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PROJECT REPORT

On

Consumer Perception on EQUITY INVESTMENT by INDIA

INFOLINE, BHUBANESWAR (special reference to steel sector)

At India infoline Ltd., Bhubaneswar

Projected report submitted for partial fulfillment of degree course in

Master of Finance and Control, Utkal University

Session 2009-11

Submitted by

Bibhuti bhusan naik

Roll number: 13767u092008

Name of external guide:……………………….Mr.Sibajee

Meher

Relationship manager

India

Infoline Ltd,Bhubaneswer

Name of internal guide:………………………. Mrs.

Anamika. Pattanayak

Faculty of

finance

ASMIT,

Bhubaneswar

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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to all those who

have given their valuable time, guidance, support & inspiration

to undertake this challenging work.

I must acknowledge my deep gratitude to Mr.Sibajee Meher,

Relationship Manager, India infoline Ltd, BBSR for giving me

his valuable time & necessary information for fulfillment of this

project into its final shape.

I would also thankfully express my gratitude to Mrs. AnamikaPattanayak, faculty of finance, ASMIT, BBSR and the entire

faculty member who guided me & provide their valuable time

for preparation of this project report in time.

Lastly I thanks to my friends who have helped me in

completion of this project.

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Bibh

uti Bhusan Naik

ROLLNO: 13767U093008

DECLARATION

I Mr. BIBHUTI BHUSAN NAIK do here declare that, this project report on

EQUITY INVESTMENT with special reference to India Infoline Ltd

submitted by me in ARYA SCHOOL OF MANAGEMENT AND

INFORMATION TECHNOLOGY (ASMIT), Bhubaneswar from Utkal

University is true to the best of my knowledge.

I declared that this project has not been submitted anywhere for any other

purpose except in ASMIT, BBSR.

Date: Name: BIBHUTI BHUSAN NAIK

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Place: roll number: 13767U093008

CONTENTS

Chapter 1………………………………………………………………

Introduction

Place of Study

Objective of the study

Scope of Study

Methodology

Limitation

Chapter 2.................................................................................................

Industry profile

Company profile

Chapter 3……………………………………………………………….

Review of literature……………………………………………………..

Investment…………………………………………….

Different investment option………………………….

Equity investment…………………………………….

Different analysis…………………………………….

Role of market trends…………………………………

Role of demat account……………………………….

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Chapter 4……………………………………………………………….

Data analysis and interpretation

Chapter 5……………………………………………………………….

Findings……………………………………………………………………

Suggestion ……………………………………………………………………

Conclusion………………………………………………………………….

Chapter 6……………………………………………………………….

Bibliography

PREFACE

Investment is the employment of funds on assets with the aim of earning

income or capital appreciation. Investment has two attributes namely time

and risk. Present consumption is sacrificed to get a return in the future. The

sacrifice that has to be borne is certain but the return in the future may be

uncertain.

The risk is undertaken with a view to reap some return from the investment.

To the economist, investment is the net addition made to the nation’s capital

stock that consists of goods and services that are used in the production

process. A net addition to the capital stock means an increase in the

buildings, equipment or inventories.

These capital stocks are used to produce other goods and services.

Financial investment is the allocation of money to assets that are expected to

yield some gain over a period of time. It is an exchange of financial claim

such as stock and bonds for money. They are expected to yield returns and

experience capital growth over the years.

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• The first chapter provides a brief description about place of study,

methodology of study, Limitation and objective of study.

• The second chapter gives a brief description on profile of INDIA

INFOLINE.

• The third chapter reflects the Review Of literature.

• The fourth chapter describes Data analysis & Interpretation.

• The fifth chapter includes a brief description about findings,

suggestion &conclusion.

• The sixth chapter gives description about the list of references for the

project.

CHAPTER - 1

• Introduction

• Place of Study

• Objective of the study

• Scope of Study

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• Methodology

• Limitation

INTRODUCTION

The stock market plays a major role in mobilizing the savings into

investment. Stock market development is positively correlated with the

development of financial intermediaries and long-term growth. Stock

market also provides a different bundle of financial functions from

those provided by financial intermediaries. The stock market in India is

more efficient than banking system on account of the enabling

government policies and that stock market development has a key roleto play in the reforms of system by generating competition for funds

mobilization and allocation. Hence, an efficient capital market would

contribute to long-term growth. According to RBI the flow of funds in

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the private corporate sector shows that there is growing reliance of the

private corporate sector on external financing.

The equity market in developing countries until the mid-1980sgenerally suffered from the classical defects of bank-dominated

economies, that is, shortage of equity capital, lack of liquidity, absence

of foreign institutional investors, and lack of investor’s confidence in

the stock market. Since 1986, the capital markets of the developing

countries started developing with financial liberalization and the easing

of legislative and administrative barriers and the adoption of tougher

regulations to boost investor’s confidence. With the beginning of

financial liberalization in the developing countries, the flow of private

foreign capital from the developed to developing countries has

increased significantly and such inflow of foreign capital have been

mainly in the form of foreign direct investment and portfolio

investment. The latter type of inflows has mainly been through their

stock markets.

In the history of International Finance, the year 1992- 1993 may be

seen as a watershed year in which emerging markets came into their

own as capital raising mechanisms and became firmly established as adistinct asset class for the word’s investment community with financial

liberalization, the east Asian capital markets like Singapore, Honkong

and Bangkok have developed over time to the extent that they are

presently regarded as international financial centers of Asia.

In the capital markets over the last few years that has made the markets

attractive to foreign institutional investors. This history shows us that

retail investors are yet to play a substantial role in the market as long-

term investors. Retail participation in India is very limited consideringthe overall savings of households. Investors who hold shares in limited

companies and mutual fund units are about 20-30 million. Those who

participated in secondary markets are 2-3 million. Both SEBI and

retail participants should be active in spreading market wisdom and

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empowering investors in planning their finances and understanding the

markets.

PLACE OF STUDY

All the activities of this project are carried out in India Infoline ltd,

Bhubaneswar.

OBJECTIVE OF THE STUDY

In the process of share trading, Technical analysis is the crucial factor,

as it says the time when the securities are to be bought and sold. As

there are several types of investors involved in the market, their

perception varies. So to know the time of buying and selling the

stocks is the main objective of investment in share market. To gain

more knowledge about investment in share market is one of the

objectives of this study.

Following are the objectives

To know different analysis made for trading of stocks.

To evaluate the time of buying and selling of security.

To determine the market prices of the security by the interaction of

supply and demand forces.

To detect the irrespective of why the security occur, shifts in demandand supply with the help of charts, graphs etc of market action.

To calculate the average price of stocks

To know the Support & Resistant level of a security

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Finally to compare different analysis made for transacting a security.

How many people aware of online trading or Demat account.

The risk tolerance of different segment of investor.

Investment pattern with respect of age & sex.

How many people are investing in share market (online/offline).

From which source people are aware about share market.

SCOPE OF STUDY

• The data and information was gathering during 2 month training from

1st June 2010 to 31st July, 2010.

• The scope is limited to secondary data only.

METHODOLOGY

While talking of research methodology we not only talk of research

methodology but also consider the logic behind it. Thus using the

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content of research study and explain why it’s being used while rest

of technique are not.

SELECTION OF FIELD

My target was to make the people invest in share market so I took

judgment sampling. According to my target population and sampling

technique I took samples from different area. By considering research

objective, budget, time, authority, intuition constraint I selected my

research field. I took the following areas as my research field.

Jayadev vihar, Acharya vihar, Nayapalli, CRP square

COLLECTION OF DATA

Depending upon the sources utilized, whether the data has come from

actual observations or come e kept for normal purposes, statistical

data can be classified into two categories:

• Primary Data

• Secondary Data

Sample size: 100

Primary source:

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Data collected by investigator him /herself for the purpose of specific

inquiry or studies are called primary data. Such data are original or

first hand in character. From the source it was collected is known as

primary source for that specific researcher.

Personal Interview:

For the personal interview we prepared a structured questionnaire.

You can watch out our questionnaire in appendix page.

“A questionnaire whether it is called a schedule interview from or

measuring instrument, it is a formalized set of question for obtaining

information from respondents”.

Secondary source: The secondary source refers to the source

from which the data collected are the secondary information means

this information is already collected for some purpose. Such as report

on company’s customer, etc.

LIMITATION

Some people were hesitating to open account through summer

trainees as we were not employee. This is also part of our SIP to open

few Demat Account.

The sample size for was small compared to the population of the main

township for haring a more value but time was not permissible.

Few respondents were reluctant to part with this feeling, truth with

regard to some parameters fearing of any untoward consequences was

one of the obstacles for my project, still then I have tried to put my

best efforts to make it a success in this short span of time.

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CHAPTER-2CHAPTER-2

• Industry profile

• Company profile

INDUSTRY PROFILE

The economic development of any country depends upon the existence

of a well organized financial system. It is the supplies the necessary

financial inputs for the productions of goods and services which in turn

promote the well being and standard of living of the people of a country.

Thus the “financial system” is a broader term which brings under its foldthe financial market and the financial institutions which support the

system. An efficient functioning of a financial system facilitates the free

flow of funds to more productive activities and thus promotes

investment. Thus, the financial system provides the intermediations

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between savers and investors and promotes faster economic

development.

These organized markets can be further classified intotwo.

These are

Capital market

Money market

Capital market

Importance of capital market

Absence of capital market acts as a deterrent factor to capital formation

and economic growth. Resource would remain idle if finances are not

funneled through capital market. The importance of capital market can

be briefly summarized as follows:

It provides an avenue for investors, particularly the household sector:

I- To invest in financial assets which are more than real assets.

II - to facilitate increase in production and productivity in economic and

thus enhances the economic welfare of the society.

Thus, it facilitates the movement of stream of command over capital to

the point of highest yield” towards those can apply them productively

and profitably to enhance the national income aggregate.

The operations of different institution in the capital market induce

economic growth. They give quantitative and qualitative directions to

the flow of funds and about rational allocation of scarce resources.

Indian capital market

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It includes primary, secondary, OTC and derivatives segments. Due to

the consequence of the growing economic and the government’s policy

of liberalization and deregulation, the various segments of capital market

in India have grown at phenomenal rates. The first stock exchange –The

Bombay stock exchange – was established in 1857. Now there are 23

stock exchanges in India. The number of shareholders has increased to

about 30-40 million. There are about 9000 listed companies. Both the

market capitalization and volume of trades have shown general growth,

although they have fluctuated over years.

Stock exchanges in India have well developed procedures for listing,

trading, settlement etc... The recent changes include shortening of the

trading and settlement period, rolling settlement, index- based price

bands, dematerialization of share etc... A number of systems and rules

exist for the regulation of the stock exchanges. The Securities and

Exchange Board of India (SEBI) is the central regulatory authority

regulating capital market in India.

The capital market is a market for financial assets which have a long or

indefinite maturity. Generally, it deals with long term securities which

have a maturity period of above one year.

Capital market may be further divided into three namely:

1. Industrial securities market

2. Government securities market

3. Long term loans market

Industrial Securities Market

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As the name implies, it is a market for industrial securities namely:

Equity Shares or Ordinary Shares, Preference Shares, Debenture or

Bonds.

It is a market where industrial concerns raise capital by issuing

appropriate instruments. It can be further sub divided into two. These

are:

• Primary market or new issue Market,

• Secondary Market or Stock Exchange

Primary market or new issue Market

The industrial securities market of India consists of new issue market and

Stock Exchanges. The new issue markets deals with the new securities

which are not previously available to the investment of public i.e. the

securities that are offered to investment of public first time. The market

therefore, makes available of new block of securities for public

subscription. In other words, new issue market deals with rising of fresh

capital by companies either for cash or for consideration of other thancash.

Primary market is a market for new issue of securities. Hence, it is also

called New issue Market. The primary market deals with those securities

which are issued to the public for the first time. In the primary market,

borrowers exchange new financial securities for long term funds. Thus,

primary market facilitates for Capital Formation.

The new issue market encompasses all institutions dealing in freshclaim. The forms in which these claims created are Equity Shares,

Preference Shares, debenture, right issues,. All financial institutions

which contribute underwrite and directly subscribe to the securities are

part of new issue market.

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There are three ways by which a company may raise capital in a primary

market. They are: Public issue, Rights issue, Private placements

This is called public issue. When an existing company wants to raise

additional capital, securities are first offered to the existing shareholder

on a pre- emptive basis. This is called right issue. Private placement is a

way of selling securities privately to a small group of investors.

Secondary market or Stock Exchange:

A stock market is a place where securities of various types are openlytraded and where one can sell and purchase securities easily. It is an

organized market for purchase and sale of listed industrial and financial

securities. Securities traded in the stock exchanges include shares,

debentures and debt instruments of public limited companies. These

securities are in fact documented evidence of ownership of claim upon

the assets of the issuing company. The securities are also not fixed in

value that is determined at the time of their buying and selling. Hence

enormous capital is rose which is generally required to operate the

industrial and commercial enterprises of the country. Ti provides

opportunity for trading in newly issued securities and facilities

mobilization. It provides ready market and liquidity to the various type of

securities listed. It also ensures efficient allocation of available capital

resources to the users in the economy. It also acts as a barometer that

easily measure and detect the incipient system of an economic boom or

decline well in advance before such an eventuality actually occurs.

Secondary market deals with securities that have been previously issued.Stock exchanges are secondary market where buyers and sellers trade in

already issued securities. A stock exchange provides the following useful

economic functions:

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1. It helps in determining fair price based on demand and supply

forces and all available information’s.

2. It provides easy marketability and liquidity for the investors.

3. It Facilitates allocation in capital allocation in primary market

through price signaling.

4. It Enables investor to adjusting portfolios of securities.

Secondary market is a market for secondary sale of securities. In other

words, securities which have already passed through the new issue marketare traded in the market. Generally, such securities are quoted in the stock

exchanges and it provides a continuous and regular market for buying and

selling of securities, this market consists of all stocks exchanges in India

are regulated under the Securities Contract Act, 1956. The Bombay Stock

Exchange is the principal stock exchange in India which sets the tone of

other stock markets.

BOMBAY

STOCK

EXCHANGE

(BSE)

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The BSE is the

premier or apex

stock exchange inIndia. It is the biggest in size in terms of the amount of fresh capital

raised, secondary market turnover and capitalization and the total

listed companies and their paid-up capital. It is also the oldest market

and has been recognized permanently, while the recognition for other

exchanges is renewed every five years. Its business is no longer

confined to Mumbai alone; at the end of 1997, there were 100 other

cities in which it had set up business. The BSE was established in

1857.

MERITS OF BSE:

Badla system: only BSE has been allowed to have the Badla system.

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NATIONAL STOCK EXCHANGE OF INDIA (NSE)

The NSE has a fully automated, electronics, screen-based trading

system. It is sponsored by the IDBI and co-sponsored by LIC, GIC,

other insurance Companies, commercial banks and other finical

institutions, viz., SBI caps, SHCIL and ILFs. Its objectives are:

To provides nation-wide equal access and fair, efficient,

completely transparent securities trading system to investors by

using suitable communication network.

To provides shorter settlement cycle and entry settlement

system.

To brings the Indian stock market in line with international

markets.

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To promote the Indian secondary market in debt instrument

such as government and corporate bonds.

Merits of NSE

Unconditional counter-party guarantee: the NSE clearing house

guarantees timely settlement of trades executed in its normal market

segment against short and bad deliveries.

Depository: the NSE introduced the first depository system in India

and began to securities in a book-entry from in December 1996. The

system has freed trades from some persistent problems of the Indian

securities market, such as paper work, bad delivery and stump duty.

Options and futures trading:

Professionalism: it has dedicated, trained, technologically – literate

staff with a respective attitude on full – time basis and so today it

caters to a fairly large number of potential investors.

Public relations: It organizes various programs for public relations. It

is well prepared to disseminate information on the exchanges rules

regulations and activities to the public through print and electronic

media.

SECRITY EXCHANGE BOARD OF INDIA (SEBI)

The government has set up the securities & exchange Board of India

(SEBI) in 12th April, 1988. For more than three years, it had no

statutory powers. It is under the SEBI Act to

(i) protect the interest of the investor in securities and

(ii) Promote the development of, and regulate, the securities

market.

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Functions of SEBI

It is the duty of SEBI to protect the interest of investors in securities

into promotes the development of, and to regulate the securities

market, by such measures as it thinks fit.

Prohibiting fraudulent and unfair trade practices relating to the

securities market

Prohibiting insider trading in securities.

Regulating the business in stock exchange(s) and any other securitiesmarket(s).

Registering and regulating the working of stock brokers, sub- brokers,

share transfer agents, bankers to an issue, trustees of trust deeds,

registrars to an issue merchant bankers, underwriters, portfolio

managers, investor advisor, and such other intermediaries who may be

associated with the securities market.

Registering and regulating the working of ventures capital andcollective investment schemes include Mutual funds.

Promoting and regulating self-regulatory organizations.

Promoting investor’s education and training of intermediaries of the

securities marked.

Conducting research for the above purpose.

Regulating substantial acquisition of shares and takeover of companies.

Calling for information and record form, undertaking inspection,

conducting inquiries and audits, stock exchanges, mutual funds and

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other persons associated with the securities market intermediaries and

self-regulatory organizations in the securities market.

Performing such functions and exercises such powers under the provisions of the Securities Contract Act, as may be delegated to it by

the Central Government.

COMPANY PROFILE

COMPANY HISTORYCOMPANY HISTORY

We were originally incorporated on October 18, 1995 as ProbityResearch and Services Private Limited at Mumbai under the Companies

Act, 1956 with Registration No. 11 93797. We commenced our

operations as an independent provider of information, analysis and

research covering Indian businesses, financial markets and economy, to

institutional Customers. We became a public limited company on April

28, 2000 and the name of the Company was changed to Probity

Research and Services Limited. The name of the Company was changed

to India Infoline.com Limited on May 23, 2000 and later to India

Infoline Limited on March23, 2001. In 1999, we identified the potential

of the Internet to cater to a mass retail segment and transformed our

business model from providing information services to institutional

customers to retail customers. Hence we launched our Internet portal,

www.indiainfoline.com in May1999 and started providing news and

market information, independent research, interviews with business

leaders and other specialized features.

In May 2000, the name of our Company was changed to

IndiaInfoline.com Limited to reflect the transformation of our business.

Over a period of time, we have emerged as one of the leading businessand financial information services provider in India. In the year 2000,

we leveraged our position as a provider of financial information and

analysis by diversifying into transactional services, primarily for online

trading in shares and securities and online as well as offline distribution

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of personal financial products, like mutual funds and RBI Bonds. These

activities were carried on by our wholly owned subsidiaries.

Our broking services was launched under the brand name of 5paisa.comthrough our subsidiary, India Infoline Securities Private Limited and

www.5paisa.com, the e-broking portal, was launched for online trading

in July 2000. It combined competitive brokerage rates and research,

supported by Internet technology besides investment advice from an

experienced team of research analysts, we also offer real time stock

quotes, market news and price charts with multiple tools for technical

analysis.

Acquisition of Agri Marketing Services Limited (Agri) In March 2000,

we acquired 100% of the equity shares of Agri Marketing Services

Limited, from their owners in exchange for the issuance of 508,482 of

our equity shares. Agri was a direct selling agent of personal financial

products including mutual funds, fixed deposits, corporate bonds and

post-office instruments. At the time of our acquisition, Agri operated 32

branches in South and West India serving more than 30,000 customers

with a staff of, approximately 180 employees. After the acquisition, we

changed the company name to India Infoline.com Distribution Company

Limited.

KEY MILESTONE OF COMPANY-

• Incorporated on Oct 18, 1995 as Probity Research and Services.

• Lunched internet portal www.indiainfoline.com in may 1999.

• Commenced distribution of personal financial product like Mutual

Fund and RBI Bonds in April 2000.

•

Lunched online trading in shares and securities branded aswww.5paisa.com in July 2000.

• Started life insurance agency business in December 2000 as corporate

agent of ICICI prudential life insurance.

http://www.indiainfoline.com/

http://www.5paisa.com/

http://www.indiainfoline.com/

http://www.5paisa.com/

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• Become a depository participant of NSDL, in Sept 2001.

• Lunched stocks messaging services in May 2003.

• Acquired commodities broking license in March 2004.

• Lunched portfolio management services in August 2004.

• Listed on NSE and BSE on May 17, 2005.

• Acquired NBFC license in May 2005.

• Acquired 75% stake holding in money tree consultancy services,

which is a distribution of mortgagees and other loan products, in Oct2005.

• Acquired 100% equity of March Mont capital adviser Pvt. Ltd. In Dec

2005, through which the company has venture into Merchant

Banking.

• DSP Merrill Lynch Capital subscribe to convertible bonds

aggregating Rs.80 crores in Dec2005.

• Become a depositary participant of CDSL. In June 2007.

• Enter into an alliance with Bank of Baroda for E-trading in Feb 2007.

• IRDA license for insurance broking in April 2007.

• CLSA institutional equities joined us 2007.

• Formed Singapore subsidiary IIFL(Asia) Pvt. Ltd. In 2007.

• Mr. Arun Kumar Purvar joined as independent director in March2008.

MANAGEMENT TEAM-

• Mr. Nirmal Jain ( Chairman & MD)

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• Mr. R. Venkataraman ( Executive Director)

• Mr. Sat Pal Khattar (Non Executive Director)

• Mr. Nilesh Vikamsey (Independent Director)

Mr. Nirmal Jain

Chairman & Managing Director

India Infoline Ltd.

Nirmal Jain, MBA (IIM, Ahmadabad) and a Chartered and Cost

Accountant, founded India’s leading financial services company India

Infoline Ltd. in 1995, providing globally acclaimed financial services in

equities and commodities broking, life insurance and mutual funds

distribution, among others. Mr. Jain began his career in 1989 with

Hindustan Lever’s commodity export business, contributing tremendously

to its growth. He was also associated with Inquire-Indian EquityResearch, which he co-founded in 1994 to set new standards in equity

research in India.

Mr. R Venkataraman

Executive Director

India Infoline Ltd.

R Venkataraman, co-promoter and Executive Director of India Infoline

Ltd., is a B. Tech (Electronics and Electrical Communications

Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the

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India Infoline board in July 1999. He previously held senior managerial

positions in ICICI Limited, including ICICI Securities Limited, their

investment banking joint venture with J P Morgan of USA and with BZW

and Taib Capital Corporation Limited. He was also Assistant VicePresident with G E Capital Services India Limited in their private equity

division, possessing a varied experience of more than 16 years in the

financial services sector.

The Board of Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of

India Infoline Ltd. comprises:

Mr. Nilesh Vikamsey

Independent Director

India Infoline Ltd.

Mr. Vikamsey, Board member since February 2005 - a practisingChartered Accountant and partner (Khimji Kunverji & Co., Chartered

Accountants), a member firm of HLB International, headed the audit

department till 1990 and thereafter also handles financial services,

consultancy, investigations, mergers and acquisitions, valuations etc; an

ICAI study group member for Proposed Accounting Standard — 30 on

Financial Instruments — Recognition and Management, Finance

Committee of The Chamber of Tax Consultants (CTC), Law Review,

Reforms and Rationalization Committee and Infotainment and Media

Committee of Indian Merchants’ Chamber (IMC) and Insurance

Committee and Legal Affairs Committee of Bombay Chamber of Commerce and Industry (BCCI).

Mr. Vikamsey is a director of Miloni Consultants Private Limited, HLB

Technologies (Mumbai) Private Limited and Chairman of HLB India.

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Mr. Sat Pal Khattar

Non Executive Director

India Infoline Ltd.

Mr. Sat Pal Khattar, - Board member since April 2001 - Presidential

Council of Minority Rights member, Chairman of the Board of Trustee of

Singapore Business Federation, is also a life trustee of SINDA, a

nonprofit body, helping the under-privileged Indians in Singapore. He

joined the India Infoline board in April 2001. Mr. Khattar is a Director of

public and private companies in Singapore, India and Hong Kong;

Chairman of Guocoland Limited listed in Singapore and its parent Guoco

Group Ltd listed in Hong Kong, a leading property company of

Singapore, China and Malaysia. A Board member of India Infoline Ltd,

Gateway Distriparks Ltd — both listed — and a number of other

companies he is also the Chairman of the Khattar Holding Group of

Companies with investments in Singapore, India, UK and across the

world.

Mr Kranti Sinha


India Infoline Ltd.

Mr. Kranti Sinha — Board member since January 2005 — completed his

masters from the Agra University and started his career as a Class I

officer with Life Insurance Corporation of India. He served as the

Director and Chief Executive of LIC Housing Finance Limited from

August 1998 to December 2002 and concurrently as the Managing

Director of LICHFL Care Homes (a wholly owned subsidiary of LIC

Housing Finance Limited). He retired from the permanent cadre of the

Executive Director of LIC; served as the Deputy President of the

Governing Council of Insurance Institute of India and as a member of the

Governing Council of National Insurance Academy, Pune apart from

various other such bodies. Mr. Sinha is also on the Board of Directors of

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Hindustan Motors Limited, Larsen & Toubro Limited, LICHFL Care

Homes Limited, Gremach Infrastructure Equipments and Projects Limited

and Cinemax (India) Limited.

Mr. Arun K. Purvar


India Infoline Ltd.

Mr. A.K. Purvar – Board member since March 2008 – completed his

Masters degree in commerce from Allahabad University in 1966 and a

diploma in Business Administration in 1967. Mr. Purwar joined the State

Bank of India as a probationary officer in 1968, where he held several

important and critical positions in retail, corporate and international

banking, covering almost the entire range of commercial banking

operations in his illustrious career. He also played a key role in co-

coordinating the work for the Bank's entry into the field of insurance.

After retiring from the Bank at end May 2006, Mr. Purwar is now

working as Member of Board of Governors of IIM-Lucknow, joined IIM–

Indore as a visiting professor, joined as a Hon.-Professor in NMIMS and

he is also a member of Advisory Board for Institute of Indian Economic

Studies (IIES), Waseda University, Tokyo, Japan. He has now taken over as Chairman of India Venture Advisors Pvt. Ltd., as well as IL & FS

Renewable Energy Limited. He is also working as Independent Director

in leading companies in Telecom, Steel, Textiles, Auto parts, Engineering

and Consultancy.

VISON OF INDIAINFOLINE

Vision of India infoline to be the most respect financial services company inIndia

CULTURE AND CORE VALUE

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Owner Mindset is one of the key principles that drive life at Indiainfoline.

Every member of tem India infoline behaves thinks and act as owner not an

employee.

COMPANY BUSINESS MODEL

Business description - Advisory and execution services for the entire gamut

of India infoline of financial services.

Core competencies- Advisory services powered by world class research.Execution backed by cutting edge technology and personalizes services.

Services offering-

• Equity broking

• Commodity broking

• Mutual Fund distribution

• Mortgages distribution

• Other debt product

• Portfolio management service

• Research and content services

• Life insurance agency

• Investment banking services

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(Corporate structure of IIFL)

CORPORATE STRUCTURE-

The various subsides company under the umbrella of indiainfoline group

are given below.

• Indiainfoline investment service Ltd.(NBFC for financing )

• Indiainfoline commodities Ltd.(commodities broking)

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• IIFL(ASIA) Pet Ltd. (new company for international operation)

• Indiainfoline Media and research.(equity research, portal and online

media)

• Indiainfoline marketing services Ltd.(Insurance distribution)

• Indiainfoline insurance broker Ltd.

• Indiainfoline insurance service Ltd.(corporate agency)

• Indiainfoline distribution Co ltd.

•Indiainfoline housing financing Ltd.

• Money line credit Ltd.

India Infoline Limited is listed on both the leading stock exchanges in India,

viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange

(NSE) and is also a member of both the exchanges. It is engaged in the

businesses of Equities broking, Wealth Advisory Services and Portfolio

Management Services. It offers broking services in the Cash and Derivatives

segments of the NSE as well as the Cash segment of the BSE. It is registered

with NSDL as well as CDSL as a depository participant, providing a one-

stop solution for clients trading in the equities market. It has recently

launched its Investment banking and Institutional Broking business.

A SEBI authorized Portfolio Manager; it offers Portfolio Management

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Services to clients. These services are offered to clients as different schemes,

which are based on differing investment strategies made to reflect the varied

risk-return preferences of clients.

India Infoline Media and Research Services Limited.

The content services represent a strong support that drives the broking,

commodities, mutual fund and portfolio management services businesses.

Revenue generation is through the sale of content to financial and media

houses, Indian as well as global.

It undertakes equities research which is acknowledged by none other than

Forbes as 'Best of the Web' and '…a must read for investors in Asia'. IndiaInfoline's research is available not just over the internet but also on

international wire services like Bloomberg (Code: IILL), Thomson First Call

and Internet Securities where India Infoline is amongst the most read Indian

brokers.

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India Infoline Commodities Limited.

India Infoline Commodities Pvt. Limited is engaged in the business of

commodities broking. Our experience in securities broking empowered uswith the requisite skills and technologies to allow us offer commodities

broking as a contra-cyclical alternative to equities broking. We enjoy

memberships with the MCX and NCDEX, two leading Indian commodities

exchanges, and recently acquired membership of DGCX. We have a multi-

channel delivery model, making it among the select few to offer online as

well as offline trading facilities.

India Infoline Marketing & Services

India Infoline Marketing and Services Limited is the holding company of

India Infoline Insurance Services Limited and India Infoline Insurance

Brokers Limited.

(a) India Infoline Insurance Services Limited is a registered Corporate Agent

with the Insurance Regulatory and Development Authority (IRDA). It is the

largest Corporate Agent for ICICI Prudential Life Insurance Co Limited,

which is India's largest private Life Insurance Company. India Infoline wasthe first corporate agent to get licensed by IRDA in early 2001.

(b) India Infoline Insurance Brokers Limited is a newly formed subsidiary

which will carry out the business of Insurance broking. We have applied to

IRDA for the insurance broking license and the clearance for the same is

awaited. Post the grant of license, we propose to also commence the general

insurance distribution business.

India Infoline Investment Services Limited

Consolidated shareholdings of all the subsidiary companies engaged in loans

and financing activities under one subsidiary. Recently, Orient Global, a

Singapore-based investment institution invested USD 76.7 million for a

22.5% stake in India Infoline Investment Services. This will help focused

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expansion and capital raising in the said subsidiaries for various lending

businesses like loans against securities, SME financing, distribution of retail

loan products, consumer finance business and housing finance business.

India Infoline Investment Services Private Limited consists of the followingstep-down subsidiaries.

(a) India Infoline Distribution Company Limited (distribution of retail loan

products)

(b) Money line Credit Limited (consumer finance)

(c) India Infoline Housing Finance Limited (housing finance)

IIFL (Asia) Pvt. Limited

IIFL (Asia) Pvt. Limited is wholly owned subsidiary which has been

incorporated in Singapore to pursue financial sector activities in other Asian

markets. Further to obtaining the necessary regulatory approvals, the

company has been initially capitalized at 1 million Singapore dollars.

Company’s philosophy on Corporate Governance

The India Infoline Group is committed to placing the Investor First, by

continuously striving to increase the efficiency of the operations as well as

the systems and processes for use of corporate resources in such a way so as

to maximize the value to the stakeholders. The Group aims at achieving not

only the highest possible standards of legal and regulatory compliances, but

also of effective management.

Committee :

Audit Committee

Terms of reference & Composition, Name of members and Chairman: The

Audit committee comprises Mr. Nilesh Vikamsey, Chairman of the

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Committee, Mr. Sat Pal Khattar, Mr. Sanjiv Ahuja and Mr. Kranti Sinha,

three of whom are independent Directors. The Managing Director, the

Executive Director along with the Statutory and Internal Auditors areinvitees to the Meeting. The Terms of reference of this committee are as

under: - To investigate into any matter that may be prescribed under the

provisions of Section 292A of The Companies Act, 1956 - Recommendation

and removal of External Auditor and fixation of the Audit Fees. - Reviewing

with the management the financial statements before submission of the same

to the Board. - Overseeing of Company’s financial reporting process and

disclosure of its financial information. - Reviewing the Adequacy of the

Internal Audit Function.

Compensation/ Remuneration Committee

Terms of reference & Composition, Name of members and Chairman: The

Compensation / Remuneration Committee comprise Mr. Sanjiv Ahuja,

Chairman of the Committee, Mr. Nilesh Vikamsey and Mr. Kranti Sinha, all

of whom are independent Directors. The Terms of reference of this

committee are as under: - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors, Senior Employees and

officers i.e. Salary, perquisites, bonuses, stock options, pensions etc. -

Determination of the fixed component and performance linked incentives

along with the performance criteria to all employees of the company -

Service Contracts, Notice Period, Severance Fees of Directors and

employees. - Stock Option details: whether to be issued at discount as well

as the period over which to be accrued and over which exercisable. - To

conduct discussions with the HR department and form suitable remuneration

policies.

Share Transfer and Investor Grievance Committee

Details of the Members, Compliance Officer, No of Complaints receivedand pending and pending transfers as on close of the financial year. The

committee functions under the Chairmanship of Mr. Kranti Sinha, a Non-

executive independent Director. The other Members of the committee are

Mr. Sanjiv Ahuja, Independent Director and Mr. R Venkataraman,

Executive Director. Ms Komal Parikh, Company Secretary is the

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Compliance Officer of the Company.

CHAPTER-3CHAPTER-3

Review of literatureReview of literature

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Investment

Different investment option

Equity investment

Different analysis

Role of market trends

Role of demat account

INVESTMENT

Investment is the employment of funds on assets with the aim

of earning income or capital appreciation. Investment has two

attributes namely time and risk. Present consumption is sacrificed to

get a return in the future.

The sacrifice that has to be borne is certain but the return in the future

may be uncertain. The risk is undertaken with a view to reap some

return from the investment.

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To the economist, investment is the net addition made to the nation’s

capital stock that consists of goods and services that are used in the

production process. A net addition to the capital stock means an

increase in the buildings, equipment or inventories.

These capital stocks are used to produce other goods and

services.

Financial investment is the allocation of money to assets that are

expected to yield some gain over a period of time. It is an exchange of

financial claim such as stock and bonds for money. They are expected

to yield returns and experience capital growth over the years.

INVESTMENT OBJECTIVEThe main investment objective are increasing the ray of return and

reducing the risk. Other objectives like Safety, Liquidity and hedge

against inflation can be considered as subsidiary objectives. These

objectives are of two types

• Primary objectives

• Secondary objectives

PRIMARY OBJECTIVES:

(i) RETURN:

Investors always expect a good rate of return from their investments.Rate of return could define as the total income the investors receives

during the holding period stated as a percentage of the purchasing

price at the beginning of the holding period.

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Return = End period value – Beginning period value +

Dividend x 100

Beginning period value

(ii) RISK:

Risk is holding securities are related with the probability of actual

return becoming less than the expected return. The word risk is

synonymous with the phase variability of return. Risk is important

part in investment because high risk expected high profit and low risk

show minimum profit but it is depending on time to time. So every

investor likes to reduce the risk of his investment by proper

combination of different securities.

(iii) LIQUIDITY:

Marketability of the investment provides liquidity to the investment.

The liquidity depends upon the marketing and trading facility. If a

portion of the investment could be converted into cash without much

loss of time, it would help the investor meet the emergencies. Stocks

are liquid only if they command good market by proving adequate

return through dividends and capital appreciation.

HEDGE AGAINST INFLATION:

Since there is inflation in almost all the economic, the rate of return

should ensure a cover against inflation. The return rate should be

higher than the rate of inflation; otherwise the investor will have loss

in real terms. Growth stock would appreciate in their values overtime

and provide a protection against inflation. The return thus earned

should assure the safety of the principal amount, regular flow of income be a hedge against inflation.

(iv) SAFETY:

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The selected investment avenue should be under the legal and

regulatory frame work. If it is not under the legal frame work, it is

difficult to represent the grievances, if any. Approval of the law itself

adds a flavor of safety. Even through approved by law, the principal

differs from one mode of investment to another.

(v) GROWTH OF CAPITALS:

Capital gains are entirely different from return in that they are only

realized when the security is sold for a price that is higher than the

price at which it was originally purchased. Selling at a lower price is

referred to as a capital loss. Therefore, investors seeking capital gains

are likely not those who need a fixed, ongoing source of investmentreturns from their portfolio, but rather those who seek the possibility

of longer-term growth.

Growth of capital is most closely associated with the purchase of

common stock , particularly growth securities, which offer low yields

but considerable opportunity for increase in value.

Capital gains offer potential tax advantages by virtue of their lower

tax rate in most jurisdictions. Funds that are garnered through

common stock offerings, for example, are often geared toward the

growth plans of small companies, a process that is extremely

important for the growth of the overall economy. In order to

encourage investments in these areas, governments choose to tax

capital gains at a lower rate than income. Such systems serve to

encourage entrepreneurship and the founding of new businesses that

help the economy grow.

SECONDARY OBJECTIVES:

http://www.investopedia.com/terms/c/commonstock.asp

http://www.investopedia.com/terms/c/commonstock.asp

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(i)TAX MINIMISATION

An investor may pursue certain investments in order to adopt tax

minimization as part of his or her investment strategy. For example ahighly-paid executive may want to seek investments with favorable tax

treatment in order to reduce his or her overall income tax burden by

Making contributions to an individual retirement account (IRA) or other

tax-sheltered retirement plan.

(ii)HEDGE AGAINST INFLATION:

Since there is inflation in almost all the economic, the rate of return

should ensure a cover against inflation. The return rate should be higher than the rate of inflation; otherwise the investor will have loss in real

terms. Growth stock would appreciate in their values overtime and

provide a protection against inflation. The return thus earned should

assure the safety of the principal amount, regular flow of income be a

hedge against inflation.

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very low liquidity

(15-year lock-in

period. Partial

withdrawal

allowed after 6

years).

Also Sec 80C

benefit. Hence a

good scheme.

investment option.

Good for investing the

debt portion of one’s

portfolio.

NSC Low risk with low

liquidity (6 years

lock-in).

8% assured returns. Interest fully

taxable. But

eligible for Sec

80C benefit.

Not very attractive

vis-à-vis other

options like 5-year

Bank FDs.

Equity High risk and high

liquidity.

Market linked

returns. Good

potential.

Attractive tax

treatment. No

Long Term

Capital Gain Tax

and 10% Short

Term Capital

Gains Tax.

Needs high risk

appetite.

Ideal for those

investors who have a

good corpus, good

knowledge and time

to track the markets

regularly. Care should

be taken to invest in

good profit making

companies. Penny

stocks should be

avoided.

Equity Funds High risk and high

liquidity in open-

ended funds.

Market linked

returns. Good

potential.

Attractive tax

treatment. No

Long Term

Capital Gain Tax

and 10% Short

Term Capital

Gains Tax.

Ideal for small and

common investors,

but with high risk

appetite.well-

diversified portfolio

with say 50-60%

money in 5-7

diversified funds, 25-

35% money in 3-4

mid/small-cap fundsand 10-15% in 3-4

sector funds.

ELSS Funds High risk with low

liquidity (3 years

lock-in period).

Market linked

returns. Good

potential.

Attractive tax

treatment. No

Long Term

Good tax saving

investment option.

Amounts beyond Rs.1

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Equity investment means the engagement of savings in the stock of a

company for the purpose of earning income such as dividend, capital

appreciation, etc.

SHARES:

The capital of the company divided into different units with definite

and equal value called shares. Holders of these shares called

shareholders. There are two types of shares which a company may

issue.

(i) Preference Shares (ii) Equity Shares

PREFERENCE SHARES:

Shares which enjoy the preferential rights as to dividend and

repayment of capital in the event of winding up of the company over

the equity shares are called preference shares. The holder of

preference shares will get a fixed rate of dividend. Preference share

are classified into different types, these are:

1. Cumulative preference shares: Cumulative preference shares

will accumulate any dividend that is not paid when due. Anyunpaid dividend is added to the amount payable the following

year and no dividends can be paid on ordinary shares until the

entire backlog of unpaid dividends on cumulative preference is

cleared.

2. Non-cumulative preference shares: Non-Cumulative

Preferred is preferred stock that no pay to the holder of any

unpaid or omitted dividends. If the corporation chooses no pay

dividends in a given year, the investor is to claim any of thoseforgone dividends in the future is lost.

3. Redeemable preference share: Type of stock (shares) that is

liable to be bought back by the issuing firm on a specified date

or after a specified period of notice. Corporate legislation in

http://moneyterms.co.uk/preference-shares/

http://www.teenanalyst.com/glossary/c/commonstock.html

http://www.businessdictionary.com/definition/stock.html

http://www.businessdictionary.com/definition/share.html

http://www.businessdictionary.com/definition/liable.html

http://www.businessdictionary.com/definition/bought.html

http://www.investorwords.com/1967/firm.html

http://www.investorwords.com/3669/period.html

http://www.businessdictionary.com/definition/notice.html

http://www.businessdictionary.com/definition/corporate-legislation.html

http://moneyterms.co.uk/preference-shares/

http://www.teenanalyst.com/glossary/c/commonstock.html

http://www.businessdictionary.com/definition/stock.html

http://www.businessdictionary.com/definition/share.html

http://www.businessdictionary.com/definition/liable.html

http://www.businessdictionary.com/definition/bought.html

http://www.investorwords.com/1967/firm.html

http://www.investorwords.com/3669/period.html

http://www.businessdictionary.com/definition/notice.html

http://www.businessdictionary.com/definition/corporate-legislation.html

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some jurisdictions prohibits the redemption if it jeopardizes the

financial health of the issuer .

4. Participating or non-participating preference shares:

Participating preference share is capital stock which provides aspecific dividend that is paid before any dividends are paid to

common stock holders, and which takes precedence over

common stock in the event of a liquidation. This form of

financing is used by private equity investors and venture capital

firms. Holders of participating preferred stock get both their

money back (with interest) and the money that is distributable

with respect to the percentage of common shares into which

their preferred stock can convert.

EQUITY SHARES:

Equity shareholders will get dividend and repayment of capital after

meeting the claims of preference share holders. There will be no

fixed rate of dividend to be paid to the equity shareholders and this

rate may vary from year to year. This rate of dividend is determined

by the directors and in case of large profits; it may even be more than

the rate attached to preference share. Such shareholders may go

without any dividend if no profit is made. Equity shares are most risk

bearing securities because holders of these shares will get repayment

of capital after meeting the claims of preference share holders,

debenture holders and other creditors. The value of these shares in

the market fluctuates upward or downward with the fortunes of the

company. Equity share holders enjoy voting right in case of any

decisions in the company.

SHARE MARKET:

http://www.businessdictionary.com/definition/jurisdiction.html

http://www.businessdictionary.com/definition/prohibit.html

http://www.businessdictionary.com/definition/redemption.html

http://www.investorwords.com/6812/financial_health.html

http://www.businessdictionary.com/definition/issuer.html

http://en.wikipedia.org/wiki/Stock

http://en.wikipedia.org/wiki/Dividend

http://en.wikipedia.org/wiki/Dividends

http://en.wikipedia.org/wiki/Common_stock


http://en.wikipedia.org/wiki/Financing

http://en.wikipedia.org/wiki/Private_equity

http://en.wikipedia.org/wiki/Venture_capital

http://www.businessdictionary.com/definition/jurisdiction.html

http://www.businessdictionary.com/definition/prohibit.html

http://www.businessdictionary.com/definition/redemption.html

http://www.investorwords.com/6812/financial_health.html

http://www.businessdictionary.com/definition/issuer.html

http://en.wikipedia.org/wiki/Stock

http://en.wikipedia.org/wiki/Dividend

http://en.wikipedia.org/wiki/Dividends



http://en.wikipedia.org/wiki/Financing

http://en.wikipedia.org/wiki/Private_equity

http://en.wikipedia.org/wiki/Venture_capital

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Share market is a place where shares are issued or purchased or sold.

These shares may be new issue or existing shares. There are two

types of share markets:

(i) Primary Market (ii) Secondary Market

Primary Market:

This is the market where fresh issues of shares are made.

Secondary Market:

In this market existing shares are traded. BSE and NSE are two

major secondary markets in India. Apart these two exchanges there

are twenty one exchanges in India.

SHARE MARKET PARTICIPANT:

There are two basic market participants these are:

(i) Investor vs. Speculator

(ii) Institutional vs. Retail Investor

Investor: An investor may be people or company who make

investment in securities with an objective to get return in long term.

Speculator: They involve in buying, holding, selling and short

selling of securities. All above these happen due to fluctuation in the

price of securities.

Institutional Investor: An institutional investor is investors such as

bank, insurance company, retirement fund, hedge fund or mutualfund that is financially sophisticated and makes large investment,

often held in very large portfolio management.

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Equity through derivatives:

Derivatives are a financial instrument which value is derived from

underlying assets (commodities, shares, forex and other assets).Derivative is three types forward contract, future contract, option.

Forward contracts:

These are used in the foreign exchanges markets to reduce currency

risk and in the commodities market to reduce the price risk.

Future contract:

Derivative contract wherein you agree to buy or sell a specifiedquantity of the underlying assets on a specified particular date in the

future, at he price agreed upon at the time of entering into contract. In

India equities future market, this price is the spot price (the price of

the underlying assets in the cash market) prevailing on the date of the

expiry of contract. Futures are legally binding and both parties are

bound to uphold the agreement.

Option:

This is a contract that gives you the right (but not the obligation or the

liability) to buy or sell a specified quantity of the underlying assets at

an agreed price (strike/agreed price) on or before the before the

specified future date (expiration date). To acquire this right, you pay a

price (option premium) to the seller of the option “option writer”. The

potential loss for the option seller is unlimited whiles his upside or

profit is limited to the premium that he receives. On the other hand

the maximum loss that the buyer could face is the option premium

that he pays, put his potential profit is unlimited.

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DIFFERENT ANALYSIS FOR EQUITY INVESTMENT:

There are different analysis are made by the investor for investment

in equity. These are

(i) Fundamental analysis

(ii) Technical analysis

Fundamental analysis:

Fundamental analysis is really a logical and systematic approach to

estimating the future share price. It is based on the premises that

share price are determined by a number of fundamental factorsrelating to the economy, industry, and company fundamentals.

Fundamental analysis is, in other words a detailed

analysis of the fundamental factors affecting the performance of the

company as well its share price.

Generally each share is assumed to be having an economic worth

based on its presents and future earning capacity, this is called

intrinsic value or fundamental value. The purpose of fundamental

analysis is to compare intrinsic value of share with the prevailing

market price of the share. The market price of the share is due to the

supply and demand of the share in the market. This helps to the

investor to make an investment decision.

The market price of the share is always trying to match with its

intrinsic price so that if the market price of the share is higher than its

intrinsic price then the investor should sell the share because the

share price will go down to match with its intrinsic price .if themarket price of the share is lower than the intrinsic price than the

investor should bought the share because the share price will go up to

match up with its intrinsic price.

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policy etc these factor affecting those companies which belongs to an

specific industry.

(iii) Company specific factor: such as the age of its plant, thequality of management, brand image of its products, its labour

management relationship, etc. These are the actors which affect the

performance of the company.

Technical analysis:

A technical analyst in technical analysis believes that the

share prices are determined by the demand and supply forces

operating in the market. These forces again influenced by a number of fundamental factors as well as the emotional factors of the

investors. The combined impact of all these factors is reflected in the

share price movement. The technical analysis includes the past share

prices to forecast the future share price. So that technical analysis is

the forecasting technique to determine the future price of the stock by

taking historical price of the stock.

Basic principle of technical analysis:

(i) The market price of the share price is related to supply and

demand forces operating in the market.

(ii) Security prices movement are continuous in a particular

direction for some length of time.

(iii) Trends in stock price shows when there is a shift in demand and

supply factors.

(iv) The shifts in demand and supply forces can be detected throughcharts prepared specially to show market action.

(v) These charts can show the resistance and support level of the

stock price.

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So during the bullish trend the investors are investing their money to

gain profit from the up word movement of share price.

(ii) Bearish trend: bearish trend is the opposite of the bullish

trend here prices began to fall due to the lost of hope on

company and investor sell their shares in first phase and in the

second phase the fall in distributing dividend and causes

further fall in share price

So during the bearish trend the investors are selling their security to

avoid the loss of capitals.

Bullish trend

Y

X0

Phase 1

Phase 2

Phase 3

XBearish trend

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Support and resistance level of share price:

Support and resistance level are those price levels at which the down

trend and up trend in share price movements is reversed. Support

occurs when price is falling but bounce back or reverse direction

every time it reaches a particular level. When all these low points are

connected through a straight line it forms the support level. Support

level is the price level at which sufficient buying pressure is exerted t

defend the fall in price

Resistance occurs when the share price moves up word. The price

fall back every time it reaches a particular price level. A straight line

joining this price level forms the resistance level. Resistance level is

the price level at which sufficient selling pressure is exerted to

restrict the share price to move up word.

Y

RESISTANCE

SUPPORT

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ROLE OF “DEMAT ACCOUNT”IN SHARE MARKET

Demat Services:

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 posses a Permanent Account

Number (PAN).

Demat account allows you to buy, sell and transact shares without the

endless paperwork and delays. It is also safe, secure and convenient.

What is demat account?

Demat refers to a dematerialized account.

Just as you have to open an account with a bank if you want to save

your money, make cheque payments etc, you need to open a demat

account if you want to buy or sell stocks. So it is just like a bank

account where actual money is replaced by shares. You have to

approach the DPs (remember, they are like bank branches), to openyour demat account.

Let’s say your portfolio has 100 of Satyam, 200 of IBM and 120 of

TCS shares. All these will show in your demat account. So you don’t

X0

Support and resistance

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have to possess any physical certificates showing that you own these

shares. They are all held electronically in your account. As you buy

and sell the shares, they are adjusted in your account. Just like a bank

passbook or statement, the DP will provide you with periodic

statements of holdings and transactions.

Is a demat account a must?

Nowadays, 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. Now a days

demat account provides you the facility of 3 linked accounts which

are opened simultaneously.

The linked account offers 24x7 investing, security,

no paper work, easy transfer of funds, instant order confirmations,

speed and transparency.

NOW to the crux:

The cost of opening and holding a demat account. There are four

major charges usually levied on a demat account: Account opening

fee, annual maintenance fee, custodian fee and transaction fee. All

the charges vary from DP to DP.

Account-opening fee

LINKED A/CTRADING DEMAT

SAVING

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Depending on the DP, there may or may not be an opening account

fee. Private Banks, such as ICICI Bank, HDFC Bank and UTI Bank,

do not have one. However, players such as Karvy Consultants and

the State Bank of India do so. But most players levy this when youre-open a demat account, though the Stock Holding Corporation

offers a lifetime account opening fee, which allows you to hold on to

your demat account over a long period.

Maintenance fee

This is also known as folio maintenance charges, and is generally

levied in advance.

Custodian fee

This fee is charged monthly and depends on the number of securities

(international securities identification numbers — ISIN) held in the

account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per

month. DPs will not charge custody fee for ISIN on which the

companies have paid one-time custody charges to the depository.

Transaction fee

The transaction fee is charged for crediting/debiting securities to andfrom the account on a monthly basis. While some DPs, such as SBI,

charge a flat fee per transaction, HDFC Bank and ICICI Bank pegs

the fee to the transaction value, subject to a minimum amount. The

fee also differs based on the kind of transaction (buying or selling).

Some DPs charge only for debiting the securities while others charge

for both. The DPs also charge if your instruction to buy/sell fails or is

rejected. In addition, service tax is also charged by the DPs.

Benefits of holding a demat account:

i. A safe and convenient way to hold securities;

ii. Immediate transfer of securities;

iii. No stamp duty on transfer of securities;

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iv. Elimination of risks associated with physical certificates such

as bad delivery, fake securities, delays, thefts etc.;

v. Reduction in paperwork involved in transfer of securities; the

guidelines, the amount of interest so taken to income should bereversed or should be provided for in full.

• With a view to ensuring uniformity in accounting the accrued interest

in respect of both performing and non-performing assets, the

following guidelines may be adopted notwithstanding the existing

provisions in the respective state co-operative Act:

i. Interest accrued in respect of non-performing advances should not be

debited to borrowed accounts but shown separately under interest

receivable account on ‘property and asset’ side of the balance sheetsand corresponding amount showed ‘under overdue interest reserve

account’ on the ‘capital and liabilities’ side of the balance sheet.

ii. In the respect of borrowed accounts, which are treated as performing

assets, accrued interest can be alternatively debited to the borrowable

account and credited to interest account and taken to income account.

In such case where the accrued interest has been to such borrowable

account but not actually received before the end of the accounting

year or the account has to be treated as NPA earlier as per guidelines,

equivalent amount corresponding to such un realized interest should

be reversed by debit to be profit and loss account and credited to

‘Overdue Interest reserve’ account.

• In the above context, it may be clarified that overdue interest reserve

is not created out of the real or earned income received by the bank

and as such, the amounts held in the overdue interest reserve account

cannot be regarded as ‘reserve’ or a part of the owned funds of the

banks. It will also be observed that the balance sheet format

prescribed under the Third Schedule to the Banking Regulation Act ,

1949(As applicable to co-operative societies) specifically requires the

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banks to show ‘overdue interest reserve’ as a distinct item on the

‘capital and liabilities’ side vide item 8 thereof.

CHAPTER -4

• Data analysis and interpretation

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Stock prices movements of Jindal Steel and Power Limited. From 21st

June to 21st July.

Date Open High Low Closing

21/06/2010 674 689 673 685

22/06/2010 675 677 667 671

23/06/2010 668 671 657 66124/06/2010 664 668 650 657

25/06/2010 650 657 639 641

28/06/2010 641 647 631 637

29/06/2010 637 636 615 621

30/06/2010 622 626 610 624

01/07/2010 612 621 610 613

02/07/2010 614 621 611 615

05/07/2010 615 618 611 616

06/07/2010 614 632 614 630

07/07/2010 634 634 622 624

08/07/2010 631 632 619 621

09/07/2010 626 635 625 631

12/07/2010 634 639 623 625

13/07/2010 627 635 622 633

14/07/2010 636 641 627 629

15/07/2010 630 633 625 629

16/07/2010 631 632 623 624

19/07/2010 621 629 614 624

20/07/2010 629 629 617 619

21/07/2010 620 638 621 633

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Stock price movement of TATA STEEL from 21st June to 21st July

Date Open High Low Closing

21/06/2010 480 506 480 504

22/06/2010 508 508 492 494

23/06/2010 491 501 489 497

24/06/2010 498 506 495 498

25/06/2010 498 501 488 49028/06/2010 490 501 490 500

29/06/2010 499 500 480 481

30/06/2010 470 487 470 485

01/07/2010 483 486 472 475

02/07/2010 475 481 471 474

05/07/2010 476 476 470 471

06/07/2010 473 481 468 480

07/07/2010 484 484 473 474

08/07/2010 485 488 478 48409/07/2010 489 497 486 495

12/07/2010 495 506 491 497

13/07/2010 496 512 495 508

14/07/2010 515 519 504 506

15/07/2010 507 517 506 512

16/07/2010 514 518 507 509

19/07/2010 503 514 502 511

20/07/2010 515 519 505 509

21/07/2010 518 532 511 530

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(Share price movement of TATA STEEL)

Form the table mention above the data are plotted in the above Chinesecandle stick chart. The chart shows that the share price of Tata steel is

moving in an up word direction. So from my point of view the share is now

profitable to make investment in it.

The above both security I examined during my project it is difficult to

determine the support and resistance level because there is no reversal trend

is shown in both securities. The support and resistance level is difficult to

determine in a long period of time and these support and resistance level is

easy to determine in a single day share price movement.

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Analysis of the data collected (primary):

According to my target population and sampling technique I filled up

my questinnaire from those people whom I guess that he/she may

know/ invest in share market and give some benefit to my project.

Sample size: 100

My collection of data is on the basis of the following questionnaires:

1. Name of the investor.

2. Age of the investor.

3. Gender

4. What is the qualification of the investor?

5. What is his/her occupation?

6. How much his/her annual income?

7. What are their investment avenues?

Bank fixed deposit

Mutual fund

Insurance

Government security

Share

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Real estate

8. How much knowledge they have about share market?

9. What is the purpose of investment?

Short term

Long term

Daily transaction

10. Mode of investment in share market?

11. What is the source of information?

12. Do they aware about IIFL?

13. Do they prefer to invest in steel sector?

14. Do they satisfied by the service provided by IIFL?

The characteristics and the specification of the data collected based on

their age as follows:

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Still today our culture is man dominated culture and most of the

housewife doesn’t know where her husband invests. So in our field

work I collected data from 85% of male & 15% female. Now most

female are aware about share market but they don’t like to enter in

share market.

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Our Research indicates that majority of the individual i.e. 29.71% are

interested in life insurance and then comes bank & corporate fixed

deposit with 23.46% and mutual fund follow them with 17.40%.

Induvidual are interested in life insurance because it gives tax benefit

and security to future. Then comes banks fixed deposit as it gives risk

free return. At last but not the least govt. savings, Shares and real

assets follow the above investment pattern with 19.43%,5.40% and

4.60% respectively. Very less percentages of people are interested for

shares and real assets as because high risk and highly volatile market

condition and less knowledge about Share market.

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Regarding investment in mutual funds, majority of investors prefer it,

i.e. 43%. This is due to diversification of risk and more profit margin

than other safe and risk free investments. Here we can see that 36%

are not interested in it , as because it is indirectly releated to stock

exchange and hence they donot want to take any risk. And rest 21%

are ignorant about mutual funds because lack of awareness.

When it comes about investment in life insurance, majority of investors are investing in life insurance, i.e.,44%. These majority

portions are investing in life insurance as because they get tax

deduction and life insurance is consisdered as risk free investment and

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guranteed money back return, but 37% investor don’t invest in life

insurance and 19% don’t have any idea about it.

24% investors are intrested in investing in real assets , 68% are not

intrested investing in real assets due to lack of knowledge & rest 8%

are ignorant about investing in real assets.

When investment pattern studied w.r.t. share, It is found that only

45% are interested in investing in shares & 38% are not at all intrested

a & remaining 17% are not aware of it. This is due to lack of

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awareness & involvement of high risk, still then people are now

showing intrest towards investment in share due to high profit.

Mostely people invest on part of saving in Mutual fund (Equity fund)

i.e.37% than equity ( secondary market ) is 32% and 22% in equity

( primary market). And lastely few people are interested in derivative

9%.Due to people always thinking about getting more return without

taking risk.

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Through my survey I ultimately found upon understanding of people

at Bhubaneswar on Share market 47% people have little

understanding, 28 % people have good unserstanding and only 15%

of people of Bhubaneswar are hignly experienced about Share Market

and rest 10 % people have no idea at all.

Through my study I have found that most of people prefer for

online investment i.e. 82% and because online trading/ investment is

very user friendly, convienence & speed,04% people go for offline

investment,14% of people invest in both online and offline mode.

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Share market is fully link with risk and time so most of people

always consider precautionary (long term) purpose i.e. 53%, 29% of

people are interested to invest their money for speculative ( short

term) purpose and rest of 18% people prefer for daily transation

purpose due to the up and down of share price during the bussiness

hours.

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From the above chart it shows that IIFL didnit creat its awareness

among the investor.

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During my project I have seen that most of the people i.e. 47% in my

concern area are satisfied by the service provided by the india infoline

limited.34 % people say no and 19% of people remain neutral.

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During my interaction with investor I have seen that most of the

them .i.e 67% are prefer to invest in steel sector because growing

demand of steel, & 33% people donot prefer to invest in it.

Between Age 21 -30 investor prefer both Fixed deposit and Insurancei.e.31% and 21% respectively. 17% and16% investor go for Shares

and Govt. Saving Scheme, only 9% and 6% people like to invest own

part of saving in mutual fund and Real Assets respectively.

The age between 31- 40 group of people are risk taking in nature,

tharefore they mostly prefer to invest their savings in share market i.e

26% and 14% in mutal funds, 28% like to expend money for

Insurance. And 17% likely to invest in Bank FD , 8% in Govt. Saving

Scheme and just 7% investment in real aseets.

Between age 41-50, 29% are inclined towards life insurance,17% are

both Bank/corporateFD and Govt. Savings Scheme or 16% are both

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Mutual fund and Share and only 5% people are interested in Real

Assets.

Under Age group 51-60, 24% are interested towards Bank/CorporateFD,23% are inclined towards Govt. Saving Scheme,21% are go for

Mutual Fund, 18% or 10% are interested towards Insurance and

Shares and only 4% people are interested towards Real Assets.

Mostely Above 60 Age group people are always think about govt.

Saving scheme and Bank/Corporate FD i.e. 36% or 35% respectively

because this age people have no more pasence for taking risk. Other

10% are interested towards Mutual Fund,9% are like to invest in

Insurance and 8% are interested towards Share and few are like toinvesr in Real Assets i.e 2% more clarity.

Investors under matric qualification mostly invest in fixed deposit

i.e.41% and 33% investor prefer on insurance , 12% invest in govtsavings scheme. But people fear to invest in share, mutual fund and in

real assets due to lack of awareness.

Investor in matric qualification most of the people are prefer to invest

their surplus earning in life insurance i.e. 35%, 33% of people consider

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about the bank fixed deposit, 14% of people are taken into

consideration govt savings is one of the investment scheme, 9% people

are focouses towards mutal funds and rest 2% and 7% people are

prefer real assets and share respectively.

It is found that in intermediate group of qualification, the investment in

in share market increases from 7% to 9%,and also in mutual fund it

increasesby 3% in comparision to matriculation,and fixed deposit

reduced by 5%.

In Graduate mutual fund investments are incseases from 12% to 22%,

Insurance sector investment increases by 3%, Govt. saving investment

decreases by 7%, In shares the investment are incseases from 9% to17%, Real assets decreases by 3% and bank fixed deposite decreases

from 28% to 11%. The above all are comparision between intermediate

and graduate.

In proffessional degree the investment in bank deposite increases from

11 % to 12%, Mutual fund investments increases by 6%, insurance

investment decreases by 15%, government savings decreases by 4%,

real assets increases from 5% to 9% and shares investment by 8%. The

above all are comparision between graduate and proffessional degree

holders.

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Individuals with an income under 100000 mostly prefer bank fixed

deposite ie 53%, life insurance 37%, govt. saving Scheme 6%, Mutual

Fund 3% and Rest 1% are invested in Shares.

Individual with an income between 1- 2.5 lakh most of people are

perfer invest their surplus earning in Bank Fixed Deposit i.e. 37%,

Insurance 29%, govt. Saving Scheme 9%, Mutual fund 17%, RealAssets 1% and Rest 8% People are investing in share.

Individual with an income between 2.5 – 5 lakh most of people are

interested to invest their surplus money in Bank Fixed Depositi.e.

30%,19% people are interested in Mutual Fund, 28% people are

interested in Insurance,7% people are go through Govt. Saving

Scheme, 3% people are prefer Real Assets and rest 13% people are

considered about Shares.

Individual with an income Above 5 lakh most of people are go

through Insurance i.e. 27%, 22% prefer people are prefer to invest in

real Assets and rest 5% People are invest their surplus money in Govt.

Saving Scheme.

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It is found that student are mostly Interested to invest their money in

Insurance i.e. 37%, 6% of student prefer to invest in Bank FD, 5% of

Student are interested in Mutual fund and 3% of Student are prefer to

invest in Share.

Individuals with business Man as their occupation are investing 36%

in Insurance, 19% in Shares, 12% in Govt.Saving Scheme, 13% in

Mutual Fund, 11% in bank FD and rest 9% are investing their surplus

earning in Real Assets.

Individuals with Service Person as their occupation are investing

18% in Bank FD, 11% in mutual fund, 38% in insurance, 20% in

Govt. Saving Scheme, 6% in real Assets and rest 7% are investing in

Share.

In professional 38% of people are interested in Insurance, 15% are

interested in Govt. Saving Scheme, 19% are interested in Bank FD,

11% are interested in mutual Fund, 7% people are interested in Real

Assets and rest 10% are interested in Shares.

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CHAPTER-5

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• Findings

• Suggestion

• Conclusion

FINDINGS

Above the above analysis and interpetation I found the following points

According to age 21-30,31-40 age people know about the

investement.

According to gender 85% of male and 15% female know about the

investment in sharemarket.

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According to qualification mainly graduates people know much more

about invesment in share market.

According to income group it received fastest growing equity booking

house large firms’ on Indian by Dun & Brand street.

Generally an up ward trend equity should be preferable to invest in it.

Support and resistance level are important to determine the timing of

purchase of share in a single trading day.

Demand and supply force of share is detemined the market price of

the share.

45% are on intersted in investing in share & 38% are not & 17% are

hot aware of it.

People invest on equity in secondary market is 32% and 22% in

primary market.

45% people have little knowledge about share market. 30% have

good, 15% people of BBSR are well known & 10% have no idea.

Most of the investors prefer to invest in steel sector.

A huge part of the market have to be satisfied by the service proveide

by the IIFL.

SUGGESTION

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Generally demat account is a product where aggressive marketing through

televisions, news paper, hoardings etc are not of much help. The

marketing of such product is generally affected and influenced by its

customer’s itself. In fact the word of mouth publicity plays wondersfor it. So it is suggested to keep the existing customers utmost satisfied,

which will help the firm further to increase its customer base through

their reference to their friends and relatives.

Depending on the client’s profile and level of knowledge proper

service structure should be built. Proper segmentation can help any

service provider to increase its customer base. Further it can help a

firm to cater the needs of individual in a better manner.

It has been noticed through the survey conducted that easydocumentation and paper works is being highly favored by the

investors of Bhubaneswar. So my recommendation in this regard

would be bringing a change in the system or service structure which

would help the investors to lead a hassle free trading sessions with

nominal paper works. Another benefit of providing such services is

that, it will bring transparency in the system, helping the company to

win over investors trust.

Review investors portfolio on a fixed interval basis, helping aninvestor to develop a personalized Investment Policy Statement (IPS)

by measuring their risk tolerance can help any service provider to win

over the confidence of any investor. Intact this would make them feel

that their service is customized according to their needs.

Conducting interactive sessions with market experts, training

programs for the beginners is worth in providing greater satisfaction

to any investor.

Measurement of clients’ satisfaction level on a quarterly basis mayhelp the service provider to review its service structure according to the

prevailing market trends and investor’s need.

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General Do's and Don’ts for Investors

1. Don’t deal with unregistered intermediaries, as this would expose you tocounter party risk.

2. Give clear and unambiguous instructions to Broker / Sub–broker.

3. Keep a record of all instructions issued to the Broker / Sub–broker.

4. Confirm with Broker / Sub–broker whether delivery is in physical or

demat form before selling shares.

5. Don’t fall prey to promises of unrealistic high returns.

6. Don’t indulge in speculative trading, go by fundamentals.

7. Trade within predetermined limits.

8. Use the Investors’ Grievance Redressed system of the Exchanges to

redress your grievances if any.

9. Understand the working of the Investor Service Cell for complaint againstlisted companies / Brokers.

10. You can trade on your own through Internet based trading by registering

with a Broker.

CONCLUSION

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On equity investment:

The price of the equity is determined through different analysis.

Role of market trend is important to make an investment decision,

such as timing of investment and selling of securities.

The present scenario of the IIFL business highlights:

Involvement and participation of highly educated people in capital

market.

People in large numbers from business and service sector are

pouring into the business.

People from younger generation are coming to join the capital

market.

Customers have become much more learned and sophisticated to

use the advantages of the modern information technology.

There is betterment of social and cultural life among thecustomers.

The interests and the motivational level of the customers have

risen up to significantly higher levels.

Lower middle and middle class people have come forward to

invest in the business.

Proper marketing required to create awareness among the people

of the society to enlarge the business.

Finally, it has changed from a seasonal business to an all time

business.

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CHAPTER-6• Bibliography

BIBILOGRAPHY:

BOOKS:

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(i) Security analysis and portfolio management, S. Kevin, PHI

publication.

(ii) Bulls, Bears and The Mouse- an introduction to online stock trading(2000), Dr. Kamlesh N Agrawala, Deeksha Agrawalal,

Macmillian Indian Limited

(iii) Stock market rules (2006), Michal D Shimon,

Tata Mc Grew Hill publishing company

limited.

Journals and article:

• BSE journal, December 2005

• Solink B.(1990), the distribution of daily stock return and

settlement procedure: the Paris Bourse, Journal of finance

XLV(5),1601-1609

• Kyriacou, K&mase, B.(2000), Rolling settlement and market

liquidity, ” Applied financial Economics”

Magazines:

(i) Business today

Website:

(i) www.google.com

(ii) www.bseindia.com

(iii) www.nseindia.com

(iv) www.moneycontrl.com

(v) www.topstockresearch.com

http://www.google.com/

http://www.bseindia.com/

http://www.nseindia.com/

http://www.moneycontrl.com/

http://www.topstockresearch.com/

http://www.google.com/

http://www.bseindia.com/

http://www.nseindia.com/

http://www.moneycontrl.com/

http://www.topstockresearch.com/

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