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(i) Synopsis on:

“Stock Holding Corporation of India Limited” (India’s Largest Depository Participant)

(ii) Review of literature and Problem Statement: The Indian investor community has undergone a sea change in the past few years.

India now has a very large investor population and ever increasing volumes of trades

This study deals with various investment avenues like equity, bonds, debentures,

bank deposits, insurance, mutual funds etc. and the risk involved in it. Apart from this, it

also gives emphasis on the depository and various functions of depository participants.

This study also consists of the investment pattern of people who reside in an

economically developing area and how the investment pattern of people varies according

to their social classes like age, education, income etc. For this study, I have taken

Bangalore as an economically developing area. In Bangalore, people are generally

preferred to take risk in investment and invest in such avenues where the return is more.

Like that, the middle age group people are investing more in Insurance, Equity and

Mutual Funds, where as the old age group people prefer to invest in government

securities, Bank Deposits etc.

And among SHCIL product, investor is giving more preference to ‘Stock Direct’

rather than any other of its products. However, government securities are the more

preferred product among older age group investors. As is one of the major DP in India,

85 per cent of its client are dealing with Demat Transaction only and merely 15 per cent

of its client invested in other products.

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a) Profile of Study Stock Holding Corporation of India Limited (SHCIL) was promoted by public financial

Institutions and insurance majors like IDBI, UTI, ICICI, LIC, GIC and its subsidiaries,

IFCI and IIBI. It was incorporated on 28th July, 1986. SHCIL acts an intermediary

between investors and NSDL/CDSL.

SHCIL was the first Depository participant to start Depository services. With the

introduction of the Depository system in the country, SHCIL commenced extending

Depository related services to the retail segment as well and over the last six years, it has

as come to acquire the stature of the largest Depository participant besides being the

country’s largest custodian. The Corporation provides Depository related services to its

retail segment through more than 140 offices located across the length and breadth of the

country.

Information Technology:

SHCIL handling large volumes of Securities has facilitated by the state-of-the-art

technology in use at SHCIL. Its highly automated set up and applications have been

acclaimed by both national and inter national organizations, including the prestigious

Smithsonian Institution in the US. SHCIL also has one of the best infrastructures in the

country in terms of networking and hardware equipment. The Wide Area Network

(WAN) nicknamed “SHCIL Net” is one of the largest WANs in the country. Further,

SHCIL in house development methodology has been certified at CMM level-3 by I-fex,

while its IT activities have been certified for ISO-9001:2000 by BVQI.

From a tentative foray in 1988 into the individual investor arena to servicing

around seven lakhs account, SHCIL has endeavored to constantly add and innovate to

make business a pleasure for investors. SHCIL has a network of more than 140 branches

spread across the country providing services at your doorstep. Across the country, 14

Depository Participant Machines (DPMs) connected to NSDL and 7 DPMs connected to

CDSL ensure fast and direct Processing of client’s instructions. SHCIL

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b) Justification of Study The money you earn is partly spent and the rest saved for meeting future

expenses. Instead of keeping the savings idle, you may like to use savings in order to get

return on it in the future. This is called Investment.” There are various investment

avenues such as Equity, Bonds, Insurance, Bank deposit etc. A Portfolio is a combination

of different investment assets mixed and matched for achieving an investor’s goal. There

are various sources, which provide information to investor undergoes various analyses

some times he takes advice from experts. There are various factors, which affects

investor’s portfolio such as annual income, government policy, natural calamities,

economical changes etc.

Initiations floating financial securities

Corporate house, government bodies and mutual funds are the main source of

investment information many of these enterprises have their own website and post

investment related information on the site.

Financial market

Stock exchange and regulated bodies also provide useful information to investor

to make there investment decisions. With respects to secondary market, the securities

board if India uses various modes to promote investors education. And takes great effort

to achieve an investor friendly secondary market in India the reserve bank of India also

provide useful information relating to the prevent interest rates and non banking financial

intermediaries that mobiles money through deposit schemes.

Financial service intermediaries

These intermediaries promote securities among the public. Many of these

intermediaries are the agencies of specific instruments especially tax saving instruments.

These intermediaries offer to share their commission from there concerned organization

with the individual investor thus investor get additional advantages while investing

through intermediaries.

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Media

Press sources such as financial newspapers, financial magazine, business news

channel, internet website, and so on provide investment information to the public.

Besides information on securities, these sources also provide, to the some extent, analysis

of information and in certain instance suggest suitable investment decisions to be made

by investor.

(iii). Objectives of the proposed Study • To understand the capital market and its various participants

• To study the depository system, its structure and operations

• To study investors preferences and trends.

• To understand investors behavior on various investment alternatives.

• To study portfolio of investor and basis of there study Before making any investment, one must ensure to:

� Obtain written documents explaining the investment

� Read and understand such documents

� Verify the legitimacy of the investment

� Find out the costs and benefits associated with the investment

� Assess the risk-return profile of the investment

� Know the liquidity and safety aspects of the investment

� Ascertain if it is appropriate for your specific goals

� Compare these details with other investment opportunities available

� Examine if it fits in with other investments you are considering or you have

already made

� Deal only through an authorized intermediary

� Seek all clarification about the intermediary and the investment

� Explore the options available to you if something were to go wrong, and then, if

satisfied, make the investment.

These are called the twelve Important Steps to Investing

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(iv). Research Methodology & Analytical Tools

a) Source of Data:

Methodology:

Collection of data from primary and secondary source

Primary source

• Questionnaire

• Personal interaction

• Observation

Secondary Source

• Company website

• Customer data base

• Company report

• Books and publications

• Related information from net

b) Sampling & Sample Survey

Selection of sample

• Population : investor of SHCIL and BGSE

• Sample Frame: people who are investing regularly

• Sample size : 80 investors

• Sample method : Random Sample

c) Tools of Analysis Measurement and analysis technique

• Simple percentage method

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• Graphical representation using data code sheet

• Applying various mathematical calculation

The most used tools for performing economic analysis are

Gross Domestic Product

Monetary policy and liquidity

Inflation

Interest rate

International influences

Consumer sentiments

Fiscal policy etc Industry Analysis:

It is very important to see how the industry to which the company belongs is

faring. Specifics like effect of Government policy, future demand of its products etc.

need to be checked. At times prospects of an industry may change drastically by any

alterations in business environment. For instance, devaluation of rupee may brighten

prospects of all export-oriented companies. Investment analysts call this as Industry

Analysis. Companies producing similar products are subset (form a part) of an

Industry/Sector. For example, National Hydroelectric power Company (NHPC) Ltd.,

National Thermal Power Company (NTPC) Ltd., Tata power company (TPC) Ltd.

Etc. belong to the Power Sector/Industry of India.

Tools for industry analysis

Cross study industry performance

Industry performance over times

Differences in industry risk

Prediction about market behaviors, and

Competition over the industry life cycle

Company Analysis:

Company analysis involved choice of investment opportunities within a specific

industry that companies of several individual companies. How ahs the company been

faring over the past few years? Seek information on its current operations, managerial

capabilities, growth plans, its past performance vis-à-vis its competitors etc.

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Financial Analysis:

If performance of an industry as well as of the company seems good, then check if

at the current price, the share is a good buy. For this, look at the financial

performance of the company and certain key financial parameters like Earnings per

Share (EPS), P/E ratio, current size of equity etc. for arriving at the estimated future

price. This is termed as Financial Analysis. For that, you need to understand financial

statements of a company i.e. Balance Sheet and Profit and Loss Account contained in

the Annual Report of a company.

d) Limitations of Study

The study is conducted by taking a limited number of sample sizes which is stated earlier

and this study reflects the perceptions of those investors who are residing in Bangalore.

There might be a chance that the perceptions of the investors’ of different nature are

varied due to diversity in social life, living pattern, income level etc.

(v) . Scope/ Relevance of Proposed Study Business research courses are recognition that students in business, not-for-profit, and

public organizations – in all functional areas – need training in the scientific method and

its application to decision making. Two factors stimulate an interest in more scientific

decision making:

(1) The manager’s increased need for more and better information and

(2) The availability of improved techniques and tools to meet this need.

These changes have created new knowledge needs for the manager. Other knowledge

demands have arisen from problems with mergers, trade policies, protected markets,

technology transfers, and macroeconomic savings – investment issues.

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(vi). Proposed questionnaire

1. Name of investor: _____________________

2. Age group:

� Below 20

� 20 to 35

� 35 to 50

� 50 and above

3. Occupation:

� Employed:

О Private Sector

О Public Sector

� Self-Employed:

О Business

О Profession

� Retired:

� Not Employed:

4. Annual income:

� Below 150000

� 150000 to 300000

� 300000 to 450000

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� 450000 and above

5. Are you short term investor or long term investor:

� Short term investment

� Long term investment

� Both

6. What is your investment per annum?

� Below 20000

� 20000 to 40000

� 40000 to 80000

� 80000 to above

7. How frequently do you invest?

� Weekly

� Monthly

� Quarterly

� Half yearly

� Yearly

8. What are your various investment alternatives?

� Equity � Real Estate � PPF � Mutual Fund

� Debentures/Bonds

� Gold/Silver

� Bank Deposits

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� Insurance � Others Please specify: __________________

9. Basis of Investment:

� Self Analysis

� Financial Advice

� Brokers Advice

� Friends/Relatives Advice

� Charted Accountant Advice

10. Source of study

� Business Channels

� Business papers

� Business Magazines

� Internet

(vii). References

Web sites

www.onlinestockholding.com

www.nseindia.com

www.bseindia.com

www.shcil.com

Text Books

Financial management (PRASANNA CHANDRA)

Investment Analysis & Portfolio Management (M.RANGNATHAN)

Security Analysis & Portfolio Management (FISCHER & JORDAN)