Comparative Study on Services Provided by Different Broking Firms

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Summer Project ReportOn

A Comparative study on Services Provided by DifferentBroking Firms

BY:

xxxxxxxxxxxxxx

AUG, 2010

Deepshikha Institute Of Management Studies,Institutional Area, Sitapura, Jaipur



Certificate of Approval

The following Summer Project Report titled "A Comparative Study on ServicesProvided by Different Broking Firms" is hereby approved as a certified study inmanagement carried out and presented in a manner satisfactory to warrant itsacceptance as a prerequisite for the award of Master of BusinessAdministration for which it has been submitted. It is understood that by thisapproval the undersigned do not necessarily endorse or approve any statementmade, opinion expressed or conclusion drawn therein but approve the Summer

Project Report only for the purpose it is submitted.

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Certificate

Jitendra

Virahyas

[email protected]

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Acknowledgement

I avail this opportunity to acknowledge my deep sense of gratitudeand indebtedness to Mr. Jitendra Virahyas and Mr. Nitesh Jain (SalesManager- Religare Securities Ltd), who rendered me their invaluablehelp, suggestions and encouragement with monumental patience andconstant guidance & other staff members of Religare for their kindness and valuable guidance and assistance, which helped me inthe completion of my vocational training.

I would also like to thank my project guide Prof. Jitendra Virahyas,

whose valuable suggestions, throughout the training session, helpedme a lot to understand the real meaning of such internship.

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CONTENTS

1. Overview of the Indian Retail Brokerage Industry

Industry Definition and Segmentation……………….10

Timeline: Evolution of the Retail Brokerage Market

Pre 1990 …………………………………………….12Fast forward to 1990s …………………………….13

Post 2000 …………………………………………14

Stock Exchanges and Stock brokers ………………….15

Recent Developments

Online trading …………………………………….. 19T+2 rolling settlement ………………………………23Growing derivative market ………………………...25

Fall in brokerage rates ……………………………..26Advanced Technology ……………………………..27

Market Size: Growth of brokerage market …………….28

2. Porter's Five Forces Analysis

Buyer Power ………………………………………………..30

Supplier Power ……………………………………………..30Intensity of Competition ………………………………...31Threat of New Entrants ……………………………………32Threat of Substitutes ………………………………………33

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3. Comparative Assessment

Company Profiles …………………………………...34Strengths and Weaknesses of Religare …………50

4. METHODOLOGY & TECHNIQUES

Methodology For Sampling……………………….. ..52Methodology For Acquiring Customers …………. 52Sources of Data ………………………………………53Process of Dematerialization ……………………...53

Working Model of Depository System……………...55

5. Findings and Observations ……………………………..59

6. Conclusion ………………………………………………...63

7. Recmmendations …………………………………………..65

8. References ………………………………………………..66

9. Appendices

Questionnaire…………………………………………..67

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List of Figures

Pay-In and Pay-Out of Funds and Shares 25Derivatives Growth in Past Years 26Average Daily Turnover 30Preference of Investments 60Awareness of online trading 61Awareness of Religare 61Awareness of Religare’s facilities 61Competitors Awareness 62Satisfaction with current broker 62Frequency of Trading 63Invested Earnings in share Trading 63

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ABSTRACT

To maintain and cope up with the growing competition from the various onlinetrading providers, Religare needs to find potential customer and also target thenew investors.

The project is being done to train the people about the whole procedure essentialto open an online trading account couple with demat account. The project willhelp in exploring the area where there is the feasibility of acquiring more newinvestors. It would also help in knowing the various competitors of the industryand exploring the areas through which competitive advantage could be obtained.The report is divided into various sections.

1. About Stockbroker & online trading:

This part describes about stockbroker and how brokers deal withcustomers and stock exchanges and also define online trading with merit anddemerit.

2. Company Profiles:

This part describes the company profile. This part recognizes the achievementsand rewards the company has achieved, it also gives little insights into whatcompany offers to the Corporate and the Consumers. This section also describesthe kind of technology used.

3. About Online trading account

Since the project leads to opening of online trading account, this section givesthe details of what all services Religare offers to the consumer. This section givesthe detail of how different services provided by the others online trading accountand how is Religare superior from them.

4. Procedures and requirement for opening a Trading cum demat

account

This section gives the detail of the different conditions that have to be met for opening a trading cum demat account. The section contains the document, whichis required to open an account.

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5. Different competitors in online trading

This section gives the detail of the different competitors and different servicesprovided by them. Then we have compared there services with our services.

6.Different formalities for opening demat account

This section throws some light over different document as well as hardware andsoftware requirement for opening of online trading cum demat account.

7. Learning about Dematerialization

This section tells you about different concepts regarding dematerialization. Howyou can get your security dematerialized? Growth rate of dematerialization etc.

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Overview of the Indian Retail Brokerage Industry

Industry Definition and Segmentation

The Indian Retail Brokerage Industry consists of companies that primarily act asagents for the buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on a commission or transaction fee basis.Hence, to understand this industry we have to study Security Market:

Security Market

Which is the most televised structure in India? A study has revealed that it is notthe Rastrapati Bhawan or Parliament House; it is not the Taj Mahal; it is not eventhe abode of Lord Tirupati; it is the Pheroze Jeejeebhoy Towers which housesthe oldest securities market participant in India, i.e. The Stock Exchange,Mumbai. This indicates our intimate relationship with the securities market. Intoday’s rational world, it really means the immense contribution of the securitiesmarket to our life and economy.

Which is the most reformed sector / segment / market in the Indian economy?Which sector / segment / market of the economy has witnessed as much as nine

special legislative interventions during the last decade? Which market / segment /sector acquired the first ever autonomous regulator (which in course timebecame the model regulator) in India? Which sector / segment / market of theeconomy consumes 3/4th space of the pink newspapers everyday? Which sector /segment / market of the economy most promptly reflects the feel good factor?The answer to all these questions is the securities market. It expresses thesignificance of the securities market in our life.

Two years down the line, there are few questions to ask-Which is the securitiesmarket first to set up demutualised stock exchanges in the World? Which is thesecurities market first to use satellite communication technology for securities

transactions? Which is the securities market first to introduce the straight throughprocessing in securities transactions? Which major securities market hasimplemented T+2 rolling settlement? Which is the largest market for stockfutures? Which securities market started real time on line position monitoring of brokers? Which is the securities market where trading terminals go off automatically when the margins are exhausted? Probably answer to all of theseis the Indian securities market. This has earned a place of respect amongst thecomity of securities markets in the World.

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Segmentation Of Security Market :

It has two main interdependent segments: Primary market and the Secondarymarket.

The primary is that part of the capital markets that deals with the issuance of newsecurities. Companies, governments or public sector institutions can obtainfunding through the sale of a new stock or bond issue. This is typically donethrough a syndicate of securities dealers. The process of selling new issues toinvestors is called underwriting. In the case of a new stock issue, this sale is aninitial public offering (IPO). Dealers earn a commission that is built into the priceof the security offering, though it can be found in the prospectus.In primary market certain companies issue their shares directly to the public,collect applications and after sorting out the good issues, they put in their applications. The share brokers get their brokerage on the transactions made.

The secondary market is the financial market for trading of securities that havealready been issued in an initial private or public offering.The secondary market comprises of brokerage that a broker earns in the buyingand selling of companies that are listed in the stock exchange. These people arein charge of the conformation and carrying out of transactions. Orders are takenand deliveries are made in the latter half of the day. The erratic fluctuation of rates in the share market makes the activity in a trade market a dynamic process.It is necessary for a broker to have adequate knowledge about the economic andpolitical factors as they affect the share market.

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

http://en.wikipedia.org/wiki/Security_(finance)

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

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

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

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

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


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


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

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

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

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

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




Evolution of the Retail Brokerage Market

A Brief History :

1. Pre 1990

Though the historical records relating to securities market in India is meager andobscure, there is evidence to indicate that the loan securities of the East IndianCompany used to be traded towards close of the 18th century. By 1830’s, thetrading in shares of banks started. The trader by the name of broker emerged in1830 when 6 persons called themselves as share brokers. This number grewgradually. Till 1850, they traded in shares of banks and securities of the East

India Company in Mumbai under a sprawling Banyan Tree in front of the TownHall, which is now in the Horniman Circle Park. It is no surprise that the majesticPhiroze Jeejeebhoy Towers is located at the Horniman Circle. In 1850, theCompanies Act introducing limited liability was enacted heralding the era of modern joint stock company which propelled trading volumes.

The American Civil War broke out in 1861 which cut off supply of cotton from theUSA to Europe. This heightened the demand for cotton from India. Cotton pricesincreased. Exports of cotton grew, payments were received in bullion. The greatand sudden spurt in wealth produced by cotton price propelled setting upcompanies for every conceivable purpose. Between 1863 and 1865, the new

ventures raised nearly Rs.30 crore in the form of paid up capital and nearly Rs.38 crore of the premia. Rarely was a share which did not command a premiumbetween 1861 and 1865. The Back Bay Reclamation share with Rs.5,000 paid upwas at Rs.50,000 premium, the Port Canning share with Rs. 1,000 paid up wasat Rs.11,000 premium, etc. There was a share mania and every body was after apiece of paper, variously called ‘allotments’, ‘scrips’ and ‘shares’. The peoplewoke up only when the American Civil war ended. Then all rushed to sell their securities but there were no buyers. They were left with huge mass of unsaleablepaper. This occurred then. This also occurs today at regular intervals. There is,little seems to have changed since then; the bubbles and burst continue to be aperennial feature of the securities market world over.

The depression was so severe that it paved way for setting up of a formal market.The number of brokers, which had increased during the civil war to about 250,declined. During the civil war, they had become so influential and powerful thateven the police had only salams for them. But after the end of the civil war, theywere driven from pillar to post by the police. They moved from place to place till1874 when they found a convenient place, which is now appropriately called

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Dalal Street after their name. They organized an informal association on or about 9th July 1875 for protecting their interests. On 3rd December 1887, theyestablished a stock exchange called ‘Native Share and Stock Brokers’

Association’ . This laid the foundation of the oldest stock exchange in India. Theword ‘native’ indicated that only natives of India could be brokers of the

Exchange.

In 1880s a number textile mills came up in Ahmedabad. This created a need for trading of shares of these mills. In 1894, the brokers of Ahmedabad formed "The

Ahmedabad Share and Stock Brokers' Association".

The 1870s saw a boom in jute prices, 1880s and 1890s saw boom in tea prices,then followed coal boom. When the booms ended, there were endlessdifferences and disputes among brokers in eastern India which was home toproduction of jute, tea and coal. This provoked the establishment of "The CalcuttaStock Exchange Association" on June 15, 1908.

Then followed the proliferation of exchanges, many of them even do not existtoday. The rest is history.

2.Fast Forward to 1990s

In 1980s and 1990s, it was increasingly realized that an efficient and welldeveloped securities market is essential for sustained economic growth. Withoutventuring into a detailed discussion, it would suffice if I just say that the securitiesmarket fosters economic growth to the extent it augments the quantities of realsavings and capital formation from a given level of national income and it raises

productivity of investment by improving allocation of investible funds. The extentdepends on the quality of the securities market. In order to improve the quality of the market, that is, to improve market efficiency, enhance transparency, preventunfair trade practices and bring the Indian market up to international standards, apackage of reforms consisting of measures to liberalize, regulate and develop thesecurities market is being implemented since early 1990s.

Legal Developments :

Control of capital issues was introduced through the Defence of India Rules in

1943 under the Defence of India Act, 1939 to channel resources to support thewar effort. The control was retained after the war with some modifications as ameans of controlling the raising of capital by companies and to ensure thatnational resources were channeled to serve the goals and priorities of thegovernment, and to protect the interests of investors. The relevant provisions inthe Defence of India Rules were replaced by the Capital Issues (Continuanceof Control) Act in April 1947.

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Though the stock exchanges were in operation, there was no legislation for their regulation till the Bombay Securities Contracts Control Act was enacted in1925. This was, however, deficient in many respects. Under the constitutionwhich came into force on January 26, 1950, stock exchanges and forwardmarkets came under the exclusive authority of the central government. Following

the recommendations of the A. D. Gorwala Committee in 1951, the SecuritiesContracts (Regulation) Act, 1956 was enacted to provide for direct and indirectcontrol of virtually all aspects of securities trading and the running of stockexchanges and to prevent undesirable transactions in securities.

3. Post 2000

Gone are the days when you left orders with your broker, received conformationson the price and quality of the shares at the end of the day and the payment

made upfront or received after delays. Your securities settlement took days toreflect in your account. Internet has changed the way you do trading. The entireprocess is speedy with limited to zero paper work. NSE launched internet tradingin early February 2000. It is the first stock exchange in the country to provide aweb-based access to investors to trade directly on the exchange.

The process : Log on to the brokers site of your choice where you get real timequotes, place a buy or sell order on the spot, and direct the site to debit therequisite amount. In some time you get confirmation and after the tradesettlement your bank and depository account will reflect the changes which youcan view anywhere, anytime. Online trading has become seamless. All that you

need is a PC, a modem, subscription to an Internet Service Provider (ISP), asaving and a depository account with any bank providing online trading facility.Along with stocks one can trade in mutual funds and investment instruments. Theadvantage with online trading that you can operate in both BSE and NSEdepending on the broking firm.NSE introduced for the first time in India a fully automated screen based trading.It uses a modern fully computerized trading system designed to offer investor across the length and breadth of country a safe and easy way to invest. The NSEtrading system called “National Exchange for Automated Trading” (NEAT) isa fully automated screen-based trading system which adopts the principle of anorder driven market.

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Stock Exchanges and Stock Brokers

BOMBAY STOCK EXCHANGE

Background: The BSE Sensitive Index (1978-79=100) has, to a considerableextent, been serving the purpose of quantifying the price movements as alsoreflecting the sensitivity of the market in an effective manner.The number of companies listed on the Bombay Stock Exchange has registereda phenomenal increase from 992 in the year 1980 to about 7831 companies by

the end of Dec 2009 and their combined market capitalization rose from Rs.5,421 crores to around Rs. 40,12,307 crores at end of Dec 2009.These factors necessitated compilation of a new broad-based index seriesreflecting the present market trends in a more effective manner and providing abetter representation of the increased equity stocks, market capitalization as alsothe newly emerged industry groups. Towards this end, the Exchange constructedand launched on 27th May 1994, two index series viz. the BSE-200 and theDOLLEX.

Coverage: The equity shares of 200 selected companies from the specifiedand non-specified lists of this Exchange have been considered for inclusion in the

sample for `BSE-200'. The selection of companies has primarily been done onthe basis of current market capitalization of the listed scrips on the exchange.Besides market capitalization, the market activity of the companies as reflectedby the volumes of turnover and certain fundamental factors were considered for the final selection of the 200 companies.

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http://www.bseindia.com/index_op.htm



Choice of Base Year: The financial year 1989-90 has been chosen as thebase year for the price stability exhibited during that year and due to its proximityto the current period.

NATIONAL STOCK EXCHANGE

The 18-year-old National Stock Exchange (NSE) has outshined the 135 years oldBombay Stock Exchange (BSE) in terms of turnover and volumes. The BSE haslost its market share in these segments from 36 per cent to 31 percent in lastthree years. The turnover in BSE stood at around Rs 98,082 crore as on Dec2009 while the turnover in NSE was Rs 1,44,638 crore. The volumes (numbers of shares traded) of NSE at 2.94 crore was also much higher than the volumes of BSE. The NSE has rewritten a number of rules and upset many traditions. As thederivatives segment has immense effect on the cash market, the movement inthis segment mostly determines the trend in the market.

Against nearly 1800 companies listed on the NSE, the BSE has nearly 7,831listed companies. Despite such a huge number of listed companies, the totalmarket capitalization of BSE is around Rs 40,12,307 crore while on the other hand NSE has a total market capitalization of Rs 47,01,923 crore.The most tracked index on NSE, CNX Nifty also has more number of stocks thanthe BSE Sensex. Nifty represents 50 stocks while the Sensex represents only 30stocks. The presence of more stocks on Nifty gives a better valuation thanSensex.

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STOCK BROKERS

A stockbroker is a person who buys and sells stocks on behalf of another person(or company). Stockbrokers also sometimes or exclusively trade on their ownbehalf, as a principal, speculating that a share or other financial instrument willincrease or decline in price. In such cases the term broker makes little sense andthe individuals or firms trading in a principal capacity sometimes call themselvesdealers, stock traders or simply traders.

In the US: When acting as an agent, the stockbroker typically charges the client

a flat fee and/or a percentage-based commission for undertaking the trade, andthe price quoted the client must be the best price available in the market. Whenacting as a principal, the trade could be with another market participant or one of the stockbroker's clients. When trading in a principal capacity with a client, thebroker informs the client and charges the client a markup or markdown from theprevailing market price.

In the UK: When acting as an agent, the stockbroker charges the client a flat feeand/or a percentage-based commission for undertaking the trade, and the pricequoted the client must be the best price available in the market. When acting as aprincipal, the trade could be with another market participant or one of the

stockbroker's clients. When trading in a principal capacity with a client, the broker is obliged to inform the client and no commission is charged

Roles similar to that of a stock broker include investment advisor , financial advisor , and probably many others. A stockbroker may or may not be also aninvestment advisor. Similarly, investment advisor may or may not be astockbroker.

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

http://en.wiktionary.org/wiki/principal


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

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

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


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

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



http://en.wiktionary.org/wiki/principal


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

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



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





The Certified Financial Planner designation initially offered by the AmericanCollege in Pennsylvania is considered by many to be the next educational step astock broker can take in order to be consider a legitimate and ethical financialconsultant.The stock market will have either one or a number of stock exchanges.

In India, the most famous are the Bombay Stock Exchange and the NationalStock Exchange.Then there are regional exchanges like the Ahmedabad Stock Exchange,Calcutta Stock Exchange and the Cochin Stock Exchange.The two most prominent ones are the BSE and NSE. Together, they account for most of the stock trades in the country. This means that if they catch a cold,exchanges all over the country will sneezePeople like you and me just cannot go to a stock exchange and buy and sellshares. If we want to do so, we have to get in touch with someone who is amember of the stock exchange. This means we need to talk to a stockbroker.

Stockbrokers buy and sell shares for themselves to make a profit. They also buyand sell shares on behalf of people like you and me and take a commission for doing so (more on this on another day).Every stockbroker has to be registered with the Securities and Exchange Boardof India, which is the stock market regulator. SEBI's main function is to makesure those who invest in the stock market follow the rules and no scams takeplace. It is supposed to act as a watchdog on behalf of the investors.Readers from Mumbai may have seen the imposing stock exchange buildingcalled Jeejeebhoy Towers. That's the home of the BSE.But you would be disappointed if you think you can step inside the building andwatch the market excitement firsthand as brokers frenziedly trade stocks. That'sbecause all stock markets in India are now electronic.Brokers have BSE computer terminals in their offices, from which they trade.They also have BSE terminals in other cities and don't have to be physicallypresent in Mumbai to trade on the BSE. This means that even if you stay outsideMumbai, you can contact a BSE broker and buy or sell stocks on the BSE.Years ago, the BSE was a place where brokers physically bought and soldstocks and shares through a system known as 'open outcry'. As a result, themarket then resembled a fish or vegetable market.

If you watch CNBC, you'll find that the New York Stock Exchange still follows thatsystem, with traders rushing around on the trading floor, scribbling trades on littleslips of paper.

Actually, the improvements in the BSE came about when the governmentpromoted the NSE. The NSE was an electronic exchange from the beginning andit started competing with the BSE, which in turn forced the BSE to tone up its act.

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

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



Recent Developments

Online Trading

Online Trading is a service offered on the internet for purchase and sale of shares. In the real world, you place orders with your stockbroker either verbally(personally or telephonically) or in a written form (fax). In Online Trading, you willaccess stockbroker's website through your internet-enabled PC and place orders

through the broker's internet-based trading engine. These orders are routed tothe Stock Exchange without manual intervention and executed thereon in amatter of a few seconds. .There are 2 types of online trading service: discount brokers and full serviceonline broker. Discount online brokers allow you to trade via Internet at reducedrates. Some provide quality research, other don't. Full service online brokerage is

linked to existing brokerages. These brokers allow their clients to place onlineorders with the Option of talking/ chatting to brokers if advice is needed.Brokerage rates here are higher.5Paisa.com, ICICIDirect.com, IndiaBulls.com,Religare.in,Geojitsecurities.com, HDFCsec.com, Tatatdw.com, Kotakstreet.comare some of the online broking sites in India.The various transactions involved in online trading can be shown from the pointof view of the

• Client

• Broker

• Stock Exchange

The client places an order via the net by logging on to his broker’s site. Thebroker accepts and executes the order, and places it with the exchanges.The exchange accepts the order after checking the share limit for the day.The brokers makes the payment either directly via the client’s bank account or pays through his own account and recovers it later from the client.The exchange receives money and completes the settlement.The client is intimated about the settlement either through the demat account or via E-mail.

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BENEFITS OF ONLINE TRADING

This mode of trading has shifted the trading power from stockbrokers to individualinvestors. The advantages are that it:

1. Ensures the best price for investors

This technique offers the best price for the buying andselling transactions of the investors, by ensuring proper matching of their orderswithin the communication network itself. Also due to the high level of transparency with regard to display of information relating to the specific stocksand company profiles ,the investors will be able to get the best quote for theshares. This leads to a reduction in the transaction cost for the investors.

2. Offers liquidity to the investors

Online trading offers 24-hour trading facilities. or trading for longer hours when compared to the traditional stock exchanges. This providesadded liquidity to the investors.

3. Offers greater transparency

Online trading gives greater transparency to the investors byproviding them an audit trail. This involves a complete integrated electronic chainstarting from order placement, to clearing and settlement and finally ending with acredit to the depository account of the investor. All these stages are subject toinspection, thus bringing in transparency into the system.

4. Enables hassle free trading

Online trading integrates the bank, the brokerage and thedemat accounts, which leads to easy and paperless trading for the client.

5. Allows quick trading

The investor will be able to execute the entire tradingtransaction, right from logging on to the broker's site, to the execution andsettlement of his bank account, in a very short period of time.

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6. Provides a level playing field

Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders. This

provides a level playing field for investors in the securities market.

7. Reduces the settlement risk

This method of trading reduces the settlement risk for theinvestor, as in this case no short sale is possible. That is .the seller will not beable to sell the securities unless he has their actual possession. In the case of ademat account (required for an online transaction), when a seller wants to sell thesecurities, his demat account is checked by the Depository Participant beforeexecuting the sale transaction. This reduces the settlement risk for the buyer,who is assured of the delivery of the securities.

HURDLES FOR ONLINE SHARE TRADING

1. Internet fraud

In India, we see this kind of frauds happening in different way due to nature of our society. Here when you talk to broker's staff while buying or selling, he willusually advise you to buy share which he has bought and plans to dump whenprice goes up.We have seen enough of PUMP and DUMP even without help of internet incases of Harshad Mehta boom of 1992 and Ketan Parekh boom of 2000 (heeven had cult following with Index of 10 shares called K-10).Today lot of investor’s depending on TV channel for recommendation aboutstocks to sell, or buy or hold. Channels like CNBS offer array of experts fromeconomist to brokers to analyst. Most of these people have vested interest instocks they recommend and promote.One of the most common forms of securities fraud on the Internet involves animposter who attempts to manipulate the price of a stock by disseminating phonypress releases or information, or creating phony websites. A recent example of this scheme is the hoax perpetrated against US based, PairGain Technologies.

2. Volatility of India’s Stock Markets

Recent market developments have once more focused attention on the volatilitythat has come to characterise India’s stock markets.Movements in the Sensex during the two years have clearly been driven by thebehaviour of foreign institutional investors (FIIs), who were responsible for netequity purchases of as much as $6.6 and $8.5 billion respectively in 2003 and2004. These figures compare with a peak level of net purchases of $3.1 billion as

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far back as 1996 and net investments by FIIs of just $753 million in 2002. In sum,the sudden FII interest in Indian markets in the last two years account for the twobouts of medium-term buoyancy that the Sensex recently displayed.Given the presence of foreign institutional investors in Sensex companies andtheir active trading behaviour, their role in determining share price movements

must be considerable. Indian stock markets are known to be narrow and shallowin the sense that there are few companies whose shares are actively traded.Thus, although there are more than 4700 companies listed on the stockexchange, the BSE Sensex incorporates just 30 companies, trading in whoseshares is seen as indicative of market activity. This shallowness would also meanthat the effects of FII activity would be exaggerated by the influence their behaviour has on other retail investors, who, in herd-like fashion tend to followthe FIIs when making their investment decisions.

3. Rampant Speculation

The Indian stock markets are perhaps the only place in the world where you canbuy shares without having to put money on the table and sell shares you do notown. This extraordinary situation has facilitated rampant speculation by all sortsof operators – the indigenous variety, FIIs and even our own native financialinstitutions (FIs) as the massive UTI scandal of recent years has demonstrated.So, when the stock markets were made to collapse by a record 800-plus pointson May 17 under the pretext that the Left is opposed to divestment, the profitsreaped by short sellers were astronomical and incalculable. Could this situation have been avoided? As aforesaid, the answer is yes. Theelectronic monitoring system in both the Bombay Stock Exchange and the bigger

National Stock Exchange automatically stopped trading for half-an-hour when thetwo markets respectively collapsed by 10 percentage points. Thereafter whentrading resumed and the markets fell further to another stipulated lower level, theelectronic system automatically stopped all trading again for another two hours. A similar situation had occurred on Tuesday, September 11, 2001, the day of theterrorist attacks in New York City. At the end of the day the stock exchangeauthorities of both the New York Stock Exchange and the heavily-weightedsoftware exchange called NASDAQ suspended all trading for the remainder threeworking days during that fateful week to safeguard investor interests.

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T+2 Rolling Settlement

As per the directive by SEBI, all transactions in all groups of securities in theEquity Segment and Fixed Income securities listed on the Exchange are requiredto be settled on T+2 basis w.e.f. from April 1, 2003. The settlement calendar,

which indicates the dates of the various settlement related activities, is drawn bythe Exchange in advance and is circulated among the market participants.

Under rolling settlements, the trades done on a particular day are settled after agiven number of business days. A T+2 settlement cycle means that the finalsettlement of transactions done on T, i.e., trade day by exchange of monies andsecurities between the buyers and sellers respectively takes place on secondbusiness day (excluding Saturdays, Sundays, bank and Exchange tradingholidays) after the trade day.

The transactions in securities of companies which have made arrangements for

dematerialization of their securities are settled only in demat mode on T+2 on netbasis, i.e., buy and sell positions of a member-broker in the same scrip are nettedand the net quantity and value is required to be settled. However, transactions insecurities of companies, which are in "Z" group or have beenplaced under "trade to trade" by the Exchange as a surveillance measure (“T”and “TS” group) , are settled only on a gross basis and the facility of netting of buy and sell transactions in such scrips is not available.

The Exchange has introduced a new segment named “BSE Indonext” w.e.f.January 7, 2005. “S” group consists of scrips from “B1” & “B2” group on BSE andcompanies exclusively listed on regional stock exchanges having capital of 3

crores to 30 crores. All trades in this segment are done through BOLT systemunder S group.

The transactions in 'F' group securities representing "Fixed Income Securities"and "G" group representing Govt. Securities for retail investors are also settled atthe Exchange on T+2 basis.

In case of Rolling Settlements, pay-in and pay-out of both funds and securities iscompleted on the same day.

The members are required to make payment for securities sold and/ or deliver

securities purchased to their clients within one working day (excluding Saturday,Sunday, bank & Exchange trading holidays) after the pay-out of the funds andsecurities for the concerned settlement is completed by the Exchange. This is thetimeframe permitted to the members of the Exchange to settle their funds/securities obligations with their clients as per the Byelaws of the Exchange.

The following table summarizes the steps in the trading and settlement cycle for scrips under CRS :

23



DAY ACTIVITY

T Trading on BOLT and daily downloadingof statements showing details of

transactions and margins

ttheend

of eachtr ad

ingday.

Downloading of provisional securities andfunds obligation statements by member-brokers.

6A/7A* entry by the member-brokers/ confirmation by

the custodians.

T+1

Confirmation of 6A/7A data by theCustodians u

T+2

Pay-in of funds and securities by 11:00a.m. and pay-out of funds and securitiesby 1:30 p.m. The member-brokers are

24



required to submit the pay-in instru

T+3

Auction on BOLT at 11.00 a.m.

T+4

Auction pay-in and pay-out of funds and securities by12:00 noon and 1:30 p.m. respectively.

Thus, the pay-in and pay-out of funds and securities takes places on the secondbusiness day (i.e., excluding Saturday, Sundays and bank & Exchange tradingholidays) of the day of the execution of the trade.

* 6A/7A : A mechanism whereby the obligation of settling the transactions doneby a member-broker on behalf of a client is passed on to a custodian based onconfirmation of latter. The custodian can confirm the trades done by the members

on-line and upto 11 a.m. on the next trading day. The late confirmation of transactions by the custodian after 11:00 a.m. upto 12:15 p.m., on the nexttrading day is, however, permitted subject to payment of charges for lateconfirmation @ 0.01% of the value of trades confirmed or Rs. 10,000/-,whichever is less.

Growing Derivative Market

One look at the accompanying derivatives ‘report card’ and you will probablyconclude that these instruments are a roaring success in India. Six years after itsdebut, the derivatives market is flourishing, riding largely on the ongoing bull run.It has filled the void left by the old badla system of trading, increasing the liquidityin the underlying cash market and providing both traders and investors with newopportunities. But that is only one part of the story. Dig beneath all the optimismand you will find that the derivatives market is in desperate need for moreproducts, more initiatives and a lot more innovation.

Are Markets Mature Enough?

Individual stock futures were launched in November 2001. Since then, not asingle product has been introduced in the equity derivatives space. This has leftmarket participants crying for more.” There is a need for long-dated options —which could have an expiry date 1-3 years in the future — as there is a high costinvolved with rolling-over one-month futures,” says Sanjeev Shah, executive

25



director, Benchmark AMC. There is alsoneed for a roll-market that simplifies therollover process, feels C.K. Narayan,vice–president, ICICI Securities.Further, most of the trading happens in

the near-month series (contracts thatexpire in the same month as the day of trade), stock options are very illiquid, andIndia’s ranking is relatively low amongworld exchanges in value terms, eventhough the volumes are high.

But the high volumes needn’t necessarily mean that the markets are mature.Much of the volume comes from arbitrage, where traders merely exploit risk-lessspreads. Only 20 per cent of the trades take a directional view on the marketestimates Narayan.

Near-month contracts are more liquid than the rest, the world over. But in India’scase, the disparity is rather extreme. On a typical trading day in the middle of themonth, about 98 per cent of the turnover comes from near-month contracts, whileless than 0.5 per cent comes from the far-month series. Of the 124 symbolsavailable for futures trading, far-month contracts of only about 10 per cent aretraded. The concentration of volumes in the near-month series means that this isa speculator’s market, points out Susan Thomas, assistant professor, IndiraGandhi Institute of Development Research (IGIDR). (She had earlier worked onthe project that led to the construction of NSE’s Nifty index.) In 2005, non-institutional trade accounted for over 93 per cent of total trade in the derivativessegment, much higher than their 83 per cent share in the cash market.

Despite its strong growth in the last six years, NSE has lagged behind globalpeers in value terms. The Korea Stock Exchange — the country’s financialreforms began in the early 1990s along with India’s — is 32 times the size of NSE (across all segments). NSE ranks No. 1 in the world in the stock futuressegment, but that’s only because the top exchanges do not trade that product. Inindex futures, NSE ranked 15th with a turnover of $38.7 billion in September. Butthis is less than 1 per cent of Chicago Mercantile Exchange’s (CME) turnover of $4,431 billion.

The futures market — accounting for 87 per cent — has been the main growthdriver of the Indian derivatives market. But stock options are pathetically illiquid,accounting for just 3 per cent of total turnover. On the positive side, the share of index derivatives has steadily increased to 44 per cent from about 11 per centfour years ago. That’s close to global norms of about 60 per cent, implying thatsome amount of hedging, not mere speculation, is being done.

26



Fall In Brokerage Rates :

Depository participants (DPs) impose various charges on the institutional as wellas on individual clients under various heads for providing services. The servicesavailable in dematerialized environment that are extended to the clients are asfollows:

Dematerialization

Rematerialization

Custodial services

Debit or Credit facility

Hypothecation

Speed-e along with smart card

Corporate benefits like bonus, stock split, dividend payment, etc.

This is an illustrative list of services available. The system of charging a fee for the services extended to an investor is in two-layers. The Depository charges theDPs and DPs in turn collect fee/charges from the investor. Each DP usesdifferent norms to classify charges depending on the extent of services rendered.

NSDL has a provision for collecting a one-time fee of 0.05 percent of marketcapitalization of the company, as custody fees for life. For these companies, nocustody charge is supposed to be charged from the investors for life.However, it is not clear whether DPs are passing this benefit to investors.Since 2-3 years with changing trends of industry and increased competition,broking houses reduce brokerage rates to very much extent.

Advanced technology :

The growth in technology and communications has impacted every aspect of business in some or the other form. These effects are enduring and havechanged the very way in which business is carried out.The stock market is one such institution whose very existence has beenchallenged by the growth in information technology. IT has turned the very idea

of a stock market on its head.

Technology has impacted the working of stock markets in every sense. However,a useful starting point for this study would be the study of dematerialization, or demat as it is popularly known as. This is simply because demat has changedthe way stocks are held and traded and therefore has effect on every other function of the market.

27



Dematerialization in simple terms means the conversion of shares from physicalto electronic form.Demat, enabled by the use of technology is probably is single most importantfactor which has repercussions on every aspect of the stock markets.Demat in India started with the creation of NSDL (National stock depository

limited) in 1996. UTI, was one of the first institutions to use demat when itdecided to dematerialize 50% of its holdings in 1997. SEBI gave a boost todemat, with compulsory trading on shares in demat form in specified scrips byinstitutional investors from Jan 15, 1998.

28



Market Size : Growth of Online Brokerage market

In five years of its existence in India, online broking has grown to account for atenth of the total trading volumes. If the numbers are considered for only the retail

segments, the growth is starker. Almost half of the Rs 5,000 crore-6,000 croredaily market volumes on the NSE are accounted for by non-retail entities such asforeign institutional investors, domestic institutions, mutual funds and arbitragetraders. Institutions aren't online customers anyway. Of the rest of the retailsegment, current estimates suggest that online broking's reach is close to 30 per cent.

As of September this year, there were 11.7 lakh Internet trading accountsregistered with the NSE, of which roughly 9.5 lakh are unique users. It's still asmall proportion of the estimated 3 crore Internet users in the country. As moresurfers take to trading online, analysts expect their number to keep doubling

every year until 30-40 per cent of India's overall trades are done online, as is thecase in some mature Internet markets like South Korea's.

The Internet's effect here has more to do with the bandwidth it has created for both brokers and clients. Banga, director of indiabulls offers an example."Traders from Ajmer use our online platform. It would otherwise have beenprohibitively loss-making to open a branch there." Thanks to the new channel,volumes are growing faster in the non-metros, where transparency is low inoffline trading. "These customers were made to pay higher charges by smallbrokers, since they weren't aware of the market rates," says PrasanthPrabhakaran, head of Kotaksecurities.com. That is one of the reasons why more

than 60 per cent of Kotak's daily online trading turnover comes from non-metros.

29



NSE’s growth story can be depicted by these figures :

Growth in cash market(online):

Month/Year

No Of Companies

No of Trades(lakh)

Turnover(Rs cr)

Avg dailyturnover(Rs cr)

Mar 2007 1084 710 167,954 7,998

April 2006 944 567 177,372 9,854

2005-06 929 6,088 1,569,556 6,253

2004-05 839 4,510 1,140,071 4,056

2003-04 787 3,780 1,099,535 4,328

2002-03 788 2,398 617,989 2,462

0

2,000

4,000

6,000

8,000

10,000

12,000

2002-

03

2003-

04

2004-

05

2005-

06

6-Apr Mar-

07

Years/Month

A v e r a g e T u r n o v e r ( R s C r

)

30



Porter's Five Forces AnalysisOf Online Brokerage Industry

Buyer Power

Awareness of investing knowledge :

Earlier retail investors often lack the knowledge and expertise in the financialsector that called them to approach the broking houses.But nowadays TV channels like CNBC and financial magazines, newspapers aregiving a brief knowledge and updates of financial sector to retail investors, alsothey provide investors tips to invest their money in stock market.Hence it increases the power of buyer and reduces his dependence.

Low Product and Service Differentiation Proves Beneficial :

The retail broking services provided by the various companies are homogeneouswith very low product differentiation. This allows customers to enjoy a greater bargaining power.

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the risingnumber of IPO's coming to the market.We see traction when initial public offers (IPOs) are announced. People find theonline platform a very convenient way to enter the market.In 2004-05, Rs 25,526 crore was raised in the markets, almost 450 per cent

more than the amount raised in 2002-03. For instance, in the month that theMaruti IPO was announced, 300,000 demat accounts were opened. In anaverage month, the figure is about 100,000.

Since 2002, the number of demat accounts has doubled to 7.1 million, many of them belonging to new investors applying for IPOs.

31



Threat of Competitors

Move towards consolidation

The bigger trend in the industry is consolidation, just like it happened in the USand South Korea, where 90 per cent of online trades are with the top 10 players.

Says Banga: "As the industry grows, people prefer going to solid brands thathave strong balance sheets. The big guys can invest in infrastructure, technologyand risk management systems." As a result, several sub-brokers have beenpushed by client demand to take up franchises of the bigger brokers.

The consolidation in the broking industry should see more and more businessesshifting from small, hole-in-the-wall brokerages to big players.

Lot of brokerage companies is moving towards consolidation with the smaller ones becoming either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking

Many leading banks are coming into retail broking field like ICICI , HDFC , UTIetc.

Actually as online trading has come into feature; it would be easy for banks to

give online trading platform with depositary services. Although they are into onlyonline trading, they are not dealing with proper services of RM (Risk manager0.

Entry Of foreign Players

Even the foreign players are seeing opportunities in the Indian markets. Variousforeign banks like ABN Amro and others are planning to enter the Indian retailbrokerage industry.

US-based E*Trade took a 34 per cent stake in IL&FS Investsmart (along withSoftbank) in March 2004

32



Online Trading Competes with Traditional Brokerage

There is an increasing demand for online trading due to consumer's growingpreference for internet as compared to approaching the brokers.

In India, the economics don't allow it to be a cost game. Says Bagchi: "Brokeragecosts are already so low (0.1-0.5 per cent for delivery) that the online mediumdoesn't really offer any significant price advantages."

Traditional brokers are now scrambling to scale up their online operations.Meanwhile, ICICI Direct & Indiabulls have raced ahead of the others. The other online players that make up the top six - Sharekhan (owned by SSKI),Religar(earlier fortis securities), Kotak Securities, HDFC Securities and 5paisa(owned by Indiainfoline) - all have hybrid models. Collectively, these players have75-80 per cent of the market.The remaining 130 players, who were given licenses to open online tradingplatforms by the NSE, can be divided into three categories - those that are activebusinesses but have less than 5 per cent of the online market (Motilal Oswalamong them); those that invested in the technology but weren't able to get their projects off the ground (the Lalbhai Group's Anagram Securities), and those thatsimply bid for the licence but didn't pursue business. Most players fall in the lastcategory.

Threat of New Entrants

Entry of Foreign Players

As it is already discussed above, many foreign players like ABN Amro and US-based E*Trade are taking place in Indian retail brokerage industry.

New forms of trading

New forms of trading including T+2 settlement system, dematerialization etc arestrengthening the retail brokerage market and attracting foreign companies to

enter the Indian industry

33



Threat of Substitutes

Alternative Investment Options :

Various alternative forms of investment including fixed deposits with banks andpost offices etc act as substitutes to retail broking products and services.The most important alternative investment form is Mutual Fund investment inwhich gain is as higher as in share investment but risk is too low.

34



Comparative Assessment

Company Profiles

IntroductionReligare is driven by ethical and dynamic process for wealth creation. Based onthis, the company started its endeavor in the financial market.

Religare Enterprises Limited (A Ranbaxy Promoter Group Company) throughReligare Securities Limited, Religare Finvest Limited, Religare CommoditiesLimited and Religare Insurance Broking Limited provides integrated financialsolutions to its corporate, retail and wealth management clients. Today, itprovides various financial services, which include Investment Banking, CorporateFinance, Portfolio Management Services, Equity & Commodity Broking,

Insurance and Mutual Funds. Plus, there’s a lot more to come your way.Religare is proud of being a truly professional financial service provider managedby a highly skilled team, who have proven track record in their respectivedomains. Religare operations are managed by more than 3000 highly skilledprofessionals who subscribe to Religare philosophy and are spread across itscountrywide branches.

Today, it has a growing network of more than 300 branches and more than 580business partners spread across more than 400 cities/towns in India and a fullyoperational international office at London.Unlike a traditional broking firm, Religare group works on the philosophy of

partnering for wealth creation. We not only execute trades for our clients but alsoprovide them critical and timely investment advice. The growing list of financialinstitutions with which Religare is empanelled as an approved broker is areflection of the high-level service standard maintained by the company.

35



GROUP COMPANIES

Religare Enterprises Limited group comprises of Religare Securities Limited,Religare Commodities Limited, Religare Finvest Limited and Religare InsuranceBroking Limited which deal in equity, commodity and financial services business.

1. Religare Securities Limited

RSL is one of the leading broking houses of India and are dealing into EquityBroking, Depository Services, Portfolio Management Services, Internet Trading,Institutional Equity Brokerage & Research, Investment Banking, MerchantBanking and Corporate Finance.To facilitate free and fare trading process Religare is a member of major financialinstitutions like, National Stock Exchange of India, Bombay Stock Exchange of

India, Depository Participant with National Securities Depository Limited andCentral Depository Services (I) Limited, and a SEBI approved Portfolio Manager.RSL serves a platform to all segments of investors to avail the opportunitiesoffered by investing in Indian equities either on their own or through managedfunds in Portfolio Management

2. Religare Commodities Limited

Religare is a member of NCDEX and MCX and provides platform for trading incommodities, which is an online facility also.RCL provides platform to both agro and non-agro commodity traders to derive

the actual price of the commodity and also to trade and hedge actively in thegrowing commodity trading market in India.With this realization, Religare Commodities is coming up with its branches atmandi locations. It is a flagship effort from our team which would be helpful infacilitating trade and speculating price of commodities in future.

3. Religare Finvest

Religare Finvest Limited (RFL), a Non Banking Finance Company (NBFC) isaggressively making a name in thefinancial services arena in India. In a fast paced, constantly changing dynamic

business environment, RFL has delivered the most competitive products andservices.RFL is primarily engaged in the business of providing finance against securities

in the secondary market. It also provides finance for application in Initial PublicOffers to non-retail clients in the primary market .RFL is also planning to initiate personal loan portfolio as fund based activity andmutual fund distribution as fee based activities.

36



Along with this, the company also undertakes non-fund based advisoryoperations in the field of Corporate Financing in the nature of Credit Syndicationwhich includes inter alias, bills discounting, inter corporate deposit, workingcapital loan syndication, placement of private equity and other structuredproducts.

4. Religare Insurance Broking Ltd.

Religare has been taking care of financial services for long but there was amissing link. Financial planning is incomplete without protective measure i.e.structured products to take care of event of things that may go wrongReligare Insurance Broking Limited. As composite insurance broker, deals inboth insurance and reinsurance, providing our clients risk transfer solutions onlife and non-life sides.This service will take benefit of Religare’s vast business empire spreadthroughout the country -- providing our valued clients insurance services across

India. We aim to have a wide reach with our services – literally! That’s why weare catering the insurance requirements of both retail and corporate segmentswith products of all the insurance companies on life and non-life Still, there ismore in store. We also cater individuals with a complete suite of insurancesolutions, both life and general to mitigate risks to life and assets through our existing network side.For corporate clients, we will be offering value based customized solutions tocover all risks, which their business is exposed to. Our clients will be supportedby an operations team equipped with the best of technology supportReligare Insurance Broking aims to provide neutral, transparent and professionalrisk transfer advice to become the first choice of India

Vision

Providing integrated financial care driven by the relationship of trust andconfidence.

Mission

To be India's first Multinational providing complete financial services solutionacross the globe.

37



Why customer trade with Religare?

1. Personal Assistance

• Dedicated dealers for facilitating trading and post trade needs.

• Dedicated Relationship Managers for assisting multiple investment needs.

2. Research & Advisory

• Regular news and updates on market

• Research service over SMS to keep you abreast

• Daily and weekly technical reports

• A complete information report on results and performance individualcompanies. Complete reports on various economic sectors and their performance along with analysis of few major companies in that sector

• Trading calls in Futures & Options

• Daily capsule of Market indices and index movement, national andinternational corporate news, and their performance along with forthcoming IPO tracker.

3. Add-Ons

• Access to all your accounts through your Customer Relationship Number (CRN)

• Access your ledger balances and account information over internet,branch and call center

PRODUCT & SERVICES

Equity & Derivatives

Commodity

Depository

Portfolio Management Services

International Equity & Commodity

NRI Services

Investment Banking

Corporate Advisory Group

38



EQUITY & DERIVATIES

Religare provides two type of Product in Equity & Derivative market:

R-ACE (Religare Advanced Client Engine) is a group of highly sophisticatedtrading platforms meant for tech-savvy individuals. Various platforms of R-ACEhave been designed to suit the varying needs of different investors. It is fullyautomated platform, wherein the client may do all his investments through

Internet.

R-ACE clients also have the option to trade on following types of product.

A. R-ACEB. R-ACE LiteC. R-ACE pro

R-ACE

• Account Activation Charges Rs.299/-

• Minimum margin of Rs.5000/- required

• No software installation required, easily accessible on browser

• NSE cash segment, NSE F&O and BSE on single platform

• Trade online and over phone

• Access your ledger balances and account information over Internet, SMSand phone.

•

Integrated DP, back- office and trading account• Online transfer of funds through multiple banks

• Lifetime free DP account (No annual maintenance charges)

• Earn interest on cash margin deposited with us

• 24∗7 Customer support center

39



R-ACE lite

• Account Activation Charges Rs.499/-


• No software installation reqqired, easily accessible on browser

• NSE cash segment, NSE F&O and BSE on single platform• Real- time streaming quotes

• Alerts

• Hot key functions


• Integrated DP, back- office and trading account

• Online transfer of funds through multiple banks


• Earn interest on cash margin deposited with us

•24

∗7 Customer support center

R-ACE pro

• Account Activation charges Rs. 999/-


• Traders terminal on your desktop

• NSE cash segment,NSE F&O and BSE on single platform

• Real- time streaming quotes

• Advanced alerts

• Technical charting (intra- day and EOD)

• Multiple watch lists

• Advanced hot- key function

• Derivative chains

• Futures & Option calculator


• Integrated DP, back- office and trading account



• Trade online and over phone

• Earn interest on cash margin deposited with us• 24∗7 Customer support center

40



RELIGARE’s ALLY also known as R-ALLY is a perfect partner for savvyinvestors.

It has been designed to provide world-class experience and expertise toinvestors. Clients opting for this service would be provided services managed bya team of dedicated relationship managers and experienced trade dealers. Theywould not only assist the client in information dissemination but would also takecare of all post trade requirements

R-ALLY clients also have the option to trade on following types of product.

A. R-ALLYB. R-ALLY LiteC. R-ALLY pro

R-ALLY

• R-ALLY clients have no option to trade on their own through our online

platforms.

• No subscription fees

• No Enrolment Deposit

• Brokerage : Jobbing : 0.10% each side + All TaxesDelivery : 0.50% each side + All Taxes(Negotiable based on volume)

R-ALLY lite

• Account Activation charges Rs. 500/-

• Browser based platform, easily accessible over internet explorer fromanywhere

• Minimum margin to be maintained Rs.10000

41

http://www.religare.in/general/offr_rally.html#%23



• No software installation required


• Real- time streaming quotes


• Hot key function

• Online transfer of funds through multiple banks• Trade Online and Over phone at Branch

• Brokerage:

Trading 0.10% each side + All Taxes

Delivery 0.50% each side + All Taxes

(Negotiable based on volume)

R-ALLY pro

• Application based platform

• Account Activation charges Rs. 1800 (refundable subscription fees )

• Traders’ terminal on your desktop


• Real time streaming quotes


• Alerts and triggers

• Advanced Hot key functions


• Trade Online and Over phone at Branch

• Make and save your own workspace

• View charts

• Brokerage :

Trading 0.10% each side + All Taxes

Delivery 0.50% each side + All Taxes

(Negotiable based on volume)

FUTURE PLANS (NEED TO HAVE STRATEGIC

PERSPECTIVE WITH TIMELINESS)

7 00,000 + retail customers being serviced through centralized call centre /web solution.

400branches/semi-branches servicing affluent/aggressive traders throughhighly skilled financial advisors.

1800 independent investment managers/franchisees servicing 50000highly valued clients.

42



Strong advisory role through Fundamental & technical research.

New initiatives - Portfolio Management Services & Commodities trading.

Depository Services

Religare is a depository participant with the National Securities DepositoryLimited and Central Depository Services (India) Limited for trading andsettlement of dematerialized shares. Religare performs clearing services for allsecurities transactions through its accounts. We offer depository services tocreate a seamless transaction platform – execute trades through ReligareSecurities and settle these transactions through the Religare DepositoryServices. Religare Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution thattakes care of all your needs.

Dematerialization and trading in the demat mode is the safer and faster alternative to the physical existence of securities. Demat as a parallel solutionoffers freedom from delays, thefts, forgeries, settlement risks and paper work.This system works through depository participants (DPs) who offer dematservices and the securities are held in the electronic form for the investor directlyby the Depository. Religare Depository Services offers dematerialization servicesto individual and corporate investors. We have a team of professionals and thelatest technological expertise dedicated exclusively to our demat department,apart from a national network of franchisee, making our services quick,convenient and efficient.

Problems of Religare

Religare has failed to evolve into a widespread Internet broking firm because of its un-focused promotional strategies (advertisements in electronic media,newspapers, etc) across the length and breadth of India. Although it is a well-known broking house in some states like Maharashtra, Gujarat, etc.It still lacksconsiderable awareness in the northern parts of India where its competitors havebeen building their reputation very rapidly.

The other problem faced by Religare is that they give more attention to HNIs(high networth individuals) as compared to retail investors or individuals; this iswhy volumes of trading at Religare are less as compared to its competitors.

43



44



OTHER MARKET PLAYERS

(COMPETITORS )

5paisa.com

Company Background

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 fromoffering online trading in stock market the company offers mutual funds online. Italso 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 + STDelivery 0.50% each side + ST

45



PRICING FOR HNI CLIENTS

Trader Terminal


•Demat 1st Yr: Rs 250•Initial Margin: Rs 5000(Compulsory)•Min Margin Retainable: Rs 1000•Brokerage:

Trading 0.10% each side + STDelivery 0.50% each side + ST(Negotiable to 0.05% each side & 0.25%)

•Account Access ChargesMonthly Rs 800, adjustable against BrokerageYearly 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 heavycompared to Speedtrade charting)

•Manual Accounting

The 5 paisa accounting system is manual, Online fund transfer through bank isnot credited instantly. Limit is provided EOD for shares sold from DP, or callSimilarly limit released for shares sold under BTST is manual Delay in receivingpay-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 keepaccount active. This can be withdrawn only on closure of account.

46



KOTAK SECURITIES

Company Background

Kotakstreet is the retail arm of kotak securities. Kotak Securities limited is a jointventure 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 22.5 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 Rs5000/- Account opening free with Rs 10,000 Margin OR Competitor Contract Note.

• No Flexibility in Leverage – Dependent on Type of Account ( 4 to 6 timesonly) 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, Nonrefundable

Many Other Charges:• Rs 22.5 p.m towards DP AMC charges

• DP incoming charges extra, 0.02%

47

http://www.kotaksecurities.com/home/index.shtml



• Rs 1,000 as retainable Margin to keep account active

• Rs 25 per call after 20 calls for the month

Indiabulls

Company Background

India Bulls is a retail financial services company present in 70 locations covering62 cities. It offers a full range of financial services and products ranging fromEquities to Insurance. 450 + Relationship Managers who act as personal financialadvisors

Online Account Type

•Signature Account: Plain Vanilla Account with focus on Equity Analysis. Theequity analysis is a paid service even for A/c holders

•Power Indiabulls: Account with sophisticated trading tools, low commissionsand priority access to R.M

Pricing of IB 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


•Demat: Rs 200 if POA is signed, No AMC for this DP•Initial Margin: NIL•Brokerage: Negotiable

48



Problems Of IndiaBulls

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 sameis 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 businessgenerated from client. This can lead to over leveraged (Interest) & high frequency(Brokerage) trading, which may not be in the best interest of the client.

49



ICICI DIRECT

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 BankLimited.

Account Types

ICICI Direct e-invest Account:

Premium trading interface of ICICIDirect Link is given to DBC partners and HNI’sPlain Vanilla Account with focus on 3 in 1 advantage. Differentiated in serviceswithin the account.

1. Cash on spot 2. MarginPlus

Account Opening: Rs. 950Schemes: For short periods Rs 950 is refundable against brokerage generatedin 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: NilBrokerage: 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 InterfaceSlow website interface with no real-time quotes creates dissatisfaction amonghigh frequency traders

Margin trading restriction

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The margin trading system is available up to 2:45 p.m, with outstanding netpositions under margin segment automatically squared off at any time between2:45 – 3:30 p.m. Thus no control of square off price.

Morning Trades Issue

Being one of the websites with largest no of after hour orders which are pushed1st thing in the morning, creates a choking of orders to the exchange, causesdelay of confirmations for new order placed during the early morning trades.

Restriction of BTSTThe sale of shares purchased is restricted to T+1 day and is not permitted onT+2 Day.

No leverage for Delivery tradesDelivery is restricted to the total money allocated into the trading account.

No flexibility on leverage on Intra-day tradesThe leverage of 4 times is available for intra- day trades.

Restriction of Bank AccountThe choice of bank is restricted to ICICI Bank.

Higher Brokerage rates with slabsThe delivery brokerage is pegged at 0.75% and trading at 0.10% each side, thismakes is very unviable for customers dealing in large volumes. Althoughprogressively the delivery and trading brokerage reduce as volumes go up.

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SWOT Analysis Of Religare

Strengths

1. It is a pioneer in online trading with a turn over of Rs.400 crores and morethan 4300 peoples working in the organization.

2. Religare is A Ranbaxy promoter Group Company.

3. Religare provides multi-channel access to all its customers through astrong online presence with www.religare.in, 580 share shops in 300 citiesand a call-center based Dial-n-Trade facility

4. Religare has dedicated research teams for fundamental and technicalresearch, Which constantly track the pulse of the market and providetimely investment advice free of cost to its clients which has a strike rate of 70-80%.

Weakness

1. Localized presence due to insufficient investments for countrywideexpansion.

2. Lack of awareness among customers because of non-aggressivepromotional strategies (print media, newspapers, etc).

3. Lesser emphasis on customer retention.

4. Focuses more on HNIs than retail investors which results in meager market-share as compared to close competitors.

Opportunities

1. With the booming capital market it can successfully launch new services

and raise its client’s base.

2. It can easily tap the retail investors with small saving through promotionalchannels like print media, electronic media, etc.

3. As interest on fixed deposits with post office and banks are all time low,more and more small investors are entering into stock market.

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4. Abolition of long-term capital gain tax on shares and reduction in shortterm capital gain is making stock market as hot destination for investmentamong small investors.

5. Increasing usage of Internet through broadband connectivity may boost awhole new breed of investors for trading in securities.

Threats

1. Aggressive promotional strategies by close competitors may hamper Religare’s acceptance by new clients.

2. Lack of sufficient branch-offices for speedy delivery of services.

3. More and more players are venturing into this domain, which can further reduce the earnings of Religare.

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METHODOLOGY

Methodology For SamplingThe team divided the entire city into zones and drew out samples out of eachzone. The size of samples drawn from each zone depended on the prospectiveness of the particular area. For e.g., if a particular research area consisted of Offices then the sample size would obviously be higher than an area likeShopping mall or PVR. This is because Office employees constitute the servicesectors who are the active investors of today. Also, the office areas consist of people from the business class who have always been in the hunt for quickmoney, not to forget that smart and timely investment in the share market canyield to enormous returns.

After dividing the city into zones, the Target audience was probed usingInterviews and questionnaires. These were later analyzed to draw out conclusiveresults.

4.2] Methodology for Customer Acquisition

The leads for customer acquisition primarily came from the questionnaires filledup by prospective customers. Apart from these customers were also pitchedthrough personal references and contacts. Moreover the organization takes everypossible effort in order to spread mass awareness. As a result of this publicity

campaign, influenced prospective customers approach the organization. Thereare various ways to make people aware about the organization as suchMarketing Research, Canopy, Personal References, Pop-up windows havingcollaboration with various portals e.g. Rediffmail.com etc. Person with adequateinterest leaves his contact information. Later on these leads are contactedpersonally for further development. The organization has efficient sales stuff thatexcels in this job. Part time trainees are also appointed for the same. This workforce been perfectly supervised by the Managers. Thus all these factors sum upinto a result oriented work force. These leads were the contacted through tele-calling and after developing a relationship, they were pitched in at the addressesprovided by them. After giving them a presentation about the product and its

advantages over its competitors, they were promised of a Demo by companysales force in case a sale had resulted. Also references were collected from suchpeople and the same methodology was repeated. For each and every customer personal quarries have been entertained after the sale is done.

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Data Source

Data used for the research work was primary and secondary in nature.Secondary data is the data that was collected from another purpose and alreadyexists somewhere. Primary data is gathered for a specific purpose and iscollected by the researcher from mapping or cold calls methods. The data usedin this project is primary data collected from the various categories of investorsfrom different areas. Secondary data was collected using various journals andpublications like:

• NSE’s module on Capital Market, October ‘03

• Business Today, Feb’05 edition

• Report on internet based securities trading and services by a committeechaired by Shri O P Gahrotra, Sr. Exec Director, SEBI.

• Share investor’s list of broking houses

Sample Size:

Sample size for the questionnaire prepared for Investors was 50.

Process of conversion of securities into the demat form

Securities specified as being eligible for dematerialization by the depository in itsbye laws and as under the SEBI (Depositories and Participants) Regulations,1996 (the Regulations) can be converted or issued in a dematerialized form. Theprocess of conversion of securities into a dematerialized form or the issuance of the same in a dematerialized form can be explained thus:

Firstly, the issuer company, whose securities are eligible for dematerialization, has to enter into an agreement with a depository for dematerialization of securities already issued, or proposed to be issued tothe public or existing shareholders.

The investor is given an option to hold the securities in a dematerializedform and it is his prerogative to exercise the option to hold the securities inthat manner.

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The depository enters into an agreement with the participants who are theagents of the depository and co-functionaries in the process of dematerialization of securities.

Any person can then enter into an agreement, through the participant, withthe depository for availing the services provided by the depository.

Upon the entering into such agreement with the depository, the personhas to surrender the certificate pertaining to the securities sought to bedematerialized to the issuer. This surrender is affected in the followingmanner:

The person (beneficial owner) who has entered into an agreement with theparticipant for dematerialization of the securities has to inform theparticipant about the details of the certificate of such securities.

The beneficial owner has to then surrender the said certificate to theparticipant.

The participant informs the depository about the particulars of thesecurities to be dematerialized and the agreement entered into betweenhim and the beneficial owner.

The participant then transfers the certificate pertaining to the saidsecurities to the issuer along with the details and particulars of thesecurities.

These certificates are mutilated upon receipt by the issuer and substitutedin the records against the name of the depository, who is the registeredowner of the said securities. A certificate to this effect is sent to thedepository and all stock exchanges where the security is listed.

Subsequent to this, the depository enters the name of the person who hassurrendered the certificate of security as the beneficial owner of thedematerialized securities.

The depository also enters the name of the participant through whom the

process has been carried out and sends an intimation of the same to thesaid participant.

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Depository System (working model)

NSDL carries out its activities through various functionaries called businesspartners who include Depository Participants (DPs), Issuing companies and their Registrars and Share Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. NSDL is electronically linked to each of these businesspartners via a satellite link through Very Small Aperture Terminals (VSATs) or through Leased landlines. The entire integrated system (including the electroniclinks and the software at NSDL and each business partner's end) is called the"NEST" [National Electronic Settlement & Transfer] system.

Benefits of Depository System

In the depository system, the ownership and transfer of securities takes place bymeans of electronic book entries. At the outset, this system rids the capitalmarket of the dangers related to handling of paper. NSDL provides numerousdirect and indirect benefits, like:

• Elimination of bad deliveries: In the depository environment, onceholdings of an investor are dematerialized, the question of bad deliverydoes not arise i.e. they cannot be held "under objection". In the physicalenvironment, buyer was required to take the risk of transfer and faceuncertainty of the quality of assets purchased. In a depository environment

good money certainly begets good quality of assets.

• Elimination of all risks associated with physical certificates: Dealingin physical securities have associated security risks of theft of stocks,mutilation of certificates, loss of certificates during movements throughand from the registrars, thus exposing the investor to the cost of obtainingduplicate certificates and advertisements, etc. This problem does not arisein the depository environment.

• Immediate transfer and registration of securities: In the depositoryenvironment, once the securities are credited to the investors account on

pay out, he becomes the legal owner of the securities. There is no further need to send it to the company's registrar for registration. Havingpurchased securities in the physical environment, the investor has to sendit to the company's registrar so that the change of ownership can beregistered. This process usually takes around three to four months and israrely completed within the statutory framework of two months thusexposing the investor to opportunity cost of delay in transfer and to risk of loss in transit. To overcome this, the normally accepted practice is to hold

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the securities in street names i.e. not to register the change of ownership.However, if the investors miss a book closure the securities are not goodfor delivery and the investor would also stand to loose his corporateentitlements.

•

No stamp duty: For transfer of any kind of securities in the depository.This waiver extends to equity shares, debt instruments and units of mutualfunds.

• Faster settlement cycle: The exclusive demat segments follow rollingsettlement cycle of T+2 i.e. the settlement of trades will be on the 2ndworking day from the trade day. This will enable faster turnover of stockand more liquidity with the investor.

• Faster disbursement of non cash corporate benefits like rights,bonus, etc. NSDL provides direct credit of non cash corporate

entitlements to an investors account, thereby ensuring faster disbursementand avoiding risk of loss of certificates in transit.

• Reduction in brokerage by many brokers for trading indematerialized Securities: Brokers provide this benefit to investors asdealing in dematerialized securities reduces their back office cost of handling paper and also eliminates the risk of being the introducing broker.

• Reduction in handling of huge volumes of paper

• Periodic status reports to investors on their holdings and transactions,

leading to better controls

• Elimination of problems related to change of address of investor,transmission, etc In case of change of address or transmission of dematshares, investors are saved from undergoing the entire change procedurewith each company or registrar. Investors have to only inform their DP withall relevant documents and the required changes are effected in thedatabase of all the companies, where the investor is a registered holder of securities.

• Elimination of problems related to selling securities on behalf of a

minor: A natural guardian is not required to take court approval for sellingdemat securities on behalf of a minor.

• Ease in portfolio monitoring: Since statement of account gives aconsolidated position of investments in all instruments.

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Disadvantages of Dematerialization

The disadvantages of dematerialization of securities can be summarized asfollows:

Trading in securities may become uncontrolled in case of dematerializedsecurities.

It is incumbent upon the capital market regulator to keep a close watchon the trading in dematerialized securities and see to it that trading doesnot act as a detriment to investors. The role of key market players incase of dematerialized securities, such as stock-brokers, needs to besupervised as they have the capability of manipulating the market.

Multiple regulatory frameworks have to be confirmed to, including theDepositories Act, Regulations and the various Bye Laws of various

depositories. Additionally, agreements are entered at various levels inthe process of dematerialization. These may cause anxiety to theinvestor desirous of simplicity in terms of transactions in dematerializedsecurities. However, the advantages of dematerialization outweigh itsdisadvantages and the changes ushered in by SEBI and the CentralGovernment in terms of compulsory dematerialization of securities isimportant for developing the securities market to a degree of advancement. Freely traded securities are an essential component of such an advanced market and dematerialization addresses such issuesand is a step towards the advancement of the market.

Dematerialization with Religare

Dematerialization is the process by which a client can get physical certificatesconverted into electronic balances maintained in his account with the DP.

Features:

Holdings in only those securities that are admitted for dematerialization byNational Securities Depository Ltd (NSDL) can be dematerialized.

Structure of holding in the securities should match with the account

structure of the depository account. Now shares in different order of names can also be demat-ted.

Example:

If the shares are in the name of X and Y, the same cannot be dematerialized intothe account of either X or Y alone. However if the shares are in the name of X

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first and Y second, and the account is in the name of Y first and X second, thenthese shares can be dematerialized in this account.Only those holdings that are registered in the name of the account holder can bedematerialized. Physical shares which have not been transferred and are stillthere with a transfer deed cannot be dematted. Only a few companies have been

given the permission to offer Transfer-cum-Demat. The list of these companiescan be viewed here.

Rematerialization:

Rematerialization is the process by which a client can get his electronic holdingsconverted into physical certificates. The client has to submit the rematerialisationrequest to the DP with whom he has an account along with a Remat requestform. The physical shares will be posted by the company directly to the clients.

Trades

For all sales made by clients, the shares will have to be given to the broker, sothat the Pay In can be made by the broker to the stock exchange concerned. For that it's essential that the shares be transferred to the account of the broker wellbefore the deadline date.You must confirm with your broker the settlement date and settlement number and then submit your instructions to your DP. Also it's important to give theinstructions to your DP as early as possible.

Pledge

Pledge enables you to obtain loans against your dematerialised shares. So youget liquidity without having to sell your shares. A highly simplified procedure maybe availed of for pledging of securities in the electronic mode. The pledgedsecurities continue to be reflected in the DP account of the clients (pledgor) butthe concerned securities are "blocked" and cannot be used for any transactions.As and when the pledge is to be removed, based on confirmations received fromboth the pledgor and the pledgee, the blocked securities will be released to "FreeBalance" of the account holder.

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KEY FINDINGS AND OBSERVATIONS

Nature of Investment Prefered

44%

28%

16%

12%Long Term

Short Term

Short Term & High

Return

Long Term High

Return

Interpretation: This shows that most of the investors prefer long terminvestment (Delivery basis). Sort term high return investment indicates thoseinvestors who believes that high risk provides high return.

Perception of Investors about Investment InStock Market

6%

34%

60%

Risky

Safe

Volatile

Interpretation This shows that 60 % investors assume investmentvolatile, 30 % assume risky, and 6 % assume safe in stock market. Itmeans that mostly, investors see investment in stock market volatile.

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Awareness of Broaking Firms

58%

52%

78%Religare

India InfolineAny Other's

Interpretation: This pie chart shows that Religare has a reasonable amount of

Brand awareness in terms of a premier Retail stock broking company. Thecompany to increase its market share over its competitors should further leverage this brand image.

Awareness of Demat & Trading A/c

68%

32%

Yes

No

Interpretation: Coz Indian stock market is still in progress stage sothere are some people they do not have knowledge about sharemarket and how to play in this market.

CONCLUSION

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In spite of these optimistic numbers, online trading in India is at a very nascent

stage (about 5-8 percent of total traded volumes) compared to countries likeSouth Korea (60 percent), US (40 percent) and UK (20 percent). Online trading inthe year 2000-2001 accounted for only Rs 50,170 crore out of total tradedvolume of Rs 25,08,445 crore.

There are currently close to 70 online brokerages in India with ICICIDirect,KotakStreet, Religare, MotilalOswal, IndiaBulls and 5Paisa being some major players. However, due to limited volumes, no online brokerage is currentlymaking money and a shakeout is imminent in the near future. The going isexpected to get tougher with the advent of capital account convertibility. On an

average, Rs 40 crore per day (Rs 1,000 crore per month) is likely to be thethreshold breakeven for online brokerages. There is scope for multiple players asthe entire segment is in a growth stage.

While there are many factors that need to be understood to justify this assertion,one simple fact is worthy of note. The average age of the Indian Internet user ascited by a recent IDC survey is 27 years. The average age of the head (andfinancial decision taker) of the Indian equity-investor household, as revealed bythe SEBI-NCAER study of Indian investors in 2000 is 45 years. The older,experienced equity investor is not online today and the fact that older, mature

investors are not ‘tech-positive’ and hence unlikely to move to online trading is amajor barrier to the growth of e-broking in India.

Here, the numbers of banks with a strong online presence are very few - again,dominated by new private banks and foreign banks. Both have lesser reachowing to a smaller network in the country. The relative inability of large public-sector banks to offer-facilities for Internet banking is a barrier in this regard.Besides, Internet penetration in India is still very low and concerns about securityalso tend to predominate. In markets like the US, online brokerages areadvertised very heavily. Online trading in India has so far not seen similar levels

of aggressive advertising, with the exception of ICICI Direct and India bulls.Besides, only scripts that have been compulsorily dematerialized can be tradedon the net here.

Brand building, assurances of security, developing multiple delivery channelswith anytime telephonic grievance redressed options is some directions, which

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may be of use for the immediate future. Online trading firms can also marketthemselves aggressively to students who are entering the professional arena,ensuring that their entry into equity happens online. One of the major issuesgoverning trading is the prevailing uncertainty in the market.

Hence, not withstanding the current sentiment in the market, potential for onlinetrading is still immense in India. With a more transparent system, increasedawareness, and a sustained bullish market we would surely be heading tobecome the largest online stock trading country by the turn of the next decade.

RECOMMENDATIONS

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We suggest following measures, which Religare could take so as to take onheavy competition from Indiabulls and 5 Paisa.com :

1. To identify regions where promotions are required. Religare lacks visibilityin northern region where as it is a well known name in western region.Even then, its promotional campaign focuses on western region where asnorthern region is still waiting for promotional campaigns.

2. Try to reduce cost, so that benefits can be passed on to customers. Senior managers at Religare keep on telling that it is difficult to reduce cost,because of services we provide. But the fact is, India being a pricesensitive market; people at times go for monetary benefits rather than for long-term non- monetary benefits.

3. If charges can’t be reduced because of costs involved, make the servicescustomized, so that services are provided to only those customers whoare willing to pay the price for services they are getting and let the other customers enjoy costs benefits without getting services.

4. Concept of margin funding should be introduced, as more and morepeople are asking for it.

5. Religare should contact with their clients regularly for knowing theproblems faced by them. This will help Religare in providing best services

to customers. This will result in additional customer base by getting further references from satisfied clients.

6. To launch slab wise brokerage structure as Religare has fixed brokeragestructure, which cannot be negotiated. But other players in the marketoffer launch slab wise brokerage structure, which motivate customers toincrease their volumes.

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References

Books and Newspapers:

1 The Economic Times, Business Standard, Business line2 Securities Market (Basic) Module :--NCFM3 Training Kit Provided by the Religare.4 Indian financial system by M.Y KHAN5 NSDL Depository operations module :--NCFM

URLs:

1 www. religare .in

2 www.indiainfoline.com

3 [email protected]

4 www.economics times.com

5 http://www.investopedia.com/articles/

6 www. nseindia.com

7 www.bseindia.com

8 www.moneycontrol.com

JitendraVirahy

as

[email protected]

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Appendices

QUESTIONNAIRE

(THIS QUESTIONNAIRE IS FOR ACADMIC PURPOSE ONLY)

NAME……………… DESINATION …………

AGE………………… CONTACT NO…………..

Q1. Are you saving oriented?

a. Yes b. No

Q2. In share which type of investment you prefer?

a. Long term b. Short term c. High returns

Q3. What is your perception regarding dealing in share market?

a. Risky b. Safe c. Volatile d. Any other

Q4. What mode do you prefer to enter the share market?

a.. New issue b. Trading (broker)

Q5. How often Do you sell or purchase securities?

a. Once in month b. Once in 6 months c. Any others

Q6. Are you aware of Demat and Trading a/c?

a.Yes b. No

Q7. Do you have any Demat and Trading a/c?

a.Yes b. No

Q8. Do you know which bank/ institution provide Demat a/c?

a. RELIGARE b. INDIAINFOLINE c. Any other

Q9. What reasons make you to choose?

a. Close to house b. Services rendered

c. Staff courtesy d. Any other

Q10. Are you satisfied by the services rendered by the bank or institution ?

a.Yes b. No

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JitendraVirahy

as [email protected]

Comparative Study on Services Provided by Different Broking Firms

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