MASTERS IN MANAGEMENT STUDIES

Summer Internship Report

Name of Company: SHAREKHAN LTD.

Address of Company: Shah & Nahar group industrial estate, 232,Sharekhan, Lower Parel,Mumbai (west)400013.

Phone No.

Email id :myaccount@sharekhan.com

Submitted by:Swati G. Pawar

(Roll No.43)

Name of Coordinator: Mustafa Sapatwala

BES’s Institute of Management Studies and Research

(Approved by AICTE & Affiliated to University of Mumbai)

May 2010

DECLARATION

I hereby declare that the Summer Internship Report submitted for the MMS Degree, BES’s Institute of Management Studies and Research (Affiliated to University of Mumbai) is my original work and conducted in Sharekhan Ltd Company.

Place: Mumbai Date:

(XXXXXXXXXXX) Signature of the Student

Certificate

This is to certify that the Summer Internship Report is the bona fide internship work carried out by Ms. Swati G.Pawar student of MMS, at BES’s Institute of Management Studies and Research (Affiliated to University of Mumbai) during the May to July 2010, in partial fulfillment of the requirements for the award of the Degree of Master in Management Studies.

Place: Mumbai

Date:

Signature of the Director Signature of the Coordinator

ACKNOWLEDGEMENTS

I wish to express my gratitude to Mr.Swanand Kale from the Sharekhan Ltd for providing me valuable information.

I am grateful to BES’s Institute of Management Studies and Research for giving me an opportunity to pursue MMS. I wish to thank Professor Vikram D. Shikhare, Director, BES’s Institute of Management Studies and Research who has been a perpetual source of inspiration and offered valuable suggestions to improve my practical Knowledge.

I am indebted to my Coordinator Mr. Mustafa Sapatwala Professor, BES’s Institute of Management Studies and Research, for abundant guidance, support, and encouragement throughout my internship Study.

I would like to express my thanks to various people from the Sharekhan Ltd Company for their support and direction.

Place: MumbaiDate: July, 2010

Signature of the student(swati G. pawar)

TABLE OF CONTENTS

Chapter No TitlePage No

A List of Abbreviations

1 Sharekhan Ltd Industry - A perspective

1.1 Introduction

1.2 Global Scenario

1.3 Indian Scenario

2 Sharekhan Ltd Company Profile

3 Marketing Department

4 Finance Department

5 Operation / Production Department

6 MIS/ IT Department

7 Solutions of Problems with Merit and Demerit

8 Recommendations to Company

9 Learning Outcomes

10 Reference Section

LIST OF ABBREVIATIONS

EU European Union

FDI Foreign Direct Investment

GDP Gross Domestic Product

NAFTA North American Free Trade Agreement

SSKI Shri Shantilal Kantilal Ishwarlal

BSE Bombay Stock Exchange

NSE National Stock Exchange

IPO Initial public offerings

F&O Futures & Options

MIS monthly income scheme

NSC National Saving Certificate

PPF Public Provident Fund

NSDL National securities depository limited

DICGC (deposit insurance and credit Guarantee Corporation

CDSL Central depository services limited

SAARC South Asian Association for Regional Corporation

Chapter 1

Sharekhan Ltd Industry - A perspective

Introduction – (Information related to specific Industry)

Sharekhan Ltd. is one of the leading retail stock broking house of SSKI Group which is running successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc.

The firm’s online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over one lakh customers. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and Superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks.On April 17, 2002 Sharekhan launched Speed Trade, a net-based executableapplication that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. Share khan’s ground network includes over 1288 centers in 325 cities in India which provide a host of trading related services.Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, VeriSign Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and content. The Morakhiya family holds a majority stake in the company.HSBC; Intel & Carlyle are the other investors.With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKI’s institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional

clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organization’s revenue, with a daily turnover of over US$ 2 million. The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop.

Sharekhan has always believed in collaborating with like-minded Corporate into forming strategic associations for mutual benefit relationships" says Jaideep Arora, Director - Sharekhan Limited. Sharekhan is also about focus. Sharekhan does not claim expertise in too many things. Sharekhan's expertise lies in stocks and that's what he talks about with authority. So when he says that investing in stocks should not be confused with trading in stocks or a portfolio-based strategy is better than betting on a single horse, it is something that is spoken with years of focused learning and experience in the’ stock markets. And these beliefs are reflected in everything Sharekhan does for us! Sharekhan is a part of the SSKI group, an Indian financial services power house, with strong presence in Retail equities Institutional equities Investment banking. Sharekhan provides 4 in 1 account. - Demat a/c - Trading a/c: for cash calculation - Bank a/c: for fund transfer -¬ Mutual fund schemes ¬Dial and Trade: for query relating trading Products: ¬ Bonds ¬ Shares – online and offline ¬ Portfolio Management System ¬Insurance Commodities Out of these we have to mostly sell demat accounts¬Fixed Deposits and Mutual Funds.

Global Scenario –

HISTORY OF THE STOCK BROKING INDUSTRY

When people talk about the Stock Market, it's no always immediately clear what they're referring to. Is the Stock Market a place? Or is it something different? To many people it is an abstract idea. They buy stocks in "the stock market" without ever leaving the comfort of their computer terminal. But the stock market is indeed a physical place with buildings and addresses, a place you can go visit. Many folks think of Wall Street and the Stock Market as one in the same, and that view isn't really far from the truth. Wall Street is the place where it all started and where the world's largest financial market was born and prospered. From Wall Street sprang a new industry with it's own language and terminology. Wall Street can trace its name back to 1653. Originally it was set up for defense and not for commerce. The year was 1790. The place was Philadelphia. The occasion was the founding of the first stock exchange in America. Two years later a group of New York merchants met to discuss how to take command of the securities business. The merchants, a group of 24 men, founded what is now known as the New York Stock Exchange. But in early 1817, the merchant group from New York, distressed at the sorry state of their stock exchange, sent a representative to Philadelphia to observe how things were being done. Upon arriving with news about the robust exchange in Philadelphia, the New York Stock and Exchange Board was soon formally organized. The exchange opened up shop on Wall Street. As for the New York Stock Exchange, it has since moved past its humble beginnings to the point where its system now facilitates billions of dollars worth of trades each day. But there was a gradual build up to this sort of status. In the early 1900s massive amounts of money were made on Wall Street. But the boom period could not be sustained indefinitely. And in 1929 this principle came front and center as the stock market crash of 1929 seared the national.nay, global. Psyche and triggered what was to be called the Great Depression. While many of the powers that be realized that the markets could not sustain a boom forever, very few publicized this view, choosing instead to let the market be its own judge, jury and executioner. As a result of the laissez-faire attitude, many people. Rich and poor alike. Lost a lot of money.

But the stock market crash of 1929 was just the beginning of sorrows for Wall Street. For while the economy eventually recovered from its catastrophic losses, the market excesses that had factored into the crash in the late 1920s seeped back into the picture. The result was the stock market crash of 1987, which saw the Dow Jones suffer what was the largest single-day loss in the stock market’s history. Since then, the government and the industry have tried to put measures in place to curtail, if not entirely eliminate, the possibility of such a large-scale crash. The stock markets are now an integral part of the global economy, and so proper safeguards to reduce the risks of another disastrous crash are necessary.

The current "stock market" is comprised of 300,000 computers situated on pro trader's desks. These computers are networked together using sophisticated protocols. This level of information sharing makes pricing an almost exact science. These 300,000 computers are further linked to another 26 million computers worldwide. These computers are located in banks, small businesses, and large corporations. These computers comprise the banking networks which make computerized transactions possible. Finally, these computers are connected to another 300 million+ computers which connect and disconnect from the financial markets daily. In New York City alone, these transactions amount to over $2.2 trillion dollars daily The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008 The total world derivatives market has been estimated at about $791 trillion face or nominal value,11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.

Indian Scenario –

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60.In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. An important early event in the development of the stock market in India was the formation of the Native Share and Stock Brokers’ Association at Bombay in 1875, the precursor of the present-day Bombay Stock Exchange. This was followed by the formation of associations /exchanges in Ahmadabad (1894), Calcutta (1908), and Madras (1937). IN addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently.

In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as "The Stock Exchange"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges.The Indian Stock Index is called the Sensex. It is comprised of 30 stock-sensitive companies and was first compiled in 1986 by the Bombay Stock Exchange. The companies come from 13 industries and are chosen to be representative of the businesses in India. It serves much like the Dow Jones Industrial Index or the S&P 500 Index in America. The Sensex crossed 1000 for the first time in 1990. Two years later, the index nearly quadrupled because of Financial Minister Man Mohan Singh's financial policies. The index passed the 8000 mark in 2005. It peaked at 20,000 in January 2008. The Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It traces its history to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbai’s Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as ‘The Native Share & Stock Brokers Association’. In 1956, the BSE became the first stock exchange to be

recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE’s trading platform. Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition.

Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI) accelerated the integration of the second Indian stock exchange called the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India. Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world. In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poor’s. In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as ‘Best IT Usage Award’ by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).

India has the second largest number of companies being traded on its stock exchanges, second only to the United States. The Bombay Stock Exchange has more companies listed than any other exchange in the world (4700 companies in 2007). The growing popularity of investing in the stock market in India has also led to more middle-class investors and on-line trading of Indian stocks. The number of Indians invested in the stock market is around 30 million.

ACHIEVEMENTS OF SHAREKHAN:

A wired company along with Reliance, HUJl, Infosys, etc by ‘Business Today’, January 2004 edition. Awarded ‘Top Domestic Brokerage House’ four times by Euro Asia money. Pioneers of online trading in India amongst the top 3 money and from India. Most preferred financial destination online trading websites Winners of “Best Financial Website” award. Amongst online broking customers. India’s most preferred brokers within 5 years. “Awaaz customers Award 2005”.

Chapter 2

Sharekhan Ltd – Company Profile

Brief History/ Background of CompanySKI Group Companies- ¬ SSKI Corporate Finance ¬ S.S. Kantilal Ishwarlal Securities Ltd (Share khan) Share khan Commodities Pvt LtdFin flow Investment Pvt Ltd.Palm spring estates Pvt Ltd. I dream Production UK Pvt Ltd. Archfund Properties Pvt Ltd.

PROFILE OF THE COMPANYName of the company: Sharekhan ltd.Year of Establishment: 1925Headquarter : Sharekhan SSKIA-206 Phoenix HousePhoenix Mills CompoundLower ParelMumbai - Maharashtra, INDIA- 400013Nature of Business : Service ProviderServices : Depository Services, Online Services andTechnical Research.Number of Employees : Over 3500Revenue : Data Not AvailableWebsite : www.sharekhan.comSlogan : Your Guide to The Financial Jungle.

Sharekhan is online stock trading company of SSKI Group, provider of India-based investment banking and corporate finance service. Sharekhan is one of the largest stock broking houses in the country. Shri Shantilal Kantilal Ishwarlal Securities Limited (SSKI) has been among India’s leading broking houses for more than a century. Sharekhan is one of the leading retail brokerage firms in the country. It is the retail broking arm of the Mumbai-based SSKI Group , which has over eight decades of experience in the stock broking business.

Sharekhan Ltd is India's leading online retail broking house with its presence through 1288'Share Shops' in 398 cities. It has a client base of 1.5 Corers. Launched on 8th February, 2000 as an online trading portal, Sharekhan offers its client’s trade execution facilities for cash as well as derivatives, on BSE and NSE, depository services, mutual funds, initial public offerings (IPOs), and commodities trading facilities on MCX and NCDEX. Besides high quality investment advice from an experienced research team Sharekhan provides market related news, stock quotes fundamental and statistical information across equity, mutual funds, IPOs and much more. Sharekhan is also about

focus. Sharekhan does not claim expertise in too many things. Sharekhan’s expertise lies in stocks and that's what he talks about with authority. To sum up, Sharekhan brings to you a user- friendly online trading facility, coupled with a wealth of content that will help you stalk the right shares.

Sharekhan is infact- Among the top 3 branded retail service providers No. 1 player in online business Largest network of branded broking outlets in the country serving more than clients 7, 00,000. Get everything you need at a Sharekhan outlet! All you have to do is walk into any of our 640 share shops across 280 cities in India to get a host of trading related services - our friendly customer service staff will also help you with any accounts related Online queries you may have.Sharekhan Ltd is India's leading online retail broking house with its presence through 1288'Share Shops' in 398 cities. It has a client base of 1.5 Corers. Launched on 8th February, 2000 as an online trading portal, Sharekhan offers its client’s trade execution facilities for cash as well as derivatives; Sharekhan is one of the leading retail brokerage firms in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. SSKI owns 37.21% in Sharekhan; balance ownership is HSBC, Intel Pacific, and General Atlantic. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc. Share khan’s ground network includes over 450 centers in more than 157 cities in India, of which 100 are fully-owned branches.

REASON TO CHOOSE SHAREKHAN LIMITED

Experience SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money broker's poll held recently, SSKI won the 'India's best broking house for 2004' award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutional-level research and broking services to individual investors.

Technology With their online trading account one can buy and sell shares in an instant from any PC with an internet connection. Customers get access to the powerful online trading tools that will help them to take complete control over their investment in shares.

Accessibility Sharekhan provides services for investors. These services are accessible through many centers across the country (Over 650 locations in 150 cities), over the Internet (through the website www.sharekhan.com) as well as over the Voice Tool.

Knowledge In a business where the right information at the right time can translate into direct profits, investors get access to a wide range of information on the content-rich portal, www.sharekhan.com. Investors will also get a useful set of knowledge-based tools that will empower them to take informed decisions.

Convenience One can call Share khan’s Dial-N-Trade number to get investment advice and execute his/her transactions. They have a dedicated call-center to provide this service via a Toll Free Number 1800-22-7500 & 39707500 from anywhere in India.

Customer Service Its customer service team assists their customer for any help that they need relating to transactions, billing, dmat and other queries. Their customer service can be contacted via a toll- free number, email or live chat on www.sharekhan.com.

Investment Advice Sharekhan has dedicated research teams of more than 30 people for fundamental andtechnical researches. Its analysts constantly track the pulse of the market and provide timely investment advice to its clients in the form of daily research emails, online chat,printed reports and SMS on their mobile phone.

Location – Head Office and Branches

122 Franchisees and 28 branchesCovers 82 cities in 17 states acrossIndia

Headquarter: Sharekhan SSKI A-206 Phoenix House Phoenix Mills Compound Lower Parel Mumbai – Maharashtra, INDIA- 400013Branches : 1) Sharekhan B/204, Kotia Nirman, 2nd Floor, Next to Fun Republic Cinema, New Link Road, Andheri (W), Mumbai - 400 053. 2) Sharekhan Flat No. 4B, Ground Floor, Ashwin Villa, Telang Road, Matunga (E), Mumbai - 400019.

Products and Services offered by the Company

The different types of products and services offered by Sharekhan Ltd. are as follows: Equity and derivatives trading Depository services Online services Commodities trading Dial-n-trade Portfolio management Share shops Fundamental researchTechnical research

Overview of Demat Account : Demat account allows you to buy, sell and transact shares without the endless paperwork and delays. It is also safe, secure and convenient. In India, a demat account, the abbreviation for dematerialized account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialized account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should possess a Permanent Account Number (PAN), and the deadline for submission of PAN details to the depository lapsed on January 2007. Is a demat account a must? Now a day, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of up to 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing. Why demat? The demat account reduces brokerage charges, makes pledging/hypothecation of shares easier, enables quick ownership of securities on settlement resulting in increased liquidity, avoids confusion in the ownership title of securities, and provides easy receipt of public issue allotments. It also helps you avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses.

What is dematerialization?

Dematerialization is the process by which physical certificates of an investor are converted to an equipment number of securities in electronic from and credited in the investor account with his DP. In order to dematerialize the certificates, an investor has to first open an account with a DP and then request for the Dematerialization Request Form, which is DP and submit the same along with the share certificates. The investor has to ensure that he marks “Submitted for Dematerialization” on the certificates before the shares are handed over to the DP for demat. Dematerialization can only be done to those certificates, which are already registered in your name and belong to the list of securities admitted for Dematerialization at NSDL.Most of the active scrip’s in the market including all the scrip’s of S&P CNX NIFTY and BSE SENSEX have already joined NSDL. This list is steadily increasing.Briefly, the process is as follows: after completion of transfer, the investor gets the option to dematerialize such shares. Investor’s willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit.Dematerialized shares do not have any distinctive or certificate numbers. These shares are fungible-which means that 100 shares of a security are the

same as any other 100 shares of the security. Odd lot shares certificates can also be dematerialized.Dematerialization normally takes about fifteen to thirty days. To get backdematerialized securities in the physical form, request DP for Rematerialization of the same is made.Rematerialization is the process of converting electronic shares in to physicalshares.

Benefits of Demat:• It reduces the risk of bad deliveries, in turn saving the cost and

wastage of time associated with follow up for rectification. This has lead to reduction in brokerage to the extent of 0.5% by quite a few brokerage firms.

• In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid the cost of courier / notarization.

• You can receive your bonuses and rights issues into your DA as a direct credit, this eliminating risk of loss in transit.

• You can also expect a lower interest charge for loans taken against Demat

• shares as compared to loans against physical shares.• There is no lost in transit, thus the overheads of getting a duplicate

copy in such circumstances is reduced.• RBI has also reduced the minimum margin to 25% for loans against

dematerialized securities as against 50% for loans against physical securities.

Why DEMAT a/c likes a BANK a/c?

Just as you have to open an a/c with a bank if you want to save your money, make cheque payments etc, you need to open a demat a/c if you want to buy or sell stocks. So it just like a bank a/c where actual money replaced by shares. Example : let’s say your portfolio has 100 of SATYAM, 200 of IBM and 120 of TCS shares. All these will show in your a/c. so you don’t have to possess any physical certificate that you own these shares. They all are held electronically in your a/c. Steps involved in opening a demat account: First an investor has to approach a DP and fill up an account opening form. The account opening form must be supported by copies of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 01, 2006. All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature. Further, the investor has to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. The DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalized the cost structure for dematerialization by

removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has vide circular dated November 09, 2005 advised that with effect from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership.

Rights: 1. You can open more than one depository account in the same name with single DP/ multiple DPs. 2. No minimum balance is required to be maintained in a depository account. 3. You can give a onetime standing instruction to your DP to receive all the credits coming to your depository a safe and convenient way to hold¬account automatically

DEMAT Conversion :- 1. Surrender the certificates of physical shares for dematerialization to your depository participants. 2. Depository participant intimates depository of the request through the system. 3. Depository participant submit the certificates to the registrar to the issuer company. 4. Registrar confirms the dematerialization request from depository. 5. After dematerializing the certificates, registrar updates accounts and informs depository of the completion of dematerialization. 6. Depository updates its accounts and informs the depository participant. 7. Depository participant updates demat a/c of the investor

DEMAT Benefits? No stamp duty on transfer of securities. Immediate transfer of securities. Elimination of risks associated with securities (0.5 % on physical shares). Physical certificates such as bad delivery, fake securities, delays, theft No odd lot problem Reduction in transaction cost. Reduction in paper work. etc. Even one share can be sold. Holding investment in equity and debt instrumentsNomination facility in a single account.etc.

A Sharekhan outlet offers the following services:

Online BSE and NSE executions (through BOLT & NEAT terminals). Sharekhan Value Line (a monthly publication with reviews of

recommendations, stocks to Watch out for etc) investment advice from Sharekhan's Research team monthly publication with reviews of recommendations, stocks to watch out for etc) 20 Daily research reports and market review (High Noon & Eagle Eye) Daily trading calls based on Technical Pre-market Report (Morning Cuppa) Cool trading products (Daring Derivatives and Market Strategy)Analysis Depository Services: DematLive Market InformationPersonalised Advice & CommoditiesDerivatives Trading (Futures and Options) Trading & Internet-based Online Trading: SpeedTrade IPO’s & Mutual Funds Distribution •

TYPES OF PRODUCTS • Classic Account • Fast trade Account • Trade Tiger

1. Classic Account This is a User Friendly Product which allows the client to trade through website www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who does not trade too frequently. This account allow investors to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, Demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer.

The features about classic account are- a. Online trading account for investing in Equities and Derivativesb. Free trading through Phone (Dial-n-Trade) I. Two dedicated numbers(1800-22-7500 and 39707500) for placing the orders using cell phones or landline phones II. Automatic funds transfer with phone banking facilities (for Citibank and HDFC bank customers) III. Simple and Secure Interactive Voice Response based system for authentication

IV. get the trusted, professional advice of Sharekhan limited’s Tele Brokers V. After hours order placement facility between 8.00 am and 9.30 amc. Integration of: Online Trading +Saving Bank + Demat Account.d. Instant cash transfer facility against purchase & sale of shares.e. IPO investments.f. Instant order and trade confirmations by e-mail.g. Single screen interface for cash and derivatives.

2. Fast trade Account

This is an internet-based software application, which enables one to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement.

This account comes with the following features:a. Instant order Execution and Confirmation.b. Single screen trading terminal for NSE Cash, NSE F&O & BSE.c. Technical Studies.d. Multiple Charting.e. Real-time streaming quotes, tic-by-tic charts.f. Market summary (Cost traded scrip, highest value etc.)g. Hot keys similar to broker’s terminal.h. Alerts and reminders.i. Back-up facility to place trades on Direct Phone lines.j. Live market debts.

3.Trade Tiger This is an internet-based software application, which enables one to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement.Trade Tiger is an application that brings you the power of a broker’s terminal, right from your desktop. Trade on multiple exchanges {NSE, BSE, MCX, NCDEX} from a single screen. Customize market watches by scripts or sectors and view them on a single screen. Get access to technical tools and trade like a pro.

This account comes with the following features: • Instant order Execution and Confirmation. • Single screen trading terminal for NSE Cash, NSE F&O & BSE. 48• Technical Studies.• Multiple Charting. • Real-time streaming quotes, tic-by-tic charts. • Market summary (Cost traded scrip, highest value etc.) • Hot keys similar to broker’s terminal.• Alerts and reminders.• Back-up facility to place trades on Direct Phone lines.• Live market debts.

HOW TO OPEN AN ACCOUNT WITH SHAREKHAN LIMITED?

For online trading with Sharekhan Ltd., investor has to open an account. Following are the ways to open an account with Sharekhan Ltd.:

• One need to call them at phone number provided below and asks that he want to open an account with them.

a. One can call on the Toll Free Number: 1-800-22-7500 to speak to a Customer Service executive

b. Or If one stays in Mumbai, he can call on 022-66621111• One can visit any one of Sharekhan Limited’s nearest branches.

Sharekhan has a huge network all over India (640 centers in 280 cities). One can also log on to “http://sharekhan.com/Locateus.aspx” link to find out the nearest branch.

• One can send them an email at info@sharekhan.com to know about their

• products and services.• One can also visit the site www.sharekhan.com and click on the option

“Open an Account” to fill a small query form which will ask the individual to give details regarding his name, city he lives in, his email address, phone number, pin code of the city, his nearest Sharekhan Ltd. shop and his preferences regarding the type of account he wants.

These information are compiled in the headquarter of the company that is inMumbai from where it is distributed throughout the country’s branches in theform of leads on the basis of cities and nearest share shops. After that theexecutives of the respective branches contact the prospective clients over phone or through email and give them information regarding the various types of accounts and the documents they need to open an account and then fixappointment with the prospective clients to give them demonstration and making them undergo the formalities to open the account. After that the forms that has collected from the clients, is scrutinized in the branch and then it is sent to Mumbai for further processing where after a few days the clients’ account are generated and activated. After the accounts are activated, a Welcome Kit is dispatched from Mumbai to the clients’ address mentioned in the documents provided by them. As soon as the clients receive the Welcome Kit, which contains the clients’ Trading ID and Trading Password, they can start trading and investing in shares.

Generally the process of opening an account follows the following steps:

LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES

CONTACT THE PERSON OVER PHONE OR THROUGH EMAI L

FIXING AN APPOINTMENT WITH THE PERSON

DOCUMENTATION

FILLING UP THE FORM

SUBMISSION OF THE FORM

LOGIN OF THE FORM

SENDING ACCOUNT OPENING KIT TO THE CLIENT

TRADING

GIVINGDEMONSTRATION

YES NO

Apart from two passport size photographs, one needs to provide with the followingdocuments in order to open an account with Sharekhan Limited.:d Photocopy of the clients’ PAN Card which should be duly attachedP Photo copy of any of the following documents duly attached which will serve as correspondence address proof:a. Passport (valid)b. Voter’s ID Cardc. Ration Cardd. Driving License (valid)e. Electricity Bill (should be latest and should be in the name of the client)f. Telephone Bill (should be latest and should be in the name of the client)g. Flat Maintenance Bill (should be latest and should be in the name of theclient)h. Insurance Policy (should be latest and should be in the name of the client)i. Lease or Rent Agreement.j. Saving Bank Statement** (should be latest)j Two cheques drawn in favour of Sharkhan Limited, one for the AccountOpening Fees and the other for the Margin Money (the minimum margin money is Rs. 5000).** A cancelled cheque should be given by the client if he provides Saving Bank Statement as a proof for correspondence address.

NOTE: Only Saving Bank Account cheques are accepted for the purpose ofOpening an account.

EXPOSURE: Sharekhan also helps their customers by providing them a Four time Exposure. Example :- If a customer invests Rs. 20000, then he will get a exposure of 4 times of Rs. 20000 that means Rs. 20000 * 4 = Rs. 100000. But only for Five days, within 5 days the customer have to pay back the amount otherwise they will sell your shares. But yes, they will sell the loss making shares first. If you make any frod , then also you may face the same problem. But Exposure always helps the customer to invest more and more in profit making scripts. It is like an Overdraft which you have to return within 5 days.

NOTES In Sharekhan account opening is free. First year’s maintenance charge is zero. Second year’s maintenance is Rs 300.

Tie ups with Banks Tie ups with Banks

Sharekhan has tied up with ten banks to facilitate the transfer of money from saving account to Dmat account and vice –versa .and by only these banks one can transfer the money by e-banking . AXIS Bank Bank of India Citi Bank HDFC ICICI Bank IDBI Bank IndusInd Bank Oriental Bank of Commerce {OBC} Union Bank of India Yes Bank

Vision, Mission, Goals and Organizational Objectives

Vision : To be the best retail brokering Brand in the retail business of stock market. Mission : To educate and empower the individual investor to make better investment decisions through quality advice and superior service

SHAREKHAN LIMITED’S MANAGEMENT TEAM: Dinesh Murikya : Owner of the company Tarun Shah : CEO of the company Shankar Vailaya : Director (Operations) Jaideep Arora : Director (Products & Technology) Pathik Gandotra : Head of Research Rishi Kohli : Vice President of Equity Derivatives

Nikhil Vora : Vice President of Research

HIERARCHY IN Sharekhan

There are 14 main hierarchical levels in Sharekhan: 1) Trainees 2) Super trainees 3) Sales executives4) Assistant sales manager 5) Area sales manager : Mr. Chirag Joshi 6) City sales manager 7) Assistant branch manager 8) Branch manager 9) Regional head 10)Cluster head11) Business head 12) Country head 13) Directors 14) CEO

Current Strategies of Company

STRATEGY ADOPTED:

INSTALL THE SOFTWARE TAKE REFERENCES

COMPLETE THE FORMALITIES TELECALLING

FIX APPOINTMENT YES ATTEND INTERESTED APPOINTMENT NOT TAKE REFERENCES

TELECALLING - WISH /GREETINGS INTRODUCTION

CLOSE THE CALL PURPOSE OF CALLING

BROKERAGE EXPLAINATION NEED GENERATION

FIX THE APPOINTMENT OBJECTION HANDLING

Future Plans:

Branches / Semi branches servicing¬centralized call centers/ web solutions. 250¬affluent / aggressive traders through high skill financial advisor. independent investment managers/ franchisee servicing 50,000 highly valued New initiatives Portfolio management Services and commodities¬clients trading.

Chapter 3

Marketing

CONSUMER BEHAVIOR - A THEORETICAL INPUT

"The most important thing is to forecast where customers are moving and to be in front of them." - Kotler The aim of marketing is to meet and satisfy target customers needs & Wants. The field of Consumer Behavioral studies how individuals, grows, and organizations. Select, buy, use & dispose of goods, services, ideas or experiences to satisfy their needs & desires. Understanding consumer behavior and "knowing customers" is never simple .Customers may say one thing but do another. They may not be in touch with their deeper motivations. They may respond to influences that change their minds at the last minute. Consumer behavior is a process and purchase is only one stage in the process. There are many underlying influences ranging from internal motivations and attitudes to social influences of various kinds. Yet, motivation and attitude can be understood through research. Perfect predication is never possible, but properly designed and used research efforts can significantly lower the risk of marketing failure. Consumer behavior is related to an individual person (micro behavior) where as consumption behavior relates to the mass or aggregates of individuals (macro behavior). The study of consumer behavior always focuses on the decision process of the individual consumer or consuming unit, such as the family. In contrast, the study of consumption behavior is concerned with description & explanation of the behavior of aggregates of consumer or consuming units, again at a given time or over a period of time.

Consumer Behavior Influencing Investment Pattern

Usually before investment consumers go on for a detailed study of each and every option available to them. Often they want to go on for those options which involves less risk and that will give more profit. Usually before investing anywhere they like to consult those to whom they rely and those who have also invested in financial services. INVESTING An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are Speculative

Types of Investment. A) Fixed Return OptionsB) Variable Return OptionsC) Conventional returns options

Fixed Return Options

i) Post Office Monthly Income Scheme In this scheme, an investment can be made by individual in single or joint names up to a maximum of Rs 9lakhs (Rs 4.5lakhs per person) with an interest of approximately 10.5% in a monthly income scheme. In addition this investment will fetch you a taxable bonus of 8% on the deposit maturity (i.e. after 6 years). Premature withdrawal is allowed after one year with a discount of 5% on the amount deposited as a penalty and after 3 years without any discount on the bonus. Interest qualifies for deduction under section 80L. Only individuals can open the account (either single or joint). The post-office monthly income scheme (MIS) provides for monthly payment of interest income to investors. It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood. The MIS is not suitable for an increase in your investment. It is meant to provide a source of regular income on a long term basis. The scheme is, therefore, more beneficial for retired persons.

ii) Other Post Office Schemes

a) National Saving Certificate (NSC): National Savings Certificates (NSC) are certificates issued by Department

of post, Government of India and are available at all post office counters in the country. It is a long term safe savings option for the investor. The scheme combines growth in money with reductions in tax liability as per the provisions of the Income Tax Act, 1961. The duration of a NSC scheme is 6 years. NSCs are issued in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 for a maturity period of 6 years. There is no prescribed upper limit on investment. Rs. 1000 becomes Rs. 1601 after 6 years at a compounded yield of 8.16% with tax benefits under section 80L and 88. No premature withdrawal is allowed. Interest accrued annually is also reinvested in this scheme and also qualifies for up to 15/20 % rebate under section 88. There is no tax deduction at source.

b) Kisan Vikas Patra Kisan Vikas Patras is a safe and long term investment option backed by the Government of India which provides interest income similar to bonds. The title of the scheme makes some misconception that it is only meant for farmers. But anyone can go for Kisan Vikas Patra. KVP is beneficial for those looking for a safe avenue of investment without the pressing need for a regular source of income. Money doubles at the end of specified period.

Money can be doubled in 8 years and 7 months. There is no upper limit that you can invest. There are no tax benefits for investments made under this scheme. The rate of interest works out to be 8.41% (2009). Loans are available against Kisan Vikas Patra. Interest is paid on maturity and cannot be claimed prior to maturity. This can be purchased jointly by two adults. In the case of loss or stolen Certificate, the purchaser should report the post office at the earliest. An application should submit in post office containing the certificate number, amount, date of purchase /maturity etc. and declare the circumstances resulting the loss of certificate. In such cases the identity slip comes useful to get a duplicate certificate. After the verification, the post office will issue a duplicate certificate. If needed, the purchaser will have to submit an indemnity bond/declaration/Bank verification.

c) Senior Citizens Savings Scheme The government has announced a new senior citizens saving scheme. It has been launched only through designated post offices from 2nd august 2004. It is for individuals who have attained the age of 60 years, and who have retired under voluntary retirement scheme on the date of opening of an account. The main features of the scheme are that it carries an interest of 9 % p.a. (taxable) on the deposit. Deposit can be a minimum of Rs. 1000 and a maximum of Rs. 15 lacs, to be held for a period of 5 years and extendable for a further 3 years. It can be prematurely withdrawn after one year with some deductions. Interest qualifies for deductions. A depositor may open the account in the individual capacity or jointly with a spouse. Nonresident Indian is not eligible to open an account. This Scheme is most beneficial to Senior citizens and provides a high rate of interest as compared to bank interest of 4.5- 4.75%. Although the interest on the deposit is taxable, the deposits themselves are tax free. As the post office is a department of the government of India, it is a safe investment. The principal amount is assured.

iii) Public Provident Fund The rate for public provident fund is currently 8% pa. This is basically a long term investment opportunity (maturity 15 years) as entire amount that is accumulated in this account can be withdrawn entirely only after 15 years. Part withdrawal is allowed only after 7 years. An investor can put up to Rs 70000 per year in PPF in either lump sum or 12 monthly installments. After 15 years the investor can renew this account for a 5 year period. Interest is totally exempt from income tax. The amount deposited qualifies for tax rebate under section 88.

iv) Bank Fixed DepositsBank fixed deposits yields will vary from bank to bank but are more or less streamlined. The yields are currently ranging from 4.5 % to 5.5 % per annum for deposits ranging from 30 days to 3 years. All scheduled banks are covered under DICGC (deposit insurance and credit Guarantee Corporation) which mean that up to Rs 1lakh deposited in a bank every person is absolutely safe and insured even if the bank collapses. Interest qualifies for deduction from income tax.

v) Government Securities or Gilts

Government securities or gilts are totally secure. Government bonds are issued by government of India periodically. These are now available in the secondary market through satellite dealers and banks. They are known to yield 5 to 6% per annum. Interest exceeding Rs 2500 is liable for TDS at 10.455%.

vi) RBI Taxable Bonds These are 8% bonds which are taxable. The maturity period is after 6 years and there is no upper limit to investment in these bonds. The interest accrued on these bonds is taxable under income tax act.

vii) Insurance There are several types of insurance policies available in the market today through various players. Life Insurance Corporation (LIC) till recently held monopoly in this market. Life insurance is the most sought option as it also offers tax benefits for premier paid. Though insurance is expenditure, it is now an investment option.

viii) Company Fixed Deposits Company fixed deposits was a highly popular investment vehicle in the past. In today’s changing scenario where the corporate world has access to cheaper funds from sources all over the world, the rates of interest offered by good companies make this a less attractive investment vehicle. If company fixed deposits are unsecured deposits and if a accompany goes insolvent; there is very little possibility of investor recovering his investments.

ix) Infrastructure Bonds An infrastructure bond is a tax saving bond that was innovated in order to provide funds for the development of key infrastructure projects. Thus, investors in these bonds apart from material benefit in terms of tax savings, have the higher satisfaction of having contributed to the development of the country’s infrastructure.

B) Variable Return Options

i)Mutual Funds: Through Mutual Funds. companies pools the money of many investors -- its shareholders -- to invest in a variety of different securities. Investments may be in stocks, bonds, money market securities or some combination of these. Those securities are professionally managed on behalf of the shareholders, For the individual investor, mutual funds provide the benefit of having someone else manage your investments and diversifying your money that may not be available or affordable to you otherwise. A mutual fund, by its very nature, is diversified -- its assets are invested in many different securities .

ii) Shares and Stock Market Indian Stock Market Overview.

The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges. However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80 per cent of the equity volume traded in India. The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has (Nifty) which consists of fifty stocks. The BSE Sensex is the oldest and more widely followed index. Now these days’ even common people are being aware about the share market in respect of 4-5 years ago. Before 4-5 years ago only affluent and highly educated people were aware about share market and they used to invest in companies stock. But the time is changing very rapidly .the people is being educated about the share market by broking firms , stock exchange , government, news papers, news channels and by introducing various new course in schools and colleges. Now common people have started investing in companies stocks by opening up Dmat account in various broking firms. In this type of investment there is no certainty of return on investment one may lose hismoney or can gain unexpected amount of return.In stock market people get two type of return1. Dividend paid by the company2. Price rise in company’s shareThese two of benefit get the stock holder only if the company is doing well and all external environment which affects the stock market is favorable.

iii) PPM (Private Placement Memorandum) A private placement memorandum (PPM) is the document that discloses everything the investor needs to know to make an informed investment decision. This includes: the offering structure, the share structure of the company, disclosures about the shares being purchased, company information, information on company operations, risks involved with the investment, management information, use of proceeds, information on certain transactions that could affect the investor, and investor suitability data. The PPM also includes the subscription agreement which is the actual "sales contract" for the shares of stock. This is the document that the investor will sign and send in with their investment funds. The PPM is very important because it provides the investor with all of the prescribed data they will need to make an investment decision and includes the actual documentation to effect the investment transaction. PPM's are designed as a stand-alone document - meaning that there need not be other information presented to the investor for them to make an accurate investment decision. Many companies will attach their business plans to the PPM as supporting documentation. This is an acceptable practice so long as the information in the business plan properly corresponds with the information in the PPM and that the investor is made aware that the business plan alone does not constitute an offer to sell securities - only the PPM can make that offer.

C) Conventional options

i) Property Investment in real estate or property is a good long-term investment for well heeled investors with a large amount of money. People used to purchase property and when they realize that they are getting maximum return on their investment sale it off and book the profit. In this type of investment there is no fix rate of return its depend on the people’s foresight.

ii) Gold and silver In developing countries, people have often trusted gold as a better investment than stock and bank deposits. Gold and silver have always been popular in India because historically these acted as a good hedge against inflation. In that sense these metals have been more attractive than bank deposits or gilt –edged securities. In gold and silver there is also an aesthetic appeal which attracts the people and they consider it as a value for money. Buying the gold and silver people feel secure because these are the scarcest and they can cash it any time at higher price than their original buying price.

The Investment at Glance

a)FIXED RETURN OPTION

Option & Benefit Safety Liquidity Return

1.Post Office – MP (8%) 10% Bonus On Maturity

High Good Good

2. N.S.C. (8.16% compounded). Tax benefits, No TDS

High Low Moderate

3. Kisan Vikas Patra (8.4%) 8yrs. 7mths. Double You’re Money. No TDS. Loan Available From Banks against KVP

High Low Moderate

4. Senior Citizen Saving Scheme (9%)

High Low Moderate

Taxable Option & Benefit Safety Liquidity Return

1PPF (8%). Offers tax benefits

High Low Moderate

2Bank FDs (between 4.5 -5.5%) Deposits covered by DICGC up to Rs. 1 lakh.

High High Low

3Government Securities, Gilts (5-6%)

High Good Low

4RBI Taxable Bonds (8%). The interest accrued is taxable

High Low Moderate

5Insurance High Low Low

6Company FD. Not a recommended investment option in today’s environment

Low Low Low

7Infrastructure Bonds

High Moderate Moderate

b) VARIABLE RETURN OPTION

Option Safety Liquidity Return

1.Mutual Fund – Debt, Income , Saving Funds

High Varies Low

2.Mutual Fund – Equity Low Low High

3.Mutual Fund –Balance Fund

Moderate

Good Moderate

4.Share market

Low Moderate High

5.Properties market

Moderate

Low Varies

INDUSTRY ANALYSIS USING PORTER’S 5 FORCES MODEL

SUPPLIERS NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI,SHCIL, ICICIdirect.com, etc. Also these regulatory bodies have got an upper hand as the bargaining power stock broking houses like SSKI, etc. would be less. NSE & BSE are playgrounds where common an investor trade through stock broking houses, for which they have to take permission from NSE/BSE.

POTENTIAL ENTERANT

InvestmartVarious BanksGeojitCipherUTI Securities Ltd.Refco Group Ltd.IDBI Capital Mkt. Services

COMPETITORSICICI Web Trade Ltd5paisa.comKotak Securities LtdIndia BullsMotilal Oswal Securities LtdHDFC Securities LtdMarwadi Finance Ltd

SUBSTITUTES

Mutual FundsInsuranceBank FD

SUPPLIERSWeb maintainersNSCLCSDLNSEBSEMCXNCDEX

BUYERSSmall InvestorsFranchise/BusinessPartnersHNI’sMF CompaniesHUFInstitutionalInvestors

NSE & BSE are under the purview of SEBI, that’s why stock broking houses like SSKI, have low bargaining power. But here there is one advantage that NSE/BSE have i.e. they cannot go for forward integration. MCX & NCDEX are stock exchanges which trade in commodities and derivatives. Here again stock broking houses have to follow rules and regulation of the same. Web maintainers are companies which maintain web sites & technical aspects of the same. Here stock broking houses like SSKI can have more bargaining power due to stiff competition among web maintaining companies. Web maintainers are companies who make and maintain software’s for stock broking houses. If say for example stock broking houses switches over to other web maintainers then that company cannot understand the mechanisms of software’s. So it is quite high switching cost.

BUYERS There are various types of investors who trade through stock broking houses like SSKI, which includes investors like small investors, medium net worth investors, business partners, institutional investors and mutual fund companies. Here the bargaining power of stock broking houses depends on how big the investor is. So here we can say that bargaining power of stock broking houses is high in case of small investors & HUF. While the bargaining power is moderate in case of HNI (High New Worth Investors)/ MNI’s (Medium Net Worth Investors) and business partners. But the in case of mutual fund companies and institutional investors bargaining power is less. There is competitive buzz in stock broking industry; competitors are offering low brokerage and best services with added feature. So switching cost is pretty much less. So the buyer can easily switch over to competitors product.

COMPETITORS The company is facing the competition from local as well as national level players. The local players provide facility for off-line trading while the national players like ICICIdirect.com and Kotakstreet.com, HDFC Security provide online trading services. There are also other big names like Indiabulls, Motilal Oswal, 5paisa and Marwadi encircles the company form both the sides by providing online and off-line trading with competitive services.

POTENTIAL ENTRANTS The potential entrants in like Investmart, Jeojit and Cipher which are coming in near future to Rajkot City.

Nationalized banks are also thinking to enter in this field by tying up with broking houses. E.g. Bank Of Baroda.

SUBSTITUES Here substitutes are such instruments which can be used instead of investingin shares. The instruments like Bank FD, insurance, mutual funds are the substitutes. If the use of this instruments increase this may be disadvantage for the stockbroking houses. The companies and banks which are having these instruments can plungeinto this industry.

How many players are in Indian Market,1. S S KANTILAL ISHWARLAL SECURITIES PVT LTD. (www.sharekhan.com)2. ICICI WEB TRADE LTD. (www.icicidirect.com)3. 5 PAISA.COM (www.5paisa.com)4. KOTAK SECURITIES LTD. (www.kotakstreet.com)5. INDIABULLS (www.indiabulls.com)6. MOTILAL OSWAL SECURITIES LTD.7. HDFC SECURITIES LTD. (www.hdfcsec.com)8. UTI SECURITIES LTD.9. IDBI CAPITAL MARKET SERIVICES LTD.10.REFCO SIFY SECURITIES PVT LTD

Market position

Follower:The followers are those who just blindly follow the other player which are leader and challenges.The players like 5 paisa, Motilal Oswal, HDFC Securities, Kotakstreet are the followers.

LEADER:ICICIdirect.com is a leader in the online account which is having 1, 24,000 accounts in the country.While in offline account Sharekhan is leading with 64,000 offline accounts.

CHALLENGER:Sharekhan, Kotakstreet and Indiabulls come under this head.

Sharekhan challenges competitors by providing quality services and research based advice.Indiabulls is also challenging with low brokerage rates and class on Services.

Market Research Activities

More than our fair share of pain The Sensex' valuation has dropped by about 17% over the last two months on heavy selling by the FIIs. We believe that the Indian equity market has had more than its share of pain compared with its peers, as the BSE Sensex has corrected much more than the other emerging market indices in the past few weeks. So what lies in store for retail investors? To know answer to that billion-dollar question, read our latest Market Outlook report dated June 3, 2006. If you don't have a trading account with Sharekhan, open an account today to access our latest Market Outlook report and other such premium contents.

Sharekhan's trading calls in the month of November 2005 has given 89% strike rate If you are an active trader looking out for intra-day and short term trading opportunity's, Just Check This Out - Out of 37 trading calls given by Sharekhan in the month of November 2005, 33 hit the profit target. These exclusive trading picks come only to Sharekhan Online Trading Customer and are based on in depth technical analysis.

Our Trading Call covers HIT LIST - A Day Trader Tool Kit SMART CHARTS for Position Calls INTRA-DAY calls and CTFT Created Today For Tomorrow

Preview Of Performance Summary November 05 Performance Summary

No of Calls

37

Winning Calls

33

Losing Calls

4

Strike Rate

89.19

Avg Win %

6

Avg Loss %

-4

Risk Reward

11.40

Product & Price management

CHARGE STRUCTURE : Fee structure for General Individual: Charges Classic Account

Trade Fast trade Account

Tiger Account

Account Opening Nil

Nil

Nil

Brokerage Intra – day – 0.10%

Intra – day – 0.10%

Intra – day – 0.10%

Delivery – 0.50% Delivery – 0.50% Delivery – 0.50% Depository Charges:Account Opening Charges Rs. NILAnnual Maintenance Charges Rs. NIL first year Rs. 300/= p.a. from

second calendar year onward

TYPES OF PLANS

Advance Brokerage

Brokerage – Intraday Brokerage -Delivery

750 10 paise 50paise/50paise

1000 9 paise 45paise/45paise

2000 7 paise 40paise/40paise

6000 5 paise 25paise/25paise

Comparative analysis

The major players in online trading

• 5paisa.com • KotakStreet. • IndiaBulls. • Icici Direct.com• Reliance:

5 paisa.com Indiainfoline 5 paisa.com Indiainfoline was founded in 1995 and was positioned as a research firm. In 2000 e-broking was started under the brand name of 5 paisa.com. Apart from offering online trading in stock market the company offers mutual funds online. It also acts as a distributor of various financial services i.e. GOI securities, Company Fixed Deposits, Insurance. It has a limited ground network, present in 20 Cities Online Account Types • Investor Terminal: Investors / Students • Trader Terminal: Day Traders / HNI’s PRICING FOR RETAIL CLIENTS Investor Terminal:- • Account Opening: Rs 500 • Demat 1st Yr: Rs 250 • Initial Margin: Rs 2500(Compulsory) • Min Margin Retainable: Rs 1000 • Brokerage: Trading 0.10% each side + ST Delivery 0.50% each side + ST PRICING FOR HNI CLIENTS Trader Terminal • Account Opening: Rs 500 • Demat 1st Yr: Rs 250 • Initial Margin: Rs 5000(Compulsory) • Min Margin Retainable: Rs 1000 • Brokerage: Trading 0.10% each side + ST Delivery 0.50% each side + ST (Negotiable to 0.05% each side & 0.25%) • Account Access Charges Monthly Rs 800, adjustable against Brokerage Yearly Rs 8000, adjustable against brokerage Problems Of 5 Paisa • Downtime Recent past 5 paisa Trader Terminal (T.T) is experiencing high frequency downtime between 3 – 3:30 p.m due to server load (as their T.T is feature heavy compared to Speedtrade charting) • Manual Accounting The 5 paisa accounting system is manual, Online fund transfer through bank is not credited instantly. Limit is provided EOD for shares sold from DP, or call Similarly limit released for shares sold under BTST is manual Delay in receiving pay-out of clear funds from trading to Bank Account. • Min Account Balance

Concept of Min Rs1,000 is to be maintained in form of cash / securities to keep account active. This can be withdrawn only on closure of account.

IndiaBulls. Company Background India Bulls is a retail financial services company present in 70 locations covering 62 cities. It offers a full range of financial services and products ranging from Equities to Insurance. 450 + Relationship Managers who act as personal financial advisors Online Account Type • Signature Account: Plain Vanilla Account with focus on Equity Analysis. The equity analysis is a paid service even for A/c holders • Power India bulls: Account with sophisticated trading tools, low commissions and priority access to Accounts Signature Account • Account Opening: Rs 250 • Demat: Rs 200 if POA is signed, No AMC for this DP • Initial Margin: NIL • Brokerage: Negotiable Power IndiaBulls • Account Opening: Rs 750 • Demat: Rs 200 if POA is signed, No AMC for this DP • Initial Margin: NIL • Brokerage: Negotiable Problems Of India Bulls POA for Clients DMAT Charges are levied to move shares from IB pool Account to client DP account All shares held by client trading with IB are moved to IB Pool Account and the same is shown as a reflection in client DP account. Paid Research Services Access to a research even for an IB trading account holder is charged a min of Rs 500 a month. Margin funding hoax The interest on funding starts on leveraged delivery trades from T+1 day itself @21% p.a, on a daily basis. The role of Relationship Manager Each RM is looked upon as a revenue generator and he gets a % on business generated from client. This can lead to over leveraged (Interest) & high frequency (Brokerage) trading, which may not be in the best interest of the client.

KOTAK SECURITIES

Company Background Kotakstreet is the retail arm of kotak securities. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs. Online Account Types • Twin Advantage / Green Channel: 2 DP’s, Limit against shares • Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction • High Trader: 6 Times Exposure Cash & Derivatives, Auto sq off 2:55 Pricing of KOTAK • Account Opening: Rs 500 • Demat: Rs 225 p.m • Initial Margin: Rs 5000(Compulsory) • Min Margin Retainable: Rs 1000 • Brokerage Slab wise: Higher the volume, lower the brokerage. Even older customers (on 0.25% & 0.40%) have been moved to the slab wise structure. Problems of Kotakstreet Rigid Account Opening Terms No Flexibility of A/c opening charges (Rs 500) + Compulsory margin Rs 5000/- Account opening free with Rs 10,000 Margin . No Flexibility in Leverage – Dependent on Type of Account ( 4 to 6 times only) No flexibility in Brokerage, driven by slab structure. No Customization of commercial Terms. Restricted Access to Terminal like product KEAT Desktop restricted distribution on payment of Rs 500, Non refundable any Other Charges: Rs 225 p.m towards DP AMC charges DP incoming charges extra , 0.02% Rs 1,000 as retainable Margin to keep account active Rs 25 per call after 20 calls for the month

ICICI Direct.com Company Background ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank Limited Account Types ICICI Direct e-invest Account: Premium trading interface of ICICIDirect Link is given to DBC partners and HNI’s Plain Vanilla Account with focus on 3 in 1 advantage. Differentiated in services within the account. 1. Cash on spot 2. Margin Plus Account Opening: Rs 750 Schemes: For short periods Rs 750 is refundable against brokerage generated in a qtr. These schemes are introduced 3-4 times a year. Demat: NIL, 1st year charges included in Account Opening Plus a facility to open additional 4 DP’s without 1st yr AMC.

Initial Margin: Nil Brokerage: All brokerage is inclusive of stamp duty and exclusive of other taxes. Slab wise brokerage ranges from 0.75% to 0.25% depending on volume Problems of ICICIDirect Poor online Interface. Slow website interface with no real-time quotes creates dissatisfaction among high frequency traders Margin trading restriction. Restriction of Bank Account.The choice of bank is restricted to ICICI Bank. Higher Brokerage rates with slabs. The delivery brokerage is pegged at 0.75% and trading at 0.10% each side, this makes is very unviable for customers dealing in large volumes.

Reliance: Here the problem is that any order you place has to be cleared by 2.30pm. No exposure is given here. There tie-ups with only two banks i.e. HDFC and IDBI. In Reliance per call is Rs15 extra.

Chapter 4

Finance

Structure of the Finance Department

Owns 56% of Owns 50.5% of

FINANCIAL INFORMATION:-

The company which is today known as the largest financial service provider of India. Sharekhan has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking, depository services, distribution of financial products, consumer finance and other activities in financial services. Sharekhan is among India’s top ten private sector business houses on all major financial parameters, with a market capitalization of Rs.325, 000 crores (US$ 81 billion),net assets in excess of Rs.115,000 crores (US$ 29 billion), and net worth to the tune of Rs.55,000 crores(US$ 14 billion) Its Endeavour is to change the way India transacts in financial markets and avails financial services. Sharekhan is a single window, enabling you to access, amongst others inequities, Equity & Commodities Derivatives, Mutual Funds, IPOs, Life & 8 General Insurance products, Offshore Investments, Money Transfer, Money Changing and Credit Cards.Sharekhan is the largest brokerage and distributor of financial products in India with more than 2.5million customers and the largest distribution network. Sharekhan Consumer finance has a loan book of over Rs. 8,000 crores at the end of June 2008. Sharekhan has increased its market share among private financial companies to nearly Convenient & effective – Anytime & anywhere financial transaction capability. Launched in April 2007.It provides the Flat fees system. It has 2.2 million customers in 1 year of official launch. It has over5, 000 outlets across 700 towns/cities. Average daily turnover – in excess

SSKI Investor Services Pvt. Ltd.Retail broking arm of the groupShareholding pattern56% Morakhia family (promoters)18.5% H Structure of Marketing DepartmentSBC Private EquityManagement, Mauritius18.5% First Carlyle Ventures, Mauritius7% Intel Pacific Inc.

SSKI Corporate Finance Pvt. Ltd.Investment banking arm of the groupShareholding pattern50.5% SSKI Securities Pvt. Ltd.49.5 % Morakhia family

SSKI Securities Pvt. Ltd.Morakhia Family &

of Rs 2,000 crores. Considering the entire life market, including the Rs. 12,890 crores booked by life insurance Corporation, Reliance life insurance market share works out to around 6.25% .The life insurance market continuous to be dominated by LIC which has about 67% share this only a marginal dip from its 73% share in end-July. These comparisons are only for first year or new business premium.Sharekhan has over 22 lakhs customers and more than 10'000 branches in around 5000 cities in India. Company is among the largest broking and distribution house of financial products and having share of more than 3% of total stock market volume at BSE & NSE

FINANCIAL MARKET:

Financial markets are helpful to provide liquidity in the system and for smooth functioning of the system. These markets are the centers that provide facilities for buying and selling of financial claims and services. The financial markets match the demands of investment with the supply of capital from various sources. According to functional basis financial markets are classified into two types. They are:t Money markets (short-term)M Capital markets (long-term)According to institutional basis again classified in to two types. They areA Organized financial marketO Non-organized financial market.

The organized market comprises of official market represented by recognized institutions, bank and government (SEBI) registered/controlled activities and intermediaries. The unorganized market is composed of indigenous bankers, moneylenders, individual professional and non-professionals.

MONEY MARKET:Money market is a place where we can raise short-term capital.Again the money market is classified in toA Inter bank call money marketI Bill market andB Bank loan market Etc.B E.g.; treasury bills, commercial papers, CD's etc.

CAPITAL MARKET:Capital market is a place where we can raise long-term capital.Again the capital market is classified in to two types and they areA Primary market andP Secondary market.E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:Primary market is generally referred to the market of new issues or market formobilization of resources by the companies and government undertakings, for new projects as also for expansion, modernization, addition, diversification and upgradation. Primary market is also referred to as New Issue Market. Primary market operations include new issues of shares by new and existing companies, further and right issues to existing shareholders, public offers, and issue of debt instruments such as debentures, bonds, etc.The primary market is regulated by the Securities and Exchange Board of India(SEBI a government regulated authority).

Function:The main services of the primary market are origination, underwriting, anddistribution. Origination deals with the origin of the new issue. Underwriting contract make the shares predictable and remove the element of uncertainty in the subscription. Distribution refers to the sale of securities to the investors.The following are the market intermediaries associated with the market:1. Merchant banker/book building lead manager2. Registrar and transfer agent3. Underwriter/broker to the issue

4. Adviser to the issue5. Banker to the issue6. Depository7. Depository participant

Investors’ protection in the primary market:To ensure healthy growth of primary market, the investing public should beprotected. The term investor protection has a wider meaning in the primary market.The principal ingredients of investors’ protection are:T Provision of all the relevant informationP Provision of accurate information andP Transparent allotment procedures without any bias.

SECONDARY MARKET

The primary market deals with the new issues of securities. Outstanding securities are traded in the secondary market, which is commonly known as stock market or stock exchange. “The secondary market is a market where scrip’s are traded”. It is a market place which provides liquidity to the scrip’s issued in the primary market. Thus, the growth of secondary market depends on the primary market. More the number of companies entering the primary market, the greater are the volume of trade at the secondary market. Trading activities in the secondary market are done through the recognized stock exchanges which are 23 in number including Over the Counter Exchange of India (OTCE), National Stock Exchange of India and Interconnected Stock Exchange of India. Secondary market operations involve buying and selling of securities on the stock exchange through its members. The companies hitting the primary market are mandatory to list their shares on one or more stock exchanges in India. Listing of scrip’s provides liquidity and offers an opportunity to the investors to buy or sell the scrip’s.

The following are the intermediaries in the secondary market:1. Broker/member of stock exchange – buyers’ broker and sellers’ broker2. Portfolio Manager3. Investment advisor4. Share transfer agent5. Depository6. Depository participants.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):S Board of Directors of Stock Exchange has to be reconstituted so as to include non-members, public representatives and government representatives to the extent of 50% of total number of members.t Capital adequacy norms have been laid down for the members of various stock exchanges depending upon their turnover of trade and other factors.s All recognized stock exchanges will have to inform about transactions within 24 hrs.

Chapter 5

Operation and Production

Number of Employees with Designation and Duties

Pathik Gandotra : Head of Research

Nikhil Vora : Vice President of Research

Mr. Shankar Vailaya – Director (Operations) of the company: A graduate in commerce from the University of Mangalore and an Associate of The Member of the Institute of Chartered Accountants of India, Mr. Shankar Vailaya heads the finance, operations and legal functions. He is responsible for settlements, depository operations, risk and compliance and regulatory & other legal commitments and Treasury. Shankar has managed broking operations through the most turbulent times of the post securities scam period in 1992 and has managed to steer clear of a flurry of bad papers in the market during 1994-95

RESEARCH METHODOLOGY INTRODUCTION Sharekhan Limited has its own in-house Research Organisation which is known as Valueline. It comprises a team of experts who constantly keep an eye on the share market and do research on the various aspects of the share market. Generally the research is based on the Fundamentals and Technical analysis of different companies and also taking into account various factors relating to the economy. Sharekhan Limited’s research on the volatile market has been found accurate most of the time. Sharekhan's trading calls in the month of November 2007 has given 89% strike rate.Out of 37 trading calls given by Sharekhan in the month of November 2007, 33 hit the profit target. These exclusive trading picks come only to Sharekhan Online Trading Customer and are based on in-depth technical analysis.As a customer of Sharekhan Limited, one receives daily 5-6 Research Reports on their emails which they can use as tips for investing in the market. These reports are named as Pre-Market Report, Eagle Eye, High Noon, Investors Eye, Daring Derivatives and Post-Market Report. Apart from these, Sharekhan Limited issues a monthly subscription by the name of Valueline which is easily available in the market.

Research Methodology refers to search of knowledge .one can also define research methodology as a scientific and systematic search for required information on a specific topic. The word research methodology comes from the word “advance learner ‘s dictionary meaning of research as a careful investigation or inquiry especially through research for new facts in my branch of knowledge for example some author have define research methodology as systematized effort to gain new knowledge. Methodology In the first phase we are trained and they teach¬of the project starts with – After that they conduct a mock viva, in this¬us different things about market. They provide¬they ask about the real life problem faced by the customers. Then after that we have to provide details¬leads and after that we make calls. Then we have to visit them and get the formed¬of product and convince them. Maintaining dairy of clients and contacting them at regular¬filled from them. ¬ Get the knowledge of technical as well as fundamental methods. ¬Basis. Observe the patterns of the scripts.

Exploratory Research: Exploratory research is a type of research conducted because a problem has not been clearly defined. Exploratory research helps determine the best research design, data collection method and selection of subjects. Given its fundamental nature, exploratory research often concludes that a perceived problem does not actually exist. Exploratory research often relies on secondary research such as reviewing available literature and/or data, or qualitative approaches such as informal discussions with consumers, employees, management or competitors, and more formal approaches through in-depth interviews, focus groups, projective methods, case studies or pilot studies. The results of exploratory research are not usually useful for decision-making by themselves, but they can provide significant insight into a given situation. Although the results of qualitative research can give some

indication as to the "why", "how" and "when" something occurs, it cannot tell us "how often" or "how many." Exploratory research is not typically generalizable to the population at large. Research is exploratory when you use no earlier model as a basis of your study. The most usual reason for using this approach is that you have no other choice. Normally you would like to take an earlier theory as a support, but there perhaps is none, or all available models come from wrong contexts. Exploratory research means that hardly anything is known about the matter at the outset of the project. You then have to begin with a rather vague impression of what you should study, and it is also impossible to make a detailed work plan in advance. Analysis in exploratory research is essentially abstraction and generalization. Abstraction means that you translate the empirical observations, measurements etc. into concepts; generalization means arranging the material so that it disengages from single persons, occurrences etc. and focuses on those structures (invariance’s) that are common to all or most of the cases. It will seldom be possible to divide exploratory study into such clear phases as is common in the case that the object has been studied earlier.The purpose of descriptive exploratory research is to extract a structure from the source material which in the best case can be formed as a rule that governs all the observations and is not known earlier (per the definition of exploratory study). Finding the unknown structure may need some creative innovation, because even the most sophisticated computerized analysis methods cannot automatically uncover which type of structure is concealed in data. Usually you first have to formulate a tentative pattern for the assumed structure in the observations and then you can ask the computer to estimate how well the data corresponds to the model, cf. Tools for Analysis

METHODS OF DATA COLLECTION

In the project work Primary data secondary data (both) sources of data has been used.

1. Primary data collection: In dealing with real life problem it is often found that data at hand are inadequate, and hence, it becomes necessary to collect data that is appropriate. There are several ways of collecting the appropriate data which differ considerably in context of money costs, time and other resources at the disposal of the researcher. Primary data can be collected either through experiment or through survey. The data collection for this study was done in the following manner: Through personal interviews:- A rigid procedure was followed and we were seeking answers to many pre- conceived questions through personal interviews. Through questionnaire:- Information to find out the investment potential and goal was found out through questionnaires. Through Tele-Calling:- Information was also taken through telephone calls. The first type is a primary source which is the initial material that is collected during the research process. Primary data is the data that the researcher is collecting themselves using methods such as surveys, direct observations, interviews, as well as logs(objective data sources). Primary data is a reliable

way to collect data because the researcher will know where it came from and how it was collected and analyzed since they did it themselves.

2. Secondary sources of data: In the secondary sources of data is used. (Internet, magazine, books, journals) In research, secondary data is data collected and possibly processed by people other than the researcher in question. Common sources of secondary data for social science include censuses, large surveys, and organizational records. In sociology primary data is data you have collected yourself and secondary data is data you have gathered from primary sources to create new research. In terms of historical research, these two terms have different meanings. A primary source is a book or set of archival records. A secondary source is a summary of a book or set of records. Secondary data analysis: There are two different types of sources that need to be established in order to conduct a good analysis. Secondary sources on the other hand are sources that are based upon the data that was collected from the primary source. Secondary sources take the role of analyzing, explaining, and combining the information from the primary source with additional information. Secondary data analysis is commonly known as second-hand analysis. It is simply the analysis of preexisting data in a different way or to answer a different question than originally intended. Secondary data analysis utilizes the data that was collected by someone else in order to further a study that you are interested in completing. Common sources of secondary data are social science surveys and data from government agencies, including the Bureau of the Census, the Bureau of Labor Statistics and various other agencies.

Sources of secondary data: Sources of secondary data may be classified into qualitative and quantitative. Examples of qualitative sources are biographies, memoirs, newspapers, etc. Quantities sources include published statistics (e.g., census, survey), data archives, market research, etc.[1] Today, with the aid of our internet capabilities, thousands of large scale datasets are at the click of a mouse for secondary data analyst. Globally, there are many sources available. These sources can arrive from the data arranged by governmental and private organizations, to data collected by any social researcher. Secondary data analysis is a growing research tool in our modern day society. Social scientists have the opportunity to explore massive amounts of secondary data. Collecting, reviewing, and analyzing secondary data The Design and Purpose of Research Secondary data analysis consists of collecting data that was compiled through research by another person and using that data to get a better understanding of a concept.In order to use secondary data three steps must be completed: 1. locate the data 2. Evaluate the data 3. Verify the data locating the data can be easily done with the advancements of searching sources online.

RESEARCH SECTION IN SHAREKHAN LIMITED: Sharekhan Limited has its own in-house Research Organization which is known as Value line. It comprises a team of experts who constantly keep an eye on the share market and do research on the various aspects of the share market. Generally the research is based on the Fundamentals and Technical analysis of different companies and also taking into account various factors relating to the economy. Sharekhan Limited’s research on the volatile market has been found accurate most of the time. Sharekhan's trading calls in the month of November 2007 has given 89% strike rate. Out of 37 trading calls given by Sharekhan in the month of November 2007, 33 hit the profit target. These exclusive trading picks come only to Sharekhan Online Trading Customer and are based on in-depth technical analysis. As a customer of Sharekhan Limited, one receives daily 5-6 Research Reports on their emails which they can use as tips for investing in the market. These reports are named as Pre-Market Report, Eagle Eye, High Noon, Investors Eye, Daring Derivatives and Post-Market Report. Apart from these, Sharekhan Limited issues a monthly subscription by the name of Value line which is easily available in the market.

Chapter 7

MIS or IT Department

Mr. Jaideep Arora – Director (Products & Technology) of the company: Jaideep Arora completed his B.Tech from IIT (Kanpur) and his PGDM from IIM Kolkata.Jaideep worked with ICICI for 8 years where his work spanned a gamut of functions, which included project finance, equity sales and brokerage, investments etc. During his tenure there he set up and headed the ‘Institutional Equity Brokerage Desk’ at ICICI Securities & Finance Co. Ltd. Jaideep joined Sharekhan in June 2000 as Head of Product Development. A year later he took over the reigns of the online business at Sharekhan. At present Jaideep’s responsibilities include spearheading Sharekhan’s online foray and overall customer acquisition effort.

Chapter 10

Solutions with Merit and Demerit

Merit

It is to analyze the changes in trading after the exchange shifted from outcry to online trading system.It is to study the functions of SHAREKHAN through various departments.To know the online screen based trading system adopted by SHAREKHAN and about its communication facilities. The appropriate configuration to set the network, which would link the SHAREKHAN to individual / members.To know about the latest and future development in the stock exchange trading system.

Demerit

Despite of the training my level best, there were still some limitation which I think remains there to draw fruitful conclusion. There were some practical problems which come across and could not be properly death with-

• The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market.

• As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays.

• If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. If he want advice on a particular stock in his portfolio he may not even be able to get that.

Chapter 11

SUGGESTIONS TO COMPANY

MORE BRANCHES – Need to open more branches to be a topper in market because it has a low distribution network. LESS TIME – They should try to make some arrangements to reduce account opening time by verifying documents at branch it selves. LINK-BANK A/Cs – Linked as many accounts as client wants to its online account.NEW BANKS IN THE KITTY – Need to tie up with major banks like SBI, Allahabad Bank, Bank of Baroda etc. CUSTOMER SATISFACTION – The Company should focus on the customer satisfaction not on just taking money from their pocket. CONTROLLED BRANCHES – The Company would have to make some arrangements to control the branches and make standardized procedures for all of Commitment should be¬them for their better control and performance appraisal. Provide the facility of free demonstrations for¬equalized for every person. Improvement in the opening of De-mat¬ & contract notice procedure is There should be a limited number of clients under the relationship¬required. Some¬manger. So that he can handle new as well as old customer properly. People¬promotional activities are required for the awareness of the customer. Seminars should¬at young age should be encouraged to invest in stock market. Be held for providing information to prospective and present customers.

Chapter 12

Learning

WEEKLY ANALYSIS:

WEEK No. 1:Had training for three days. In this training we were told about Sharekhan Company, history of Sharekhan, organization structure, products, Sharekhan research reports, trading techniques, clients, Demat accounts, Derivatives, and how to fill the “Know Your Customer” form or KYC form, Online trading accounts in detail - SpeedTrade and Classic account, learned how to buy and sell shares through these online terminals, Sales technique, Telecalling, Sharekhan`s brokerage. Got an assignment on “THINGS TO BE TOLD TO THE CLIENT ABOUT THE COMPANY”. Did telecalling and coldcalling to 40 people, out of this 17 people were interested in Sharekhan`s Demat account. Met 17 people, out of this 6 people were interested in Sharekhan`s Demat account. Client Conversion ratio: 0%. As this was my first week and had training for 3 days I got very less time to understand the products, market and potential customers.

WEEK No. 2: Met 46 people, out of this 20 people were interested in Demat account. Client Conversion ratio: 0%. As this was the beginning of the SIP I found it very difficult to identify the potential customers.

WEEK No. 3: Met 66 people, out of this 16 people were interested in Demat account. Client Conversion ratio: 0% Collected many leads and references. Got follow up dates and appointments from the interested customers.

WEEK No. 4: Met 70 people, out of this 37 people were interested in Demat account. Client Conversion ratio: 0%. Collected leads and references. Got follow up dates and appointments from the interested customers.

WEEK No. 5: Met 57 people, out of this 38 people were interested in Demat account. Opened 1 demat account worth Rs 20,000/- Client Conversion ratio: 0.017% Collected leads and references. Got follow up dates and appointments from the interested customers. Learned how to approach and convince the customer.

WEEK No. 6: Met 59 people, out of this 41 people were interested in Demat account. Opened 2 demat account worth Rs 25,000/- each Client Conversion ratio: 0.33%

WEEK No. 7: Met 48 people, out of this 28 people were interested in Demat account. Opened 1 demat account worth Rs.25,000/- Client Conversion ratio for demat: 1/48 = 0.021% Collected leads and references. Most of the clients were busy or out of station. Got follow up dates and appointments from the interested customers.

WEEK No. 8: Met 53 people, out of this 28 people were interested in Demat account. Opened 1 demat accounts worth Rs.25,000/- Client Conversion ratio: 1/53= 0.018 % Collected leads and references. Got follow up dates and appointments from the interested customers. Over achieved the weekly target.

WEEK No. 9: Met 50 people, out of this 39 people were interested in Demat account. Opened 2 demat accounts worth Rs.10,000/ each Client Conversion ratio for demat: 0.04% Collected leads and references. Got follow up dates and appointments from the interested customers. Over achieved the weekly target.

WEEK No. 10: Met 53 people, out of this 35 people were interested in Demat account. Opened 1 demat account worth Rs.25,000/- Got 2 mutual fund of Rs.10000/- Client Conversion ratio for demat: 1/53 = 0.019% Documentation of some of the demat accounts and mutual funds was in process.

WEEK No. 11: Met 53 people, out of this 43 people were interested in Demat account. Opened 1 demat account worth Rs.25,000/- Got 2 mutual fund of Rs.15000/- Client Conversion ratio for demat: 0.019% Documentation of some of the demat accounts. Generated leads for the next week.

WEEK No. 12: Met 53 people, out of this 38 people were interested in Demat account. Opened 1 demat accounts worth Rs.10000/- Got 2 mutual fund of Rs.10000/- Client Conversion ratio for demat: 1/53 = 0.019% Weekly target was overachieved

Chapter 13

QUESTIONNAIRE

Q1. In which of these Financial Instruments do you invest into? (i) Shares (ii) Mutual Funds (iii)Bonds (iv) Others

Q2. Which type of trading you prefer? (i) Online (ii) Offline (iii) Not Applicable

Q3. If you prefer Online Trading then the reasons for it? i) Privacy (ii) User friendly & Time Saving (iii) Convenience (iv) All The Above

Q4. What factors motivates you to invest in securities? (i) New IPO's (ii) Entry of FII's (iii) More returns in less

time (iv) Others

Q5. Does online trading system motivate you to deal in securities? (i) Yes (ii) No

Q6. Have you heard about Sharekhan? (i) Yes (ii) No

Q7. Which Brokerage Firm do you prefer for Online Trading? (i) ICICI Direct (ii) Sharekhan (iii) India bulls (iv) Kotak Securities (v) 5paisa (vi) Any other__________

Q8. What differentiates your Share Trading Company from others? (i)Brokerage (ii) Research Report (iii) Dial up trade facility iv) Magazine (v) Exposure (vi) Account opening charges Others

Q9. How often do you trade? (i) Daily (ii) Weekly (iii) Monthly (iv) Yearly

Q10. In which category does your income fall? (Per month in Rs) i) 0-15000 ii) 15000 – 35000 iii) 35000 – 60000 iv) Above 60000

Q11. What percentage of your earnings do you invest in share trading? (i)Up to 10% (ii) Up to 25% (iii) Up to 50% (iv) Above 50%

Q12. According to your preference rank the attributes of a share trading company.(1=Most Important, 5= Not Important at all) 1. Customer Service ____ 2. Proper Guidance ____ 3. Regular Updates ____ 4. Trustworthiness____ 5. Brokerage Charges_____

13. Rank these share trading companies according to the quality of service they provide.(1=Excellent, 5= Very poor) 1. 2. 3. a. Sharekhan b. ICICI Direct 4. 5. c. India Bulls d. Kotak Securities e. others (specify )

Q14. What additional features do you wish to have in Online Share Trading? Personal Information Name: Age: Sex: Male Female Phone No: Occupation

BIBLIOGRAPHY

BOOKS:

1) Philips Kotler,’Marketing Management’ Prentice Hall Of India. New Delhi, 10th edition, 20012) Kothari C.R. ‘Research Methodology’ Wishwa Prakashan, New Delhi, 2nd, Edition, 20013) Kulkarni M.V.’Marketing Research’ Everest Publishing House, Mumbai, Millinium Edition,2001.

Webliography

http://www.icicibank.com/pfsuser/demat/demathome.htmhttp://www.sharekhan.com/Services/http:// www.Equitymaster.comhttp:// www.Moneycontrol.com http://nseindia.com/www.bseindia.com

http:/www.sahrekhan.com/images/research/smartchartcallsNov05.gifwww.Google.com www.moneycontrol.com www.sharekhan.com www.5paisa.com www.Indiabulls.com www.hdfcsecurities.com NEWSPAPERS: 1. ECONOMIC TIMES 2. TIMES OF INDIA 3. FINANCIAL EXPRESS