Download pdf - Marwadi Final

  • 8/14/2019 Marwadi Final



    Stock exchanges to some extent play an important role as indicators, reflecting the

    performance of the countrys economic state of health. Stock market is a place

    where securities are bought and sold. It is exposed to a high degree of volatility,

    prices fluctuate within minutes and are determined by the demand and supply of

    stocks at a given time. Stock brokers are the ones who buys and sells securities on

    behalf of individuals and institutions for some commission.

    The Securities and Exchange Board of India (SEBI) is the authorized body, which

    regulates the operations of stock exchanges, banks and other financial institutions.

    The past performances in the capital markets especially the securities scam by

    Hasrshad Mehta has led to tightening of the operations by SEBI. In addition theinternational trading and investment exposure has made it imperative to better

    operational efficiency. With the view to improve, discipline and bring greater

    transparency in this sector, constant efforts are being made and to a certain extent

    improvements have been made.

  • 8/14/2019 Marwadi Final







  • 8/14/2019 Marwadi Final







  • 8/14/2019 Marwadi Final



    The organization defines saving as the excess of current income over current

    expenditure. It is the balancing item on the income and joutlay accounts of

    producing enterprise and households, goverement administration, and other final

    consumers. For the purpose of estimating the domestic saving, the economy has

    been divided into three broad institutional sectors;


    The household sector comprises heterogeneous entities such as individuals,

    unincorporated business enterprises (sole proprietorships and partnership

    concerns), farm production units, and a number of non-profit institute.



  • 8/14/2019 Marwadi Final


    Private corporate sector comprises non-government, non-financial companies,

    private financial institutions, and co-operative institutions.

    C. PUBLIC:

    The public sector comprises the government, administrative depertments and

    enterprises both departmental and non-departmental. The saving of the

    government administration is defined as the excess of current receipts over current



    In todays era investor invest their funds after basic analysis. The basic function of

    financial market is to facilitate the transfer of funds from surplus sectors that is


  • 8/14/2019 Marwadi Final


    from (lenders) to deficit sectors (borrowers). If we look at the financial cycle then

    we can say that households make their savings, which is provided to industrial

    sectors, which earn profit and finally this profit will go to the households in the

    form of interest and dividend. Indian Financial System is made-up of 2 types of

    markets i.e. Capital Market & Money market.


    Securities market may be classified is by the types of securities bought and sold

    there. The broadest classification is based upon whether the securities are new

    issues or are already outstanding and owned by investors. Now we see following

    chart for understanding market types.


  • 8/14/2019 Marwadi Final


    Primary Market:

    Securities available for the first time are offered through the primary securities

    markets. The issuer may be a brand-new company or one that has been in business

    for many years. The securities offered may be a new type for the issuer of

    additional amounts of a securities used frequently in the past. In primary market

    funds are mobilized in the primary market through prospectus, rights issues ,and

    private placement.


    Capital Market

    Primary Market Secondary Market


    Over TheCounter

  • 8/14/2019 Marwadi Final


    Secondary market:

    Once new issues have been purchased by investors, they change hands in the

    secondary markets. This market also known as stock market. In India the

    secondary market consist of recognized stock exchanges operating under rules, by-

    laws and regulations duly approved by the government. There are actually two

    broad segments of the secondary markets.

    a. Organized market :

    Organized exchange are physical marketplaces where the agents of buyers and

    sellers operate thorough the auction process. There are number of organized

    exchanges in India. NSE(National Stock Exchange) and BSE (Stock Exchange

    Mumbai) are main stock exchange. Other than this there are more then 23 stock


    b. Over The Counter (OTC) :

    The OTC market is not a central physical marketplace but a collection of broker-

    dealer scattered across the country. This market is more a way of doing business

    than a place. Bu matched not through the auction process on the floor of an

    exchange but through negotiated bidding, over a massive network of telephone and

    teletype wires that link thousand of securities firms here and abroad


  • 8/14/2019 Marwadi Final



    The money market has 2 components-The organized & unorganized. The

    organized market is dominated by commercial banks. The other major

    participants are RBI, LIC, GIC, UTI, and STCI.The main function of it is that

    of borrowing & lending of short term funds. On the other hand unorganized money

    market consists of indigenous bankers & money lenders. This sector is

    continuously providing finance for trade as well as personal consumption.


  • 8/14/2019 Marwadi Final



    The Stock Exchange, Mumbai, popularly known as "BSE" was established in

    1875 as "The Native Share and Stock Brokers Association". It is the oldest one

    in Asia, even older than the Tokyo Stock Exchange, which was established in

    1878. It is a voluntary non-profit making Association of Persons (AOP) and is


  • 8/14/2019 Marwadi Final


    currently engaged in the process of converting itself into demutualised and

    corporate entity. It has evolved over the years into its present status as the premier

    Stock Exchange in the country. It is the first Stock Exchange in the Country to

    have obtained permanent recoginition in 1956 from the Govt. of India under the

    Securities Contracts (Regulation) Act,1956.

    The Exchange, while providing an efficient and transparent market for trading in

    securities, debt and derivatives upholds the interests of the investors and ensures

    redressal of their grievances whether against the companies or its own member-

    brokers. It also strives to educate and enlighten the investors by conducting

    investor education program and making available to them necessary informative


    A Governing Board having 20 directors is the apex body, which decides thepolicies and regulates the affairs of the Exchange. The Governing Board consists

    of 9 elected directors, who are from the broking community (one third of them

    retire ever year by rotation), three SEBI nominees, six public representatives and

    an Executive Director & Chief Executive Officer and a Chief Operating Officer.


  • 8/14/2019 Marwadi Final


    BSE Sensex is depend on the 30 companies which are as follows.

    1. ACC 16. Maruti

    2. Bajaj auto 17. NTPC

    3. Bharti 18. ONGC

    4. BHEL 19. Ranabaxy5. Cipla 20. RCVL

    6. Dr. Reddy 21. Reliance

    7. GACL 22. REL

    8. Grasim 23. Satyam

    9. HDFC 24. SBI

    10. HDFC bank 25. Tata motors11. Herohonda 26. Tata Steel

    12. ICICI bank 27. TCS

    13. Infosys 28. Wipro

    14. ITC 29. Hindalco

    15. L & T 30. HLL


  • 8/14/2019 Marwadi Final



  • 8/14/2019 Marwadi Final



    NSE was incorporated in 1992 and was given recognition as a stock exchange in

    April 1993. It started operations in June 1994, with trading on the Wholesale Debt

    Market Segment. Subsequently it launched the Capital Market Segment inNovember 1994 as a trading platform for equities and the Futures and Options

    Segment in June 2000 for various derivative instruments.

    NSE has been able to take the stock market to the doorsteps of the investors. The

    technology has been harnessed to deliver the services to the investors across the

    country at the cheapest possible cost. It provides a nation-wide, screen-based,

    automated trading system, with a high degree of transparency and equal access to

    investors irrespective of geographical location. The high level of information

    dissemination through on-line system has helped in integrating retail investors on a

    nation-wide basis. The standards set by the exchange in terms of market practices,

    Products , technology and service standards have become industry benchmarks and

    are being replicated by other market participants. Within a very short span of time,

    NSE has been able to achieve all the objectives for which it was set up. It has been

    playing a leading role as a change agent in transforming the Indian Capital

    Markets to its present form. The Indian Capital Markets are a far cry from what

    they used to be a decade ago in terms of market practices, infrastructure,technology, risk management, clearing and settlement and investor service.


  • 8/14/2019 Marwadi Final


    About NSDL:

    Although India had a vibrant capital market which is more than a century old, the

    paper-based settlement of trades caused substantial problems like bad delivery

    and delayed transfer of title till recently. The enactment of Depositories Act in

    August 1996 paved the way for establishment of NSDL, the first depository in

    India. This depository promoted by institutions of national stature responsible for

    economic development of the country has since established a national

    infrastructure of international standard that handles most of the trading and

    settlement in dematerialized form in Indian capital market.

    Using innovative and flexible technology system, NSDL works to support the

    investers and brokers in the capital market of the country. NSDL aims at ensuring

    the safety and soundness of Indian marketplaces by developing settlement

    solutions that increases efficiency, minimize risk and reduces costs. At NSDL, we

    play a quiet but central role in developing products and services that will continue

    to nurture the growing needs of the financial services industry.

    In the depository system, securities are held in depository accounts, which is

    more or less similar to holding funds in bank accounts. Transfer of securities is

    done through simple account transfers.This method does away with all the risks

    and hassles normally associated with paperwork. Consequently, the cost of

    transacting in a depository environment is considerably lower as compared to

    transacting in certificates.


  • 8/14/2019 Marwadi Final



    Enables the surrender and withdrawal of securities to and from the


    ( dematerialization and re- materialization)

    Maintains investor holdings in the electronic form.

    Effects settlement of securities traded to the exchanges.

    Carries out settlement of trades not done on the stock exchange. ( off market

    traders )

    Transfer of securities

    Pledging / hypothecation of dematerialized securities.


    NSDL offers a host of services to the investors through it

    Network of Dips

    Maintenance of beneficiary holdings through DPS


    Off market trades

    Settlement in dematerialized securities

    Receipt of allotment in the dematerialized form

    Distribution of corporate benefits16

  • 8/14/2019 Marwadi Final


    Re materialization

    Pledging and Hypothecation Facilities

    Freezing / Locking of investors account

    Stock lending and borrowing facilities

    Speed e




    NCDEX started working on 15th December, 2003. This exchange provides

    facilities to their trading and clearing member at different 130 centers for contract.


  • 8/14/2019 Marwadi Final


    In commodity market the main participants are speculators, hedgers and


    Promoters of NCDEX are

    National Stock Exchange(NSE)

    ICICI bank

    Life Insurance Corporation(LIC)

    National Bank for Agricultural and Rural Development (NABARD)


    Punjab National Bank (PNB)



    NCDEX is nationalized screen based system which is providing transparent,

    private and easy services.

    NCDEX is one of the traditional media which gives online information

    NCDEX is one of the Indian commodity exchange, constructed on the basis

    of the current national institutes the exchange has been established with the

    coloration of leading institutes like NABARD, LIC, NSI etc.

    In India NCDEX has maximum settlement guarantee fund.

    NCDEX has appointed two exports for checking quality at the time of



  • 8/14/2019 Marwadi Final



    NCDEX has developed facility for checking of commodity and also

    provides a wear house facility

    By collaborating with industrial partners, industrial companies, news

    agencies, banks and developers of kiosk network NCDEX is able to provide

    current rates and contracts rate.

    To prepare guidelines related to special products of securitization NCDEXworks with bank.

    To avail farmers from risk of fluctuation in prices NCDEX provides special

    services for agricultural.


  • 8/14/2019 Marwadi Final


    NCDEX is working with tax officer to make clear different types of sales

    and service taxes.

    NCDEX is providing attractive products like weather derivatives


  • 8/14/2019 Marwadi Final


  • 8/14/2019 Marwadi Final



    The market watch window is used to view the market details for a particular orgroup of contracts and for a particular instrument type. This window displays thefollowing details: Symbol,Expiry,price quotation unit, buy qty, buy price, sell

    price, sell qty, last traded price,D.P.R,volume (in 000s), value (in lac),% change,average trade price, high, low, open, close & open interest.



  • 8/14/2019 Marwadi Final


    A person holding assets (Securities/Funds), either to meet his liquidity needs or to

    reshuffle his holdings in response to changes in his perception about risk and

    return of the assets, decides to buy or sell the securities. He selects a broker and

    instructs him to place buy/sell order on an exchange. The order is converted to a

    trade as soon as it finds a matching sell/buy order. At the end of the trade cycle, the

    trades are netted to determine the obligations of the trading members

    securities/funds as per settlement cycle. Buyer/seller delivers funds/ securities and

    receives securities/funds and acquires ownership of the securities.

    A securities transaction cycle is presented above. Just because of this Transaction

    cycle, the whole business of Securities and Stock Broking has emerged. And as an

    extension of stock broking, the business of Online Stock broking/ Online Trading/

    E-Broking has emerged.








  • 8/14/2019 Marwadi Final







    A/c Opening Fee Brokerage Interface







    Banks Associated

    withMarwadi 750 NIL 0.30 0.10 HDFC

    ICICI Direct 750 NIL 0.75 0.18 ICICI Bank

    Indiabulls 750 250 0.40 0.10 N.A.

    5 paisa 800 NIL 0.20 0.05Citibank, HDFC,

    OBC, UTI &

    ICICI Bank

    Kotak Street 500 N.A. 0.59 0.06Kotak Bank &


    HDFC Securities 700 NIL 0.50 0.15HDFC & Other 4



  • 8/14/2019 Marwadi Final



  • 8/14/2019 Marwadi Final



    From a decade all financial service groups are offering stock -broking and

    commodity - broking through NSE, BSE, NCDEX and MCX. Marwadi also offer

    depository services as DP of NSDL and CDSL. Marwadi is spread through out

    Saurashtra Kutch Peninsula with their 46 branches and manpower strength of over

    300 employees. Marwadi have built up customer trust and credibility through

    qualitative service and prompt redressal of queries. Marwadi have 100,000

    customers, whose various investment needs Marwadi are servicing, vindicates their

    index of customer credibility. The company has always been driven by a desire to

    create values for its customers by customer First approach, ethical and transparent

    business practices, reverence for professionalism and implementation of cutting-

    edge technology. These have enabled them to flourish into one of the top-50 stock

    broking houses in India.

    A convincing index of their customer loyalty is that nearly 75% of their

    customers have been with them for period of three years. This means that a bulk of

    their customer has subscribed to their services on a long term basis.

    MSFL strength lies in its team of young, talented and confident individuals.


  • 8/14/2019 Marwadi Final


    Qualified and experienced professionals to carry out different functions under


    Leadership of its promoter's viz. Mr. Ketan Marwadi, Mr.Deven Marvadi and


    Company profile

    Name ~ Marwadi Shares And Finance Ltd.

    Establishment ~ 1992

    Registered office ~ Limda Lan Jamnagar

    Head office Ltd. ~ Marwadi Shares And finance,


  • 8/14/2019 Marwadi Final


    Nr. Kathiawad Gymkhana,

    Dr,Radhakrishna Road

    RAJKOT 360001

    Ph No ~ (0281) 2481313

    E-Mail ~ [email protected]

    Web Site ~

    Managing Director ~ Mr. Ketan Marwadi

    Directors ~ Mr. Deven Marwadi

    Mr. Sandeep Marwadi

    Deputy General Manager ~ Mr. Haresh Maniyar

    CEO ~ Mr. Jay kumar A.S

    Company Secretary ~ Mr. Tushit Mangaliya


    mailto:[email protected]://[email protected]:[email protected]://[email protected]
  • 8/14/2019 Marwadi Final



  • 8/14/2019 Marwadi Final



    1992...Marwadi Shares And Finance Pvt. Ltd. was incorporated.

    1996...Became a corporate member of National Stock Exchange Of India -


    1998...Became a member of Saurastra Kutch Stock Exchange (SKSE) 1999...Launched Depository services of Depository Participant under

    National Depository Security Ltd. (NSDL)

    2000...Commenced Derivative Trading after obtaining registration as

    Clearing and Trading Member in NSE.

    2003...(MCBPL) Became a corporate member of the National Commodity

    and Derivatives Exchange of India Ltd.

    2003...(MCBPL) Became a corporate member of The Multi Commodity

    Exchange of India Ltd.

    2004...Became a corporate member of Bombay Stock Exchange Ltd. (BSE)

    2004...Launched Depository Services of Depository Participant under

    Central Depository Services (India) Ltd.

    2005...Launched Portfolio Management Services

    2006...MSFPL converted to Public Limited (Marwadi Shares And Finance



  • 8/14/2019 Marwadi Final


    2006 The Company raised private equity from ICGU Limited, a wholly

    owned subsidiary of India Capital Growth Fund.

    2007 The Company raised further private equity from Caledonia

    Investments plc.


  • 8/14/2019 Marwadi Final


    Ahmedabad (C G






    Amreli 9909958604

    Anand 9879207325

    Ankleshwar 9879615936

    Banglore 9972038321

    Baroda 9879159060

    Bharuch 9879615935

    Bhavnagar 9879207326

    Bhuj 9879207328

    Chandigarh 9915777515

    Chennai 9383180636

    Cochin 9388129275

    Coimbatore 9345147763

    Delhi 9313756795

    Dhoraji 9979862133

    Dahod 9979862174

    Dhrangdhra 9825026678

    Disha 9925247562

    Kolhapur 9423281810

    Kolkata 9831582888

    Kanpur 9935115911

    Manavadar 9879207342

    Mandvi 9879207343

    Mangrol 9909958610

    Mehsana 9879615932

    Mithapur 9879207385

    Morbi 9879615916







    Mumbai (Vashi) 9323035983

    Nadiad 9879615934

    Navsari 9879615937

    Neemuch 9301909991

    Okha 9824884471

    Palitana 9909958549

    Patan 997986217032

  • 8/14/2019 Marwadi Final



    Introduction Demat Service

    The concept of Depository Participant came in India in 1996 and on national level

    stock exchanges started settlement in demats form in the year 1999. So it became


  • 8/14/2019 Marwadi Final


    compulsory for each and every broking client to have a demat account for this

    obligation in trading. As present approximately 390 DPs are registered with SEBI.

    Depository Participant addresses the needs of retail investor clients of Gujarat.

    Marwadi were the first corporate DP in Saurashtra. As on date service 50,000 plus

    clients through a well-equipped branch network. They offer online services offered

    by NSDL/CDSL. Affiliated to both NSDL and CDSL in order to give optimum

    cost solution to clients keeping in view the investors needs. Company place a high

    premium customer service and prompt reporting in order to ensure integrity of

    transactions. Customer centric schemes have been designed to address the investor

    needs relative to element (such as trade execution dematerialization and re

    materialization) economical prices.

    Marwadi is one of the big players in depository participant market. Marwadi has

    more than 25000 clients. The head of the department is Mr. Arvind A. Gamot. Inthis department mainly 23 employees are working under him. Balance inquiry,

    DRF, receipt of trade and forms for opening or closingof demat account are

    being provided.

    Marwadi shares & finance ltd, a leading broking house, started to provide

    depository participant services in May 1999. At present Marwadi is having about

    35,000 clients situated at 550 pin codes. MSFL is having more than 28 branches

    for their depository participants operations.

    Marwadi also gives following services without any charges :


  • 8/14/2019 Marwadi Final


    Demat Confirmation

    Remat Confirmation

    Rejection of Instruction

    Special Transaction Statement as our desire

    Allotment of Shares under IPO

    Every quater we send the Ledger to each Client

    Inimates the renewal of account

    Speed - e services client without any additional charges

    Account Opening Procedure

    Proof of Identity: A beneficiary account must be opened only after

    obtained a proof of identity of the applicant. The applicant's signature and

    photograph must be authenticated by an existing account holder or by

    applicant's bank or after due verification made with the original of the

    applicant's valid passport, voter ID, driving license or PAN card with

    photograph and further.

    Proof of Address: Certified copies of ration card/passport/voter ID/PAN

    card/driving license/bank passbook.


  • 8/14/2019 Marwadi Final


    Ensure that all compulsory fields in the account opening form are filled.

    In case of corporate, ensure a copy of board resolution of authorized

    signatories. Ensure proper authorization in case of power of attorney holder.

    DP should give a copy of agreement to the client, including the charges.

    An investor intending to hold securities in the electronic form in a

    depository system should open an account with a participant. So also should

    all the clearing members who intend to provide settlement function in the

    depository system.

    The participant will make available the relevant account opening form

    (depending on whether the client is a retailer investor or corporate client or

    clearing member) and specify the relevant list of documents regarding

    references that should be submitted along with the form. It will also give a copy

    of the relevant agreement, to be entered with the client, in duplicate.

    The client will submit the duly filled in account opening form. It should also

    furnish such documents regarding references, as specified electronic form in by

    the participant, along with the account opening form. After executing the

    agreement the client has to forward it to the Marwadi.

    The Marwadi will verify that the account opening form is duly filled in. it13THHKLM will also verify the enclosed documents, if any. Incomplete forms

    will be forwarded to the client for rectification.


  • 8/14/2019 Marwadi Final


    The authorized signatories are enclosed.

    After completion of all documentation, the Marwadi will enter the client details

    as mentioned in the account opening form in the DPM screen provided for the

    purpose. After entering client details in the system, a client account number will

    be generated by the DPM. The Marwadi will enter this in the account opening


    The Marwadi will record the clients signature (on the form) as specimen for

    authorization in the future.

    The Marwadi will give a copy of the report listing the client details captured in

    the DPM database to the client.

    Finally Marwadi dispatch, demat account kit to the client by courier. In this

    kit Marwadi provide following things.

    Trade book of NSDL. With requisition slip.

    Trade book of SDSL.

    DRF book

    Identify card

    Agreement copy, duly authenticated

    Account closing form


  • 8/14/2019 Marwadi Final


    Guild lines for operation demat account

    Account master letter Covering letter



  • 8/14/2019 Marwadi Final


    Procedure for opening of Demat Account of Corporate:-

    Memorandum & Articles of Association (MOA & AOA ), board resolution for

    opening demat account and list of authorized signatories and photographs, etc.

    Introduction by an existing account holder or by the applicant's bank.

    Proof of address of the corporate evidenced by the document registered with

    Registrar of Companies or acknowledged copy of Income Tax Return or Bank

    Statement or Leave and License agreement/Agreement for sale.


  • 8/14/2019 Marwadi Final


    An authorized official of the Participant shall verify the proof if address with

    the original documents and affix his/her signature on the documents submitted

    by the Client.

    Change of Address:

    A written application for change of address of the corporate entity, signed by all

    the authorized signatories should be submitted to the Participant.

    Following documents should be submitted along with the application:

    Latest transaction statement of the corporate's account received from the


    Proof of new address along with the original document of new address,

    for verification by the Participant.

    At least one of the authorized signatories should visit the office of the

    Participant in person to submit its application for change of address along with

    necessary documents and sign the application once again in the presence of the

    officials of the participant.

    An authorized official of the Participant shall verify the application and the

    abovementioned documents with the original and put his/her signature on the

    application with remarks "verified" and thereafter record the change of address

    in the DPM system.

    Change of Signature:


  • 8/14/2019 Marwadi Final


    The client should make a request in writing specifying reasons for change in


    New signature should be duty attested by client's banker.

    Client should visit participant's office personally and procedure valid proof of

    identify as well as the latest transaction statement of its account.

    In the presence of officials of participant client should affix his/her new


    An authorised official of the participant shall under his signature varify the

    identity proof with the proof and photograph that were furnished at the time of

    opening of account and thereafter, if found satisfactory, make necessary

    changes in its records.

    Process Of Security Transfer:

    Procedure for buying and selling dematerialized share is similar to the procedure

    for buying and selling dematerialized shares is similar to the procedure for buying

    and selling physical shares. The difference lies in the process of delivery (in case

    of sell) and receipt (in case of Purchase of securities.

    In case of purchase:

    The broker will receive the securities in his account on the payout day


  • 8/14/2019 Marwadi Final


    The broker will give instruction to its DP to debit his account and credit

    investor's account

    Investor will give Receipt Instruction to DP for receiving credit by filling

    appropriates form. However one can give standing instruction for credit in to

    ones account that will obviate the need of giving Receipt Instruction every


    In case of Sell:

    You will give delivery instruction to DP to debit ones account and credit your

    brokers account. Such instruction should reach to your DPs office at least 24

    hours before the pay-in other wise DP will accept the instruction only at your risk.

    Transfer of Security by Depository:

    The first step is that two receipts are prepared one is for trade received by fax,

    which is done through broker the other is for investors & small investors.

    The next step is that the batch is generated after every hour. After that signature

    is verified.


  • 8/14/2019 Marwadi Final


  • 8/14/2019 Marwadi Final


    The first step is that the pledgor will submit an instruction to its participant to

    initiate a pledge / hypothecation request in the DPM by indicating the option

    create a pledge / hypothecation in the pledge / hypothecation form vide exhibit

    is the pledgor will indicate therein the agreement number, closure date of the

    pledge / hypothecation.

    The next step is that the participant will check for the completeness of the form.

    If the form is complete in all respects, the participant will accept the form for

    processing and issue an acknowledgment for the same to the pledgor.

    The participant will then enter the details of the request in the DPM and the

    DPM will generate a pledge / hypothecation instruction number of request.

    If there is sufficient balance in the clients account, the participant will enter the

    request form.

    The acceptance / rejection of pledge / hypothecation confirmation is

    electronically communicated to the DPM of the pledgors participant through


    In case of rejection by the pledge creation of the pledge / hypothecation

    instructions will be reversed and the reasons for the rejections are displayed in

    the DPM of the pledgors participant

    After once confirmation of creation of the pledge / hypothecation it cant becancelled.


  • 8/14/2019 Marwadi Final


    The pledges participant can not confirm the creation of pledge hypothecation

    after the closure date.

    What should one do to pledge electronic securities?

    Both investor (pledgor) as well as the lender (pledgee) must have depository


    Investor has to initiate the pledge by submitting to DP the details of the

    securities to be pledged in a standard format ;

    The pledgee has to confirm the request through his/her DP;

    Once this is done, securities are pledged

    Corporate benefits on the pledged securities:

    It is very important to know that who receive corporate benefits such as dividend,

    bonus etc... So, in this case the securities pledged are only blocked in the account

    of pledgor in favor of the pledgee. The pledgor would continue to receive all the

    corporate benefits.

    Closure Procedure:


  • 8/14/2019 Marwadi Final


    After repayment of loan to the pledgee, the pledgee will send instructions. After

    that participant will check for completeness of the form submitted by pledgor. If

    the form is complete in all respect, the participant will accept the form for further

    processing & will issue an acknowledgement.

    Now the next step is that the participant will compare details of form with those

    recorded in the DP as specified in the form. Now the participant will enter the

    closure request details in the dam against the pledge / hypothecation number. Now

    the participant will enter the closure details in the DPM against the from of the

    pledge / hypothecation. Closure request is electronically communicated to the

    DPM of ledgers participant through the dm for confirmation.

    Demet Requisition Form (DRF):

    In todays era, all the transactions are done through electronic form in NSE/BSE.

    So here, investors need to convert their physical certificate into electronic form.

    The applicant must have gone through a systematic process to open demat account.

    The first step is that the applicant will make request for opening his account with

    DP. Marwadi has to first fill up DRF form.

    Procedure for Dematerialization:



  • 8/14/2019 Marwadi Final


    Steps :

    DPS provides DRF(De-mat Requisition Form) to the clients

    Client/ investors submit the DRF and physical certificates of securities to

    DP. DP checks whether the securities are available for de-mat. Client

    defaces the certificate by stamping Surrendered for Dematerialization. The DP should enter the dematerialization request in DPM. dpm

    generate request number (drm) which should be mentioned in


    DP punches two holes on the name of the company and draws two parallel

    lines across the face of the certificate.

    DP enters the de-mat request in his system to be sent to nsdl. Dp dispatchesthe physical certificates along with the drf to the r&t agent



    NSDL R & T Agent

  • 8/14/2019 Marwadi Final


  • 8/14/2019 Marwadi Final



    With the increasing popularity of scrip less trading many brokers and sub

    brokers are attempting to assess possible impact of this in their business practices.

    In lay man language, the broker can be considered as a wholesaler of services

    and sub broker can be considered as a retailer. As a part of service the sub

    brokers also collect the securities and funds from the investor and delivers the

    same to the main broker for onward settlement with the clearing corporation

    (CC)/clearing house (CH).

    According to SEBIrules, it is advisable to open trading account. An investor can

    open trading account in any depository. As per the guidelines prescribed,

    partnership firm & corporate body cannot open their trading account. Marwadi has

    different segments to facilitate the transactions related to trading. To open trading

    account anyone must have to follow the specific procedure which is as follows.


  • 8/14/2019 Marwadi Final





  • 8/14/2019 Marwadi Final


    Clients can be divided mainly in three segments.

    Direct Client (All Segment) Authorized Persons Client (Derivatives Segment)

    Sub Broker Client (Cash Segment) 1. DIRECT CLIENT:When client wants to deal in each and every segment then Marwadi make direct

    client agreement. When client wants to open an account in Marwadi or in any of

    the branches at that time Marwadi also makes direct client agreement.



  • 8/14/2019 Marwadi Final



    Trading members of the Exchange may appoint authorized person who can be

    individuals, registered partnership firms, corporate bodies or companies as defined


  • 8/14/2019 Marwadi Final


    under the Companies Act, 1956 in the Capital Market (CM) segment or Futures &

    Options (F&O) segment or in both Capital market and Future & Options segment.



  • 8/14/2019 Marwadi Final



    When client wants to deal in only cash segment then Marwadi makes sub broker

    client agreement.



  • 8/14/2019 Marwadi Final



    Client ask for form

    The client fills up the form and submit to Marwadi

    The Marwadi checks all the details and then verify the proves.

    Marwadi makes agreement according to segment and relevant agreement

    form has been attached.

    The next step is coding. In coding name and surname has been checked and

    if anything matches then it shows that account is already been opened.

    Otherwise new code is given. After coding address details have been


    The next step is brokerage. The brokerage charge depends upon different

    segments and clients. In same day square up the brokerage is fixed that is

    0.8 paisa. Client gives brokerage to broker and broker will give it to

    Marwadi at the end of month. There would not be any delivery charge.

    Marwadi decides the different slabs according to which clients are charged.


  • 8/14/2019 Marwadi Final


    At last data entry has been done.


    Photo copy (driving license, ration card, voter id card, pass port)

    De-mat account copy

    Pan card number

    Bank Account number

    Electric bill (Last Two Months bill)

    Authority letter

    E-mail id



  • 8/14/2019 Marwadi Final



    A beneficial owner or clearing member may close his account with the participant.

    at the time of default of client participant can also be initiated for closure of

    account for which the client has to submit an account closure request form to the

    participant on the other hand client can also re-materialize his holdings or can

    transfer it with another participant.


    The client will submit a request to the Participant in the form vide for

    account closure.

    On receipt of the request form, the Participant will verify that the form is

    duly filled in and issue to the client, an acknowledgement slip, signed and



  • 8/14/2019 Marwadi Final


    The Participant will verify signature of the client on the form with the

    specimen signature available in its records.

    If the signature differs, the Participant will ensure the identity of the client.

    The client is required to indicate whether it has opted for transferring the

    holding to another account or for re-materialization.

    If the option is for transfer of holding to another account, procedure laid

    down to another transfer will be followed.

    If the option is for re-materialization, procedure laid down for re-

    materialization will be followed.

    After all the balances in the client account become zero, the Participant will

    change the status of the client account to TO BE CLOSED.

    The Participant will issue a final statement of accounts to the clien



  • 8/14/2019 Marwadi Final


    Different Option for Trading,

    NSE Cash NSE Derivatives BSE Cash


    The trading system provides tremendous facilities to the users in terms of

    orders that can be placed on the system.

    It provides complete online market system.

    The market screen at any point of time provide complete information on

    total order depth, five best buyers & sellers available in the market, the

    quantity traded during the day in that security, the high - low, the last

    traded price etc

    Immediately after the trading limit has been placed in order book investor

    can know the fate of the orders.

    Limit orders are orders to bye & sell shares at a stated quantity & stated


    If price quantity condition doesnt match; the limit order will not be



  • 8/14/2019 Marwadi Final


    NSE CASH The neat system supports an order driven market, where in orders match on

    the basis of time & price priority. All quantity fields are in units & prices are

    quoted in Indian currency (RS.)

    The regular lot size & tick size for various securities traded are notified by

    the exchange from time to time.

    The system (NEAT) is available for trading on all days except Saturday,

    Sunday & other Holidays which are declared by the exchange from time to


    The trading member can carry out following activities after login to the

    NEAT system & before the market pens for trading

    Setup market watches (i.e. the securities which the user would Like to

    view the entire screen)

    Viewing inquiry screens.

    Now the trading market is divided into different phases as follows.

    1. Open phase

    2. Market close

    3. Surcon


  • 8/14/2019 Marwadi Final


    1) Open phase:The open period indicates the commencement of the trading activity. At that time a

    message is sent to all the trader workstations.

    Order entry is allowed only when all the securities have been opened.

    The activities that are mainly done at this stage are order inquiry, order

    modification, order pending until executed, cancellation at the time of



    At the time of closing normally no further orders can be entered but in F&O there

    are two types available i.e. American & European in which European type allows

    users to enter the order after closing the session.

    3) SURCON:


  • 8/14/2019 Marwadi Final


    Surveillance & control is that period after closure of the market during which the

    users can, inquire. After every SURCON period, the system processes the data for

    making the system available for the next trading day.


    The Capital Market System has four types of market. Marwadi are:

    Normal Market

    Odd Lot Market

    ALBM Market

    Auction Market


    Normal market consists of various book types wherein orders are segregated as

    Regular Lot orders, Special Term orders, Negotiated Trade orders and Stop Loss

    orders depending on their order attributes. All orders have to be of Regular Lot

    size or multiples thereof.



  • 8/14/2019 Marwadi Final


    An order is called an Odd Lot order if the order size is less than Regular Lot size.

    Such orders are traded in the Odd-Lot market. These orders do not have any

    special terms attribute attached to them. In an Odd-Lot market, both the price and

    quantity of the orders (buy and sell) should exactly match for the trade to take



    ALBM orders are similar to the normal market orders except that ALBM orders

    have different settlement periods vis-a-vis normal market. The orders entered in

    this market do not have any special terms attribute attached to them.


    In the Auction market, auctions are initiated by the Exchange on behalf of trading

    members for settlement related reasons.

    There are three participants in this market.

    A. Initiator :

    The party who initiates the auction process is called an initiator.

    B. Competitor:

    The party who enters orders on the same side as of the initiator is called a


    C. Solicitor:


  • 8/14/2019 Marwadi Final


    The party who enters orders on the opposite side as of the initiator is called a




  • 8/14/2019 Marwadi Final



    The following windows are displayed on the Trader Workstation screen:

    Title Bar

    Ticker Window

    Tool Bar

    Market Watch Window

    Inquiry Window

    Snap Quote

    Order/Trade Window

    Message Window


    Derivatives are one of the most complex instrument. Delivery contracts, stating

    what is to be delivered for a fixed priced at a specified place on a specified date.

    These contracts were undertaken between farmers & merchants to element the risk

    arising out of uncertainty future prices of grains. A derivative is Na contract whose

    value is derived from value of another assets, known as the underlying, which

    could be a share, a stock market index, and interest rate, a commodity or a



  • 8/14/2019 Marwadi Final



  • 8/14/2019 Marwadi Final


    As per above structure of derivative markets, two major segment of it

    financial derivative market and commodity derivative market. In financial

    derivative market it sub divided in organized market and Over The Counter (OTC)

    market. All the financial instruments are treaded under this market. The functions

    of financial derivative markets are treading, clearing, settlement.


    The transaction of BSE is done in BOLT software. The BSE On-Line trading

    system (BOLT) is designed and developed by CMC LtdIt is simple to use,

    screen-based computer trading system. You can trade on the all scripts using this

    system. This is a primary guide on how to use the BOLT system.

    The BOLT system aims at converting the open outcry system of trading to a

    screen-based system. You, as a trader on the BOLT system can input orders.

    What is BOLT?


  • 8/14/2019 Marwadi Final


    BOLT is CMCs implementation of the screen based on-line trading system for

    Bombay Stock Exchange. Trading Rules on the BOLT system are based on the

    business Requirements Specification (BRS) provided by the BSE.

    Options :

    There are two type of options- calls and puts, calls give the buyer the right but

    not the obligation to buy a given quantity of the underlying asset, at a given price

    on or before a given future date. Puts give the buyer the right but not the

    obligation to sell quantity of the underlying asset at a given price on or before a

    given date.

    Option, as the word suggests, is a choice given to the investor to either honor

    the contract; or if he chooses not to walk away from the contract. There are two

    kinds of options: Call Options and Put Options.


  • 8/14/2019 Marwadi Final


    A Call Option is an option to buy a stock at a specific price on or before a

    certain date. When you buy a Call option, the price you pay for it, called

    the option premium, secures your right to buy that certain stock at a

    specified price called the strike price. If you decide not to use the option to

    buy the stock, and you are not obligated to, your only cost is the option


    Put Options are options to sell a stock at a specific price on or before a

    certain date. In this way, Put options are like insurance policies. With a Put

    Option, you can "insure" a stock by fixing a selling price. If something

    happens which causes the stock price to fall, and thus, "damages" your

    asset, you can exercise your option and sell it at its "insured" price level. If

    the price of your stock goes up, and there is no "damage," then you do not

    need to use the insurance, and, once again, your only cost is the premium.

    Technically, an option is a contract between two parties. The buyer

    receives a privilege for which he pays a premium. The seller accepts an

    obligation for which he receives a fee.

    Forwards:A forward contract is an agreement between two entities to buy or sell the

    underlying asset t a future date, at todays pre-agreed price.


  • 8/14/2019 Marwadi Final


    Futures:A futures contract is an agreement between two parties to buy or se the

    underlying asset at a future date at todays future price.Futures contracts

    differ from forward contracts in the sense the they are standardized and

    exchange traded.


    A Swaps can be defined as an exchange of obligation by two parties forinstance I an interest rate Swap(IRS), one company arrange with another toexchange interest rate payment.

    There are many types of Swaps like Assets Swap, Currency swaps and so on.The most important one is an interest rate Swaps (IRS) and Currency Swaps.

    Interest Rate swap (IRS):-

    One company may be paying fixed rate of interest but prefer floating rates.Another company may be paying a floating rate but would fina a fixed rateadvantageous. Thus it makes sense for both the companies to enter into an

    IRS agreement.


  • 8/14/2019 Marwadi Final


    An important advantage of IRS is that different firms can access funds atvarying rates and terms. They may not always find these terms beneficial,they enter into Swap agreement. IRS enables them to access sources offunding at better rates than what they would be able to achieve on a direct


    Currency swaps:

    These entail swapping both principal and interest between the parties, withthe cash flows in one direction being in a different currency than those in theopposite direction.


    Options generally have lives of up to one year; the majority of options tradedon options exchanges have a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over-the-counter.



  • 8/14/2019 Marwadi Final


    Basket options are options on portfolios of underlying assets. The underlyingasset is usually a moving average or a basket of assets. Equity index optionsare a form of basket options.


    Currently in India, all future transactions are settled in cash. There is no system of

    physical delivery. It is widely expected that NSE/BSE will move to a physical

    delivery soon. However index based future and options will continue to be based

    on cash settlement system.

    Following items are treaded in commodity exchange namely NCDEX

    and MCX.


  • 8/14/2019 Marwadi Final



  • 8/14/2019 Marwadi Final



    A corporate may raise capital in the primary market by way of an initial public

    offer, rights issue or private placement. An Initial Public Offer (IPO) is the selling

    of securities to the public in the primary market. It is the largest source of funds

    with long or indefinite maturity for the company.

    In case the issuer chooses to issue securities through the book building route then

    as per SEBI guidelines, an issuer company can issue securities in the following


    100% of the net offer to the public through the book building route.

    75% of the net offer to the public through the book building process and 25%

    through the fixed price portion.

    Under the 90% scheme, this percentage would be 90 and 10 respectively.

    The traditional method of doing IPOs is the fixed price offering. Here, the issuer

    and the merchant banker agree on an "issue price" - e.g. Rs.100. Then you and I


  • 8/14/2019 Marwadi Final


    have the choice of filling in an application form at this price and subscribing to the


    Extensive research has revealed that the fixed price offering is a poor way of doing

    IPOs. Fixed price offerings, all over the world, suffer from `IPO underpricing'. In

    India, on average, the fixed-price seems to be around 50% below the price at first

    listing; i.e. the issuer obtains 50% lower issue proceeds as compared to what might

    have been the case. This average masks a steady stream of dubious IPOs who get

    an issue price which is much higher than the price at first listing. Hence fixed price

    offerings are weak in two directions: dubious issues get overpriced and good issues

    get underpriced, with a prevalence of underpricing on average.

    There should be no fragmentation of the shares on offer. All shares to be sold

    should go through a single auction. If a retail investor wanted to "access the IPO at

    prices close to the offer price" she would just place non--competitive bids at the

    IPO, where she bids to buy (say) 100 shares at the IPO price, whatever it proves to


    Allocation of shares in the depository should take place on Tuesday itself. There

    should be no physical shares. Trading on NSE should start on Wednesday (the next

    day). This gives us a one--day lag between the IPO and the start of trading.


  • 8/14/2019 Marwadi Final



    A bid is the demand for a security that can be entered by the syndicate/sub-

    syndicate members in the system. The two main components of a bid are the price

    and the quantity



    The person who has placed a bid in the Book Building Process.

    Book Running Lead Manager,

    A Lead Merchant Banker who has been appointed by the Issuer Company as the

    Book Runner Lead Manager. The name of the Book Runner Lead Manager is

    mentioned in the offer document of the Issuer Company.

    Floor Price,

    The minimum offer price below which bids cannot be entered. The Issuer

    Company in consultation with the Book Running Lead Manager fixes the floor


    Merchant Banker,


  • 8/14/2019 Marwadi Final


    An entity registered under the Securities and Exchange Board of India (Merchant

    Bankers) Regulation, 1999.

    Syndicate Members,

    Syndicate Members are the intermediaries registered with the Board and permitted

    to carry on activity as underwriters. The Book Running Lead Managers to the issue

    appoints the Syndicate Members.



    Portfolio management is a tool provides some basic benefits such as giving a

    holistic view of the various investments and the alignment of the investments withthe long term goals of the individual. However Portfolio is one of the most

    challenging jobs and therefore isn't easy. Portfolio Management can help you gain


  • 8/14/2019 Marwadi Final


    control of your investments and deliver some meaningful value to your earnings

    from the investments. Portfolio Management takes a holistic view of the overall

    earning strategy of the individual.

    While managing the investment portfolio; it is important to remember that the

    riskier strategic investments should always be balanced with more conservative

    investments. The investment mix should be constantly monitored to assess which

    investments are on track, and which are the ones that need help and which are the

    ones that need to be shut down.

    However, the key of successful portfolio management lies in the execution. A

    strong portfolio management program can turn any sinking investment around and

    do the following:

    maximize value of investments while minimizing the risk. Allow investors to schedule resources more efficiently

    Reduce the number of redundant investments and make it easier to kill loss

    making investments.

    And of course portfolio management definitely means that you are left with more

    money in your pockets. Efficient portfolio management also reduces overall

    expenditures by 20% by saving the losses that are otherwise made on loss making



  • 8/14/2019 Marwadi Final


    Marwadi having own 3 schemes under the BAGBAN product for Portfolio management there

    are as follows.

    1. Baramasi

    2. Marigold3. Sunflower


  • 8/14/2019 Marwadi Final


    So far in INDIA most of the middle class earners have been risk-averse and

    therefore park most of their savings in Fixed Deposits and Other Savings

    Accounts, though the yield from such investment avenues is very low. However,

    the recent trend has been such that more people have been attracted towards

    investment in Mutual Funds and Equities. It is in this light that Portfolio

    Management Companies have been gaining prominence in India. The trend is only

    set to go upwards in the years to come, as the Indian middle class becomes more

    risk friendly

    IT portfolio management can help any organization to gain control of its IT

    projects and deliver meaningful value to the business. IT Portfolio management

    takes a holistic view of the organizations overall IT strategy. Both IT and business

    leaders analyze project proposals by matching them with the company's strategic


    Effective IT portfolio management also helps in the following manner:

    Helps to maximize value of IT investments while minimizing the risk

    Improves communication and alignment between Information Systems and

    business leaders

    Encourages business leaders towards teamwork and to take responsibility

    for projects

    Allows planners to schedule the IT resources more efficiently


  • 8/14/2019 Marwadi Final


    The application and definition of pharmaceutical portfolio management has

    evolved greatly over the past 20 years. It is becoming even more important in India

    in the face of the patents regime coming to an end in 2005. The TRIPS agreement

    brings about great implications for the pharmaceutical portfolio management of

    the Indian companies, as many drugs will be coming off-patents this year. It is

    imperative that the Indian pharmaceutical organizations handle this changing

    scenario to their best advantage and build a competitive advantage earlier on in

    this equal platform.

    Product Portfolio Management is a system that is put in place in organizations in

    order to select a portfolio of new product development projects.

    This system is implemented in any organization with the view of achieving the

    following goals:

    Maximizing the profitibality or value fo the portfolio

    Providing balance supporting the strategy of the enterprise

    Product Portfolio Management is the responsibility of the senior management team

    of an organization or business unit. The team, which is involved in the process, is

    usually called the Product Committee. The product committee meets regularly to

    manage the product pipeline and make decisions about the product portfolio.


  • 8/14/2019 Marwadi Final


    Program portfolio management in any multimedia company or a television

    channel company is akin to the concept of product portfolio management followed

    by any other product manufacturing company, or in fact similar to the financial

    portfolio management followed by any investment professional.

    The program portfolio management is a concept that has only recently emerged in

    the Indian entertainment industry owing to the fact that, before the advent of

    international channels in the Indian scenario, the Indian television industry was

    monopolized by the national television channel and therefore had no requirement

    for any channel or program management as the audience gulped down whatever

    was offered to them through the only channel of entertainment in the country.


  • 8/14/2019 Marwadi Final


  • 8/14/2019 Marwadi Final


    dismantled and remained dormant for about four decades until the new millennium

    when the Government, in a complete change in policy, started actively

    encouraging the commodity derivatives market. Since 2002, the commodities

    futures market in India has experienced an unprecedented boom in terms of the

    number of modern exchanges, number of commodities allowed for derivatives

    trading as well as the value of futures trading in commodities, which might cross

    the $ 1 Trillion mark in 2006. However, there are several impediments to be

    overcome and issues to be decided for sustainable development of the market. This

    paper attempts to answer questions such as: how did India pull it off in such a short

    time since 2002? Is this progress sustainable and what are the obstacles that need

    urgent attention if the market is to realize its full potential? Why are commodity

    derivatives important and what could other emerging economies learn from the

    Indian mistakes and experience?

    The Indian economy is witnessing a mini revolution in commodity derivatives and

    risk management. Commodity options trading and cash settlement of commodity

    futures had been banned since 1952 and until 2002 commodity derivatives market

    was virtually non-existent, except some negligible activity on an OTC basis. Now

    in September 2005, the country has 3 national level electronic exchanges and 21

    regional exchanges for trading commodity derivatives. As many as eighty (80)

    commodities have been allowed for derivatives trading. The value of trading has

    been booming and is likely to cross the $ 1 Trillion mark in 2006 and, if all goes

    well, seems to be set to touch $5 Trillion in a few years.


  • 8/14/2019 Marwadi Final


    Role of Marwadi in Commodity

    Marwadi Commodity Broker Ltd. (MCBL) is experienced share broker dedicated

    for progress of Commodity Derivatives. Marwadi Group owns MCBL. MCBL

    provided all the commodity related services against Commodity Derivativesbrokerage.


  • 8/14/2019 Marwadi Final


    MCBL has Commodity Derivatives dedicated teams for research, dealers,

    experienced industrialist and experts. Currently MCBL is member of NCDEX and

    MCX and planning to provide to deal in other world-class exchanges shortly.

    MCBL will provide best services with the help of its own researched advices.

    Why are Commodity Derivatives Required?

    India is among the top-5 producers of most of the commodities, in addition to

    being a major consumer of bullion and energy products. Agriculture contributes

    about 22% to the GDP of the Indian economy. It employees around 57% of the

    labor force on a total of 163 million hectares of land. Agriculture sector is an

    important factor in achieving a GDP growth of 8-10%. All this indicates that India

    can be promoted as a major center for trading of commodity derivatives. It is

    unfortunate that the policies of FMC during the most of 1950s to 1980s suppressed

    the very markets it was supposed to encourage and nurture to grow with times. It

    was a mistake other emerging economies of the world would want to avoid.

    However, it is not in India alone that derivatives were suspected of creating toomuch speculation that would be to the detriment of the healthy growth of the

    markets and the farmers. Such suspicions might normally arise due to a

    misunderstanding of the characteristics and role of derivative product. It is

    important to understand why commodity derivatives are required and the role they

    can play in risk management. It is common knowledge that prices of commodities,

    metals, shares and currencies fluctuate over time. The possibility of adverse price

    changes in future creates risk for businesses. Derivatives are used to reduce or

    eliminate price risk arising from unforeseen price changes. A derivative is a

    financial contract whose price depends on, or is derived from, the price of another



  • 8/14/2019 Marwadi Final


    Two important derivatives are futures and options.

    (i) Commodity Futures Contracts: A futures contract is an agreement for buying

    or selling a commodity for a predetermined delivery price at a specific future time.

    Futures are standardized contracts that are traded on organized futures exchanges

    that ensure performance of the contracts and thus remove the default risk. The

    commodity futures have existed since the Chicago Board of Trade (CBOT, was established in 1848 to bring farmers and merchants together.

    The major function of futures markets is to transfer price risk from hedgers to

    speculators. For example, suppose a farmer is expecting his crop of wheat to be

    ready in two months time, but is worried that the price of wheat may decline in this

    period. In order to minimize his risk, he can enter into a futures contract to sell hiscrop in two months time at a price determined now. This way he is able to hedge

    his risk arising from a possible adverse change in the price of his commodity.

    (ii) Commodity Options contracts: Like futures, options are also financial

    instruments used for hedging and speculation. The commodity option holder has

    the right, but not the obligation, to buy (or sell) a specific quantity of a commodity

    at a specified price on or before a specified date. Option contracts involve two

    parties the seller of the option writes the option in favour of the buyer (holder)

    who pays a certain premium to the seller as a price for the option. There are two

    types of commodity options: a call option gives the holder a right to buy a


  • 8/14/2019 Marwadi Final


    commodity at an agreed price, while a put option gives the holder a right to sell a

    commodity at an agreed price on or before a specified date (called expiry date).

    The option holder will exercise the option only if it is beneficial to him; otherwise

    he will let the option lapse. For example, suppose a farmer buys a put option to sell

    100 Quintals of wheat at a price of Rs.25 per quintal and pays a premium of

    Rs.0.5 per quintal (or a total of Rs.50). If the price of wheat declines to say Rs.20

    before expiry, the farmer will exercise his option and sell his wheat at the agreed

    price of Rs.25 per quintal. However, if the market price of wheat increases to say

    Rs.30 per quintal, it would be advantageous for the farmer to sell it directly in the

    open market at the spot price, rather than exercise his option to sell at Rs.25 per

    quintal. Futures and options trading therefore helps in hedging the price risk and

    also provide investment opportunity to speculators who are willing to assume risk

    for a possible return. Further, futures trading and the ensuing discovery of price

    can help farmers in deciding which crops to grow. They can also help in building a

    competitive edge and enable businesses to smoothen their earnings becausenonhedging of the risk would increase the volatility of their quarterly earnings.

    Thus futures and options markets perform important functions that can not be

    ignored in modern business environment. At the same time, it is true that too much

    speculative activity in essential commodities would destabilize the markets and

    therefore, these markets are normally regulated as per the laws of the country.


  • 8/14/2019 Marwadi Final



  • 8/14/2019 Marwadi Final


    Commodities productsGold,Gold HNI, Gold M, I-Gold,Silver, Silver

    HNI, Silver M

    Castor Oil,Castor Seeds, Coconut Cake, Coconut

    Oil, Cottonseed,

    Crude Palm Oil,Groundnut Oil,

    Kapasia Khalli (Cottonseed Oilcake), Mustard

    /Rapeseed Oil,

    Mustard Seed (Sirsa),RBD Palmolein, Refined Soy

    Oil,Refined Sunflower Oil,Rice Bran Refined Oil,

    Sesame Seed, Soymeal, Soy Seeds

    Cardamom,Jeera,Pepper,Red Chilli

    Aluminium,Copper,Lead,Nickel,Sponge Iron,

    Steel Flat,Steel Long (Bhavnagar),

    Steel Long (Gobindgarh),Tin, Zinc

    Cotton Long Staple ,

    Cotton Medium Staple,

    Cotton Short Staple,Cotton Yarn,Kapas

    Chana, Masur, Tur, Urad, Yellow Peas,

    Basmati Rice, Maize, Rice,Sarbati Rice, Wheat

  • 8/14/2019 Marwadi Final


    Brent Crude Oil, Crude Oil,Furnace OilMiddle

    East Sour Crude Oil

    Arecanut, Cashew Kernel, Rubber

    High Density Polyethylene (HDPE),

    Polypropylene (PP), PVC

    Guar Seed, Guargum,Gurchaku,Mentha Oil,Potato,Sugar M-30,Sugar S-30,

  • 8/14/2019 Marwadi Final


    National Commodity & Derivatives Exchange Limited (NCDEX) is a

    professionally managed online multi commodity exchange promoted by ICICI

    Bank Limited (ICICI Bank),

    Life Insurance Corporation of India (LIC), National Bank for Agriculture and

    Rural Development (NABARD) and National Stock Exchange of India Limited

    (NSE). Punjab National Bank (PNB), CRISIL Limited (formerly the Credit Rating


  • 8/14/2019 Marwadi Final


    Information Services of India Limited), Indian Farmers Fertiliser Cooperative

    Limited (IFFCO) and Canara Bank by subscribing to the equity shares have joined

    the initial promoters as shareholders of the Exchange. NCDEX is the only

    commodity exchange in the country promoted by national level institutions. This

    unique parentage enables it to offer a bouquet of benefits, which are currently in

    short supply in the commodity markets. The institutional promoters of NCDEX are

    prominent players in their respective fields and bring with them institutional

    building experience, trust, nationwide reach, technology and risk management


    NCDEX is a public limited company incorporated on April 23, 2003 under the

    Companies Act, 1956. It obtained its Certificate for Commencement of Business

    on May 9, 2003. It has commenced its operations on December 15, 2003.

    NCDEX is a nation-level, technology driven de-mutualized on-line commodityexchange with an independent Board of Directors and professionals not having any

    vested interest in commodity markets. It is committed to provide a world-class

    commodity exchange platform for market participants to trade in a wide spectrum

    of commodity derivatives driven by best global practices, professionalism and


    NCDEX is regulated by Forward Market Commission in respect of futures trading

    in commodities. Besides, NCDEX is subjected to various laws of the land like the

    Companies Act, Stamp Act, Contracts Act, Forward Commission (Regulation) Act

    and various other legislations, which impinge on its working.


  • 8/14/2019 Marwadi Final


    NCDEX is located in Mumbai and offers facilities to its members in more than 390

    centres throughout India. The reach will gradually be expanded to more centres.

    NCDEX currently facilitates trading of thirty six commodities - Cash