Stock Brkng Industry

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COMPARATIVE ANALYSIS

OFBROKERAGE FIRMS

Submitted on completion of Summer InternshipProgramme

AtKotak Securites Limited,

Netaji Subhash Place, Pitampura, New Delhi.

Submitted To: Submitted by:Mr. Varun Aggarwal Gurleen KaurUnit Manager

Kotak Securities

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES(Aff. to Guru Gobind Singh Indraprastha University)

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Undertaking

The project Comparative Analysis Of Brokerage Firms is submitted to Mr.

Varun Aggarwal as a Summer Training Project for MBA, 2005-2007.

Company Name: Kotak Securities Limited

Unit Manager: Mr. Varun Aggarwal

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CERTIFICATE

This is to certify that Gurleen Kaur, a student of Master of business

administration (MBA),Rukmini Devi Institute of Advanced Studies (affiliated to

G.G.S. Indraprastha University) (bearing enrollment no.1071593906), has

undertaken the summer internship training at KOTAK SECURITIES

( PITAMPURA BRANCH), during________________________. She has worked

under my guidance for the project title COMPARATIVE ANALYSIS OF ONLINE

BROKING FIRMS. Mr. Varun Aggarwal (Unit Manager- Kotak Securities,

Pitampura branch) and Mr.Saurav Singhai (Relationship Manager) have also

guided her.

This project report is prepared in partial fulfillment of master of business

administration (MBA) to be awarded by Rukmini Devi Institute of advanced

studies, affiliated to G.G.S. Indraprastha University, Delhi.

To the best of my knowledge, this piece of work is original and no part of this

report has been submitted by the student to any other institute/university earlier.

Miss Shikha GargFinance Lecturer

Rukmini Devi institute of advanced studies

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Acknowledgement

Any work in this world would be practically impossible without a proper and constant

guidance. Efforts alone do not get you success, rather it is the right effort in right

direction that helps you attain your objectives.

It gives me great pleasure acknowledging the invaluable assistance to me by various

personalities in the successful completition of the project. At the very outset, I would

like to convey my heartful gratitude to Mr. Varun Aggarwal, the Unit Manager of

branch.

I am indebted to my guide Mr. Saurav Singhai for his useful insights and valuable

suggestions that he gave me during preparation of the project. My acknowledgement

would be incomplete if I do not thank Mr. Saurab Gupta, team leader of the branch.

Their unremitting inspiration and encouragement helped this report to take final

shape.

Gurleen Kaur

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Table of Contents

Serial Number Topic

Executive SummarySection A Introduction of Indian Stock MarketSection B Research methodology and literature

reviewSection C Profile of Kotak SecuritiesSection D Profile Of competitorsSection E Comparative AnalysisSection F Situational AnalysisSection G Summary and RecommendationsSection H Annexure and Bibliography

Table of Charts

Figure 1..............................................................................................................................12

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Figure 2..............................................................................................................................13Figure 3..............................................................................................................................13

Figure 4..............................................................................................................................14

Figure 5..............................................................................................................................15Figure 6..............................................................................................................................67

Figure 7..............................................................................................................................68Figure 8..............................................................................................................................74Figure 9..............................................................................................................................75

Figure 10............................................................................................................................76

Figure 11............................................................................................................................77Figure 12............................................................................................................................78

Figure 13............................................................................................................................79

Figure 14............................................................................................................................80

Figure 15............................................................................................................................81Figure 16............................................................................................................................83

Executive Summary

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The project aims at projecting a comparative study of different brokerage firms on

different basis. The project aims to find the best options available for different

consumers according to their tastes and needs.

The project has been divided in various sections. The first section gives an

introduction about Indian Capital Market, the recent changes that have taken place in

Indian Capital Market and reasons for choosing India as an investment hub.

The second section talks about the research methodology followed in making

comparison and the literature sources used for collecting the data.

The third section gives detailed profile of Kotak Securities, covering its products,

services and fee structure.

The fourth section gives profile of its 6 competitors namely India Bulls, Reliance

Money, Share khan, ICICI Direct, HDFC Securities and Angle Broking.

The fifth section gives comparative study of 7 brokerage firms chosen specifying

their strengths and weakness.

The sixth section provides the interpretation of the questionnaire. It also covers the

situational analysis specifying best available options for the investors under different

situations.

The last section provides the summary of the project and recommendations thereon.

Section A

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a) Introduction about Financial Markets

Financial market is a mechanism that allows people to easily buy and sell the

financial securities, commodities and other fungible items of value at low transaction

costs and at prices that reflect efficient markets.

Markets work by placing many interested sellers in one place, thus making them

easier to find for prospective buyers.

Financial markets facilitate:

Raising of capital (in capital market)

Transfer of risk (derivative markets)

International trade (currency markets)

There are different types of financial markets:

Financial marketsFinancial markets

Capital marketsCapital markets CommodityCommodity DerivativesDerivatives

StockStock BondsBonds

Foreign exchangeForeign exchange

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b) Introduction about Indian Capital Markets

Indian stock market is one of the oldest in Asia. It dates back to 200 years ago. It has

passed through different phases.

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East India Company used Indian Stock Market to transact its business in loansecurities towards close of 18th century.

By 1830 business on corporate stocks and shares in Bank and Cotton took placein Bombay.

In 1850 rapid development of commercial enterprise and brokerage businesstook place.

In 1860 end of American War brought about disastrous slump in stock market.

In 1874 Dalal Street was discovered by the brokers thrown out during war so asto start transacting freely

In 1887 Native Share and Stock Brokers association was formed in Bombay. In1899 finally Bombay Stock Exchange was inaugurated.

hhhhh

In 1887 Native Share and Stock Brokers association was formed in Bombay. In 1899

finally Bombay Stock Exchange was inaugurated.


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c) Concept of Stock Exchange

Stock Exchange, share market orbourse is a corporation or mutual organization

which provides facilities for stock brokers and traders, to trade company stocks and

other securities. Stock exchanges also provide facilities for the issue and redemption

of securities as well as other financial instruments and capital events including the

payment of income and dividends. The securities traded on a stock exchange

include: shares issued by companies, unit trusts and other pooled investment

products and bonds. Trade on an exchange is by members only. The initial offering

of stocks and bonds to investors is by definition done in the primary market and

subsequent trading is done in the secondary market. A stock exchange is often the

most important component of a stock market. Supply and demand in stock marketsis driven by various factors which, as in all free markets, affect the price of stocks .

Indian Stock Exchange

There are about 22 stock exchanges in India but the two most important of them are:

Bombay Stock Exchange : BSE is the oldest stock exchange in Asia. It is

located in the Dalal Street in Mumbai. This stock exchange was set up in

year 1875. Today it has around 3500 companies listed with the exchange

and has the highest trading volume. It is one of the biggest stock exchanges

in the world. It was recognized by GOI in year 1956 under Securities and

Exchange Board of India.

National Stock Exchange : NSE is the leading stock exchange covering

various cities and towns across the country. NSE was set up by leading

institutions to provide a modern, fully automated screen- based trading

system with national reach on its recognition as a stock exchange under

Securities Contracts (Regulation) Act, 1*956 IN April 1993. NSE

commenced its operations in 1994.

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d) Changing Phase of Indian Stock Market

In tune with the global stock markets that began to recover from the second half of

2003; Indian stock markets too witnessed rapid growth. Indias two leading indices,

the most popularBSE Sensex, and the one most used by the markets the National

Stock Exchanges S&P CNX Nifty rose to record levels. Both primary and secondary

market activity experienced sharp surge. Much progress has been made in further

strengthening and streamlining risk management, market regulation and supervision.

A few aspects of the major developments in the Indias stock markets are described

below:

Market structure: Indian Securities Market is fairly large as compared to

several other emerging markets. There has been a significant improvement in

number of stock exchanges, brokers, sub-brokers, FIIs.

0

2000

4000

6000

8000

10000

12000

1946 1961 1971 1975 1980 1985 1991 1995

listed companies

number of stock issued by

listed companies

Figure 1

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02000400060008000

1000012000

ahmedabad

banglore

bombay

calcutta

delhi

nationalse

brokers

sub-brokers

Figure 2

Market capitalization : There has beensteep rise in market capitalization of

both BSE and NSE which can be shown as under:

0

10000

20000

30000

40000

97 99 2002 2004 2006

NSE

BSE

Figure 3

Equity Issusance : There has been changing trend of issusance of the equity

in the form of public issues, rights issues, IPOs.

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0

2000

4000

6000

8000

10000

12000

14000

16000

98-99 00-01 2002-2003 2005-2006

nse

bse

Figure 5

e) Major developments in the Equity brokerage industry:

Corporate Membership: There is a growing surge of corporate memberships

and the scope of functioning of the brokerage firms has transformed from that

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of being a family run business to that of professional organized function that

lays greater emphasis on observance of market principles and best practices.

Wider Product offerings: The product offerings of brokerage firms today go

much beyond the traditional trading of equities. A typical brokerage firm today

offers trading in equities and derivatives, most probably commodities futures,

exchange traded funds, distributes mutual funds and insurance and also

offers personal loans for housing, consumptions and other related loans,

offers portfolio management services, and some even go to the extent of

creating niche services such as a brokerage firm offering art advisory

services.

Greater reliance on research: Client advising in India has graduated from

personal insights, market tips to becoming extensively research oriented andgoverned by fundamentals and technical factors. Vast progress has been

made in developing company research and refining methods in technical and

fundamental analysis.

Online broking: Several brokers are extending benefits of online trading

through creation of separate windows. Some others have dedicated online

broking portals. Emergence of online broking enabled reduction in transaction

costs and costs of trading.

Foreign collaborations and joint ventures: The way the brokerage industry

is run and the manner in which several of them pursued growth and

development attracted foreign financial institutions and investment banks to

buy stakes in domestic brokerage firms, paving the way for stronger

brokerage entities and possible scope for consolidation in the future.

f) Why invest in Indian Capital Market?

India is one of the fastest growing economy in the world. Investment in Indian

market is prefered because:

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Business Week says that of 100 emerging market firms which are rapidly

globalising 21 are Indian Firms.

Economists project India to become the third largest economy in the world

by 2040.

Indian Capital Market regulator has acquired international credibility in the

leadt possible time.

Disclosure and investor protection guidance are available.

Indias accounting standards are close to international standards.

India will become regional hub for bond trading once a free financial zones

are set up.

Mutual funds are permitted to invest overseas upto $3 billion.

SEBI has made corporate governance guidelines mandatory for listed

companies.

Clearing Houses and corporations with novation in place.

Section B

RESEARCH METHODOLOGY

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Research methods

Hypothesis Formulation

Sample Design

Collecting data

Analysis of data.

Research Methodology

The project Comparative Analysis of Brokerage Firms has evolved a

descriptive as well as analytical study.

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1) It involves descriptive research in the sense as it involves stating the

functioning of the different units. It involves surveys and fact finding

enquires of different kinds.

2) The project has also used analytical approach to derive solutions. The

data collected has been used to derive strengths and weakness which is

thereupon used to evolve answers to situational problems.

Hypothesis Formulation: The null hypothesis drawn is that the investor is

indifferent between the brokerage firms.

The alternate hypothesis is that investor differentiates between brokerage

firms and makes the best choice.

Research Design: Since the project majorily involves descriptve study so the

research design chosen is rigid which involves specific guidelines to reach thr

results. The data collected is on specific parameters.

Sample Design: The population in this case is all the brokerage firms playing

in India. The sampling design chosen here is a combination of Judgemental

and conveinance design.

For this 7 prominent brokerage firms have been chosen namely Reliance

Money, Kotak Securities, India Bulls, Share Khan, ICICI Direct, HDFC

Securities and Angel Broking.

Collecting the Data: Data was collected both from Primary as well as

Secondary Sources.

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1) Primary Sources: The Primary Sources includes data collected from

the employees of the firm through direct personal as well as telephonic

interviews .

For filling the questionnarie the data was collected from the present as

well as the prospective clients of Kotak Securities Limited.

2) Secondary Sources: A large amount of information was obtaines

through ths brouchers and pamphlets provided by respondents. Vast

information was also available on the web sites of companies.

Analysis of Data: The data collected is coded, edited and tabulated to

draw meanongful results. The refined data is then converted into bar-

charts , tables and diagrams to draw meaningful results.

Section C

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COMPANY PROFILE KOTAK

SECURITIES

Introduction

Products and variants available

Services provided

Fees and Opening formalities.

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KOTAK SECURITIES

Company Profile

a) Introduction :

Kotak Securities is one of Indias leading stock broking houses providing a

platform for investments in shares, commodities, IPOs, Mutual Funds, and

Future & Options etc.

Kotak Securities Limited (KSL) is a strategic joint venture between Kotak

Mahindra Bank and goldman Sachs (One of Worlds leading In vestment Banks

and brokerage firms, holding 25% stake in the company) is Indias leading stock

broking house with a market share of close to 9%. The company was set up in

1994 and is a corporate member of both BSE and NSE. Its distribution includes

both stock broking and distribution of financial products including private and

secondary placement of debt and equity and mutual funds.

KSL is a depository participant with NSDL and CDSL providing dual benefit

services wherein the investors can use the brokerage service of company for

executing the transaction and depository services for settling them.

Kotaksecurities.com is the onlinedivision of Kotak Securities Limited that makes

the trading of financial instruments easy and fast.

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b) Products and Variants Available: KSL provides its customer the facility of

trading in various financial instruments like equity (both delivery and intraday),

futures and options, commodities. It provides both on-line as well as off-line. The

various variants of equity available are:

Auto Invest: It is a product based on Systematic Investment Planning

that gives the investors the opportunity to gradually build a diversified

portfolio while averaging the cost of their investments. It is Indias first

SIP in Direct Equity and Mutual Fund together. The concept not only

provides diversification but also gives compounding effects to

investments.

This account is ideal for those Indian investors who do not often havea lump sum amount to invest and wish to enjoy the benefits of both

equity and mutual funds. It is unique from general SIP in a way that it

assesses the risk profile and investment objectives of the investors,

the practice that mutual funds fail to practice.

The investor need to invest minimum of Rs.5000p.m. to trade through

this product.

BROKERAGE CHARGED: 2% per transaction.

Kotak Super Saver: It is a product beneficial for small traders that

want to trade in equity market at a flat brokerage rate irrespective of

their turnover. Here a flat rate is charged on sale purchase

transactions of delivery, intraday and future-options.

Minimum Margin required for starting the account is Rs.25000.

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BROKERAGE CHARGED:

Advance brokerage of Rs.2000 as upfront brokerage is charged.

Kotak Gateway: it is the product available to the investors

starting the account with an initial margin of anywhere between Rs.0-

500000. Here the brokerage is charged according to the turnovergenerated during a month.

BROKERAGE CHARGED:

1) Delivery:

2) Intra-Day:

Transaction Brokerage Charged

Delivery .45%

Intra-Day .05%

Futures .06%

Turnover Brokerage (%)


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2) Intraday:

3) Futures :

4) Options:

EXPOSURE GIVEN: The exposure given varies from 5 times (on A

category stocks), 4 times (on B category stock), 3 times (on C category

stocks).

Kotak Privilege: It is the product for clients having an initial

investment of more than 10 lacs. Here also the brokerage is charged

on the basis of turnover.

BROKERAGE CHARGED:

1) Delivery:


2 cr.- 5 cr. .04

2500000-2cr. .05


Intraday settlement

5.5 cr.- 10cr. .036 .046

2 cr. 5.5 cr. .045 .073


Intraday settlement

11-20 lac 1.8 2.3


> 2 cr. .18

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2) Intraday:

3) Futures:

4) Options:

Turnover Brokerage (%)> 5cr. .03

Brokerage

Turnover Intraday settlement

10 cr.-25 cr. .027 .046

>25 cr. .023 .032

Brokerage

Turnover Intraday settlement

20-50 lacs 1.35 2.3

>50 lacs 1.15 1.6

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EXPOSURE GIVEN: The exposure varies from 6 times (on A

category), 5 times (on B category), 4 times (on C category), 3 times

(on D Category).

Kotak Portfolio Management Services: KSL is one of the oldest in

the field of Portfolio Management Services. In this product the

Financial Planner controls the portfolio of investors. The financial

planners thoroughly discuss and understand the desires of eachclient, their financial goals, risk appetite, time constraints and

accordingly tailor make their portfolios and manage it.

PMS combines competent fund manager, dedicated research and

technology to ensure rewarding experience for clients.

The minimum initial margin required to start the account is Rs.5 Lacs.

The BROKERAGE is charged @1% per transaction.

Kotak Assistance: it is a privileged broking service that is designed

to assist client in making the right decision at the right time. The

experts of Assist Investment Team constantly evaluates the market

conditions and let the client know when and where to invest.

Minimum margin required would be 5 lacs. In the case margin is

between 5-10 lacs then entire margin need to be in cash but if the

margin amount is more than 10 lacs then a minimum of 5 lacs or 25%

would be in cash.

BROKERAGE CHARGED:

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Margin Amount BrokerageDelivery Square off Derivatives

Rs.2 cr.+ .50% .07% .07%Rs. 1-1.99 cr. .60% .07% .07%Rs. 50-99.99 lacs .7 .07 .07Rs. 25-49.99 lacs .8 .07 .07Rs. 10-24.99 lacs .8 .07 .07Rs. 5-99.99 lacs 1.25 .07 .075 lacs margin 1.25 .07 .07

SERVICES PROVIDED

Kotak securities is a brokerage firms providing investors the opportunity to trade in

equity, mutual funds, commodities, IPOs, Futures and Options. It provides

numerous services which make it a leading name in stock market. The services

provided are as under:

2-way trading: KSL provides its clients the facility to trade on-line as

well as off-line. In case of on-line all the trading is done through a

terminal provided by the company. In case of off-line orders can be

booked, rates can be asked on telephone.

KEAT Software: The Company provides to its client a software called

KEAT (a java enabled software). It is user friendly software that

makes the trading and research easier for the client. The clients get

the desktop version that helps to prepare a watch list containing 25

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scrips. The privileged clients get the Premium Version that helps to

view scrips of n companies as well as the technical aspects.

Service Providers: KSL attaches with its client two different

personalities Relationship Manager (RM) and the Advisor.

The RM remains in contact with client, opens his account, carries the

documentation work. The Advisor looks into the needs of clients,

advises him on the portfolio management. He even provides the

delivery and intra-day tips on daily basis.

Research Centre: KSL has its research centre at Mumbai where daily

research of the stock market is done and the research reports are

delivered to the clients. Research Team has good experience of 10-12

Years. The research reports include daily morning briefs, marketupdate, weekly technical analysis, sector reports, and monthly

research reports.

SMS facility: Clients can get daily trading tips via SMS on payment of

a minimal charge.

BNST-G facility: KSL provides to its clients the facility of Buy Now Sell

Tomorrow Guaranteed, under which clients can sell 75% of their stock

even before getting delivery of it in its demat account. This is possible

because Kotak has its own Mutual Fund house to provide surplus

stocks. The payment for BNST-G is to be made within T+5 days from

the day of buying the stock.

Wide retail distribution: KSL has around 835 outlets in 295 cities. It

has around 7000 agents and about 20 franchises. Such wide retail

distribution helps in ensuring wide coverage.

Intraday Exposure: KSL provides the facility of 15 times exposure on

the intraday transactions to the heavy traders. But the payment has to

be made the same day by 3:10 p.m. otherwise the shares are

squared-off.

Mutual Fund Funding: KSL is the only company that provides funding

for buying the stock against the mutual funds in the demat account.

Exposure provided is 5 times which is to be returned after T+5 days.

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Commodities Trading: The commodity trading is performed off-line.

The minimum margin required for agricultural goods is Rs.50000 and

for industrial goods is Rs.1 lac.

FEES AND OPENING FORMALITIES:

a) Opening Formalities:

Some documents are required to open the account. These are PAN card

copy, address proof, photographs and cheque.

KSL has bank linkages with 5 banks- ICICI, HDFC, Kotak Mahindra, UTI,

and CITY. In case client does not has linkages with the above mentioned

bank then a zero balance account can be opened with Kotak Mahindra

It takes about 7-8 working days for the account to get activated.

b) Opening Fees:

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SECTION D

COMPANY PROFILE OF COMPETITORS OF

KOTAK SECURITIES LIMITED

Profile of India Bulls

Profile of Reliance Money

Profile of Share Khan

Profile of ICICI Direct

Profile of HDFC Securities

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Profile of Angle Broking

INDIA BULLS

Company Profile

A) Introduction

India Bulls is Indias leading financial services and real estate company

having large number of branches and serving the needs of large number of

customers with its wide range of financial services and products from

securities, derivatives trading, depositary services, research and advisory

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http://www.indiabulls.com/default.htm?location=home


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services, consumer secured and unsecured credit, loan against shares and

mortgage and housing finance.

India Bulls Financial Services Ltd. is listed on the National Stock Exchange,

Bombay Stock Exchange and Luxembourg Stock Exchange.

Business of the company has grown in leaps and bounds since its inception.

Revenue of the company grew at a CAGR of 159% from FY03-FY07. During

the same period profits of the company grew at a CAGR of 184%.

b) Phases of growth

India Bulls has emerged as one of the leading and fastest growing financial company

in less than 2 years, since its Initial Public Offering in September 2004. It has a

market capitalization of around 2350 million (25 April 2007) and consolidated net

worth of group is around USD 510 million.

2000-2001

2001-2003

35

India Bulls Financial Services Ltd. Established Indias one of the firsttrading platforms with the development of an In-house Team.

India Bulls expands its service offerings to include Equity, F&O,wholesale debt, mutual funds, IPO distribution and equity research.


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c) Mortgage

(Home Loans, Loan against Property)

d) Real Estate Development

(Commercial Development, Residential Development, SEZs)

D) Services Provided:

1) Securities Operation:

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India Bulls provide both on-line as well as off-line facilities in case of

securities. In case of online it provides two types of terminals.

India Bulls provide BNST-G facility i.e. Buy Now Sell Tomorrow in which

100% stock can be sold before taking the delivery of stock.

The clients are attended by two personalities- dealer who just places order

on behalf of client AND relationship manager who opens the accounts of

interested customers, advices them on different investment options and

manages their portfolio.

Cash Exposure given on Delivery is 4 Times and on Intraday is 8 Times.

Stock Exposure of 4 times is also provided on the stock present in the

Demat Account.

2) Commodities Operation:

The commodities operation is performed off-line.

It involves trading in both agricultural goods as well as metals.

E) Opening Formalities and Fee Structure:

Using web site as

terminal helps to

display just 30 scripsand requires separate

screen for F&O

Using Software

Power India helps

to view 100 scripsand shows 4-5

screens together.

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1) Opening Charges:

Documents required for opening the account are: PAN card,

Address Proof, photographs, cheque of the linked banks.

Bank linkages withICICI, IDBI, HDFC.

Account Opening Charges: Rs.900, refundable at time of closure

of account.

5 working days are required for activation.

2) Brokerage Rates:

Delivery Varies from 50p to 10p

Intraday - 10p

Futures - 10p

Options - 2.5% or Rs.100 whichever is higher

3) Other Payments:

Payment of Rs.750 for using Software- Power India Bulls.

Payment of exposure amount on delivery and intraday is to be

made within 7 days of buying and the interest @18-20% is

charged from the day of sale.

Payment of Rs.750 to be made for getting the margin account

operated.

There are no account maintenance charges.

The service tax of12.36% is charged on the brokerage.

The Security Transaction Tax is charged @.125% of turnover in

the delivery transactions, @.025% of turnover in the intraday

transactions, @.017% of turnover in the derivative market. The stamp duty charged is Re.1 on Rs.10000 for delivery and

futures. No stamp duty is charged for intraday

F) Miscellaneous:

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1) There are about 4000 relationship managers in the India Bulls branches.

2) The target for the relationship managers is in the form of brokerage they have

to achieve as a percentage over their salaries.

3) India Bulls has about 640 branches all over India. (Initially there were 750

branches). There are no franchises or sub-brokers.

4) The service that makes India Bulls distinct from other brokerage firms is

provision of margin account. Apart from normal cash account they provide the

facility of margin account which provides 2 times exposure on the amount

maintained in the account. The amount traded can be repaid within 1 year. (The

exposure provided in cash basis is to be repaid within 7days).

In case the stock is sold before the provided time period of 1 year then net

amount after deducting the amount of exposure is transferred to the trading

account. Interest has to be paid @ 18-20%.

Reliance Money

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a) Introduction:

Reliance Money is part of the Reliance Anil Dhirubai Ambani Group and is

promoted by Reliance Capital, the fastest growing private sector financial

services company in India, ranked amongst the top 3 private sector financial

companies in terms of net worth. Reliance Money is the flagship of Reliance

ADA Group for its foray into Equity Commodity and forex broking in India.

Through its state of art of online trading platform Reliance Money is making its

active foray into equity, commodity and forex broking. For the first time in

India R trade will provide the Indian investors the facility of trading in equity,

commodity and forex, derivatives, mutual funds, IPOs, insurance, credit cardson a single platform. Travelmate Services India Pvt. Limited was taken over

by Reliance Money and is now into the business of full fledged money change

business and money transfer business.

Reliance Money is a single window for all financial transaction needs. It is a

comprehensive electronic transaction platform offering a wide range of asset

classes. Its endeavor is to change the way India transacts in financial

services.

b) Products Available:

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Equity, Derivatives, Mutual Funds: It provides both online as well as

offline facilities for trading in equity, derivatives (Futures, Options,

Warrants, and Swaps).

IPO: It has made possible to apply in IPOs without going through the

hassles of filling any application form

Commodities: It provides a base for trading in commodities. The

trading in commodities has not been started on a full fledge scale.

Forex: It provides facility of money remittance (one side facility). It has

agreement with Western Union in this regard.

Insurance:

G.I.: It provides wide range of insurance products that covers most risks

including property, marine, casualty and liability. It has link ups with IFCO

for this.

L.I.: It provides comprehensive financial solutions which besides

offering financial security provide opportunity for saving, tax planning etc.

it has links with Tata/ HDFC in this regard.

c) Services Provided:

Insurance

General Insurance Life Insurance

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1) Securities Operation:

Reliance money provides both on-line as well off-line facilities for

trading in equity, derivatives, and mutual funds. The software called

Insta-Trade allows monitoring of n scrips at a moment.

It provides the facility of ATST (Acquire Today Sell Tomorrow). In

this 100% stock can be sold before getting the delivery.

There is no exposure in delivery transactions. Exposure of 5 times

is provided in case of intraday.

2) Service Provider:

Direct Executives: The clients can be made directly by the sales

force of the company and can be handled by the operations

department.

Franchises: Franchises both big established houses and small

firms act as a sub-broker for Reliance Money. In some cases

because of insufficient funds the advisory services are provided by

the broker but if the franchisee has ample funds then it can itselfhandle the advisory job.

Agents: Reliance Money also has agents which are individuals

working to get clients for the company in return of commission. The

work of agents is only restricted to getting clients for the company.

After services are handled by the company itself.

c) Opening Formalities and fee structure:

1) Opening Charges

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The documents required are 3 photographs, pan card copy, bank

statement, and address proof.

Reliance Money has linkages with UTI, HDFC, and IDBI.

It requires 7 working days for the account to get activated.

There is Rs.750 account opening charges that are one time charge

and non-refundable.

2) Other charges:

A flat fee as a brokerage is charged irrespective of the turnover.

This fee is valid for specified months or specified transaction value.

A detailed chart is given as

Accesss

Fee

Validity

(whichever is earlier)

Turnover Limits

Time validity Turnover

Validity

Non-delivery

Turnover

Delivery

Turnover500 2 months Rs. 1 cr. Rs. 90 lac Rs. 10 lac1350 6 months Rs. 3 cr. Rs. 2.7 cr. Rs. 30 Lac.

2500 12 months Rs. 6 cr. Rs.504 cr. Rs. 60 lac.

(The brokerage is inclusive of Service Tax)

An annual charge of Rs.50 is taken towards the demat

maintenance.

The Security Transaction Tax and Stamp Duty is charged

Daily tips through SMS are given. The SMS charges are:

3) Miscellaneous:

Time Period Charges (Rs.)

1 Month 125

2 Months 300

6 Months 600

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Sharekahan is one of Indias leading brokerage firms. It is the retail arm of SSKI. It

has been in this business since over 8 decades.

Sharekahan was created when SSKI Investor Services Pvt. Limited, a company in

the securities and equities segment decided to harness the power of Internet and

offer services to the customer through an online stock broking portal. The company

offers its services through a combination of online and offline channels. The online

model comprises a portal, chat facilities and speed trade terminals. And the off-line

model uses a combination of an IVR infrastructure and a team of customer agents to

receive orders over the telephone.

Sharekhan offers trade execution facilities which are also core service for cash as

well as derivatives such as equity and derivative trading on BSE&NSE, depository

services, online trading, IPO services, commodities trading on MCX& NCDEX and

Portfolio management services. Sharekhans added services like research, stock

ideas, demat, online trading for customers so as to make investment experience of

customers rewarding.

At the heart of company are the trading platform and the risk management services.

b) Products Available:

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1) Opening Formalities and Fees:

The documents required are PAN card copy, address

proof, photographs, cheque as margin money.

The opening fee is Rs.750 which is a one time non-

refundable charge.

It has links with HDFC, ICICI, UTI, Oriental Bank of

Commerce, IDBI, CITY, YES Bank, Union Bank of India,

Bank of India, and Centurion Bank.

It takes 7-8 working days for the account to get activated.

2) Other Charges:

Account Maintenance Charges are Rs.300 per year. AMC for

PRO Prime is 2.5% while foe PRO Tech is nil.

Brokerage: Delivery0.50, Intraday---0.10, F&O0.10.

Brokerage in case of PRO Prime and PRO Tech is .5%.

Service Tax and Securities Transaction Tax are applicable.

SMS facility can be availed @ Rs.100p.m.

The interest is charged on the exposure granted from the day

of availing exposure @14%p.a.

e) Miscellaneous:

There are about 500 branches of Share khan all over India.

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ICICI DIRECT

A) Introduction:

ICICI Direct is a stock trading company of ICICI Bank. Along with stock trading

and trading in derivatives in BSE and NSE, it also provides the facility to invest in

IPOs, mutual funds and bonds. It has occupied a high place in the minds of

investors due to its linkages with ICICI Bank.

It provides both on-line as well as off-line facilities for trading with financialinstruments. The online model comprises a portal, chat facilities and speed trade

terminals. And the off-line model uses a combination of a team of customer and

agents to receive orders over the telephone.

Business of the company has grown in leaps and bounds since its inception. The

main advantage of trading through ICICI Direct is its 3-in-1 account that

integrates bank, trading and demat account. Moreover its link with both NSE and

BSE provides valuable support to clients.

b) Products and services offered:

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Mutual Funds: The Company provides the online facility while

investing in mutual funds. One can invest in 19 MFs through it. It

provides various options in MF i.e. buy, redeem, switch, systematic

investment plan, systematic withdrawl plan.

Equity, IPO, Futures & Options: The company provides the option

of investing in shares, mutual funds, IPOs

GOI Savings and Government Tax savings bond: one can invest

bonds online without going through the hassles of visiting office.

Personal Finance Section: The personal Finance section can be

used to plan investments, retirements benefit.

Customer Service Feature: All customer queries can be handled on-

line.

c) Other Services Offered:

It provides the BTST facility i.e. the freedom to sell 100% stock

before getting the delivery in T+2 days. No interest is charged in

event of non-payment as the default amount is blocked in the

savings account.

It provides an online terminal with a web based link free of cost.There is a continuous requirement to refresh the account every time

to watch the live rates.

It provides daily tips to its client through the terminal.

It provides the facility of Spot Trading.3

Service Providers: The Relationship Manager is the main person

who makes clients, handles their portfolio and advice them. Direct

tips from the advisors are provided by the HNI clients.4 The advisory

base has around 7 years of experience.

Exposure: The company provides 4 times exposure on delivery and

20 Times exposure on intraday.

c) Fees and other opening formalities:

3 Spot Trade is a type of trading that involves cash sales for immediate delivery.4 HNI clients mean High Net worth Individual.

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It requires opening of three account namely-ICICI Demat, trading

and savings account.

The documents required are address proof, PAN card, photographs.

One time non-refundable fees of Rs.750 is to be paid for opening the

account.

The bank account linkages are with ICICI Bank only and account

activation takes 7 days.

In case of trading in commodity a person not having an account with

ICICI needs to give a cheque of Rs.1250. for opening a 4 in 1

account5 but in case person has account with ICICI then Rs.500

would be debited from his account. For opening just a commodities

account Rs.250 would be charged.

d) Brokerage Charged:

Delivery

Total turnover BrokerageAbove 5 cr. .25%2-5 cr. .30%

1-2 cr. .35%50 lacs-1 cr. .45%25 lacs- 50 lacs .55%10 lacs- 25 lacs .70%Less than 10 lacs .75%

(The brokerages are inclusive of demat transaction charges)

Intra-day:

Total turnover BrokerageAbove 20 cr. .03%10-20 cr. .035%5-10 cr. .04%

5 4 in 1 account includes demat, trading, bank and commodity account.

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Less than 5 cr. .05%

Futures and Options:

Total turnover Brokerage Effective

brokerage on set-

offAbove 20 cr. .03% .015%10-20 cr. .035% .0175%5-10 cr. .04% .02%Less than 5 cr. .05% .025%

e) Other Charges:

Service Tax and Security Transaction Tax are charged. No account maintenance charges and stamp duty are levied.

f) Miscellaneous Information:

The company has 300 branches with 39 in Delhi. (It would go up to 90

by December.)

There are around 1500-2000 RMs in various branches.

It has customer base of around 12 lac. Customers.

HDFC Securities

A) Introduction:

HDFC Securities, a trusted financial service provider promoted by HDFC Bank

and JP Morgan Partners and their associates is a leading stock broking company

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in the country, serving a diverse customer base of institutional and retail

investors.

HDFCsec.com provides investors a robust platform to trade in equities in NSE

and BSE and derivatives in NSE. It provides its customer with the highest

standard of service, convenience and hassle free trade tools. The research team

tracks the economy, industries and companies to provide the latest information

and analysis.

The content offers financial information, analysis, invests guidance, views and

news and is designed to meet the requirements of everyone from a beginner to a

savvy to a well informed trader.

The website of the company hdfcsec.com provides the benefit of speed,

convenience, transparency, expertise and timely and relevant information.

b) Products offered: It provides the facility of investment both on-line as well as off-

line in various instruments like equity shares, IPOs and derivatives.

c) Services Provided: It provides a number of services like:

It provides the on-line as well as off-line facilities of trading in financial

market.

It provides a web-based link to trade in stock market. But there is no

facility to get live rates.

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It provides 4 times exposure on both delivery and intra-day transactions.

It provides free tips through SMS to its HNI clients.

Service Providers: The Relationship Managers basically handles the

clients portfolio, providing them advice on daily as well as delivery

transaction.

The Advisors directly provide advisory services to the HNI clients.

Advisors have more than 5 years of experience.

It provides the BTST facility in which 100% stock can be sold before

delivery. The clients are allowed to trade up to the amount in their saving

account.

d) Opening Fees and other formalities:

The documents required for opening trading account are address proof,

PAN card copy, photographs.(Only trading account is opened by HDFC

securities. The demat and bank account are handled by the HDFC

Bank.)

It has linked with HDFC Bank. It requires all the three accounts to be

with HDFC.

It requires 7 working days for activation. The account opening charges are Rs.799. this is a one time and non-

refundable amount. No account maintenance charges are there.

e) Brokerage:

Delivery

Turnover Brokerage Refund Effective

BrokerageAbove 5 cr. .50% .25% .25%2-5 cr. .50% .20% .30%1-2 cr. .50% .15% .35%50 lacs-1 cr. .50% .05% .45%

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Angel Broking

a) Introduction:

Mr. Dinesh Thakkar began his career in Broking in 1987 and later, went on to

set up Angel Broking, a premium Indian stock broking and wealth

management house. It focuses on retail business with proven leadership and

commitment to give Real Value for Money to its clients.

Angel is a member of the Bombay Stock Exchange and its group companies

are members of the National Stock Exchange and also the countrys two

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leading Commodity Exchanges the NCDEX and MCX. Angel is also

registered as a Depository Participant with CDSL.

Angel Group has emerged as one of the top 5 retail stock broking houses in

India. It is the only 100% stock broking house of offering a gamut of retail

centric services like research, investment advisory and wealth management

services, e-broking and commodities to individual investor. Angel has a

dedicated investment advisory and state-of-theart centralized helpdesks to

answer investor queries and complaints. This facility is available 24x7, with a

Web-enabled, value-added back office, accompanied by a brilliant team of

experts for quality assurance.

b) Products Offered: The broking firm offers a number of products like

equity, IPOs, commodities and Futures and Options. Both on-line as well as

off-line facilities are provided for trading.

c) Services Provided:

It provides an on-line terminal for trading along with three types of

software

a) Angel Diet software which is a VM Java enabled

software. One can view 100-150 scrips at a time through

this software.b) Angel Anywhere software that provides technical details

and analysis of the reports.

c) Dot net is a facility available only to investors.

It provides the Position Pix facility instead of BTST facility. In this

customers are required to book profits within 3-5 days of buying.

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Service Providers: Relationship manager is attached to each

client. Special advisory services are provided to the HNI client by the

advisors themselves.

They provide the facility of both on-line and off-line trading in

commodities. No margin is required to start the account.

It provides exposure of 6 times on delivery and for 6 times on

intraday (for 2 days only).

Tips through free SMS are provided to HNI clients.

d) Opening Fees and other formalities:

The account opening requires address proof, PAN card and

photographs.

The account opening fees is Rs.660. it is non-refundable.

It has linkages with UTI, PNB, ICICI, HDFC, Yes Bank.

It requires 3 working days for the account to get activated.

e) Brokerage:

Delivery: .50 paisa

Intraday:.05 paisa

Futures and Options:.05

f) Other charges:

Account maintenance charges are Rs.300p.a.

Commodities trading Rs.100 per exchange

g) Miscellaneous:

It has 72 branches, 1000 outlets and 2300 sub-brokers

It has more than 1800 employees.

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SECTION E

COMPARITIVE ANALYSIS OF BROKERAGE FIRMS

Comparative Sheet

Weakness and Strengths of different brokerage firms.

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Comparative Sheet

a) On basis of products and services:

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Basis India

bulls

Reliance

Money

Share

Khan

ICICI

Direct

HDFC

Securitie

s

Angle

Broking

Kotak

Securities

Products

available

E, c, IPO,

MF,

Consume

r finance,

mortgage

, real

estate

E, c, IPO,

Forex,

insurance

E, d, c, MF E, d, c,

Govt.

bonds,

personal

finance ,

MF

E, IPO, d, E, IPO, c,

d, MF

E, d, MF,

IPO, C

Web-linked

terminal

Yes, 30

scrips

---- ----- Yes Yes ------ ------

Software Power

India

bulls/ 100

scrips

Insta

trade/ n

scrips

50 scrips -----.

Need for

refreshin

g screen

------ Angel

diet,

angel

anywhere

, dotnet

Keat (Kotak

e-trading

access

terminal)/25

scripsBTST-G/

any other

facility

BNST-G

(100%)

ATST,

100%

BTST,100

%

BTST,

100%

BTST,

100%

Position

Pix

BNST-G,

75%

Service

providers

Dealers,

RM

Executive

,

franchise

s, agents

RM,

advisors,

shareshop

s

RM,

Advisor

RM,

Advisor

RM,

Advisor

RM,

Advisor

Exposure

delivery

4 - 4-6 4 4 6 4-6

Exposure

intraday

8 5 4-6 20 4 6 15

Franchisee,

sub-broker

--- Yes Yes No Yes -----

Distinct

service

Provision

of margin

account

Facility of

kiosks

Quality of

research

report

Spot

trading

Free SMS Free SMS Funding on

Mutual

Funds

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b) On basis of Opening formalities and fee structure:

Basis India

bulls

Reliance

Money

Share

Khan

ICICI

Direct

HDFC

Securities

Angle

Broking

Kotak

Securitiesbank

linkages

ICICI,

IDBI,

UTI,

HDFC,

HDFC,

ICICI,

ICICI HDFC UTI,

PNB,

HDFC,

ICICI, CITY,

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HDFC IDBI UTI,

OBI,

IDBI,

CITY,

YES

BANK,

UNION,

BOI

ICICI,

HDFC,

YES

UTI, KOTAK

MAHINDRA.

Account

opening

900, fully

refundabl

e

750 750 750 799 660 750, 250

refundable

Days for

activation

5 7 7-8 7 7 3 7-10

Software

cost

750 ---- ------ ----- ------ ----- -----

Interest on

non-payment

18-

20%p.a.

14%p.a

.

----- ------ ------ 15-20%

Account

maintenance

---- 50 p.a. 300 p.a. ---- ---- 300p.a. 30 p.m.

Stamp duty Yes Yes Yes No No No No

SMS Charge 100p.m. 125 p.m.

100

p.m.

Free

to HNI

Free to HNI Free to

HNI

100 p.m.

Commodities

trade

Off-line Off-line Off-line On-line On-line On-line Off-line

c) On basis of Brokerage Structure:

Basis India

bulls

Reliance

Money

Share

Khan

ICICI

Direct

HDFC

Securities

Angle

Broking

Kotak

SecuritiesDelivery 50-10

paisa

Rs. 500 for 2

months or 1

cr. turnover

50paisa 75

Paisa

50 paisa 50 paisa 45 paisa

Intraday 10

paisa

10

paisa

.05

paisa

.05 paisa .05 paisa .05 paisa

Futures 10 10 paisa .05 .05 paisa .05 paisa .06 paisa

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paisa paisa

d) On basis of spread out (number of branches):

0

500

1000

ib

reliance

share

khan

icici

hdfc

angel

broking

kotak

securities

branches

Figure 6

e) On the basis of customer base:

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0200000400000600000800000

10000001200000

ind

ia

bulls

sha

rekhan

hdfc

kotak

securities

india bulls reliance money sharekhan icici direct

hdfc angel kotak securities

Figure 7

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Analysis of Strengths and Weakness of Brokerage Firms

Based on the response of the interviewers following conclusions about the

strengths and weakness of brokerage firms have been drawn out :

a) Kotak Securities

Strengths Weakness It has its own Mutual Funds section

that helps in meeting the needs of

clients taking the advantage of BNST-

G facility.

It is the only brokerage firm to give

funding against mutual funds. It

provides 5 times exposure against

mutual funds.

Clients get the service of two different

personalities i.e. Relationship

Manager and the advisor.

The linkages with Kotak Mahindra

Bank make the transactions easy.

The minimum margin money to start

the account is Rs.25000. Thus it is not

possible for the small investors to

deal with KSL.

The brokerage is high as compared to

other brokerage firms.

Web-interface not very user friendly.

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b) Reliance Money

c) India Bulls

Strengths Weakness The software is very powerful

in terms of speed andexecution.

They have a system of margin

account.

They maintain a 6pool account for meeting

the obligations of BNST-G. The disadvantageof this is that in case of scams one cant

withdraw the stocks out of pool account.

6 A pool account is a system in which stocks of all clients are pooled and used to meet the obligations in case of

short selling.

Strengths Weakness

It provides a flat brokerage irrespective

of the turnover.

The feature that sets Reliance Money

apart from other brokerage firms is the

service of KIOSKS provided at various

Reliance Money, Barista outlets and at

various shopping malls. These are the

computers that allow the customers to

trade conveniently while moving

around.

It deals in various products under one

roof, so it gets the benefit of

economies of scale.

Reliance Money conducts its

business mostly through the

intermediaries like sub-brokers,

franchisees and agents.

Because of this proper service and

advisory is not provided by these

middlemen to the clients.

It doesnt have separate advisory

panel.

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d) SharekhanStrengths Weakness

Bank linkages with maximum

number of banks allowed

flexibility.

The quality of its Research

Report is very high. The strike

rate of its call has been 89%

according to a report.

It is not possible to have a

software work with normal

HTTP port.

e) ICICI Direct

Strengths Weakness ICICI is the best brokerage firm

from the safety point of view.

A very high exposure on the

intraday transactions (20

times).

It has its own bank which

makes the transactions easy.

The brokerage is high and not

negotiable.

The system needs to be

refreshed each time to view

live rates.

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SECTION F

SITUATIONAL ANALYSIS

Questionnaire

Situational analysis

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Q2) Which type of trading do you prefer? a) On-line b) Off-line c) Both

Response:

1

10

100

on-line off-line both

trading type

Figure 9

Interpretation: The figure shows more and more investors are opting for on-line

trading which has surely increased the volume of trade and profits both for

themselves as well as the market. The reason given for their switching over to online

is:

a) Freedom from paperwork

b) instant credit and money transfer.

c) Timely advance research reports.d) Information and price alerts.

e) Need to increase the volume and profits.

f) To reduce the excess cost.

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Q3) Which broking firms do you prefer?

a) Kotak Securities b) Reliance Money c) India Bulls

d) Sharekhan e) ICICI Direct f) HDFC Securities

g) Angel Broking h) others

Response:

0

100

200

KSL

indiabulls

icicidirect

angel

brokerage firm

Figure 10

Interpretation: The figure shows that ICICI Direct is preferred by maximum number

of people followed by sharekhan. The interpretations from this question were as:

a) People preferred ICICI Direct due to its linkages with the ICICI Bank.

b) Many investors preferred to invest through local brokers and through firms like

alankit etc. due to flexible conditions provided by such brokers.

c) Reliance money is not very preferable due to new entry in this field.

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Q4) Which factors help to choose a broking firm?

a) Brokerage b) Services c) Exposure on trading d) research e) financial

stability f) others

Response:

brokerage services exposure on trading

research financial stability others

Figure 11

Interpretation: The figure shows that:

a) The most important factor that people take into account is the brokerage

pattern of the brokerage firm. 5 paisa is one of the leading names in market

because of its low brokerage on delivery.

b) The next factor people take into account is the services provided. Thesoftware provided by India Bulls is very powerful and one of the reasons for

selecting it. In ICICI the clients get to deal with leading ICICI Bank.

c) Big traders look for the exposure provided so that they can maximize their

volumes.

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d) Investors also look into the financial stability of the firm. The firm initially

involved in scams is often avoided.

Q5) Do you like to trade in commodities?

a) Yes, very often b) No, never c) Rarely

Response:

yes no rarely

Figure 12

Interpretation: The figure shows that there are small numbers of investors

investing in commodities market though the number has been growing

gradually. The reasons for the low investment are:

a) Many brokerage firms dont have enough experienced staff to handle the

commodities business.

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b) Trading in future commodities is risky as these are leveraged.

c) Commodities are quite volatile to market changes.

Q6) in which type of trading activity do you generally engage in?

a) Delivery b) Intraday c) Futures and Options

Response:

0

10

20

30

40

50

60

delivery intraday f&o

response

Figure 13

Interpretation:

The figure shows that people are slowly showing a shift in their behavior from

mere delivery transactions to daily trading. It also shows that the knowledge

about future and option trading in Indian market is still on the lower side.

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Q7) what was the reason for your investment in stock market?

a) High returns b) Diversified portfolio c) Tax Saving

d) Others

Response:

0

10

20

30

40

50

60

high returns d iversif ied

portfolio

tax saving others

reasons

Figure 14

Interpretation:

The diagram clearly shows that :

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a) The main factor for investment in the stock market is the high return

provided as a result of rise in price of shares as well as high dividend provided

by the companies in case of exceptionally high profits.

b) Tax saving also serves as a good reason to invest in mutual funds as shown

by the ULIP funds in this category.

c) The customers intended to diversify the portfolio can invest a fraction of

money in mid caps and small caps. They can even go for blue-chip stocks.

Q8) Are you satisfied with services provided by your broker?

a) Yes, I am fully satisfied b) No, I wont recommend the same to

anyone c) Average Rating

Response:

Yes No Average

Figure 15

Interpretation: The diagram clearly shows that:

a) Small percentage of investors is satisfied with services offered by their

brokerage firms.

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b) Maximum investors are not satisfied with the services or hidden charges

levied by the broker. In that case the investor before choosing a broker should

keep following things in mind:

The financial stability of the firm should be looked into.

The services should be compared with the competitors.

The charges should be analyzed in detail to find any hidden charges.

Q9) Which statement best describes the USP of your investment and

return?

a) Low returns with low risk b) medium return with some risk

c) High return with high risk d) none of these

Response:

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low return medium return high return none of these

Figure 16

Interpretation:

The diagram clearly shows that the investors ready to take low to medium

risk form large part of population. Thus it can be interpreted the investment in

small and midcap stock, mutual funds is going to increase in the near future

in India.

Q10) what is the duration of your investment?

a) > Than 2 yrs b) 2-5 yrs c) 5-10 yrs d) 10 yrs above

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Interpretation -

In the current market scenario, investors prefer medium term investment rather going

for long or short term, as they feel that the market is very volatile.

So the percentage is very low for longterm investments, as investing for 5-10 years,

the respondent were only 30 & the respondents were only 15 for investing in the

above 10 years option.

According to the survey, 160 respondents have preferred for going for medium term

investments i.e.2-5years, as they feel that security and returns have the best option

in that term.

Situational Analysis

84

45

160

30

15

0

20

40

60

80

100

120140

160

180

Less than

2Yrs

2 - 5 yrs 5- 10 Yrs 10 yrs above

Series1


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Different types of investors have different needs ad thus prefer different types

of brokerage firms. An analysis of needs and the situation of different

investors have brought about the best alternatives in their respective cases

which are as under:

a) First investor: Mr. A is new to stock market and wants to start trading. His

constraints are:

He can invest maximum of Rs.10000.

He wants an effective advisory to guide him.

He wants to invest in mutual funds and start with delivery trading

with an effective on-line portal.

The fee structure should be reasonable.

Options Available

India bulls Share khan Icici direct Reliance

money

HDFC

Securities

Angel

Broking

Kotak

Securities

High

account

opening

charges(900),

software

charges

(750), risk

high.

Good

advisory

base with

high qualityresearch

report,

brokerage

negotiable,

no initial

margin.

3 in 1 account

ensures safety,

advisory

available, nomaintenance

charges.

No

advisory

provided,

customerin the

hands of

agents.

Mutual funds

trading not

available

and theterminal not

very

effective

Advisory

available

only to

HNI client

High initial

margin

(minimum

Rs.25000)

The options for such a case would be Sharekhan and ICICI Direct.

b) Second Investor: Mr. B is an investor who has large trade volumes; he

carries his own research work. His requirements are:

He wants low brokerage.

He wants high exposure.

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He wants stead and superior returns.

He wants safety of his safety.

Options AvailableIndia

bulls

Share khan Icici direct Reliance

money

HDFC

Securities

Angel

Broking

Kotak

Securities

PMS

service

not

available.

Independent

fundamental

research,

bottom up

stock

selection,

experienced

team

managing

portfolio.

PMS service

not available

PMS

service not

available

PMS service

not

available.

PMS

service not

available

Portfolio

managers

have around

10 years of

experience,

dedicated

research

methodology

to prepare and

manage

clients

portfolio.

Thus viable options under this situation are Sharekhan and Kotak

Securities.

SECTION G

CONCLUSION AND SUMMARY

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Conclusion

Summary

Annexure

Glossary

Bibliography

Conclusion

Hypothesis Testing: On the basis of analyzed data it can be concluded that Ho is

rejected and H1 is accepted.

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This means that the investors differentiate between different brokerage firms. In

other words they prefer one competitor over the other.

Result: The analysis shows that Indian Stock Market is booming and as a result the

role of brokers is increasing day by day.

Every brokerage firm stands out on one parameter or the other. The best brokerage

can be chosen keeping in mind the needs and expectations of customer in mind.

Thus the best broker will be one that helps to balance consumers needs with its

services.

This has been concluded as:

For small new investors Share khan and ICICI Direct are better options

For big traders Share Khan, India Bulls, Angel Broking, Kotak Securitiesare better options.

For client with requirement of PMS, Share Khan and Kotak Securities are

good options.

Summary

The project Comparative Analysis of Brokerage Firms covers a detailed analysis of

different brokerage firms present in the Indian market.

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It gives a brief overview of Indian Capital Market. Indian Capital Market that is a 200

years old market has passed through different phases of development and gradually

attained the current status. There are two prominent exchanges Bombay Stock

Exchange and National Stock Exchange. There has been significant growth in the

listed companies, number of stock exchanges and the number of stock issued by the

listed companies. There has been increase in market capitalization and trading

volumes. There has been some major development in equity brokerage firms like in

corporate membership, improvement in research and introduction of on-line trading

etc.

It has also been stated that India is emerging to be an investment hub.

A detailed profile of Kotak Securities and its 6 competitors namely India Bulls,

Reliance Money, Share Khan, HDFC, ICICI Direct and Angel Broking has been

discussed.

A comparative sheet showing comparison amongst different brokerage firms on

different parameters like products offered, software, services, fees, customer base,

number of branches has been drawn. This comparison has brought forward thestrengths and weakness of different firms.

Data has been collected through questionnaire that has further helped in analyzing

the investment behavior of respondents, their preferences for the brokerage firms

and the parameters they look into while investing in stock market.

Lastly a situational analysis is performed which suggests best viable options of

brokerage firms to investors in different situations and having different constraints.

Annexure

A) Questionnaire: The following questions were included in the questionnaire:

1) In which of the financial instruments do you invest?

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a) Equity b) mutual fund c) bank d) post office e) others

2) Which type of trading do you prefer?

a) On-line b) off-line c) both

3) Which broking firms do you prefer?

a) Kotak Securities b) Reliance Money c) India Bulls d) Share Khan

e) ICICI Direct f) HDFC Securities g) Angel Broking h) Others

4) Which factors helps to choose a broking firm?

a) Brokerage b) Services c) Exposure on Trading d) Research

e) Financial Stability f) others

5) Do you like to trade in commodities?

a) Yes, very often b) No, never c) Rarely

6) In which type of trading activity do you generally engage in?

a) Delivery b) Intraday c) Futures and Options

7) What was the reason for your investment in stock market? a) High Returns b) Diversified Portfolio c) Tax Saving d) others

8) Are you satisfied with the services provided by your broker?

a) Yes, I am fully satisfied. b) No, I wont recommend the same to anyone

c) Average Rating

9) Which statement best describes the USP of your investment and return?

a) Low returns with low risk b) Medium return with some risk

c) High returns with high risk d) none of these

10) What is the duration of your investment?

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a) > than 2 years b) 2-5 years c) 5-10 years d) 10 years and above

Glossary

Capital markets: The market in which corporate equity and longer-term debt

securities (those maturing in more than one year) are issued and traded.

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Commodity Markets: A bulk good such as an agricultural product, food,

natural resource or metal that is traded on an exchange in bulk quantities.

Derivatives: Instruments, such as options and futures contracts, which derive

their value from the value of an underlying security, group of securities or an

index.

BSE Sensex: A stock index (one of many) commonly used as an indicator of

changes in the general level of the stock market or stock prices in India. In

this index, there are 30 diversified stocks thought to be representative of the

market in general.

Demat account: An account showing the shares bought or sold in

dematerialized form.

Trading account: The account where all trading of shares is done.

Delivery: The physical exchange of money and securities on the brokerage

transaction's settlement date.

Intraday: the buy and sell of shares done on the same day.

Market Capitalization: Market capitalization represents the aggregate value

of a company or stock.

IPO:A companys first sale of stock to the public.

Mutual funds: A professionally managed investment in a group of stocksand/or bonds those are selected and diversified to meet the stated objective

of the fund.

S&P CNX Nifty: The S&P CNX Nifty is the leading index for large companies

on the National Stock Exchange of India. It consists of 50 companies

representing 24 sectors of the economy,

NSDL: National Securities Limited

Bibliography

a) Magazines and brochures:

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Training kit provided by Kotak Securities

Brochures provided by Share khan, Reliance Money.

b) Internet:

Web sites of the firms kotaksecurities.com, reliancemoney.com,

indiabulls.com, sharekhan.com, icicidirect.com, angelbroking.com,

hdfcsecurities.com.

www.traderguruji.com (an on-line portal)

www.iflr1000.com

www.wikia.com

www.economictimes.com

www.ficci.com

www.mdtrading.com