- secondary data which has already been collected & analyzed by some one else. Documents given by bank. Internet information & websites. Book & magazines. Information given by customers Registration kit and information broacherDATA ANALYSIS-{BASED ON INVESTORS OF SHARE MARKET IN VARIOUS REGION OF Meerut} Representing in the form of table & chart.There are some areas of Ghaziabad region from where I got the investors response which are already invests their money in share market through India Info line. From where I found some persons either most satisfied or least satisfied. Analysis is given below:

PALLAV PURAMIn this area 11 % investors are dissatisfied, 17 % satisfied, 28 % good, 44 % excellent.

PALLAV PURAM

11 % DISSATISFIED 17 % SATISFIED

28 % GOOD

44 % EXCELLENT

According to this diagram 11% dissatisfied,28% good17% satisfied and 44%excellent because some problem are related to the awareness of stock market.

GANGANAGARIn this area 17 % investors are dissatisfied, 22 % satisfied, 22 % good, 39 % excellent.

GANGANAGAR

17 % DISSATISFIED 22 % SATISFIED

22 % GOOD

39 % EXCELLENT

39%22%22%17%EXCELLENTGOODSATISFIED DISSATISFIED According to this diagram 17% dissatisfied, 22% good 22% satisfied and 39%excellent because some problem are related to the awareness of stock market.

P.L SHARMA ROADIn this area 6 % investors are dissatisfied, 22 % satisfied, 33 % good, 3%excellent.

P.L SHARMA ROAD

6 % DISSATISFIED 22 % SATISFIED

33 % GOOD

39 % EXCELLENT

According to this diagram 22% dissatisfied, 33% good 22% satisfied and 39%excellent because some problem are related to the awareness of stock market.

SAKET

In this area 17 % investors are dissatisfied, 22 % satisfied, 28 % good, excellent.

SAKET

17 % DISSATISFIED 22 % SATISFIED

28 % GOOD

43% EXCELLENT

43%28%22%17%EXCELLENTGOODSATISFIED DISSATISFIED

According to this diagram 17% dissatisfied ,28% good 22% satisfied and 43%excellent because some problem are related to the awareness of stock market.

Market Research Analysis

Interpretation: This shows that although the mutual fund market is on rise yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased.

Awareness of online share trading

Interpretation: With the increase in cyber education, the awareness towards online share trading has increased by leaps and bounds. This awareness is expected to increase further with the increase in internet education.

Awareness of India Info line Ltd in as a Brand Interpretation: This pie-chart shows that India Infoline Ltd has reasonable amount of Brand awareness in terms of a premier Retail Stock Broking Company. This brand image should be further levered by the company to increase its market share over its competitors.

Awareness of India Info line Ltd Facilities Interpretation: although there is sufficiently high brand equity among the target audience yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness

DEMAT Account MarketInterpretation: This shows that even with sufficiently high Brand Equity India Info line Ltd ranks only 3rd amongst the Demat Account providers. This is probably because of two main reasons.

1. Lack of promotion and unfocussed approach towards Product awareness.2. Non transparent marketing policies of the company. Hence, the company should crystallize its products and should indulge in aggressive marketing and promotion.

Satisfaction Level among Customers with Current Broker

Interpretation: This pie-chart accentuates the fact that Strategic Marketing, today, has gone beyond only meeting sales targets and generating profit volumes. It shows that all the competitors are striving hard not only to woo the customer but also to make them Brand loyal by generating customer satisfaction.

Frequency of Trading Interpretation: In spite of the huge returns that the share market promises, we see that there is still a dearth of active trade and investors. This is because of non transparent structure of the Indian share market and the skepticism of the target audience that is generated by the volatility of the stock market. It requires efficient bureaucratic intervention on the part of the Government.

Percentage of Earning Invested In Share Trading

Interpretation: This shows that people invest only up to 10% of their earnings in the stock market, again reiterating the volatile and non-transparent structure of the Indian stock market. Hence, effective and efficient steps should be undertaken to woo the customers to investment more in the lucrative stock market. Rating of Share Trading Companies Interpretation: The survey indicated that people ranked India Infoline Ltd at the 3rd position as an online stock broking company. Even after relatively low brokerages and better services being provided in competitors, India Infoline Ltd is not at top spot because of ineffective marketing and promotion strategies. Hence, the company should indulge in to aggressive marketing and promotional methods and should approach this problem in a more structured format.

SWOT ANALYSIS

A SWOT analysis focuses on the internal and external environments, examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment.

STRENGTHSSERVICEAs products of India Infoline Ltd is a extremely innovative product with very less cost. Services like online trading facility, institutional and domestic broking, customized research reports with almost 80% efficiency etc give India Infoline Ltd an edge over its competitors. India Infoline Ltd provides other support services that make retail investors more confident and assured with their trading. SMS alerts (allowing traders and investors to make the most of the available opportunities), Softer, intangible features like imagery, equity driving preference. Through efficient trading processes Investors can place their orders directly on the Internet, do all the information seeking and basically own the investing processDistribution NetworkWe have a growing network of 150 branches and more than 300 business partners spread across 180 cities in India and a fully operational international office at LondonOUR target is to have 350 branches and 1000 business partners in 300 cities of India and more than 7 International offices by the end of 2006.Unlike a traditional broking firm, India Infoline Ltd group works on the philosophy of partnering for wealth creation.

ProductsCompanys product line is quite flexible in the sense that there is a product for every kind of investors. Also all the products cover all the loop holes of all the products offered by the other competitors like low cost, user friendly online trading services etc.

Weakness

Branding

Though the company has efficient products but large part of investment interested population does not know the company. The most basic expectation for a trader or investor when one begins trading is that one must get timely delivery of shares and proceeds from sale of shares. Also ones cash balances with the broker must be safe and secure. Though this confidence in the broker comes with time and experience, good and transparent practices also play a major role in imbibing confidence in tradersCompetition from BanksMost of the banks due to good branding have the faith of the customers of their banking database. So they enjoy the liberty of huge database and customers find it more reliable to trade there rather than with a unknown broker. Also banks like HDFC Bank and ICICI Bank have the advantage of linking the trading accounts of their customers to saving accounts. This makes trading easier, and at the same time a trader withdraws exactly as much money from his account as is needed to complete the trade. Similarly sales proceeds are credited directly to saving account

OPPORTUNITIESThe external environment analysis may reveal certain new opportunities for profit and growth. Ever-Increasing MarketAfter the NSE brought the screen based trading system stock markets are now more secured which has attracted lot of retail investors and the demand is increasing day by day. This has resulted in improved liquidity and heavy volumes on transactions. India Infoline Ltd is one of the early entrants here. As to how much it will roar and how swift it can swoop on the market, the future alone can answer such queries. India Infoline Ltd has been a mega player and is known for being a mover of stocks. It is also known for putting big deals through and enjoys good networking with the FIIs. It has been dynamic enough to move with the times and capture the opportunities that the market throws up from time to time.Improving TechnologyIn country like India technology is always improving which gives the company a chance to keep on improving their product with time whereas for the small players like local brokers it will be difficult to keep the same pace as the changing technology. Also with SEBI lying down some strict guidelines small brokers are finding it harder to retain the customers with no research department and small capital. The traditional business model is highly dependent on a large network of sub-brokers, and many established players may not have systems (technology, customer service, etc.) capable of directly servicing so many retail customers.

Unfulfilled Needs of the CustomersWith so many competitors offering their products in the market but no one is able to completely satisfy the customers. Some have the problem of lack of information or some were scared of volatility of the stock markets. India Infoline Ltd has the opportunity to tap this unsatisfied set of customers and to make hold in the market. The Internet serves to break all barriers to information, as it offers an extremely hassle-free investing platform. And, India Infoline Ltd hopes to fully utilize and capitalize on this platform. This original idea by India Infoline Ltd itself was born out of the consumer's need for a more transparent, easy to understand and convenient option of investing in stocks.Education LevelThe education level in the country is improving year after year as far as technology goes. With that the understanding of the stock market is also increasing and a lot of retail investors are steeping in the markets which are being shown by increasing volumes, transactions and indices.

THREATSNew CompetitorsA lot of new competitors are trying to enter the market in this bullish run to taste the flavor of this cherry. This is creating a lot of competition for large players like India Infoline Ltd and it is creating little confusion in the minds of the customers about the services provided by the broker. Also many banking firms are entering into the market with huge investment. Competitors like ICICI, kotuku; HDFC, 5-paisa etc. are posing a lot of threats to the company.Technology Based BusinessOnline trading is totally based on the technology which is quite complex. Typically, the technology solution has to start from the Internet front-end (or the screen that you see when you begin trading). Then it needs to get into the 'middle tier' of risk management systems that assess data from banks and depository participants (DP), calculate client risk at that point in time, and give the 'Go/No go' advice to the trade. So technology is a kind of threat because unless until it is working properly it is good .s

FINDINGS AND RESULT

FINDINGS

During the Customer Awareness about Share Trading main points that came into focus are:

Dematerialization is basic tool of share trading. Equity fund is not complicated. It is clear and specific fund. By the increase in demand of equity, company can get more profit. The current knowledge is very compulsory and all the event occurring in the world are also mention for better profit. Market is uncertain and fluctuates by a tiny event.

The analysis of all the stock market leads us to: Some findings and Result- While I was doing the project I came across so many investors, I studied their behavior, Their reactions, I studied various research reports, news articles, and from all that I could Find out that each and every thing, whether a minute one or a big one, affects the Investors decision and thus affect the share prices. I have listed some factors in the report which affect the share prices, also I have done a Technical analysis for the same, but what comes out at the end is that there are still so many unnoticed factors which affect the share prices. This list is not exhaustive; still there is so much which needs to be studied and I tried to cover as much as I could. From the analysis, I could find out and conclude that, the Share Prices are affected by Each and every factor in varying degree. The analysis shows that there is a very small impact of Interest Income, Advances, Deposits, Borrowings and a slightly more impact of Bank Nifty Index on Share Prices. It is so because there are N numbers of factors and it was not possible to quantify each one of them and conduct the analysis, there were some technical difficulties also which turn out to be the limitation of the project. But at the end of the analysis we can ACCEPT THE HYPOTHESIS, as most of the factors, do affect the Share Prices in some or other manner. From the one and half month training at India Info line, I could get that INVESTORS SENTIMENTS work out most for the market dynamics, this is the most significant factor which affect Share Prices drastically in either of the direction. A latest example I can quote is the post election result session on Monday, 18 May, 2009, when Investors were happy that UPA government was back into power and the market jumped thousand points up. Talking about the investors, what I can suggest them from my study is that they should be very careful while investing in the Stock Market. The market is simply UNPREDICTABLE. One should do a proper and detailed analysis before investing in stocks. Banks shares are pretty safe, as I could find from the analysis. The Banking Sector is ever growing and thus money invested in it would always give you good returns. But still one should beware of the Markets unpredictable ups and downs. This report is of great help to the company and investors. They can use the analysis and draw conclusions. Also they can do their own analysis if they want keeping this Analysis as a base. They can use the tools and techniques to take decision and play safe in the market.

LIMITATIONS OF THE STUDY

Though the resources seem sufficient enough to achieve high standard for this research, still we foresee the following limitations of study. The Sector is very vast and it was not possible to cover every nook and corner of this sector. The objective which we want to fulfill in this project is really good, but the major demerit to our study is the availability of time for our search and analysis, but then also, I have tried my level best to show a glimpse of my Research in tune with the objectives.

CONCLUSION

On the basis of the study it is found that India infoline is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. India infoline provides the relationship manager facility for encouragement and protects the interest of the investors. It also provides the information through the internet and mobile alerts that what IPOs are coming in the market and it also provides its research on the future prospect of the IPO.Study also concludes that people are not much aware of commodity market and while its going to be biggest market in India. From the above survey and observation it is found that most of the people who are trading in share market belongs to the employee group, next comes the business men and other class of income people. As the share market value goes on increasing day by day the investor who wants to invest in shares also increasing. But investing in shares is as risky as earning yield.Trading in online trading firm is easy as it all delivered with internet and within a few minutes the customer can buy and sell shares which save time as well as reduction of paper work. Hence trading in share market is increasing day by day and investors are ready to invest their investment in share market only.I got the knowledge about the customers needs and their references for having a particular product. The need of customers differs from person to person, area, locality and occupation. Customer always wants more service by paying less.They expect all the information such less rates, less brokerages, highly returns and better service level without delay.

SUGGESTIONS / RECOMMENDATIONS

Provide the facility of free demonstrations for all Improvement in the opening of De-mat & contract notice procedure is required There should be a limited number of clients under the relationship manger. So that he can handle new as well as old customer properly Some promotional activities are required for the awareness of the customer People at young age should be encouraged to invest in stock market Seminars should be more held for providing information to prospective and present customers In the organization, There must me be co-operation with other department and other branches Company should make more promotional activities by giving advertisements and publicity. Give more demonstration to customers so that they can get complete knowledge about online trading Give the complete information about products and services offered by the company to the customers. The number of branches it has at present should be increased all over the country, which will attract a large number of customers. Company should educate about the rules and regulations of SEBI to its customers.

REFERENCES AND BIBLIOGRAPHY

Books(1)Chandra P - Investment Analysis and Portfolio Management (Tata Mc Graw Hill, 2008)2) Fischer and Jordan - Security Analysis and Portfolio Management (Prentice-Hall, 1996, 6th edition)3) Ranganatham - Investment Analysis and Portfolio Management (Pearson Education, 1st Ed.)4) Pandian P - Security Analysis and Portfolio Management (Vikas, 1st Ed.)5) Bodie, Kane, Marcus & Mohanti - Investment and Indian Perspective (TMH, 6th Ed.).

Websites www.usectrade.com www.angeltrade.com www.indianshareshistory.com www.bseindia.com www.statebankofindia.com www.moneycontrol.com News Papers Times of India Business Standard Economic times

ANNEXURE

QUESTIONNAIRE1. Would you like to invest in the stock market?(a) Yes (b) No2. If not why?(a) Lack of Knowledge(b) Feel its Risky(c) No time(d) Dont have money3. Do you know about online share trading?(a) Yes(b) No4. Does u have Demat & Trading A/C?(a) Yes(b) No5. In which Brokerage house y