“INVESTMENT IN CAPITAL MARKET IN INDIABULLS” AT INDIABULLS SECURITIES LTD.
Transcript of “INVESTMENT IN CAPITAL MARKET IN INDIABULLS” AT INDIABULLS SECURITIES LTD.
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INTRODUCTION
Indiabulls started in 1999 as an online broking firm. It soon ventured into offline broking, then
credit services, real estate, and lately into insurance (in JV with SocieteGenerale), a multi-
commodity exchange (in JV with MMTC) and so on. Now the group, co-founded by threeIITians,
Sameer Gehlaut, Rajeev Rattan and Saurabh Mittal, is looking at venturing into private equity
business.
Indiabulls Financial Services is the holding company of three other firms:
Indiabulls Securities, the broking and investment activities Indiabulls Insurance Advisors, a distributor of insurance products Indiabulls Commodities, a commodities trading broker
Indiabulls has emerged as one of the leading and fastest growing financial company in less than
two year, since its initial public offering in September 2004. It has a market capitalization of
around6,300 million(31st December, 2007) and consolidated net worth of the group is around
USD 905 million.
Indiabulls is India's leading Financial Services and Real Estate Company having over640 branches
all over India. Indiabulls serves the financial needs of more than4,50,000customerswith its wide
range of financial services and products from securities,derivatives trading, depositary services,
research & advisory services, consumer secured &unsecured credit, loan against shares and
mortgage & housing finance. With around 4000 Relationship Managers, Indiabulls helps its
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clients to satisfy their customized financial goals. Indiabulls through its group companies has
entered Indian Real Estate business in 2005. It is currently evaluating several large-scale projects
worth several hundred million dollars.
Business of the company has grown in leaps and bounds since its inception. Revenue of the
company grew at a CAGR of 159% from FY03 to FY07. During the same period, profitsof the
company grew at aCAGR of 184%.
"Indiabulls Financial Services Ltd"is listed on the National Stock Exchange, Bombay Stock
Exchange and Luxembourg Stock Exchange. Indiabulls and its group companies have attracted
more than USD 800 million of equity capital in Foreign Direct Investment (FDI) since March
2000. Some of the large shareholders of Indiabulls are the largest financial institutions of the
world such as Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon
Capital.
Learning from organization
Being a part of treasury department of Indiabulls, I have learnt so many practical things
about managing a part of finance in a company. My leanings are as follows:
Managing excess cash flow-How does a company manage excess cash and how does it
meet shortage of funds.
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Analysis of daily cash report, it is a main document for daily investment for Indiabulls.
I got in hand experience of bank guarantees, RTGS (Real time gross settlement) and how
they help in doing safe investment.
Managing the wealth of finance group- like how much to invest in mutual fundsand in
which mutual funds? How much to put in Fixed deposit, etc.
I got to know certain general but important things like how to work in time constraints.
Like in Indiabulls we have time limit for doing certain part of total process after that it has no
value and it could cause loss to the company.
Apart from departmental work, I experienced to work in a competitive organization which has
added value to my experience.
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Contribution to organization
My project includes study of various investment opportunities available to investors in India. It
includes detail explanation of each asset class and their comparison on risk and
return parameter.
In Treasury department of Indiabulls one of the prime activities was to manage cash on day to
day basis. The excess cash we used to invest on daily basis in mutual funds. Now, there are several
schemes and types of mutual funds, what I have analyzed during my period that they invest in
liquid funds and that could be liquid or liquid plus or some cash scheme. To explore more options
for investment I have shown what return we can expect from other asset classes and have
compared other schemes of mutual funds to broaden the investment base. In the report I have
shown that liquid funds give return of 7-8% in 3yrs. Other funds such as balanced and equity
fund provides higher return of 24% and 39% respectively. Return is high in these funds but their
major disadvantage over liquid fund is lack of liquidity. Where liquid fund can be redeemed next
day, these funds can't be redeemed so early.
But if we want to do investment for long time period then we can opt for these funds. For a short
span of time Govt. securities are other good option because this provides more or less same return
from 6 to7% as liquid funds and are highly liquid asset class. Over the mutual funds they are less
risky because mutual funds performance depends upon market performance and govt. securities
promise certain fixed return The firms online trading and investment site-www.raligare.com-was
launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail
customers across the country. Known for its jargon-free, investor friendly language and high quality
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research, the site has a registered base of over one lakh customers. The number of trading members
currently stands at over 5000. While online trading currently accounts for just over 1 per cent of the daily
trading in stocks in India, Indiabulls alone accounts for 22 per cent of the volumes traded online.
The content-rich and research oriented portal has stood out among its contemporaries because of
its steadfast dedication to offering customers best-of-breed technology and superior market
information. The objective has been to let customers makeinformed decisions and to simplify the
process of investing in stocks.
On April 17, 2002 Indiabulls launched SpeedTrade, a net-based executable application that
emulates the broker terminals along with host of other information relevant to the Day Traders.
This was for the first time that a net-based trading station of this caliber was offered to the
traders. In the last six months SpeedTrade has become a de factostandard for the Day Trading
community over the net.
Indiabulls has always believed in investing in technology to build its business. The company has
used some of the best-known names in the IT industry, like Sun Microsystems, Oracle,
Microsoft, Cambridge Technologies, Vignette, VeriSign Financial Technologies India LTD,
Spider Software Pvt. Ltd. to build its trading engine and content.
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OBJECTIVE
PRIMARY OBJECTIVE
Study of competitive market and to acquire new customer on the basis of need gap analysis.
SECONDARY OBJECTIVE
To analyze, interpret and study the competitiveness of various brokerage houses.
To know the attitude & preference of the general investors in the Indian capital market.
To analyze the various pros and cons in the capital market.
Making aware them to providing the good service by Indiabulls.
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LITERATURE REVIEW
In few years Share Market has emerged as a tool for ensuring ones financial well being.As
information and awareness is rising more and more people are enjoying the benefits of
investing in share market. The main reason the number of retail share market investors
remains small is that nine in ten people with incomes in India do not know that share
market exist. But once people are aware of Share market investment opportunities, the
number who decide to invest in share market increases .The analysis and advice presented
in this Project Report is based on market research on the saving and investment practices of
the investors and preferences of the investors for investment in Share market. This Report
will help to know about the investors Preferences in Share market means Are they prefer
any particular Asset Management Company (AMC), which type of Product they prefer,
which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow.
This Project as a whole can be divided into two parts.
The first part gives an insight about Share market and its various aspects, the Company
Profile, Objectives of the study, Research Methodology. One can have a brief knowledge
about Share market and its basics through the Project.
The second part of the Project consists of data and its analysis collected through survey
done on 50 people. For the collection of Primary data I made a questionnaire and surveyed
of 50 people. I also taken interview of many People those who were coming at the
Indiabulls securities where I done my Project. I visited other AMCs in Gurgaon to getsome
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knowledge related to my topic.This Project covers the topic INVESTMENT IN
CAPITAL MARKET.
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WHAT ARE STOCKS
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WHAT ARE STOCKS
1.1 The Definition of a Stock:
Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the
company's assets and earnings. As you acquire more stock, your ownership stake in the company
becomes greater. Whether you say shares, equity, or stock, it all means the same thing.
1.2 Being an Owner:
Holding a company's stock means that you are one of the many owners (shareholders) of a
company, and, as such, you have a claim (usually very small) to everything the company owns.
Yes, this means that technically you own every piece of furniture, every trademark, and every
contract of the company. As an owner, you are entitled to your share of the company's earnings
as well as any voting rights attached to the stock.
A stock is represented by a stock certificate. This is a fancy piece of paper that is proof of your
ownership. In today's computer age, you won't actually get to see this document because your
brokerage keeps these records electronically, which is also known as holding shares in Demit
form. This is done to make the shares easier to trade. In the past when a person wanted to sell his
or her shares, that person physically took the certificates down to the brokerage. Now, trading
with a click of the mouse or a phone call makes life easier for everybody.
Being a shareholder of a public company does not mean you have a say in the day-to-day
running of the business. Instead, one vote per share to elect the board of directors at annual
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meetings is the extent to which you have a say in the company. For instance, being a Microsoft
shareholder doesn't mean you can call up Bill Gates and tell him how you think the company
should be run.
The management of the company is supposed to increase the value of the firm for shareholders.
If this doesn't happen, the shareholders can vote to have the management removed--well, this is
the theory anyway. In reality, individual investors don't own enough shares to have a material
influence on the company. It's really the big boys like large institutional investors and billionaire
entrepreneurs who make the decisions.
It isnt too big a deal that the shareholders are not the ones managing the company. After all, the
idea is that you don't want to have to work to make money, right? The importance of being a
shareholder is that you are entitled to a portion of the companys profits and have a claim on
assets. Profits are sometimes paid out in the form of dividends.
The more shares you own, the larger the portion of the profits you get. Your claim on assets is
only relevant if a company goes bankrupt. In case of liquidation, you'll receive what's left after
all the creditors have been paid. This last point is worth repeating: the importance of stock
ownership is your claim on assets and earnings.
Another extremely important feature of stock is its limited liability, which means that, as an
owner of a stock, you are not personally liable if the company is not able to pay its debts. Other
companies such as partnerships are set up so that if the partnership goes bankrupt the creditors
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can come after the partners (shareholders) personally and sell off their house, car, furniture, etc.
Owning stock means that, no matter what, the maximum value you can lose is the value of your
investment. Even if a company of which you are a shareholder goes bankrupt, you can never lose
your personal assets.
1.3 Debt vs. Equity:
Why does a company issue stock? Why would the founders share the profits with thousands of
people when they could keep profits to themselves? The reason is that at some point every
company needs to raise money. To do this, companies can either borrow it from somebody or
raise it by selling part of the company, which is known as issuing stock.
A company can borrow by taking a loan from a bank or by issuing bonds. Both methods fit under
"debt financing." On the other hand, issuing stock is called "equity financing." Issuing stock is
advantageous for the company because it does not require the company to pay back the money or
make interest payments along the way. All that the shareholders get in return for their money is
the hope that the shares will some daybed worth more. The first sale of a stock, which is issued
by the private company itself, is called the initial public offering (IPO).
Shareholders earn a lot if a company is successful, but they also stand to lose their It is important
that you understand the distinction between a company financing through debt and financing
through equity. When you buy a debt investment such as a bond, you are guaranteed the return of
your money (the principal) along with promised interest payments.
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This isn't the case with an equity investment. By becoming an owner, you assume the risk of the
company not being successful. Just as a small business owner isn't guaranteed a return, neither is
a shareholder. As an owner your claim on assets is lesser than that of creditors. This means that if
a company goes bankrupt and liquidates, you, as a shareholder, don't get any money until the
banks and bondholders have been paid out.Shareholders earn a lot if a company is successful, but
they also stand to lose their entire investment if the company isn't successful.
1.4 Risk:
Itmust be emphasized that there are no guarantees when it comes to individual stocks. Some
companies pay out dividends, but many others do not and there is no obligation to pay out
dividends even for those firms that have traditionally given them. Without dividends an can
make money on a stock only through its appreciation in the open market. On the downside, any
stock may go bankrupt, in which case your investment is worth nothing. Although risk might
sound all negative, there is also a bright side. Taking-on greater risk demands a greater return on
your investment. This is the reason why stocks have historically outperformed other investments
such as bonds or savings accounts.
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INVESTING IN SHARES
While investing is relatively painless, its rewards are plentiful. To understand why you need to
invest, you need to realize that you lose when you just save and do not invest. That is because the
value of the rupee decreases every year due to inflation. For example, if you ran a household
within a budget of Rs100,000 in 2010, to run the same household today (assuming the same set
of expenses) you would probably need Rs125,000--that's Rs25,000 added to your budget because
of inflation! Thus you need to generate an additional Rs25,000 and that can be possible only by
INVESTING your hard-earned money.
2.1 VARIOUS INVESTMENT OPTIONS:
One can invest in various financial instruments like equities (popularly referred to as shares),
bank fixed deposits, National Savings Certificates etc as well as in gold, real estate etc. Out of
these shares give best return on investment.
KEY BENEFITS OF INVESTING IN SHARES
Shares or equities are one of the best investment option for individual investors due to the
following benefits:
Possibilities of higher return:Shares have outperformed all the other investment instruments and given the maximum returns
in the long run while the other instruments have barely managed to generate returns at a rate
higher than the inflation rate (6.10%) on an average shares have given returns of about 17% in a
year.
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Dividend income:Investments in shares are attractive as much for their appreciation in the share prices as for the
dividends their companies pay out.
Tax advantages:Shares appear as the best investment option if you also consider the unbeatable tab benefits that
they offer. First, the dividend income is tax-free in the hands of investors. Second, you are
required to pay only a 10% short term capital gains tax on the profits made from investments in
shares, if you book your profits within a year of making the purchase. Third, you don't need to
pay any long-term capital gains tax on the profits if you sell the shares after holding them for a
period of one year. The capital gains tax rate is much higher for other investment instruments: a
30% short-term capital gains tax (assuming that you fall in the 30% tax bracket) and a 10% long-
term capital gains tax.
Easy liquidity:Shares can also be made liquid anytime from anywhere (on sharekhan.com you can sell a share
at the click of a mouse from anywhere in the world) and the investments can be realized in just
two working days.
Considering the high returns, the tax advantages and the highly liquid nature, shares are the best
investment option to create wealth.
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WHAT CAUSES PRICES TO CHANGE?
Stock prices change every day by market forces. By this we mean that share prices change
because of supply and demand. If more people want to buy a stock (demand) than sell it
(supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it,
there would be greater supply than demand, and the price would fall.
Understanding supply and demand is easy. What is difficult to comprehend is what makes people
like a particular stock and dislike another stock. This comes down to figuring out what news is
positive for a company and what news is negative. There are many answers to this problem and
just about any investor you ask has their own ideas and strategies.
That being said, the principal theory is that the price movement of a stock indicates what
investors feel a company is worth. Don't equate a company's value with the stock price. The
value of a company is its market capitalization, which is the stock price multiplied by the number
of shares outstanding. For example, a company that trades at Rs.100 per share and has 1,000,000
shares outstanding has a lesser value than a company that trades at Rs.50 but has 5,000,000
shares outstanding (Rs.100 x 1,000,000 = Rs.100,000,000 while Rs.50 x 5,000,000 =
Rs.250,000,000). To further complicate things, the price of a stock doesn't only reflect a
company's current value--it also reflects the growth that investors expect in the future.
The most important factor that affects the value of a company is its earnings. Earnings are the
profit a company makes, and in the long run no company can survive without them. It makes
sense when you think about it. If a company never makes money, they aren't going to stay in
business. Public companies are required to report their earnings four times a year (once each
quarter). The reason behind this is that analysts base their future value of a company on their
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earnings projection. If a company's results surprise (are better than expected), the price jumps up.
If a company's results disappoint (are worse than expected), then the price will fall.
So, why do stock prices change? The best answer is that nobody really knows for sure. Some
believe that it isn't possible to predict how stocks will change in price while others think that by
drawing charts and looking at past price movements, you can determine when to buy and sell.
The only thing we do know as a certainty is that stocks are volatile and can change in price
extremely rapidly.
HERE ARE THE IMPORTANT THINGS TO GRASP ABOUT THIS
SUBJECT:
1. At the most fundamental level, supply and demand in the market determine stock price.
2. Price times the number of shares outstanding (market capitalization) is the value of a
company. Comparing just the share price of two companies is meaningless.
3. Theoretically earnings are what affect investors' valuation of a company, but there are other
indicators that investors use to predict stock price. Remember, it is investors' sentiments,
attitudes, and expectations that ultimately affect stock prices.
4. There are many theories that try to explain the way stock prices move the way they do.
Unfortunately, there is no one theory that can explain everything.
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THE BULLS, THE BEARS, AND THE FARM :
On a stock market, the bulls and bears are in a constant struggle. If you haven't heard of these
terms already, you undoubtedly will as you begin to invest.
THE BULLS:
A bull market is when everything in the economy is great, people are finding jobs, GDP is
growing, and stocks are rising. Things are just plain rosy! Picking stocks during a bull market is
easier because everything is going up. Bull markets cannot last forever though, and sometimes
they can lead to dangerous situations if stocks become overvalued. If a person is optimistic,
believing that stocks will go up, he or she is called a "bull" and said to have a "bullish outlook."
THE BEARS:
A bear market is when the economy is bad, recession is looming, and stock prices are falling.
Bear markets make it tough for investors to pick profitable stocks. One solution to this is to make
money when stocks are falling using a technique called short selling. Another strategy is to wait
on the sidelines until you feel that the bear market is nearing its end, only starting to buy in
anticipation of a bull market. If a person is pessimistic, believing that stocks are going to drop, he
or she is called a "bear" and said to have a "bearish outlook."
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THE OTHER ANIMALS ON THE FARM :
Chickens and Pigs Chickens are afraid to lose anything. Their fear overrides their need to
make profits and so they turn only to money-market securities or get out of the markets all
together. While it's true that you should never invest into something over which you lose sleep,
you are also guaranteed never to see any return if you avoid the market completely and never
take any risk.
Pigs are high-risk investors looking for the one big score in a short period of time. Pigs
buy on hot tips and invest in companies without doing their due diligence. They get impatient,
greedy, and emotional about their investments, and they are drawn to high-risk securities without
putting in the proper time or money to learn about these investment vehicles. Professional traders
love the pigs, as it's often from their losses that the bulls and bears reap their profits.
WHAT TYPE OF INVESTOR WILL YOU BE?
There are plenty of different investment styles and strategies out there. Even though the bulls and
bears are constantly at odds, they both can make money with the changing cycles in the market.
Even the chickens see some returns, though not a lot. The one loser in this picture is the pig.
Make sure you don't get into the market before you are ready. Be conservative and never invest
in anything you do not understand. Before you jump in without the right knowledge, think about
this old stock market saying:
Bulls make money, bears make money, but pigs just get slaughtered!
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BUYING AND SELLING
OF SHARES
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BUYING AND SELLING OF SHARES
4.1 DIFFERENT WAYS OF INVESTING IN SHARES:
There are basically two ways of investing in shares:
a) Purchase shares from the primary market (i.e. IPOs):The first time that a companys shares are issued to the public, it is By a process called the
initial public offering (IPO). In an IPO the company offloads a certain percentage of its total
shares to the public at a certain price. Most IPOs these days do not have a fixed offer price.
Instead they follow a method called the book buildingprocess, where the offerprice is placed in a
band or a rangewith the highest and the lowestvalue.
The public can bid for theshares at any price in theband specified. Once the bidscome in, the
company evaluates all the bids and decides on an offer price in that range. After the offer price is
fixed, the company eitherallots its shares to the people who had applied for its shares or returns
them their money.
b)Trade in the secondary market, i.e. stock exchanges:Once the offer price is fixed and the shares are issued to the people, stock exchanges
facilitate the trading of shares for the general public. Once a stock is listed on an exchange,
people can start trading in its shares. In a stock exchange the existing shareholders sell their
shares to anyone who is willing to buy them at a price agreeable to both parties. Individuals
cannot buy or sell shares in a stock exchange directly; they have to execute their transactions
through authorized members of the stock exchange who are also called stock brokers.
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FUNCTIONS OF STOCK MARKET
In order to understand how the stock market operates, you should have knowledge about
the role of following institutions / organist ions:
a) Stock exchanges,b) Brokers,c) Registrars,d) Depositories and their participants, ande)
Securities and Exchange Board of India (Sebi)
a) Stock exchanges:
A stock exchange is the marketplace where companies are listed and where the trading happens.
There are different stock exchanges in the country, the pre-dominant being the National Stock
Exchange (NSE) and the Bombay Stock Exchange (BSE).
b) Brokers:
A stock exchange functions through its members called brokers. If you want to buy or
sell a share, you contact a broker. Each stock exchange has a limited set of brokers and these
brokers contact each other using trading terminals to find out who is interested in the share you
want to buy or sell. Brokers have terminals linked to the BSE or the NSE and they directly
purchase or sell shares using these terminals. The entire transaction happens electronically or
through websites like www.indiabullssecurities.com.
Brokers may also authorize a sub-broker to conduct the transactions on behalf of them. Since
brokers are providing a service they charge you for the same. Normally this payment is not a flat
rate, but a commission of the transaction value. Brokerages normally range from 0.5% to 1% for
delivery-based transactions and 0.05% for intra-day transactions.
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c) Registrars:
The registrar for each company maintains records of all the shareowners of the company
and the number of shares that they own. Whenever an ownership changes takes place, the
registrar updates the shareholders database.
d) Depositories and their participants:
Depositories are organizations that hold shares of investors, on request, in electronic form
through a registered Depository Participant.
It can be compared with a bank as it holds securities in an account, transfers securities between
accounts on the instruction of the account holder, facilitates the transfer of ownership without the
account holder needing to handle securities and makes the safekeeping of shares easy.
The agent through which a depositories interfaces with the investor is known as a depository
participant.
You can create a demat account with a DP, who will keep an account of all the shares you own.
This is much like the banking system, where you just create an account and have a passbookwhich updates you on the money you own and the transactions you have made. In your demat
account you own shares in an electronic format and your account gets updated as you buy and
sell shares.
e) SEBI:
The regulatory body that governs all stock market transactions is the Securities and
Exchange Board of India. SEBI forms rule and regulations that govern transactions in securities
market and that the stock exchanges and other intermediaries follow all such rules and
regulations set by it and/or the government. SEBI also looks into investor complaints against
companies. It is quasi-judicial and can try cases and pass judgments against any market
participants. It also looks into mergers and acquisitions of companies.
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4.5 DO I KNOW WITH WHOM I AM TRANSACTING WITH?
When you transact in a share, you are basically placing an order through your broker.
Transactions happen through exchange systems through anonymous order matching mechanism.
Therefore the details of counter party to your transactions are not known to you. You get unique
transaction numbers as allotted by the Exchange from your broker.
Transactions are settled on a daily rolling settlement basis. All the transactions carried through
the day are summarized by the Exchange at the end of the day. You have to settle your
transactions with your Broker and the Broker in turn settles transactions with the stock exchange.
This process of settlement is called a settlement cycle and the time taken for this is currently T+2
days. i.e., the settlement will occur two working days after you make the trade. You need to payfor the purchases/losses before the settlement deadline and you will receive securities after the
settlement deadline. Similarly you need to deliver securities sold before the deadline and you
receive payment for sale/profit after the settlement deadline.
If you have an online trading account and a demat account with Indiabulls then settlement
process for securities happens as a paperlesstransaction.
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HOW CAN ONE KNOW CURRENT PRICE OF ANY OTHER STOCK ?
Whenever you are buying or selling a share, you will encounter certain terms related to
share prices. These terms deal with the individual price movements of a single share as well as
the price movements of all the shares. For every share, typically there are four price parameters.
a) Open:This is the price at which the share opened on a particular day, that is the price at which
the first purchase of the share was made during that day.
b) High:This is the highest price that a share went up to on a given day, or the highest price the
investors paid for that share.
c) Low:This refers to the lowest price that a share fell to during a day, or the lowest price an investor
paid for that share.
d) Close:This is the price at which the share closed on that day or the price for the last trade of that day.
At any given point of time, the share price will fluctuate between the highs and the lows,
sometimes reaching new highs, sometimes falling to new lows.
When trading in shares, you need to mention the price point at which you want to buy or sell. To
specify the price point, it helps if you know the statistics or the trends of your stock, and the
stock's opening and closing prices of the previous days.
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You can also trade in shares without specifying the pricethis is known as a market order. In
this case the trade happens at the market price at that point of time.
4.3 TRACKING THE STOCK MARKETThe BSE Sensex (Bombay Stock Exchange Sensitive Index) measures the movement of 30 most
actively traded shares on the BSE. These 30 companies represent a cross-section of sectors of the
economy.
Similar to the BSE Sensex is the Nifty or the S&P CNX Nifty, which measures the movement of
the NSE. This index tracks 50 stocks, which represent about 60% of the market capitalization of
the NSE.
The upward or downward movement of the Sensex or Nifty is a typical indication of whether
the share prices are going up or down in general.
If the Sensex goes up on a particular day, it doesn't mean that the share prices of all companies
would have gone up on that day. Tracking the movement of stock indices over a longer period is
an important part of intelligent investing.
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4.4 EARNING FROM INVESTMENTSShares can give you returns in two forms:
a) Appreciation in share prices
You buy shares with the belief that their price will increase and that when this happens
you will be able to sell off your shares and earn profit. For example, if you bought a share for
Rs100 three years ago and it is Rs500 today, then you have earned Rs400 in three years.
B)Dividend
When a company makes profits, it can choose to share part of its profits with its
shareholders by paying out dividend. This dividend is paid as a percentage of the face value of
the share. For example, a company may declare a dividend of 25%. Then if the face value of its
share is Rs10 you will get Rs2.50 for every share you own of that company, irrespective of the
market price.
In itself this might not be much, but over a longer period of time or if you have a lot of shares,
you could earn quite a bit from the dividend itself. The best thing about dividends is that they are
tax free in the hands of investors. Dividend yield stocks are known to give returns higher than
fixed deposits.
[Dividend yield = (dividend per share / market price of the share) x 100].
Indiabulls informs its customers of good dividend yield stocks from time to time.
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4.5 EXPENSES DURING A TRANSACTIONEvery share transaction attracts some tax or the other. Some of the main expenses are as
follows:
a) Capital gains tax:
If you purchase a share and sell it at a price higher than the purchase price and if this sale
is within a year of the purchase, then approximately 10% capital gains tax is levied on the profit
that you make. For example, if you bought a share for Rs100 on January 1, 2013 and sold it for
Rs150 on July 1, 2013, then you have to pay a tax of 10% on the Rs50 profit that you make. If
you sell after a year of purchase, there is no tax on the long-term gains.
b) Securities transaction tax
Securities transaction tax (STT) is levied by the government on every transaction you do
on a stock exchange. You don't have to pay this separately; it's collected by your broker. As per
the Union Budget 2013 the STT for cash segment transactions will be 0.10% (sell as well as buy)
on delivery-based transactions and 0.025% on intra-day sells transactions.
c) BrokerageBrokers get a commission on every trade that they do for you. This commission varies
from broker to broker; at sharekhan.com the brokerage is 0.5% for delivery-based transactions
and 0.05% for intraday transactions. On the brokerage amount you are required to pay a service
tax to the government (to be collected by the broker). There could also be separate transaction
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charges in the nature of Exchange turnover based charges, stamp duty on transactions etc. The
brokerage varies depending on the service that the broker provides you. Some brokers, such as
Sharekhan, offer its clients regular updates on companies, multiple means to transact and
customer service support.
d) Depository fees
Since most of the shares exist in a dematerialized form, every time you buy or sell shares
the transactions are being noted by your DP. The DPs normally levy a charge which is an annual
charge and also .a charge on each transaction.
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5.2 COMPONENTS OF FUNDAMENTAL RESEARCH:
A fundamental researcher looks at the performance of a company over a period of time as
well as its future growth prospects. He might compare this data with that of the other companies
in the same sector and measure the same against a stock market index. Most of the data
necessary for doing fundamental research comes from the quarterly and annual reports of
companies as well as from the analysis of their stock prices. A fundamental researcher tidies the
following: (1) annual reports and (2) ratios like EPS, PER etc.
5.3 ANNUAL REPORT:
The annual report of a company provides a wealth of information about the company. In
an annual report investors must look for the Profit & Loss (P&L) statement and the Balance
Sheet.
The P&L statement:The P&L statement gives you the figures relating to the company's income, expenditure,
earnings before interest, depreciation, tax and amortization (EBIDTA), and net profit. Income,
Expenditure and Net profit are the main heads of the P&L statement.
A) Income:The total earnings of the company from varied sources. This can include sales, income
from dividends, interest received, profit from asset sales, stock variation (which refers to the
closing stock in inventory) and so on. However attention should be paid to the Sales figure,
which pertains to the core business of the company.
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example, if a company has profits of Rs100 million and has issued 10 million shares, its EPS is
10. The EPS is used to gauge a company's profitability per unit of shareholder ownership.
You can use the ratio to compare two companies in the same sector. For example, companies A
and B both earn Rs100, but company A has ten shares outstanding, while company B has 50
shares outstanding. It means that company A has an EPS of 10 and company B has an EPS of 2.
As a general rule, a higher EPS drives up the stock price of a company.
However the EPS should not be viewed in isolation and should also be analyzed along with the
industry average as well as the EPS of the other companies in the same sector.
ii) PER:While the EPS looks at the profitability of a company, the PER (i.e the price/earnings
ratio) is the market price equivalent. The PER refers to the market price divided by the EPS.
Thus in the above example if the EPS is 10 and the market price is 50, then the PER is 50/10 = 5.
Meaning, the share of the company is trading at a multiple of 5. This ratio is typically compared
with that of the other companies in the same sector and you get to know whether the company is
on the fast track or is a slow runner. While comparing the PERs it is better to stick to the
companies in a particular industry and not compare across industries.
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MINIMISE RISKS AND
MAXIMIZE RETURNS
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6.5 BLUE-CHIPS ARE SAFE BETS:
Blue-chip companies are there because they have done well in the past and have a high
market capitalization. It is a likely guess that they will maintain their track record and give you
higher returns even in future. Therefore invest in companies that have a good track record.
6.6 SLOW AND STEADY STREAM OF INVESTMENTS:
Set aside a certain portion of your earnings every month and invest that sum in shares
irrespective of the market conditions. This way, over a period of time you can amass a
substantial number of shares of the stocks in your portfolio.
6.7 THINK PORTFOLIO:
Don't put all your earnings in a single stock. Try to have a diverse portfolio of stocks.
This way even if one stock doesn't do well, you are still well protected. Also invest across
sectors, since any problem in one sector would affect all stocks in the sector. As a thumb rule, if
you have investments of up to Rs50,000 invest in two to three stocks. For about Rs150,000
invest in three to five stocks, for around Rs500,000 have five to seven stocks, and around ten
stocks for higher amounts.
6.8 DONT INVEST ALL YOUR SAVINGS:
Always maintain a core set of reserves. You should never touch these reserves for
investing, so that even in the worst case you still have some money. Typically these reserves
should be your salary of about six months.
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6.9 BE REALISTIC:
Analyze the reason why you are investing in shares, i.e. why you require the money. For
a better life style? For your child's future education? For retirement planning? Once you have
answered that, ask yourself how much appreciation do you need to get that amount? Work
towards this amount and you won't be disappointed.
6.10 BE LEVEL-HEADED:
Invest wisely, don't get swayed by rumours and allow Indiabulls to be your guide at all
times. Investment success won't happen overnight, so avoid overreacting to short term market
swings.
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ONLINE TRADING
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ONLINETRADING
7.1 PROCEDURE:
Just like offline trading, online trading also involves three main intermediaries and one
ancillary institution.
A broker,
An exchange,
Your bankers, and
Your depository participant.
In this form of trading, your broker provides you an Internet broking account which
allows you to buy and sell shares at your convenience. To put it simply, the broker is providing
an interface on the computer that acts like a broker.
So you no longer have to call your broker to place a trade. Just go online to your account, select
the shares you want to buy or sell and execute the trade! It's as simple as that.
During this trade, your bankers provide the feature of transferring money from or to your bank
account. The brokers then collect this trade information in real time using software at their end
and forward it to the exchange.
The exchange executes the trade and informs the broker. The broker in turn informs you and
also ensures that your depository account gets updated; and in case of selling shares it places the
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value of shares you sold in your account. You can transfer this amount back to your bank or use
it for buying shares.
7.2 STEPS FOR TRADING ONLINE:
There are three basic steps in trading online:
STEP I: Go to your broker and open an online account. During this stage you also need to take
a depository account.
STEP II: Ensure that you have a bank account with a bank that facilitates online transactions
(i.e. allows for net banking). Most leading banks such as HDFC Bank and Citibank allow this.
STEP III: Once you open an account, you get a username and password for checking your
account details as well as another password for carrying out your actual transactions. This
ensures a double layer of security. Using these details you go to your broker's website, log on to
your account and start trading.
7.3 BENEFITS OF TRADING ONLINE?
Online trading is quite convenient for the following reasons:
Freedom from paperworkYour online trading account is integrated with your bank, your depository and digital
contracts. It thus eliminates all paperwork.
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Instant credit and transferOnline trading gives you instant credit money transfer to and from your bank account,
enabling you to trade surplus credit without delay.
Trade from anywhereA major benefit of online trading is the facility of trading from anywhere. Even when you
are in a new place, just connect to the Internet, log on to your account on
indiabullssecurities.com and start trading.
Real-time portfolio trackingOnline trading provides auto update of trades executed by you and gives you real-time
information on your investments and the current value of your portfolio. Indiabulls provides
portfolio tracking service to its clients absolutely free of cost.
After-hour ordersYou can place orders even when the market is closed. The order gets queued up and gets
executed the next time the markets open.
Get live quotesOnline trading provides you live, minute-by-minute streaming quotes and using the
software you can create appropriate filters to watch the movement of the stocks that you are
interested in.
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Host of features a click awayPlace limit orders, check your portfolio and calculate your earnings, check your
depository account, transfer money from your bank to the broking account and vice versa, at
just a click of your mouse.
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Five Golden Rules
For Investing In Share
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FIVE GOLDEN RULES FORINVESTING IN SHARES
RULE 1: THINK PORTFOLIO:
While investing in shares one should not just invest in just one single stock. Always look at buying more than one company and build a portfolio.
RULE 2: DIVERSIFY YOUR PORTFOLIO:
All stocks in your portfolio should not belong to just one or two sectors. The portfolio approach calls for diversification amongst business like software, pharm,
steel, cement, etc.
Why is this important?Lets assume that you have 10 stocks in your portfolio and all of them belong to the steel
industry. It is not a balanced portfolio because:
The factors that affect the steel industry will take their toll on each of steel companies. Hence the portfolio is as risky as one with just one steel company. It may fail to give balanced returns because there is no diversification across various
businesses.
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RULE 3: DONT SPREAD YOUR NET TOO WIDE:
Ideally a portfolio should not have more than 15 or 20 stocks.
As the number of stock keeps increasing, the portfolio becomes unmanageable.
Your total returns may start reducing.
RULE 4: UNDERSTAND YOUR RISK PROFILE:
Portfolio creation is all about maximizing returns, given a risk profile and a time horizon. Your risk profile is a function of: Your age Ability to withstand losses Investment horizon (Time) Existing cash flows (income - expense)
Experience and expectations from the market
RULE 5: SELECT STOCKS TO SUIT YOUR RISK - REWARD
EXPECTATIONS:
Invest in stocks based on your risk profile Never get into a herd mentality
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SERVICES
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SERVICES
9.1 PORTFOLIO MANAGEMENT SYSTEM:
Can you analyze the prices of 1,500 shares every morning? Can you afford to gamble only on the
recommendations from your friends and the information overload from magazines and financial
dailies?
And, of course, more importantly, if you happen to be a High Net worth Individual, do you have
the time to judge which advice is reliable, authentic and has the least chance of failure?
With the Indiabulls Team Managing Your Portfolio, you can be assured that your investments
are in safe hands! We follow a multi-disciplined approach incorporating quantitative analysis,
fundamental analysis and technical analysis. This multi-pronged approach enables us to provide
risk-controlled returns for you.
Right from choosing the combination of stocks most suitable for you based on your risk appetite
to monitoring their movements and discussing them with you at special events.
9.2 COMMODITIES TRADING:
The process of economic liberalization in India began in 1991. As part of this process,
several capital market reforms were carried out by the capital market regulator Securities and
Exchange Board of India. One such measure was to allow trading in equities-based derivatives
on stock exchanges in 2000. This step proved to be a shot in the arm of the capital market and
volumes soared within three years. The success of the capital market reforms motivated the
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government and the Forward Market Commission (the commodities market regulator) to kick off
similar reforms in the commodities market. Thus almost all the commodities were allowed to be
traded in the futures market from April 2003. To make trading in commodity futures more
transparent and successful, multi-commodity exchanges at national level were also conceived
and these next generation exchanges were allowed to start futures trading in commodities on-
line.
Commodities exchanges have seen a surge in commodity futures volumes in the last few months.
This rise in volumes has been led by bullion (gold and silver) trading. Today a whole lot of
commodities are available for trading in futures and the list is getting bigger by the day. No
wonder then that the commodity futures market is being viewed as a significant business
segment by manybusinessmen, investors, institutions, brokers, banks.
Of course there are still millions of Indians who are not aware that commodities other than gold
and silver can also be traded in on commodity exchanges. Fewer still know that be traded online.
Hence to educate Indian investors in the benefits of trading in commodities Indiabulls has
decided to bring out a compilation of questions on the subject along with their answers.
Demystifying Commodities seeks to cover every aspect of commodity trading and has been
written in a language that is simple and lucid, a characteristic of Indiabulls.
I am certain that Demystifying Commodities will go a long way in generating awareness about
commodity trading among Indian investors. The various money-making trading strategies for the
commodities market discussed in Demystifying Commodities will also be of immense help to
those billion investors who are already trading in commodities.
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How to Open an Commodity Account?
Need Rs 500 cheque in the name of "Indiabulls Commodity Ltd"to open an account
Latest bank act statement Xerox Identity proof Residential proof Trading in commodity exchange require 5-10 percentage margin money.
How do I trade in commodities?
You can place your orders through our dealers across all our branch/franchisee Toll free number
39708090 during the market hours between 10 am to 11.30 pm in summer & 10 am to 11.55 pm
in winter. If you require terminal for mcx/ncdex or both need Rs. 1 lac as margin money, there is
terminal fees asking by exchange i.e. Rs. 1000 each exchange/month.
9.3 SHARE SHOPS:
Get everything you need at aIndiabulls outlet all you have to do is walk into any of our 588 share
shops across 213 cities in India to get a host of trading related services - our friendly customer
service account related queries you may have.
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AIndiabulls outlet offers the following services:
Online BSE and NSE executions (through BOLT and NEAT terminals)
Free access to investment advice from Indiabulls research team
Indiabulls Value Line (a fortnightly publication with reviews of recommendations,stocks to watch out for etc
Daily research reports and market review (High Noon, Eagle Eye) Pre-market Report (Morning Cuppa) Daily trading calls based on technical analysis Cool trading products (Daring Derivatives, Trading Ring and Market Strategy) Personalized advice Live market information Depository services: Demit and Remit transactions Derivatives trading (Futures and Options)
Internet-based online trading: Speed Trade, SpeedTradePlus
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INDIABULLSOnline
TradingInterfaces
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INDIABULLS ONLINE TRADING INTERFACES
The customer can choose the online trading interface that meets his requirement based on his
trading habits and preferences.
10.1 CLASSIC account:
Investing Online is so much easier! This account enables you to buy and sell shares through our
website.
FEATURES OF CLASSIC ACCOUNT:
Facility to integrate choice of 7 Banks / DP / Trading Account Instant credit for shares sold from DP Automatic pick-up of shares from linked DP for Pay-in Automatic deposit of shares into linked DP after pay-out Times leverage on Margin Trades Margin Trading available for entire market session Slab wise brokerage structure for delivery and margin trades, shortly Free Calls for order placement on Toll-Free Trusted, professional advice of Tele-brokers Facility to enter After Market orders online & via phone Daily Research newsletter (Investor Eye) via e-mail Access to new IPO without any paperwork Advanced portfolio monitoring Tools
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Integrated DP account with trading account Choice of linking 4 banks to trading a/c for online payments Cash and Derivatives trading in a single account E-mail confirmations for all transactions Choice of electronic / physical contracts
SYSTEM REQUIREMENTS:
You will need access to a computer which has at least the following configuration:
Pentium 3 PC Minimum 128 MB RAM Windows 2000/XP Internet connection Internet Explorer 6.0
10.2 SPEEDTRADE:
The speedtrade is meant for customers who trade in Equities. The ideal tool for active traders and
jobbers who transact frequently during the day's trading session, Speedtrade enables you to
capitalize on intra-day price movements.
Speedtrade is an Internet-based executable application that provides everything a trader needs on
ONE screen.
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FEATURES OF SPEED TRADE:
It contains all the features of classic account. In addition to all those features it contains the
following features:
Real-time streaming quotes using 2 Market Watches Trade Execution in 2-3 seconds Instant order / trade confirmations in the same window Hot keys similar to a Brokers Terminal Multiple Tic-by-Tic Intra-day charts with multiple indicators Availability of 2 ISP & 6 Servers ensuring maximum uptime Customized alerts based on Multiple Parameters Cancel All / Square Off All Facility Window for Top Gainers, Top Losers, most active updated Live.
SYSTEM REQUIREMENTS:
Pentium 3 PC Minimum 128 MB RAM Windows 2000/XP Internet connection Dial-up Modem/ Cable Modem JAVA enabled in IE Internet Explorer 6.0
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10.3 DIAL-N-TRADEToll Free:Trade in Equity by using your phone! Free with your IndiabullsClassic Account,the Dial-
n-Trade service enables you to place orders for buying and selling shares through your
telephone.
All you have to do is dial any one of our two dedicated numbers (1-800-11-44-88), enter your
TPIN number (which is provided at the time of opening your account) and on authentication
you'll be directed to a telebroker who will buy and sell shares for you.
The DNT is a value added services meant for all customers who want to transact but are not
online
FEATURES OF DIAL-N-TRADE:
Dedicated Toll-Free number for Order placements Automatic fund transfer with phone banking* Simple and secure IVR based system for authentication No wait time. On entry of Phone Id & TPIN, the call is transferred Trusted, professional advice of Tel-brokers who offer undilutedIndiabulls Research Inputs
After-hours order placement facility ** Transfer of money using phone banking is available with bank Between 9 a.m to 9:55 a.m and 3:30 p.m to 6 p.m
http://d/D:educationTAJSHAREKHANSharekhan.comsskisharekhan.comClassicAccountdefault.htmhttp://d/D:educationTAJSHAREKHANSharekhan.comsskisharekhan.comClassicAccountdefault.htm -
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10.4 DOCUMENTS REQUIRED:
3 Passport size Photographs
1 Cheque of Rs.750 in Favour of Indiabulls commodities limited
Photo ID Proof Residence Proof
Passport Pan Card Driving Licence Voter's ID MAPIN UIN Card
Passport (valid) Voter's ID Driving License (valid) Bank Statement Telephone Bill Electricity Bill Ration Card Flat Maintenance Bill Insurance Policy Leave-License/Purchase Agreement
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RESEARCH METHODOLOGY
RESEARCH DESIGN
A research design is the specification of methods and procedures for acquiring the needed data to
solve the problem.
TYPES OF RESEARCH DESIGN
The arrangement of conditions suitable for collection and analysis of data varies
depending upon the type of research study.
1.Exploratory research design.
2.Descriptive research design.
3.Conclusive research design.
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DESCRIPTIVE RESEARCH:
Descriptive study is a fact- finding investigation with adequate interpretation. It is the simplest
type of research. It is more specific than an explanatory study, as it has focus on particular aspect
of the problem studied. It is designed to get her descriptive information and provide information
for formulating more sophisticated studies. Data are collected by using one or more appropriate
method, observation, interviewing and mail questionnaire.
TYPE OF DATA USED:-
There are basically two types of Data
Primary Data Secondary Data
PRIMARY DATA
Primary Data is first hand information that the researcher collects. It helps in collecting useful
and most accurate information that is needed for the researcher to do his research.
SOURCES OF PRIMARY DATA:-
Questionnaire Interview Schedule
SECONDARY DATA
Secondary data is what the researcher collects from different sources. It also help researcher to
get elaborate information to do his research.
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SOURCES OF SECONDARY DATA:-
Internet Journals
TARGET GROUP/ POPULATION
As this research is based on Relationship Marketing my Target group is my Clients who are
using the Services of Indiabulls Securities in Dealing with Capital Market.
Area of Study:- GURGOAN
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DATA INTERPRETATION
&ANALYSIS
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In which professions are you engaged in?
RESPONDENTS PERCENTAGE
Business 25 50%
Service 10 20%
Professional 10 20%
Entrepreneur 5 10%
TOTAL 50
0
5
10
15
20
25
30
Business Service Professional Enterprenure
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Interpretation:
50% of the respondents are Business Man 20% of the respondents are Service Man 20% of the respondents are Professionals 10% of the respondents are Entrepreneur
Inferences:
From the above survey most of the respondents are found to be business man by profession.
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Do you trade in Stock Market?RESPONDENTS PERCENTAGE
YES 39 78%
NO 5 10%
EARLEAR, BUT NOW
STOPPED
6 12%
Total 50 100%
Interpretations:
78% of the respondents trade in stock 10% of the respondents do not trade in stock 12% of the respondents trade earlier
Inferences:
39
5 6
0
5
10
15
20
25
30
35
40
Yes No Earlier But Now
Stopped
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From the above survey most of the respondents trade in stock market.
How much is your income or your Credibility?RESPONDENTS PERCENTAGE
Between 1- 2 lac 10 20 %
Between 2-3 lac 20 40 %
Between 3-4 lac 15 30 %
Above 4 lac 5 10 %
TOTAL 50
20%
40%
30%
10%
1 - 2 lac
2- 3 lac
3 - 4 lac
Above 4 lac
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Interpretation:
40% of the respondents are between 2- 3 lac 30% of the respondents are between 3-4 lacs 20% of the respondents are between 1-2 lacs 10% of the respondents are between above 4 lac
Inferences:
From the above survey most of the respondents falls under 2- 3 lac bracket.
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How much you trade in stock MarketRESPONDENTS PERCENTAGE
10,000 - 50,000 23 46%
50,000 - 1,00,000 15 30%
1,00,000 - 1,50,000 8
Above 1,50,000 4 8%
16% 50
23
15
8
4
0
5
10
15
20
25
10,000 - 50,000 50,000 - 1,00,000 1,00,000 - 1,50,000 Above 1,50,000
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Interpretation:
46% respondents invest 10,000-50,000 30% respondents invest 50,000- 1, 00,000 16% respondents invest 1, 00,000- 1, 50,000 8% respondents invest above 1, 50,000
Inferences:
From the above survey most of the respondents invest 10,000- 50,000 in stock
market.
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How much Return you Get after Investing?
0
5
10
15
20
25
30
> 5 % 5 - 10 % 10 - 15 % 15 - 20 %
RESPONDENTS PERCENTSGE
Below 5% 10 20%
5- 10 % 27 54%
10- 15 % 9 18%
15- 20 % 4 8%
TOTAL 50 100%
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Interpretation:
20% of the respondents get below 5% 54% of the respondents get 5- 10 % 18% of the respondents get 10 - 15 % 8% of the respondents get 15-20 %
Inferences:
From the above survey most of the respondents get 5- 10 % returns on their
investments.
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Interpretation:
10% of the respondents are highly risky 54% of the respondents are average 18% of the respondents are Moderate 18% of the respondents are risk free
Inferences:
From the above survey most of the respondents are average risk takers.
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Which mode of trading do you prefer?
0
5
10
15
20
25
30
35
Online Offline
RESPONDENTS PERCENTAGE
Online 19 38%
Offline 31 62%
TOTAL 50 100%
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Interpretation:
38% of the respondents prefer online 62% of the respondents prefer offline
Inferences:
From the above survey most of the respondents prefer offline trading as they are
new to stock market.
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What has been your investment experience in stocks?RESPONDENTS PERCENTAGES
Excellent 5 10%
Good 12 24%
Average 20 40%
Bad 13 26%
TOTAL 50 100%
0
2
4
6
8
10
12
14
16
18
20
Excelent Good Average Bad
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Interpretation:
10% of the respondents feel excellent 24% of the respondents feel good 40% of the respondents feel average 26% of the respondents feel bad
Inferences:
From the above survey 40% of the respondents have an average investment
experience in stock market.
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What extra services do you expect from your broker?RESPONDENTS PERCENTAGES
Depository 2 4%
Marginal
Financing
4 8%
P.M.S 7 14%
Trading 9 18%
Research 9 18%
All the above 19 38%
TOTAL 50 100%
2
4
7
9
9
19
0 5 10 15 20
Depository
Marginal Financing
P.M.F
Trading
Research
All the Above
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Interpretation:
4% respondents prefer Depository service 8% respondents prefer Marginal Financing 14% respondents prefer P.M.S 18% respondents prefer Trading 18% respondents prefer research 38% respondents prefer all the above services
Inferences:
From the above survey most of the respondents prefer all services that any broker
must provide to its clients.
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Are you satisfied with the service of your Broker House?RESPONDENTS PERCENTAGES
Yes 27 54%
No 5 10%
Cant Say 18 36%
TOTAL 50 100%
27
5
18
0
5
10
15
20
25
30
Yes No Can't Say
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Interpretation:
54% of the respondents say yes 10% of the respondents say no 36% of the respondents say cant say
Inferences: From the above survey 54% of the respondents are satisfied the
services of their broker house.
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Rate the service according to your Criteria?RESPONDENTS PERCENTAGES
Excellent 5 10%
Very good 15 30%
Good 21 42%
Poor 9 18%
TOTAL 50 100%
0
5
10
15
20
25
Excillent Very Good Good Poor
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Interpretation:
10% of the respondents say excellent
30% of the respondents say very Good
42% of the respondents say Good
18% of the respondents say Poor
Inferences:
From the above survey most of the respondents rate good to the services provide
by their broker house.
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Have you heard of Indiabulls Securities?RESPONDENTS PERCENTAGES
Yes 44 88%
No 6 12%
TOTAL 50 100%
Yes, 44
No, 6
Yes
No
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Interpretation:
88% of the respondents know IndiabullsSecurities 12% of the respondents dont know about Indiabulls Securities
Inferences:
From the above survey most of the respondents know Indiabulls securities
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FINDINGS
In this survey most of the questionnaires are filled from brokerage houses where clients sit on the
terminal & trade in the stocks. As the data collected shows that people who mostly invest in the
market are businessmen & service class person who dont have enough time to keep continuous
watch on the market fluctuation so they need regular assistance from their relationship manager
who is assigned to them so every company is suggested to enforce their relationship managers to
stay in contact with their clients. There are some No answer in this survey because many time
clients may be with his friend who dont trade in the market & that friend might be interested or
not do the relationship manager in that brokerage firm must take some extra care for them. Here
difference is because of the presence of the friend of client in the brokerage house who doesnt
want to trade in the stock market because he might be afraid of losses or due to lack of resources.
But if that friend has lack of time than the relationship manager has to give a proper assistance &
dedication to that person so that friend can make himself to trade in the stocks. As technology
increases most of the people have less time to spend on the other activities than their core
business so most of the clients prefer online trading so they can put their bids whenever they
want as 24*7. In the case of online trading clients are not need to be provided any kind of
assistance from their relationship manager but if the dedicated relationship manager provide
them a good assistance can put that relationship manager & that organization apart from their
competitors. But even after the presence of internet some people like to trade through offline
mode reasons might be lack of knowledge or cost sensitive as offline product is used to being at
lower cost so here in offline that dedicated relationship manager has to be in contact with his
client. Most of the people look for moderate return because of presence of risk well as the age
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group changes the risk-taking factor as age increase people started investing in bonds where a
fixed return is possible. As the data shows most of the people were satisfied with their brokers
because they are giving them profits on their investment & they were ready to pay more to their
brokers if they get some extra services.
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RECOMMENDATION
The Recommendation which is to be suggested is as follow:-
Indiabulls securities should enhance the customer care department where queries can betimely solved.
Indiabulls securities should provide more security to the existing and prospective clients Indiabullssecurities should build its BRAND Image more strong by increasing visibility There should be more banners posters pamphlets distribution in the market to increase the
awareness level among the people
It should provide regular and update market information Special attention need to be given to the delivery of monthly & fortnightly report to the
clients
Timely release of Brokerage & Fast redressed of clients grievance is a major plus ifIndiabulls is looking to develop long term relationship with its clients
Services should be more efficiently delivered to the prospective clients in order todevelop a long term relationship with the clients.
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CONCLUSION
In spite of the bleak and grim outlook the future of capital market it is growing at a very high
pace. Taking this things into consideration there are lots of opportunity for the Broker House
which already exist and which are due to enter in the Indian market. These are little awareness
about Equity and Mutual fundsin India people have accepted it as one of the major investment
avenue. As people have entered in this particular investment avenue they have lost there money
because of movement in the market which is below the par value and this has shaken the faith of
investor in this particular avenue. Another reason for low investment in this sector is due to
country most of the companies not performing well and also due to the scams that are taking
place frequently Once people know about the benefit offered by it, Capital market will become
one the sought after investment avenue. As far as other product marketed by Indiabulls is
concerned they have a ready market. The only thing which is needed to focus on is that they
should have a strong marketing strategy so that prompt service and availability of forms is made
available to the investors at a short notice and if it keeps the traditional base for marketing in
India which is a price sensitive. We can say that Indiabulls has a great future ahead.
Indiabullshas emerged a very strong player in the field of distri bution of financial product
within a short period of one year in Northern India and is giving stiff competition to the entire
player in the Jaipur & other parts. If the progress of Indiabullsgoes in the same way then I can
say that Indiabulls will going to emerge as a major player in the Capital market. They have
much more potential to expand there business and market in India.
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ANNEXURE
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QUESTIONNARE
1. In which professions arssse you engaged in?Business Service
Professional Entrepreneur
2. Do you trade in stock market?Yes No Earlier, But now Stopped
3. How much is your income or your Credibility?Between 1 lac to 2 Lac Between 2 Lac to 3 Lac
Between 3 lac to 4lac Above 4 lac
4. How much you trade in stock Market?10,00050,000 50,0001, 00,000
1,00,0001, 50,000 Above 1, 50,000
5. How much Return you Get after Investing?
> 5 % 510 %
10-15% 1520 %
6. What according to you is your risk level?
Highly Risky Average
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Moderate Risk free
7.
Which mode of trading do you prefer?
Online trading Offline trading
8. What has been your investment experience in stocks?Excellent Good
Average Bad
9. What extra services do you expect from your broker?a. Depository servicesb. Margin financingc. Portfolio management services
d.
Trading
e. Research and Technical servicesf. All of the above
10.Are you satisfied with the service of your Broker House?Yes No Cant Say
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11. Rate the service according to your Criteria?
Excellent Very Good
Good Poor
12.Have you heard of Indiabulls Securities?Yes No
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BIBLIOGRAPHY
1. Varsha Kulkarni1 and NiveditaDeoVolatility of an Indian stock market:
A Random matrix approach
2. Catriona Purfield, Hiroko Oura, Charles Kramer and Andreas Jobst
Asian Equity Markets: Growth, Opportunities and Challenges
3 Forrest Capie, Terence C Mills , Geoffrey Wood
Gold as hedge against Dollar
4.N. J. YasaswyHow gold stacks up as investment option
5. G. Vasudha Asst. ProfessorTKR Institute of Management & Science, HyderabadGold as an investment option
6. Financials text: Business line, Economic times