Investor Perception Towards Share Market

8/13/2019 Investor Perception Towards Share Market

1/91

A Report On

Analytical Study on InvestorPreference With Respect To

Increasing Trend in Share Market

y!arun "hunna

UNIVERSITY ROLL NO.80104317059

MA #$$%$'$

A Report su()itted in Partialfulfill)ent of the re*uire)ents of P+

PRO+RAMP,-. T/01-I0A2 ,-I!/RSIT3


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ACKNOWLEDGEMENT

This research 4ould not have (een possi(le 4ithout the

)onu)ental support fro) Rel!"#e M$"e% L&'5 Of course6ulti)ately such help co)e fro) people5 I 4ould like to thankReliance Money 2td5 for giving )e the approval to do this pro7ectin the organi8ation5 It is a great pleasure to ackno4ledge the support ofM(. S)!*& S)!(+! 90enter Manager:5 1e 4as there every step ofthe 4ay5 I have learnt a lot fro) hi) a(out share )arket5 I 4ant to thank all the respondents 4ho provided)e ti)e and infor)ation for )y pro7ect and at the sa)e ti)e ne4e;periences in day to day life5I thank )y faculty guide M(. ,!(-"'e( S") 4ho help )e outat every critical point and gave )e his valua(le advice to solve

pro(le)s5I 4ant to give )y special thanks to all faculty )e)(ers of+5+5-5I5M5T for providing )e opportunity to 4ork on this pro7ect5 2ast (ut not the least I a) very thankful to+5+5-5I5M5T as this institute provided )e an opportunity to co)e

into this field and do training in Reliance Money 2td5

VARUN D/UNNA


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DECLARATION

I here (y declare that this pro7ect 4ork entitled Analytical Study

on Investor Preference With respect To Increasing Trend in Share

Market is )y 4ork6 carried out under the guidance of )y


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,REACE

This pro7ect report pertains to the )aking of a TRAINING

$ M.2.A. #((#l+.

The P,RPOS/ of this pro7ect is to )ake the students to have

thorough kno4ledge of the topics given to the)5 I learned a lot

fro) the hard 4ork I put in to collect infor)ation regarding the

sa)e6 4hich 4ould (e of great use in )y near future as aprofessional5

.ustification cannot (e done to 4hatever I have learnt 4ithin

a fe4 pages (ut I have still tried )y (est to cover as )uch as

possi(le a(out Analytical study of investor perception towards

increasing trend in share marketin this report5

eing students of Masters in usiness Ad)inistration6 4e

need to (e a4are of the organi8ational internal?e;ternal

environ)ent5


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TA2LE O CONTENTS

Introduction

Share )arket? stock )arket

Mutual fund

Research o(7ective

Research )ethodology

"ata Analysis 4ith Interpretations


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INTRODUCTION

/ISTORY O ADA GROU,

$"'e( M(. D)()! A+!"

"hiru(hai A)(ani the )ost cherished 4as perhaps Indias greatest 4ealth

creator5 In one lifeti)e6 he (uilt6 starting fro) the prover(ial scratch6 Indias

largest private sector enterprise5

When "hiru(hai e)(arked on his first (usiness venture6 he had a seed

capital of (arely ,SB >$$ 9around Rs '=6$$$:5 Over the ne;t three and a half

decades6 he converted this fledgling enterprise into su) of Rs C$6$$$ crore

colossus an achieve)ent 4hich earned Reliance a place on the glo(al


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When

"hiru(hai

A)(ani

died6 his

(oth sons

9Mukesh

"hiru(hai

A)(ani E

Anil

"hiru(hai

A)(ani:

launched

into a

(itter and

very

pu(lic

(attle6

4hich

spanned

the past

seven

)onths5


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settle)ent (et4een the)5 After this state)ent the e)pire 4as divided (et4een the)5 So

the e)pire 4hich 4as given to Anil "hiru(hai A)(ani ca)e to (e kno4n as A"A

group

INTRODUCTION TO COR,ORATE

V6$"

To build a global enterprise for all our stakeholders, and a great future

for our country6 to give )illions of young Indians the po4er to shape their

destiny6 the )eans to reali8e their full potentialG

M66$"

Our Mission is to keep the custo)er satisfaction as focus point of all our

operations6 adopt the (est international practices in under4riting6 clai)s and

custo)er service6 (e the )ost innovative in product develop)ent6 esta(lish

presence all over India6 ensure sustained value addition to all stake holders

and to uphold 0orporate !alue E 0orporate +overnance5

I"&($'#&$" $ ($


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The Reliance H Anil "hiru(hai A)(ani +roup is a)ong Indias top three

private sector (usiness houses on all )a7or financial para)eters6 4ith a

)arket capitali8ation of Rs5>#D6$$$ crores 9,SB %' (illion:6 net assets in

e;cess of Rs5''D6$$$ crores 9,SB # (illion:6 and net 4orth to the tune of

Rs5DD6$$$ crores 9,SB '= (illion:

Across different co)panies6 the group has a custo)er (ase of over '$$

)illion6 the largest in India6 and a shareholder (ase of over '# )illion6

a)ong the largest in the 4orld5

Through its products and services6 the Reliance & A"A +roup touches the

life of ' in '$ Indians every single day 5It has a (usiness presence that

e;tends to over =6D$$ to4ns and >$$6$$$5villages in India and D continents

across the 4orld5 The interests of the +roup range fro) co))unications

9Reliance 0o))unications: and financial services 9Reliance 0apital 2td:6 to

generation6 trans)ission and distri(ution of po4er 9Reliance /nergy:6

infrastructure and entertain)ent5

Within a year of its (irth as a result of de)erger of Reliance Industries6 Anil

"hiru(hai A)(ani +roup 9A"A+: had gone for a corporate i)age

)akeover6 unveiling a ne4 logo and signature tune in line 4ith its custo)er

interface5

The group has allocated appro;i)ately Rs5 'D$ crore for the corporate

advertise)ent fil)6 4ith the the)e line6 JThink (iggerK Think (etterJ6 in

televisions and other )edia outlets5

According to Anil A)(ani6 the corporate )akeover presents

the group 4ith the opportunity Lto get closer to our ne4

identity6 to reflect on the philosophy (ehind it6 and to cele(rate

the spirit of tea)4ork that lies at the heart of it5L


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-e4 corporate colors (lue and red convey values of integrity6 confidence6

energy and passion555 Reliance Ape; is an e)(odi)ent of hope6 opti)is)

and success5

A(out the 0hair)an Mr5 Anil " A)(ani

Regarded as one of the fore)ost corporate leaders of conte)porary India6

Mr5 Anil " A)(ani6 =%6 is the chair)an of all listed co)panies of the

Reliance A"A +roup6 na)ely6 Reliance 0o))unications6 Reliance 0apital6

Reliance /nergy and Reliance -atural Resources5He is also the president of the DhirubhaiAmbani Institute of Information and Communications Technology, Gandhinagar

An MA fro) the Wharton School of the ,niversity of Pennsylvania6 Mr5

A)(ani is credited 4ith pioneering several financial innovations in the

Indian capital )arkets5 1e spearheaded the countrys first forays into

overseas capital )arkets 4ith international pu(lic offerings of glo(al

depositary receipts6 converti(les and (onds5

,nder his chair)anship6 the constituent co)panies of the Reliance A"A

group have raised nearly ,SB > (illion fro) glo(al financial )arkets in aperiod of less than 'D )onths5

Mr5 A)(ani has (een associated 4ith a nu)(er of prestigious acade)ic

institutions in India and a(road5

/e 6 #((e"&l% ! +e+e( $

oard of +overnors6 Indian Institute of Manage)ent 9IIM:6 Ah)ada(ad

oard of +overnors6 Indian Institute of Technology 9IIT:6 Fanpur

/;ecutive oard6 Indian School of usiness 9IS:6 1ydera(ad

Wharton oard of Overseers6 the Wharton School6 ,SA


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In .une #$$=6 Mr5 A)(ani 4as elected as an Independent )e)(er of the

Ra7ya Sa(ha H ,pper 1ouse6 Parlia)ent of India6 a position he chose to

resign voluntarily on March #D6 #$$C5

A!('6 !"' A#)e-e+e"&6 $ M(. A+!"

Selected (y Asia 4eek )aga8ine for its list of J2eaders of the

Millenniu) in usiness and


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Oe#&-e6 $ ADA G($

S)!(e)$l'e( I"&e(e6&

We value the trust of shareholders6 and keep their interests para)ount in

every (usiness decision 4e )ake6 every choice 4e e;ercise

,e$le C!(e

We possess no greater asset than the *uality of our hu)an capital and no

greater priority than the retention6 gro4th and 4ell&(eing of our vast pool of

hu)an talent

C$"6+e( $#6

We rethink every (usiness process6 product and service fro) the standpoint

of the consu)er H so as to e;ceed e;pectations at every touch point

E:#elle"#e " E:e#&$"

We (elieve in e;cellence of e;ecution H in large6 co)ple; pro7ects as )uch

as s)all everyday tasks5 If so)ething is 4orth doing6 it is 4orth doing 4ell5

Te!+ W$(*

The 4hole is greater than the su) of its partsK in our rapidly&changing

kno4ledge econo)y6 organi8ations can prosper only (y )o(ili8ing diverse

co)petencies6 skill sets and e;pertiseK (y i)(i(ing the spirit of thinking

together && integration is the rule6

/scalation is an e;ception

,($!#&-e I""$-!&$"


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We nurture innovation (y (reaking silos6 encouraging cross&fertili8ation of

ideas E fle;i(ility of roles and functions5 We create an environ)ent of

accounta(ility6 o4nership and pro(le)&solving H(ased on participative 4ork

ethic and leading&edge research

Le!'e(6) % E+$e(+e"&

We (elieve leadership in the ne4 econo)y is a(out consensus (uilding6

a(out giving up controlK a(out ena(ling and e)po4ering people do4n the

line to take decisions in their areas of operation and co)petenceG

S$#!l Re6$"6l&%

We (elieve that organi8ations6 like individuals6 depend on the support of the

co))unity for their survival and sustenance6 and )ust repay this generosity

in the (est 4ay they can.


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C$+!"e6 "'e( ADA ($

Reliance Capital

Reliance 0apital is one of Indias leading and fastest gro4ing private sector

financial services co)panies6 and ranks a)ong the top > private sector

financial services and (anking co)panies6 in ter)s of net 4orth5

The co)pany has interests in asset )anage)ent and )utual funds6 life and

general insurance6 private e*uity and proprietary invest)ents6 stock (roking

and other activities in financial services5

Reliance Communications Limited

The flagship co)pany of the Reliance H A"A +roup6 Reliance

0o))unications 2i)ited6 is the reali8ation of our founders drea) of

(ringing a(out a digital revolution that 4ill provide every Indian 4ith

afforda(le )eans of co))unication and a ready access to infor)ation5

The co)pany (egan operations in ' and has over =% )illion su(scri(ers

today5 It offers a co)plete range of integrated teleco) services5 These

include )o(ile and fi;ed line telephonyK (road(and6 national andinternational long distance services6 data services and a 4ide range of value

added services and applications ai)ed at enhancing the productivity of

enterprises and individuals5

Reliance Infrastructure Ltd


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It is not only Indias largest private sector enterprise in po4er utility (ut also

the largest private sector player in )any other infrastructure sectors of India5

In the po4er sector 4e are involved in generation6 trans)ission6 distri(ution

and trading of electricity and constructing po4er plants as /P0 partners5 In

the infrastructure space the co)pany is focused on roads6 ur(an

infrastructure 4hich includes MRTS6 Sea link and Airports6 Specialty Real

/state 4hich includes (usiness districts6 trade to4ers6 convention centre and

S/ 4hich includes IT E IT/S S/ and non IT S/ as 4ell as free trade

8ones5

Reliance Health

In a country 4here healthcare is fast (eco)ing a (oo)ing industry6 Reliance

1ealth is a focused healthcare services co)pany ena(ling the provision of

solution to Indians6 at afforda(le prices5 The co)pany ai)s at providing

integrated health services that 4ill co)pete 4ith the (est in the 4orld5 It also

plans to venture into diversified fields like Insurance Ad)inistration6 1ealth

care "elivery and Integrated 1ealth6 1ealth Infor)atics and Infor)ation

Manage)ent and 0onsu)er 1ealth5

Reliance Health aims at reolutioni!ing healthcare in India by

enabling a healthcare enironment that is both affordable and

accessible through partnerships "ith goernment and priate

businesses.

Reliance Media !ntertainment

As part of the Reliance & A"A +roup6 Reliance /ntertain)ent is

spearheading the +roups foray into the )edia and entertain)ent space5 The

key content initiative are across Movies6 Music6 Sports6 +a)ing6 Internet E

)o(ile portals6 leading to direct opportunities in delivery across the


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e)erging digital distri(ution platfor)s digital cine)a6 IPT!6 "T1 and

Mo(ile T!5

Reliance A"A +roup ac*uired Adla(s )ediu) and

large si8ed po4er pro7ects 4ith a co)(ined planned installed capacity of #%6#$$ MW6

one of the largest portfolios of po4er generation assets under develop)ent in India5 Our

'> po4er pro7ects are planned to (e diverse in geographic location6 fuel

type6 fuel source and off&take6 and each pro7ect is planned to (e strategically

located near an availa(le fuel supply or load center5 The identified pro7ect

sites are located in 4estern India 9'#6##$ MW:6 northern India 96$%$ MW:

and northeastern India 9#6$$ MW: and southern India 9=6$$$ MW:5 They

include si; coal&fired pro7ects 9'=6C#$ MW: to (e fueled (y reserves fro)

captive )ines and supplies fro) India and a(road6 t4o gas&fired pro7ects

9'$6#%$ MW: to (e fueled pri)arily (y reserves fro) the Frishna +odavari

asin 9the LF+ asinL: off the east coast of India6 and four hydroelectric

pro7ects 9>6>$$ MW:6 three of the) in Arunachal Pradesh and one in


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,ttarakhand5 Reliance Po4er has ac*uired the t4o ultra )ega po4er

pro7ects of =6$$$ MW each at Sasan in Madhya Pradesh and Frishnapatna)

in Andhra Pradesh5 The 6=%$ MW pro7ect to (e located at "adri in ,ttar

Pradesh is e;pected to (e the largest gas&fired po4er pro7ect at a single

location in the 4orld5 We intend to sell the po4er generated (y these

pro7ects under a co)(ination of long&ter) and short&ter) PPAs to state&

o4ned and private distri(ution co)panies and industrial consu)ers5

N!+e !"' l$#!&$" $ G($ #$+!"e6

Rel!"#e C!&!l ;Re6&e(e' O#e$>#$$$?'&$##&>$>##'>

0ontact


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I"&($'#&$" $ Rel!"#e #!&!l

Reliance 0apital 2td is a part of the Reliance & Anil "hiru(hai A)(ani

+roup6 and is ranked a)ong the #D )ost valua(le private co)panies in

India5

Reliance 0apital is one of IndiaJs leading and fastest gro4ing private sector

financial services co)panies6 and ranks a)ong the top > private sector

financial services and (anking groups6 in ter)s of net 4orth5

Reliance 0apital has interests in asset )anage)ent and )utual funds6 life

and general insurance6 private e*uity and proprietary invest)ents6 stock

(roking6 depository services6 distri(ution of financial products6 consu)er

finance and other activities in financial services5

The Reliance Anil "hiru(hai A)(ani +roup is one of IndiaJs top # (usiness

houses6 and has a )arket capitali8ation of over Rs5#6$6$$$ crore 9,SB D

(illion:6 net 4orth in e;cess of Rs5DD6$$$ crore 9,SB '= (illion:6 cash flo4s

of Rs5 ''6$$$ crore 9,SB #5% (illion: and net profit of Rs5 6$$ crore 9,SB

'5 (illion:


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2$!(' $ '(e#&$(6

A+&!) >)")"!l! ;V#e?C)!(+!"!"

Mr505P5 .ain6 C'6 is the for)er 0hair)an and Managing "irector of -TP0

2td5 9-ational Ther)al Po4er 0orporation:5


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C$+!"e6 "'e( Rel!"#e #!&!l

Reliance Money

Reliance Mutual $und %RM$&

Reliance Life Insurance

Reliance 'eneral Insurance

Reliance Consumer $inance


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I"&($'#&$" $ Rel!"#e +$"e%

Reliance Money is pro)oted (y Reliance 0apitalK one of IndiaJs leading and

fastest gro4ing private sector financial services co)panies6 ranking a)ong

the top > private sector financial services and (anking co)panies6 in ter)s

of net 4orth5 Reliance 0apital is a part of the Reliance Anil " A)(ani

+roup5

Reliance Money 4hich co))enced co))ercial operations in April #$$

has over >$$6$$$ custo)ers and =6>$$ outlets in )ore than >6D$$ locations

across India5 As on March >'6 #$$%6 Reliance Money had a distri(ution

net4ork of over %6D$$ outlets in over =6#D$ locations

Thus6 Reliance Money provides a co)prehensive platfor)6 offering an

invest)ent avenue for a 4ide range of asset classes5 Its endeavor is to

change the 4ay India transacts in financial )arket and avails financial

services5 Reliance Money offers a single 4indo4 facility6 ena(ling you to

access a)ongst others6 /*uities6 /*uity and 0o))odity derivatives6

Offshore Invest)ents6 IPOs6 Mutual


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0ost /ffective

0onvenience

Security token

Single Windo4 for Multiple Products

> in ' Integrated Access

"e)at Account 4ith Reliance 0apital

It also offers ne4s fro) the "OW .O-/S and R/,T/RS5

,($'#&6 $ Rel!"#e M$"e%

C$++$'&% 0o))odities )eans rice6 4heat6 sugar6 gold etc5 These could

(e traded 4ithout o4ning a piece of the co))odity you trade in5

0o))odities6 4hich you have (een eating or using all this years or donning

it as a fashion accessory or even running you car 4ith6 can (e no4 traded on

the Indian e;changes5 It has al4ays (een traded in the +lo(al e;changes6

no4 it is your turn to e;perience the po4er of co))odities5

$(e: The glo(al foreign e;change )arket is the (iggest )arket in the

4orld5 The nearly ,S" # trillion daily turnover e;ceeds the co)(ined

turnover of the entire 4orlds stock and (ond )arkets5 There are )any

reasons for the popularity of foreign e;change trading6 (ut a)ong the )ost

i)portant are6 the high li*uidity #= hours a day and the very lo4 dealingcosts associated 4ith trading5 The )arket is so large that a handful of players

can never influence its outco)e

E@&% /*uity is a share in the o4nership of a co)pany5 It represents a


24/91

clai) on the co)panys assets and earnings5 The ter)s share6 e*uity and

stock )ean the sa)e thing and can (e used 1olding a co)panys stock

)eans that you are one of the )any o4ners 9shareholders: of a co)pany6

and6 as such6 you have a clai) 9to the e;tent of your holding:5To everything

the co)pany o4ns5 As an o4ner6 you are entitled to your share of the

co)panys earnings as 4ell as any voting rights attached to the stock5

Another e;tre)ely i)portant feature of e*uity is its li)ited lia(ility6 4hich

)eans that6 as a part&o4ner of the co)pany6 you are not personally lia(le if

the co)pany is not a(le to pay its de(ts5 In case of other entities such as

partnerships6 if the partnership goes (ankrupt6 the partners are personally

lia(le to4ards the creditors?lenders and they )ay have to sell off their

personal assets like their house6 car6 furniture6 etc56 to )ake good the loss5 In

case of holding e*uity shares6 the )a;i)u) value you can lose is the value

of your invest)ent5 /ven if a co)pany of 4hich you are a shareholder goes

(ankrupt6 you can never lose your personal assets5

De(-!&-e6 "erivative products have (een around for a long6 long ti)e5 In

fact6 as early as the 'CD$s6 dealings rese)(ling present day derivative

)arket transactions 4ere seen in rice )arkets in Osaka6 .apan5 The first leap

to4ards an organi8ed derivatives )arket ca)e in '%=%6 4hen the 0hicago

oard of Trade 90OT:6 the largest derivative e;change in the 4orld6 4as

esta(lished5 Today6 e*uity and co))odity derivative )arkets are rapidly

gaining in si8e in India5 In ter)s of popularity too6 these )arkets are

catching on like a forest fire5

G$l' C$"6 An instru)ent of long ter) invest)ent6 +old acts as a hedge

against inflation (esides providing high li*uidity5 Most Indians share an


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e)otional (ond 4ith +old nearly (ordering on spirituality5


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contingencies5 ,nder certain Acts of Parlia)ent6 so)e types of insurance

like Motor Insurance and Pu(lic 2ia(ility Insurance have (een )ade

co)pulsory5

I,O When an unlisted co)pany )akes either a fresh issue of securities or

an offer for sale of its e;isting securities or (oth for the first ti)e to the

pu(lic5 This paves 4ay for listing and trading of the issuers securities5

Le "6(!"#e 2ife insurance helps Provide financial assurance E security

for your dependents E loved ones5 It is an i)portant part of the financial

planning (ou*uet for all individuals E fa)ilies5 2ife insurance products

offer co)prehensive financial solutions 4hich (esides offering financial

security also provide opportunity for saving6 invest)ent E ta; planning5

M&!l "'6 A )utual fund is an entity6 4hich offers a nu)(er of

invest)ent sche)es 4ith different invest)ent o(7ectives5 An investor

interested in investing in these sche)es needs to assess 4hich sche)e has an

invest)ent o(7ective that )atches his6 to )ake his selection fro) a)ong the

availa(le sche)es5

Mutual funds are 4ell&structured and closely&regulated entities6 4hich hire

invest)ent professionals to invest and )anage investors funds5 Mutual

funds are 4ell&structured and closely&regulated entities6 4hich hire

invest)ent professionals to invest and )anage investors funds5Mutualfunds issue units to each investor (ased on the a)ount invested5 ,nits of

)utual funds are si)ilar to shares issued (y co)panies5


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offering units at Rs '$ per unit6 he 4ill receive D$$ units in the sche)e 9Rs

D6$$$ ? Rs '$:5

The )utual fund invests the )oney collected fro) unit&holders on their

(ehalf5 Inco)e earned on these invest)ents is distri(uted (y the )utual fund

a)ong its investors in proportion to their holding in the sche)e5


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Investors

An investor is any party that )akes an invest)ent5 The ter) has taken on a

specific )eaning in financeto descri(e the particular types of people and

co)panies that regularly purchase e*uityor de(tsecuritiesfor financial gain

in e;change for fundingan e;panding co)pany5 2ess fre*uently6 the ter) is

applied to parties 4ho purchase real estate6 currency6 co))odity

derivatives6 personal property6 or other assets5 Invest)ent or investing is a

ter) 4ith several closely&related )eanings in(usiness )anage)ent6 financeand econo)ics6 related to saving or deferring consu)ption5 An asset is

usually purchased6 or e*uivalently a deposit is )ade in a (ank6 in hopes of

getting a future returnor interest fro) it5 The 4ord originates in the 2atin

LvestisL6 )eaning gar)ent6 and refers to the act of putting things 9)oney or

other clai)s to resources: into othersJ pockets5
http://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Personal_propertyhttp://en.wikipedia.org/wiki/Assetshttp://en.wikipedia.org/wiki/Business_managementhttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Saving_(money)http://en.wikipedia.org/wiki/Consumption_(economics)http://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Return_(finance)http://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Personal_propertyhttp://en.wikipedia.org/wiki/Assetshttp://en.wikipedia.org/wiki/Business_managementhttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Saving_(money)http://en.wikipedia.org/wiki/Consumption_(economics)http://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Return_(finance)http://en.wikipedia.org/wiki/Investment


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(ypes of investors

Individual investors9including trustson (ehalf of individuals6 andu)(rella co)panies for)ed for t4o or )ore to pool invest)ent

funds:

0ollectorsof art6 anti*ues6 and other things of value

Angel investors6 either individually or in groups

!enture capital funds6 4hich serve as invest)ent collectives on

(ehalf of individuals6 co)panies6 pension plans6 insurance

reserves6 or other funds5

Invest)ent (anks

usinessesthat )ake invest)ents6 either directly or via a captive

fund

Invest)ent trusts6 including real estate invest)ent trusts

Mutual funds6 hedge funds6 and other funds6 o4nership of 4hich

)ay or )ay not (e pu(licly traded 9these funds typically pool

)oney raised fro) their o4ner&su(scri(ers to invest in securities:
http://en.wikipedia.org/wiki/Natural_personhttp://en.wikipedia.org/wiki/Trust_(property)http://en.wikipedia.org/wiki/Collectorshttp://en.wikipedia.org/wiki/Arthttp://en.wikipedia.org/wiki/Antiqueshttp://en.wikipedia.org/wiki/Angel_investorshttp://en.wikipedia.org/wiki/Venture_capitalhttp://en.wikipedia.org/wiki/Investment_bankshttp://en.wikipedia.org/wiki/Businesseshttp://en.wikipedia.org/wiki/Investment_trustshttp://en.wikipedia.org/wiki/Real_estate_investment_trusthttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Hedge_fundshttp://en.wikipedia.org/wiki/Publicly_tradedhttp://en.wikipedia.org/wiki/Natural_personhttp://en.wikipedia.org/wiki/Trust_(property)http://en.wikipedia.org/wiki/Collectorshttp://en.wikipedia.org/wiki/Arthttp://en.wikipedia.org/wiki/Antiqueshttp://en.wikipedia.org/wiki/Angel_investorshttp://en.wikipedia.org/wiki/Venture_capitalhttp://en.wikipedia.org/wiki/Investment_bankshttp://en.wikipedia.org/wiki/Businesseshttp://en.wikipedia.org/wiki/Investment_trustshttp://en.wikipedia.org/wiki/Real_estate_investment_trusthttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Hedge_fundshttp://en.wikipedia.org/wiki/Publicly_traded


30/91

I"-e6&+e"&6

Investing is a )ethod of purchasing assets in order to gain profit in the for)

of reasona(ly predicta(le inco)e 9dividends6 interest6 or rentals: and

appreciation over the long ter)5 A person should invest so that the )oney

gro4s and shields against rising inflation5 The rate of return on invest)ents

should (e greater than the rate of inflation6 leaving you 4ith a nice surplus

over a period of ti)e5 Whether your )oney is invested in stocks6 (onds6

)utual funds or certificates of deposit 90":6 the end result is to create

4ealth for retire)ent6 )arriage6 college fees6 vacations6 (etter standard of

living or to 7ust pass on the )oney to the ne;t generation or )ay(e have

so)e fun in your life and do things you had al4ays drea)ed of doing 4ith a

little e;tra cash in your pocket5 Also6 itJs e;citing to revie4 your invest)ent

returns and to see ho4 they are accu)ulating at a faster rate than your

salary5

y investing into the )arket right a4ay you allo4 your invest)ents )ore

ti)e to gro46 4here(y the concept of co)pounding interest s4ells your

inco)e (y accu)ulating your earnings and dividends5 0onsidering the

unpredicta(ility of the )arkets6 research and history indicates these three

golden rules for all investors

'5 Invest early


31/91

#5 Invest regularly

>5 Invest for long ter) and not short ter)

There is no statutory a)ount that an investor needs to invest in order to

generate ade*uate returns fro) his savings5 The a)ount that you invest 4ill

eventually depend on factors such as

' 3our risk profile

#5 3our Ti)e hori8on

>5 Savings )ade


32/91

$ll$" A(e &)e I"-e6&+e"& W)e(e I"-e6&$( C!"

I"-e6&

Invest)ent Opportunities for anInvestor

+overn)ent securities5

#5 -on +overn)ent securities5


33/91

1< G$-e("+e"& 6e#(&e6

+overn)ent securities(G-secs) are sovereign securities which are issued by the Reserve

Bank of India on behalf of Government of India, in lieu of the Central Governments market

borrowing !rogramme"

The ter) +overn)ent Securities includes

0entral +overn)ent Securities5 State +overn)ent Securities5

Treasury ills5

T%e6 $ G$-e("+e"& Se#(&e6

Types of+overn)ent

Securities

"atedSecurities

ero 0oupon(onds

Partly PaidStock


34/91

"ated #ecurities$ %re generally fi&ed maturity and fi&ed cou'on securities usuallycarrying semi-annual cou'on" hese are called dated securities because these are identifiedby their date of maturity and the cou'on, e"g", "*+ GI .*. is a Central Government

security maturing in .*., which carries a cou'on of "*+ 'ayable half yearly" he keyfeatures of these securities are$

They are issued at face value5

0oupon or interest rate is fi;ed at the ti)e of issuance6 and re)ainsconstant till rede)ption of the security5

The tenor of the security is also fi;ed5

Interest ?0oupon pay)ent is )ade on a half yearly (asis on its face value5

The security is redee)ed at par 9face value: on its )aturity date5

ero 0oupon (onds$ %re bonds issued at discount to face value and redeemed at 'ar"hese were issued first on /anuary 0, 001 and were followed by two subse2uent issues in001-03 and 003-04 res'ectively" he key features of these securities are$

They are issued at a discount to the face value5

The tenor of the security is fi;ed5

The securities do not carry any coupon or interest rate5 The difference(et4een the issue price 9discounted price: and face value is the return on thissecurity5


Partly Paid Stock$ Is stock where 'ayment of 'rinci'al amount is made ininstallments over a given time frame" It meets the needs of investors with regular flow offunds and the need of Government when it does not need funds immediately" he first issueof such stock of eight year maturity was made on 5ovember 3, 001 for Rs" .*** crore"#uch stocks have been issued a few more times thereafter" he key features of these

securities are$


35/91

They are issued at face value6 (ut this a)ount is paid in install)entsover a specified period5

0oupon or interest rate is fi;ed at the ti)e of issuance6 and re)ainsconstant till rede)ption of the security5

The tenor of the security is also fi;ed5

Interest ?0oupon pay)ent is )ade on a half yearly (asis on its facevalue5



36/91


2e"e&6 $ I"-e6&" " G$-e("+e"& Se#(&e6

Additional Inco)e Ta; (enefit u?s %$2 of the Inco)e Ta; Act forIndividuals

@ualifies for S2R purpose

ero default risk (eing sovereign paper

1ighly li*uid5

Transparency in transactions and si)plified settle)ent proceduresthrough 0S+2?-S"25


37/91

< N$" G$-e("+e"& 6e#(&e6


38/91

A< S)!(e M!(*e& B S&$#* M!(*e&

Indian Stock Markets are one of the oldest in Asia5 Its history dates (ack to

nearly #$$ years ago5 The earliest records of security dealings in India are

)eagre and o(scure5 The /ast India 0o)pany 4as the do)inant institution

in those days and (usiness in its loan securities used to (e transacted to4ards

Types of -on +overn)entSecurities

A: Share Market

: Mutual


39/91

the close of the eighteenth century5 y '%>$Js (usiness on corporate stocks

and shares in ank and 0otton presses took place in o)(ay5 Though the

trading list 4as (roader in '%>6 there 4ere only half a do8en (rokers

recogni8ed (y (anks and )erchants during '%=$ and '%D$5 The '%D$Js

4itnessed a rapid develop)ent of co))ercial enterprise and (rokerage

(usiness attracted )any )en into the field and (y '%C$ the nu)(er of

(rokers increased into C$5

In '%C$&C' the A)erican 0ivil War (roke out and cotton supply fro)

,nited States of /urope 4as stoppedK thus6 the JShare ManiaJ in India (egun5

The nu)(er of (rokers increased to a(out #$$ to #D$5 1o4ever6 at the end

of the A)erican 0ivil War6 in '%CD6 a disastrous slu)p (egan 9for e;a)ple6

ank of o)(ay Share 4hich had touched Rs #%D$ could only (e sold at

Rs5 %:5 At the end of the A)erican 0ivil War6 the (rokers 4ho thrived out

of 0ivil War in '%=6 found a place in a street 9no4 appropriately called as

"alal Street: 4here they 4ould conveniently asse)(le and transact (usiness5

In '%%6 they for)ally esta(lished in o)(ay6 the L-ative Share and Stock

rokersJ AssociationL 94hich is alternatively kno4n as The Stock

/;change L:5

,(+!(% Se#$"'!(% M!(*e&

There are t4o 4ays for investors to get shares fro) thepri)ary andsecondary )arkets5 In pri)ary )arkets6 securities are (ought (y 4ay of

pu(lic issue directly fro) the co)pany5 In Secondary )arket share are

traded (et4een t4o investors5


40/91

,RIMARY MARKET

Market for ne4 issues of securities6 as distinguished fro) the Secondary

Market=4here previously issued securities are (ought and sold5 A )arket ispri)ary if the proceeds of sales go to the issuer of the securities sold5 This is

part of the financial )arket 4here enterprises issue their ne4 shares and

(onds5 It is characteri8ed (y (eing the only )o)ent 4hen the enterprise

receives )oney in e;change for selling its financial assets5

SECONDARY MARKET

The )arket 4here securities are traded after they are initially offered in the

pri)ary )arket5 Most trading is done in the secondary )arket5 To e;plain

further6 it is trading in previously issued financial instru)ents5 An organi8ed

)arket for used securities5 /;a)ples are the -e4 3ork Stock /;change

9-3S/:6 o)(ay Stock /;change 9S/:6 -ational Stock /;change -S/6

(ond )arkets6 over&the&counter )arkets6 residential )ortgage loans6

govern)ental guaranteed loans etc5

While there has (een increased activity in pri)ary de(t issues6 the secondary

)arket for de(t is yet to (eco)e active5 The entry of


41/91

/$ &$ T(!'e S&$#* M!(*e& S%6&e+

The stock )arket syste) is an avenue of ho4 to trade stock for listedcorporations5 As a corporation is for)ed6 its initial shareholders are a(le to

ac*uire shares of stock fro) the point of su(scription 4hen a co)pany is

created5 When a co)pany starts to (e traded to the pu(lic6 the pri)ary

)arket co)es in 4here those 4ho su(scri(e to the initial pu(lic offering

9IPO: takes on the shares of stock sold fro) point of IPO5 When those 4ho

(ought into a co)pany at IPO point of vie4 decides to sell their shares of

stock to other people6 they can do so (y going to the stock )arket5

The stock )arket is a secondary )arket for securities trading 4herein

original or secondary holders of a co)panys shares of stock can sell their

stocks to other individuals 4ithin the fra)e 4ork of the stock )arket

syste)5

The stock )arket has (uyers of stocks or those 4ho 4ants to o4n a part of

the co)pany (ut 4asnt a(le to do so during the initial pu(lic offerings

)ade (y the co)pany to the pu(lic 4hen it has decided to list itself as a

pu(licly listed co)pany5 The secondary )arket or the stock )arket allo4s

other individuals to sell shares of the co)pany 4hen the initial shareholders

)ay have reali8ed that they 4ant to sell their shares after gaining either

significant profit or reali8ed significant loss fro) point of ac*uiring a

co)pany fro) its IPO price5

As the stock )arket has developed and progressed over the years6 the 4ays

of ho4 to trade stock fro) one individual to another has (eco)e )ore

co)plicated and )ore challenging to (e regulated5 Technology has aided in


42/91

Providing )ore efficient 4ays of transactions5


43/91

A: 2$+!% S&$#* E:#)!"e

Of the ## stock e;changes in the country6 Mu)(aiJs 9earlier kno4n as

o)(ay:6 o)(ay Stock /;change is the largest6 4ith over C6$$$ stocks

listed5 The S/ accounts for over t4o thirds of the total trading volu)e in

the country5 /sta(lished in '%D6 the e;change is also the oldest in Asia5

Stock /;changes in India

A: o)(ay Stock /;change 9S/:

: -ational Stock /;change 9-S/:

0: Regional Stock /;changes


44/91


45/91

long&run rate of return on the S/ Sense; and that co)es to $5D# per 4eek

9continuously co)pounded: 4ith a standard deviation of >5C5 This

translates to # per annu)6 4hich translates to roughly '% per annu)

after co)pensating for inflation5

Ne De-el$+e"&6

In -ove)(er6 'C6 as a )ove to reduce the counter party risk6 the

/;change set up a trade guarantee sche)e i5e5 all trades carried out on the

O2T are guaranteed (y the 0learing 1ouse of the /;change5 A depository

has (een set up as a 7oint venture (y the ank of India and the /;change5

1o4ever6 it 4ill (e a su(sidiary of the ank of India5 The /;change

introduced trading in fi;ed inco)e securities under a separate group to give

i)petus to trading in de(entures and other corporate de(t instru)ents6 to

increase trading in govern)ent dated securities5

2< N!&$"!l S&$#* E:#)!"e

The -ational Stock /;change 9-S/:6 located in o)(ay6 is IndiaJs first de(t

)arket5 It 4as set up in '> to encourage stock e;change refor) through

syste) )oderni8ation and co)petition5 It opened for trading in )id&'=5 It

4as recently accorded recognition as a stock e;change (y the "epart)ent of

0o)pany Affairs5 The instru)ents traded are6 treasury (ills6 govern)ent

security and (onds issued (y pu(lic sector co)panies5 The nu)(er of


46/91

)e)(ers trading on the e;change has (een on a steady increase6 helping

integrate the national )arket and providing a )odern syste) 4ith a

co)plete audit trail of all transactions5

Me+e(6) '$#C trading )e)(ers on the 0apital Market seg)ent6 of 4hich

around %C account for corporates and the re)aining individuals and

fir)s5 ''> trading )e)(ers on the Wholesale "e(t Market seg)ent6 all of

4hich account for corporates5 9Out of these ''> trading )e)(ers6 '$C

are )e)(ers of the 0apital Market seg)ent also and are included in

the '$#C )e)(ers indicated a(ove:5

Ge$(!)# D6&(&$" Over #C$$ trading ter)inals

Over 'D$$ !SATs across the country 4ith a #= hour -et4ork

)onitoring syste) in over 'C$ cities as of "ece)(er >'st6 '5

N+e( $ C$+!"e6 On the 0apital Market seg)ent6 C$$ securities are listed and C#

securities are per)itted to trade as of "ece)(er >'st6 '5


47/91

On the Wholesale "e(t Market seg)ent6 =$ securities are listed

and >C securities are per)itted to trade as of "ece)(er >'st6

'5 Of the =$ securities listed6 #C are +overn)ent Securities6

T&ills and the (alance account for other securities5

C!&!l M!(*e& Oe(!&$"6 -S/ is 4orking to increase the capacity of the trading syste) fro)

the present =6 $$6$$$ trades per day to )ore than '$6 $$6$$$ trades

per day5

The average daily nu)(ers of trades have gone up fro) over %>trades in -ove)(er&= to over '6 =%6%> trades in -ove)(er $%5

On August 6 the nu)(er of trades reached a record high of #6

>C6='' 4hich )akes -S/ one of the largest stock e;changes in the

4orld5

Average daily traded value has increased fro) Rs5 crores in -ove)(er&

= to )ore than Rs5 '=%$ crores in "ece)(er&$% 4ith a high of

Rs5>6$%$5C' crores recorded on #Cth .une&$%5

-u)(er of shares traded has increased fro) C5'$ lakhs in -ove)(er&=

to ''6'=%5#' lakhs in "ece)(er&$%5

-et traded value has increased fro) Rs5'#D crores in -ove)(er &= to

Rs5 >#6D= crores in "ece)(er&$%5

"elivered value 9settle)ent 4ise: has increased fro) Rs5C$ crores in

-ove)(er &= to Rs5D6 $$% crores in "ece)(er &$%5


48/91

-u)(er of shares traded 9depository seg)ent: has increased fro) #$$

shares in "ece)(er &C to '6 '6'$# shares in "ece)(er&$%5

-et traded value 9depository seg)ent: has increased fro) Rs5$5=> lakhs

in "ece)(er &C to Rs5'%D5== lakhs in "ece)(er&$%5

Market share of cities other than five )etros 9Mu)(ai6 "elhi6 0alcutta6

0hennai E Ah)eda(ad: 4hich 4as a(out 'C in first *uarter of 'C

gre4 to as high as #= during the last *uarter of '5

The ratio of contri(ution to turnover fro) -on Stock /;change centers to

Stock /;change centers has risen fro) $5>C in first *uarter 9.an to Mar:

of 'C to over '$ in fourth *uarter of '5

The )arket capitali8ation of co)panies has increased fro) Rs5 ##C>

crores in -ove)(erJ= to Rs5 =D'CC> crores in $ crores in -ove)(er&= to over Rs5'$=#

crores per 4eek in "ece)(er&5 The highest value of shares

handled during the period 4as )ore than Rs5 ##D'5=$ crores5

Inter&Region 0learing -S002 has Regional 0learing 0enters at

"elhi6 0alcutta6 0hennai and a 0entral 0learing 0entre at Mu)(ai5


49/91

Me)(ers have the option of delivering?receiving the securities at a

clearing centre chosen (y the)5

T(!'" ,!&&e(" $ &)e I"'!" S&$#* M!(*e&

Trading in Indian stock e;changes is li)ited to listed securities of pu(lic

li)ited co)panies5 They are (roadly divided into t4o categories6 na)ely6

specified securities 9for4ard list: and non&specified securities 9cash list:5

/*uity shares of dividend paying6 gro4th&oriented co)panies 4ith a paid&up

capital of at least Rs5D$ )illion and a )arket capitali8ation of at least Rs5'$$

)illion and having )ore than #$6$$$ shareholders are6 nor)ally6 put in the

specified group and the (alance in non&specified group5


50/91

T4o types of transactions can (e carried out on the Indian stock e;changes

9a: spot delivery transactions Lfor delivery and pay)ent 4ithin the ti)e or

on the date stipulated 4hen entering into the contract 4hich shall not (e

)ore than '= days follo4ing the date of the contractL and 9(: for4ard

transactions Ldelivery and pay)ent can (e e;tended (y further period of '=

days each so that the overall period does not e;ceed $ days fro) the date of

the contractL5 The latter is per)itted only in the case of specified shares5 The

(rokers 4ho carry over the outstanding pay carry over charges 4hich are

usually deter)ined (y the rates of interest prevailing5

A )e)(er (roker in an Indian stock e;change can act as an agent6 (uy and

sell securities for his clients on a co))ission (asis and also can act as a

trader or dealer as a principal6 (uy and sell securities on his o4n account and

risk6 in contrast 4ith the practice prevailing on -e4 3ork and 2ondon Stock

/;changes6 4here a )e)(er can act as a 7o((er or a (roker only5

The nature of trading on Indian Stock /;changes are that of age old

conventional style of face&to&face trading 4ith (ids and offers (eing )ade

(y open outcry5 1o4ever6 there is a great a)ount of effort to )oderni8e the

Indian stock e;changes in the very recent ti)es5

C) Regional Stock Excange!

There are ## stock e;changes in India5 A)ong the) t4o are national level

stock e;changes na)ely o)(ay Stock /;change 9S/: and -ational Stock

/;change of India 9-S/:5 The rest #$ are Regional Stock /;changes5


51/91

L6& $ Re$"!l S&$#* E:#)!"e6 " I"'!

Ah)eda(ad Stock /;change5

angalore Stock /;change5

hu(anesh4ar Stock /;change5

0alcutta Stock /;change5

0ochin Stock /;change5

0oi)(atore Stock /;change5

"elhi Stock /;change5

+u4ahati Stock /;change5

1ydera(ad Stock /;change5

.aipur Stock /;change5

2udhiana Stock /;change5

Madhya Pradesh Stock /;change5

Madras Stock /;change5

Mangalore Stock /;change5Meerut Stock /;change5

Pune Stock /;change5

Magadh Stock /;change5

Saurashtra Futch Stock /;change5

!adodara Stock /;change5

,ttar Pradesh Stock /;change5

T)e 'e-el$+e"& " I"'!" 6e#(&e6 +!(*e& 6"#e199.


52/91

SE"I # Intro$%ction

In '%% the Securities and /;change oard of India 9S/I: 4as esta(lished

(y the +overn)ent of India through an e;ecutive resolution6 and 4assu(se*uently upgraded as a fully autono)ous (ody 9a statutory oard: in the

year '# 4ith the passing of the Securities and /;change oard of India

Act 9S/I Act: on >$th .anuary '#5 In place of +overn)ent 0ontrol6

statutory and autono)ous regulatory (oards 4ith defined responsi(ilities6 to

cover (oth develop)ent E regulation of the )arket6 and independent po4ers

have (een set up5 Parado;ically this is a positive outco)e of the Securities

Sca) of '$&'5 The (asic o(7ectives of the oard 4ere identified as

To protect the interests of investors in securitiesK

To pro)ote the develop)ent of Securities MarketK

To regulate the securities )arket and


53/91


54/91

S/I introduces regulations for pri)ary and other secondary )arketinter)ediaries6 (ringing the) 4ithin the regulatory fra)e4ork5

Refor)s (y S/I in the pri)ary )arket include i)proved disclosurestandards6 introduction of prudential nor)s6 and si)plification of issue

procedures5 0o)panies re*uired to disclose all )aterial facts and specificrisk factors associated 4ith their pro7ects 4hile )aking pu(lic issues5

2isting agree)ents of stock e;changes a)ended to re*uire listedco)panies to furnish annual state)ent to the e;changes sho4ingvariations (et4een financial pro7ections and pro7ected utili8ation of fundsin the offer docu)ent and actual figures5 This is to ena(le shareholders to)ake co)parisons (et4een perfor)ance and pro)ises5

S/I introduces a code of advertise)ent for pu(lic issues to ensure fairand truthful disclosures5

"isclosure nor)s further strengthened (y introducing cash flo4state)ents5 -e4 issue procedures introducedX(ook (uilding for institutionalinvestorsXai)ed at reducing costs of issue5

S/I introduces regulations governing su(stantial ac*uisition of sharesand takeovers and lays do4n conditions under 4hich disclosures and)andatory pu(lic offers are to (e )ade to the shareholders5 Regulationsfurther revised and strengthened in 'C5

S/I reconstitutes the governing (oards of the stock e;changes andintroduces capital ade*uacy nor)s for (roker accounts5

Over&the&0ounter /;change of India for)ed5

-ational Stock /;change 9-S/: esta(lish)ent as a stock e;change 4ith

nation4ide electronic trading5

o)(ay Stock /;change 9S/: introduces screen&(ased tradingK 'Dstock e;changes no4 have screened&(ased trading5 S/ granted

per)ission to e;pand its trading net4ork to other centers5

0apital ade*uacy re*uire)ent for (rokers enforced5


55/91

Syste) of )ark&to&)arket )argins introduced in the stock e;changes5

Stock lending sche)e introduced5

Transparency (rought out in short selling5

-ational Securities 0learing 0orporation6 2td5 set up (y -S/5

S/ in the process of i)ple)enting a trade guarantee sche)e5

S/I strengthens surveillance )echanis)s and directs all stocke;changes to have separate surveillance depart)ents5

S/I strengthens enforce)ent of its regulations5 egins the process ofprosecuting co)panies for )isstate)ents and ensures refunds ofapplication )oney in several issues on account of )isstate)ents in the

prospectus5

Indian co)panies per)itted to access international capital )arketsthrough /uro issues5


56/91

The fund )anager creates a portfolio

of securities and re invests the collective 4ealth of the investors into this

specific portfolio5 Investors have the option to choose any particular kind of

portfolio they 4ould like to invest in fro) 4ithin the universe of sche)es

availa(le5 The value of this invest)ent gets reflected as the -et Asset !alue

or N-A! 4hich is pu(lished daily5

T%e6 $ M&!l "'6

'5 "e(t


57/91

H T)e+e !6e' "'6H Invest according to a specific the)e

identified (y the fund )anager5 $$ days

H Gl& "'6 H Invest only in de(t paper issued (y the

govern)ent5

H I"#$+e "'6H Invest in de(t securities 4ith )aturity greater

than one year

H MI,6H MIPs or Monthly Inco)e Plans invest up to #$ of

their portfolio in e*uity shares and the re)aining in de(t

securities5

2!l!"#e' "'6invest (oth in e*uity shares and de(t securities 4ith

a vie4 to getting capital appreciation 4ith less risk5 The proportion in

de(t or e*uity )ay vary depending on )arket conditions5 In the


58/91

current )arket situation typically (alanced funds have C$&$

invested in e*uity and the rest in de(t5

Se#!l&% "'6invest in de(t and e*uity securities6 (ut are set up

4ith a specific goal in )ind5

H C)l'(e"6 G& "' H Invest in de(t and e*uity at the

discreation of the fund )anager 4ith a '$&'D year invest)ent

hori8on5

H "' $ "'6H Invest in other )utual fund sche)es of the

sa)e AM05

O&)e( (el!&e' 66e6

Oe" E"'e' S#)e+e6H ,nits in these sche)es can (e (ought and sold at

any ti)e5

Cl$6e' E"'e' S#)e+e6H ,nits in these sche)es can (e (ought and sold

only on specific days or the invest)ent )ay (e re*uired to (e locked in for a

specific ti)e period5 years

E"&(% L$!'H This is applica(le on )ost e*uity (ased sche)es5 The entryload is an additional charge paid at the ti)e of )aking an invest)entK this

)ainly caters to the distri(utors co))ission


59/91

E:& L$!'H This )ay (e applica(le to funds 9at the discretion of the AM0:

if the invest)ent is 4ithdra4n (efore a specified nu)(er of )onths ?days

have elapsed

M&!l "'6 !(e (e#$++e"'e' *ee" " +"' &)e $ll$"

& Invest)ent philosophy and outlook of the fund )anager

& Return o(7ective of the particular funds

& Perfor)ance over a specific period of ti)e

1istory of Mutual


60/91

1987?1993E+e(e"#e $ ,l# Se#&$( "'6

"uring this phase6 pu(lic sector (anks6 financial institutions and

insurance co)panies 4ere allo4ed to set up )utual funds

SI 4as the first (ank&sponsored )utual fund and the 'st after

,TI to (e set up

S/I got its regulatory po4ers in '#

1993?199F E+e(e"#e $ ,(-!&e "'6

The private sector 4as allo4ed to set up )utual funds in '>


61/91

A,M (y end of #$$= app;5 I-R 'D>6$$$ crores


62/91

O./0TI!/

/;ecutive training is (eing conducted for giving real ti)e 4ork

e;perience to students5 .o( pressure6 deadlines6 corporateenviron)ent all students are e;posed to these conditions5/;ecutive training 4ill help us to i)prove our co))unicationskills5


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At the sa)e ti)e this is opportunity to set his?her course for a ne4future5 y 7oining Reliance Money ltd one can learn all a(out allthe ele)ents of the corporate 4orld and finance sector5 "uring SIP one can learn also ho4 to

target an o(7ective5 Whatever 4e 4ere planning to ac*uire oracco)plish6 the first step is targeting the o(7ective5 -o4 its ti)eto target our career o(7ective and apply 4hat 4e have learnt to our

7o( search5 SIP progra) is the special kind of progra) 4hich(egins creating a list of things6 4hich help for ne;t career toinclude5

To deter)ine the gro4th tend in the Indian share )arket5

To study the scope of share )arket 4ith regard to theirinvest)ents5

To study the trend in "e)at trading

To analy8e the overall gro4th of share )arket

To )easure investor preference to4ards the gro4ing trend of

the share )arket in 2udhiana5


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RESEARC/ MET/ODOLOGY


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Method is a 4ay of doing so)ething and )ethodology is a set of )ethods

used in a particular area of activity5 The purpose of this research is to find

out Investor Preference With respect To Increasing Trend in Share Market5

S$(#e $ "$(+!&$"

Since this research is related to the Investor preference 4ith regard to the

increasing trend in share )arket6 so the infor)ation is collected fro) the

*uestionnaire and fro) the secondary data through internet5

D!&! &%e $( &)e ($e#&

Pri)ary data collection is collection of data through @uestionnaire6

Personal intervie4 etc5 In this pro7ect data is collected through fillingthe *uestionnaire fro) people in 2udhiana5

Secondary data collection is through internet

S!+le 6e The sa)ple si8e of the pro7ect is '$$ *uestionnaires5

Re$(& (e6e!(#) "'"6 & This part co)es at the end6 in 4hichresults are found like 4hatever infor)ation is collected till no4K 4eanaly8e it at the end


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Interpretation&'5 The total no of respondent are '$$5#5 % respondents are investing in share )arket5>5 '' respondents are not investing in share )arket5

#5 If yes then in 4hich invest)entY

Particulars Total no5 of investor Percentage

/*uity #' #'

Mutual fund ># >#

Insurance ' '

Post office D D


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anking '# '#

Total '$$ '$$

Interpretation&'5 #' respondents are investing in e*uity shares5

#5 ># respondents are investing in )utual funds5>5 ' respondents are investing in insurance5=5 D respondents are investing in post office5D5 '# respondents are investing in (anking sector5

>5 "o you invest other than share )arketY

Particulars Total no5 of investors Percentage

3es #' #>5D

-o C% C5$=


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Interpretation

The total no of investor 4as % fro) % the #' investor investing in other

than share )arket and C% investors are not investing other than share)arket5

=5 "o you invest through online trading or offline tradingY

Particulars -o5 of investor Percentage

Online trading ># >D5D

Offline trading D C=5$D

Total % '$$


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Interpretation&

'5 >C app; are doing online trading5#5 C= app; are doing offline trading5

D5 Through 4hich (roking house you are investingY

Interpretation

The total no5 of investor are % and out of %


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># investor doing online trading they do not prefer offline trading orany (roking house5 investor are investing through angel (roking5>> investor are investing through reliance )oney ltd5'$ are investing through sharekhan5D are investing through religare securities ltd5# are investing through fifty paise (roking house5

C5 1o4 long you have (een investing in stock )arketY


2ess than a year #' #>5D

'&D years >D >5>#

More than D years >= >%5#$


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Interpretation&

#>5D respondents are investing in share )arket fro) less than Dyears6 >5># respondents are investing in share )arket fro) D yearsand >%5#$ respondents are investing in share )arket fro) past Dyears5

5 In 4hich instru)ent you are investingY

Interpretation


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The total no5 of investor are % and out of %D are investing in e*uity shares are investing in de(t )arket> are investing in )oney )arket## are investing in )utual funds

%5 What is your trading preferenceY


Intraday >' >=5%>

"elivery >D >5>#

#D5%=


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Interpretation&

'5 >=5%> respondents prefer intraday trading5

#5 >5># respondents prefer delivery trading5>5 #D5%= respondents prefer future trading5

5 1ave you increased your invest)ent levelY


3es D C=5$=

-o ># >D5D


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Interpretation&

'5 C= respondents increase their investing level#5 >C respondents are not increasing their investing level5

'$5"o you think ne4 height of sense; is good sign for gro4th ofecono)yY

Particulars -o of investor Percentage

3es % '$$

-o $ $


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Interpretation&

'5 All the respondents agreed that the gro4th of sense; is good forecono)y5

''5"o you (elieve in high risk and high profitY


3es C %D5>

-o '> '=5C'


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Interpretation&

'5 %D5> respondents are agree 4ith the ter) high risk and highprofit5

#5 '=5C' are not agree5

5 What are the reasons of tradingY


1igh profits #C #5#'


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Interpretation&

5 investor interest is increased 4ith increasing in share )arket4hile #$5#> interest is not increasing5

'>5What kind of attitude you prefer in share )arketY


Rationally >> >5$

0alculative risk #' #>5D


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Assistance 'D 'C5%D

Market de(t #$ ##5=

Interpretation&

'5 >5$ investor adopting the rationally (ehavior#5 #>5D investor adopting the calculative risk (ehavior5>5 'C5%D investor adopting the assistance (ehavior5=5 ##5= investor adopting the )arket de(t (ehavior5

'=5 Are you long ter) investor or short ter)Y

Particulars Total no5 of investors Percentage

2ong ter) D C=5$=

Short ter) ># >D5D


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Interpretation&

The total no5 of investor are %5D investor are long ter) investor5># are short ter) investor5

INDINGS

': There is a gro4th trend in Indian share )arket5 The gro4th can (e seenfro) the follo4ing &


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!: Increase in the nu)(er of stock e;changes5 As 4e see there 4as only stock e;changes in India in 'DD (ut at present the nu)(er of stocke;changes increases to ##5

: Increase in the nu)(er of listed co)panies5 In 'DD there 4ere only ''#Dlisted co)panies (ut it increases to '%%>C in #$$5

#: Increase in the 0apital of 2isted 0o)panies5 In 'D the capital investedin the share )arket 4as Rs DD%> 0r 4hich increases to Rs5#%CD% cr in#$$5

#: The invest)ent level in the share )arket is also increasing5 In #$$= thetotal invest)ent 4as Rs5 >DC$> 0r5 This increases to Rs #>CC$$ in #$$5

>: As there is an increase in the nu)(er of clients account it gives rises tothe invest)ent level in the share )arket increases5 In #$$= there areonlyD>5%'$ lakh account 4hich increases to 5=> lakhs in #$$5

R/0OM/-"ATIO-S

There are )any i)portant things need to kno4 to trade and investsuccessfully in the stock )arket or any other )arket5 '# of the )osti)portant things that I can share 4ith you (ased on the study are enu)erated

(elo45


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'5 2% l$?6ell )).As si)ple as this concept appears to (e6 the vast)a7ority of investors do the e;act opposite5 3our a(ility to consistently (uylo4 and sell high6 4ill deter)ine the success6 or failure6 of your invest)ents53our rate of return is deter)ined '$$ (y 4hen you enter the stock )arket5

#5 The 6&$#* +!(*e& 6 !l!%6 ()&and price is the only reality in trading5If you 4ant to )ake )oney in any )arket6 you need to )irror 4hat the)arket is doing5 If the )arket is going do4n and you are long6 the )arket isright and you are 4rong5 If the stock )arket is going up and you are short6the )arket is right and you are 4rong5

Other things (eing e*ual6 the longer you stay right 4ith the stock )arket6 the)ore )oney you 4ill )ake5 The longer you stay 4rong 4ith the stock)arket6 the )ore )oney you 4ill lose5

>5 E-e(% +!(*e& $( 6&$#* &)!& $e6 ll $ '$" !"' +$6& +!(*e&6 $(6&$#*6 &)!& )!-e $"e '$" ll $ 5 The )ore e;tre)e the )ove up ordo4n6 the )ore e;tre)e the )ove)ent in the opposite direction once thetrend changes5 This is also kno4n as Lthe trend al4ays changes rule5L

=5 If you are looking for H(e!6$"6H that 6&$#*6 $( +!(*e&6 )ake largedirectional )oves6 you 4ill pro(a(ly never kno4 for certain5 Since 4e aredealing 4ith perception of )arkets&not necessarily reality6 you are 4asting

your ti)e looking for the )any reasons )arkets )ove5A huge )istake )ost investors )ake is assu)ing that stock )arkets arerational or that they are capa(le of ascertaining 4hy )arkets do anything5 To)ake a profit trading6 it is only necessary to kno4 that )arkets are )oving &not 4hy they are )oving5 Stock )arket 4inners only care a(out directionand duration6 4hile )arket losers are o(sessed 4ith the 4hys5

D5 S&$#* +!(*e&6 e"e(!ll% +$-e " !'-!"#e $ "e6 $( 6$(&-e"'!+e"&!l6& so)eti)es )onths in advance5 If you 4ait to invest until it

is totally clear to you 4hy a stock or a )arket is )oving6 you have toassu)e that others have done the sa)e thing and you )ay (e too late5

3ou need to get positioned (efore the largest directional trend )ove takesplace5 The )arket reaction to good or (ad ne4s in a (ull )arket 4ill (epositive )ore often than not5 The )arket reaction to good or (ad ne4s in a(ear )arket 4ill (e negative )ore often than not5


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C5 The trend is your friend5 Since the trend is the (asis of all profit6 4e needlong ter) trends to )ake si8ea(le )oney5 The key is to kno4 4hen to geta(oard a trend and stick 4ith it for a long period of ti)e to )a;i)i8e profits50ontrary to the short ter) perspective of )ost investors today6 all the (ig)oney is )ade (y catching large )arket )oves & not (y day trading or shortter) stock investing5

5 3ou +6& le& %$( ($&6 (" and cut your losses *uickly if you are tohave any chance of (eing successful5 Trading discipline is not a sufficientcondition to )ake )oney in the )arkets6 (ut it is a necessary condition5 Ifyou do not practice highly disciplined trading6 you 4ill not )ake )oneyover the long ter)5 This is a stock trading syste) in itself5

%5 The /fficient Market 1ypothesis is fallacious and is actually a derivativeof the perfect co)petition )odel of capitalis)5 The /fficient Market1ypothesis at root shares )any of the sa)e false pre)ises as the perfectco)petition paradig) as descri(ed (y a 4ell kno4n econo)ist5

The perfect co)petition )odel is not (ased on anything that e;ists on thisearth5 0onsistently profita(le professional traders si)ply have (etterinfor)ation & and they act on it5 Most non&professionals trade strictly one)otion6 and lose )uch )ore )oney than they earn5

The co)(ination of superior infor)ation for so)e investors and the usual

panic as losses )ount caused (y (uying high and selling lo4 for others6creates inefficient )arkets5

5 Traditional technical and funda)ental analysis alone )ay not ena(le youto consistently )ake )oney in the )arkets5 Successful )arket ti)ing is

possi(le (ut not 4ith the tools of analysis that )ost people e)ploy5

If you eli)inate opti)i8ation6 data )ining6 su(7ectivis)6 and other suchstatistical tricks and data )anipulation6 )ost trading ideas are losers5

'$5 -ever trust the advice and?or ideas of trading soft4are vendors6 stocktrading syste) sellers6 )arket co))entators6 financial analysts6 (rokers6ne4sletter pu(lishers6 trading authors6 etc56 unless they trade their o4n)oney and have traded successfully for years5

-ote those that have traded successfully over very long periods of ti)e arevery fe4 in nu)(er5 Feep in )ind that Wall Street and other financial fir)s)ake )oney (y selling you so)ething & not instilling 4isdo) in you5 3ou


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should )ake your o4n trading decisions (ased on a rational analysis of allthe facts5

''5 The 4orst thing an investor can do is take a large loss on their position

or portfolio5 Market ti)ing can help avert this )uch too co))one;perience5

3ou can avoid )aking that huge )istake (y avoiding (uying things 4henthey are high5 It should (e o(vious that you should only (uy 4hen stocks arelo4 and only sell 4hen stocks are high5

Since your starting point is critical in deter)ining your total return6 if you(uy lo46 your long ter) invest)ent results are irrefuta(ly (etter thanso)eone that (ought high5

'#5 The )ost successful investing )ethods should take )ost individuals no)ore thanfour or five hours per 4eek and6 for the )a7ority of us6 only oneor t4o hours per 4eek 4ith little to no stress involved5

LIMITATIONS

"ue to technology advance)ent no4 )ostly people prefer to do thetrading (y their o4n through online trading )ode5


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"ue to increase in the sense; level the invest)ent level in share )arketincreases5 -o4 people invest )ore in share )arket irrespective of de(t)arket5

There )ay (e so)e (ias infor)ation provide (y Investor5

The last (ut the )ost i)portant point to that survey 4as carried through@uestionnaire and the @uestions 4ere (ased on perception5 Mosti)portant is positioning5 ut there )ay (e certain aspects not taken intoconsideration5

2I2LIOGRA,/Y

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UESTIONNAIRE

Analytical Study on Investor Preference WithRespect To Increasing Trend in Share Market


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'5 "o you invest in share )arketY

3es -o

#5 If yes then in 4hich invest)entY

/*uity Mutual 5 "o you invest other then share )arketY

3es6 -o

If yes6 Please specify your )ode of invest)ent GGGG5

=5 "o you invest through Online Trading or through OfflineTradingY

Online Trading Offline Trading

D5 Through 4hich (roking house6 you are doing your tradingY

GGGGGGGGGGGGGGGGG55

C5 1o4 long you have (een investing in stock )arketY

2ess than a year '&D years

More than D years

5 In 4hich instru)ent you are investingY GGGGGGGGGGG55


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%5 What is your Trading PreferenceY

Intraday "elivery


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-a)e 555GGGGGGGGGG5

Age GGGGGGGGGGGG5Occupation GGGGGGGG5@ualification GGGGGGGG5Marital Status GGGGGGGG55

Documents

Investor Perception Towards Share Market