Motilal Oswal Project

MOTILAL OSWAL SECURITIES LTD, DAVANGERE.

A

TRAINING REPORT

ON

SUBMITTED TO:PUNE UNIVERSITY

in the partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION(INDUSTRY INTEGRATED)

(III Semester)

Submitted by

SHRIKANT KARNEWAR

SANKALP BUSINESS SCHOOLVADGAON BK,PUNE Maharashtra

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INTRODUCTION:

In the current economic scenario, fluctuation in the share market has put investors in confusion.

One finds it difficult to take decision on investment. This is primarily, because of investments

are risky in nature and investors have to consider various factors before investing in investment

avenues.

These factors include risk, return, safety, volatility of shares and liquidity. The main

objective of the study is to analyze the equity shares and to know the where investors prefer to

invest in stock market.

Analysis has done on percentage method for studying equity shares. Those who have

well knowledge in equity market they can go for equity investments rather that investing in

mutual funds because no control on the expenses made by the fund manager.

The study will guide the new investor who wants to invest in equity, by providing

knowledge about the equities.

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200

years ago. The earliest records of security dealings in India are meager and obscure. The East

India Company was the dominant institution in those days and business in its loan securities used

to be transacted towards the close of the eighteenth century. By 1830's business on corporate

stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was

broader in 1839, there were only half a dozen brokers recognized by banks and merchants during

1840 and 1850.

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The 1850's witnessed a rapid development of commercial enterprise and brokerage

business attracted many men into the field and by 1860 the number of brokers increased into

60.In 1860-61 the American Civil War broke out and cotton supply from United States of Europe

was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about

200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began

(for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87).

At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,

found a place in a street (now appropriately called as Dallal Street) where they would

conveniently assemble and transact business. In 1887, they formally established in Bombay, the

"Native Share and Stock Brokers' Association" (which is alternatively known as “The Stock

Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it was

inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges is limited to listed securities of public limited

companies. They are broadly divided into two categories, namely, specified securities (forward

list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented

companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least

Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified

group and the balance in non-specified group.

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Two types of transactions can be carried out on the Indian stock exchanges:

1. Spot delivery transactions "for delivery and payment within the time or on the date stipulated

when entering into the contract which shall not be more than 14 days following the date of the

contract”

2. Forward transactions "delivery and payment can be extended by further period of 14 days each

so that the overall period does not exceed 90 days from the date of the contract". The latter is

permitted only in the case of specified shares. The brokers who carry over the outstanding pay

carry over charges (can tango or backwardation) which are usually determined by the rates of

interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell securities

for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and

sell securities on his own account and risk, in contrast with the practice prevailing on New York

and London Stock Exchanges, where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old conventional style of

face-to-face trading with bids and offers being made by open outcry. However there is a great

amount of effort to modernize the Indian stock exchanges in the very recent times.

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STOCK EXCHANGES:

Exchanges are the physical locations where stocks are bought and sold. They are the

sisters of the over-the-counter (OTC) market. The OTC refers to a market in which securities

transactions are conducted through a telephone and computer network connecting dealers in

stocks and bonds, rather than on the floor of an exchange. Together, these two markets form the

secondary market. The primary and secondary markets together make up the stock market.

Exchanges are located all over the world, with the most famous one being the New York

Stock Exchange. The NYSE annually trades almost $12 trillion dollars worth of capital.

Thousands of stocks are listed on this exchange. When you buy a stock, you will need to learn

which exchange(s) list it. Other than locating a quote in the newspaper, with online trading and

the automation of order systems, there is very little reason to determine where the stock trades

from the customer's viewpoint.

The Securities and Exchange Commission (SEC) regulates stock trading and

exchanges. The National Association of Securities Dealers (NASD) administers additional

regulation. The NASD makes and enforces rules for its members and enforces federal securities

acts and the SEC makes rules for its membership. As you read more about investing, you will

become more familiar with these organizations and their protective regulations.

BOMBAY STOCK EXCHANGE (BSE):

This premier stock exchange is the oldest stock exchange in Asia. The origin of Bombay

stock exchange dates back to 1875. It was organized under the name of ‘the native stock and

share brokers association as voluntary and non-profit making association. It was recognized on

the permanent basis in 1957. In March 1995, the Bombay stock exchange has introduced screen

based trading called BOLT (Bombay Online Trading).

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The main objectives of the stock exchange are:

To safeguard the interest of investing public having dealing on the exchanges.

To establish and promote honorable and just practices in securities transactions.

To promote, develop and maintain well-regulated market for dealing in securities.

To promote industrial development in then country in the country through efficient

resource mobilization by way of investment in corporate securities.

NATIONAL STOCK EXCHANGE (NSE):

The national stock exchange of India started its operation in 1994 at Mumbai. The

genesis of the NSE lies in the recommendation of the pherwani committee (1991). The main

promoters of NSE are IDBI, IFCI, LIC, GIC, SBI, Bank of Baroda, Canara Bank, Corporation

Bank, Indian Bank, and Union Bank of India, Punjab National Bank, IL&FS.

THE MAIN OBJECTIVES OF NSE ARE AS FOLLOWS.

To establish the nationwide trading facility for equities, debt instruments and hybrids.

To ensure equal access to investors all over the country through appropriate

communication network.

To enable shorter settlement cycle and book entry settlement system.

To meet current international standards of securities market.

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PRESENT CURRENT SCENARIO OF INDIAN STOCK MARKET:

Stock market:

Indian Stock Market contains more than 20 Stock Exchanges, some of which are popular

nationally as well as regionally. The first stock market started in the country was the Bombay

Stock Exchange (BSE). It’s the oldest stock market in Asia and was established as “the Native

Share and Stock Broker's Association” in the year 1875.It has around 5000 listings and a volume

of more than US$ 1 Trillion. The other most popular Stock Exchange is the National Stock

Exchange (NSE). It’s also the largest Stock Exchange in the country and third in the world.

These two exchanges constitute a major part of the Indian Capital Market.

What is their purpose?

Stock markets basic role is to provide a platform for the masses of the country to invest their

savings and also as a source of funds for various organizations and institutions. It provides an

opportunity for any person to become a part-owner of the company by buying the companies

shares. These shares can be sold and exchanged as well as used as collateral in certain cases. One

can deal in a variety of financial instruments in a stock market such as Equity which has already

been explained, Future's, Retail Debt, Wholesale Debt, Currency Future's, Derivatives, Bonds

etc. Trading can only be performed by a registered broker of the respective stock one wants to

deal in or through a broker.

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http://www.paisawaisa.com/stocks/


Impact on The Economy:

The stock market has both positive and negative effects on the Indian Economy. Some of

which are listed below

1.Provides a source of funding for organizations

2.An investment avenue

3.A source of income for investors

4.A source of revenue for the government in the form of taxes

5.A source of employment opportunities

6.Meeting place for investors and organizations

7.Idle funds of common investors can be used for profitable purposes

Present current scenario of Indian stock market

The current condition of Indian markets have drastically improved. There is absolute

transparency and instant transactions. All Indian Stock markets are now computerized and

Internet Trading has become a common phenomenon. Indian stock markets have also developed

a dynamic nature and can change from a bullish temperament to a bearish slide. Any small bit of

information or even a rumour from any part of the country can affect the market and is a fairly

accurate indicator of the prevalent atmosphere in the region or country. People from across the

country and globe get in touch with minute wise readings on the stock market and gain a lot of

trading aptitude after daily seeing BSE Stock Gainers or BSE top losers list which does a world

of good to their investment portfolio.

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http://www.paisawaisa.com/stocks/top-loosers.aspx

http://www.paisawaisa.com/stocks/top-gainers.aspx


Conclusions:

The Indian Stock Markets can be a very rewarding avenue of investment but the

constant changes and the inherent dynamic nature of the markets can wipe out your funds or

savings within a minute. Thus, the key words for every retail investor are to be constantly alert

and very observant. Don't always rely on the daily list of BSE top gainers or BSE top losers as it

only takes a minute to get the things changed here. Keeping one’s eyes and ears open can the

insure the investor against any major losses. Following such rules and with some experience and

practice, one can emerge victorious and can churn out a fortune for himself as well. Hence, it is a

way to turn your savings into a fortune.

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. CAPITAL MARKET

INTRODUCTION

Market exists to facilitate the purchase and sale of goods and services. The financial

markets exists to facilitate sale and purchase of financial instruments and comprises of two major

market, capital market and money market the distinction between capital market and money

market is that capital market mainly deals in medium and long-term instruments(maturity more

than a year) while the money market deals in short-term instruments(maturity up to a year).

Capital market is, thus, important for raising funds for capital formation and investments

and forms a very vital link for economic development of any country. The capital market

provides a means for issuer to raise capital from investors (who has surplus money available

from savings for investment). Thus, the savings normally flow from household sector to business

or government sector, who normally invests more than they save.

FUNCTIONS OF CAPITAL MARKET

To mobilize resources for investments

To facilitate efficient use of capital

To facilitate buying and selling of securities

To facilitate the process of efficient price discovery

To facilitate settlement of transactions in accordance with predetermined time schedules.

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. MAJOR ENTITIES INVOLVED IN CAPITAL MARKET:

SEBI(Regulator)

Stock Exchanges

Clearing Corporation(CC)/Clearing Houses(CH)

Depositories and Depository Participants

Custodians

Stock Brokers and their Sub Brokers

Mutual Funds

Merchant Bankers

Credit Rating Agencies

Financial Institutions

Foreign Institution Investors

Non-Banking Institutions

Issuer/Registrar and Transfer Agents

Investors

Bombay Stock Exchange

National Stock Exchange

Merchant Bankers

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Brokers

Underwriters and sub underwriters

Agents

SEGMENTS OF CAPITAL MARKET:

Capital market consists of

1. primary market

2. secondary market

1. PRIMARY MARKET:

A market were the issuers access their prospective investors directly for funds

required by them generally either for expansion or for meeting the working capital needs this

process is called disintermediation where the funds flow directly from investors to issuers.

Securities

COMPANY/ISSUER INVESTORS

Funds

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Primary market comprise of market for new issues of shares and debentures, where

investors apply directly to the issuer for allotment of shares/debentures and pay application

money to the issuer.

Primary market is one where issuer contacts directly to the public at large in search of

capital. It also helps limited companies as well as Government companies to issue their securities

to the new/existing share holders by making public issue/rights issue. After the public issue, the

securities of the issuer are listed on a stock exchange(s) provided it complies with requirements

prescribed by the stock exchange(s).

ACTIVITIES IN THE PRIMARY MARKET:

Appointment of merchant banker

Pricing of securities being issued

Communication/marketing of the issue

Information on credit risk.

Making public issues

Collection of money.

Minimum subscription

Listing on the stock exchange(s)

Allotment of securities in demat/physical mode

Record keeping

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2. SECONDARY MARKET:

In the secondary, market the investors buy/sell securities through stock exchanges. Trading of securities on stock exchange results in exchange of money and securities the investors.

Secondary market provides liquidity to the securities on the exchange(s) and this

activity commences subsequent to the original issue. For example, having subscribed securities

of a company, if one intends to sell the same, it will have to be done in secondary market.

Similarly, one can buy the securities of a company from the secondary market.

A Stock Exchange is the single most impotent institution in the secondary market for

providing a platform to the investors for buying and selling of securities through its members. In

other words the Stock Exchange is place where already issued securities are bought and sold by

the investors. Thus secondary market activities is different from the primary market in which

issuer issue securities directly to the investors.

ACTIVITIES IN THE SECONDARY MARKET

Trading of securities

Risk management

Clearing and settlement of trades

Delivery of securities and funds

STOCK EXCHANGES:

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Exchanges are the physical locations where stocks are bought and sold. They are the

sisters of the over-the-counter (OTC) market. The OTC refers to a market in which securities

transactions are conducted through a telephone and computer network connecting dealers in

stocks and bonds, rather than on the floor of an exchange. Together, these two markets form the

secondary market. The primary and secondary markets together make up the stock market.

Exchanges are located all over the world, with the most famous one being the New York

Stock Exchange. The NYSE annually trades almost $12 trillion dollars worth of capital.

Thousands of stocks are listed on this exchange. When you buy a stock, you will need to learn

which exchange(s) list it. Other than locating a quote in the newspaper, with online trading and

the automation of order systems, there is very little reason to determine where the stock trades

from the customer's viewpoint.

The Securities and Exchange Commission (SEC) regulates stock trading and

exchanges. The National Association of Securities Dealers (NASD) administers additional

regulation. The NASD makes and enforces rules for its members and enforces federal securities

acts and the SEC makes rules for its membership. As you read more about investing, you will

become more familiar with these organizations and their protective regulations.

BOMBAY STOCK EXCHANGE (BSE):

This premier stock exchange is the oldest stock exchange in Asia. The origin of Bombay

stock exchange dates back to 1875. It was organized under the name of ‘the native stock and

share brokers association as voluntary and non-profit making association. It was recognized on

the permanent basis in 1957. In March 1995, the Bombay stock exchange has introduced screen

based trading called BOLT (Bombay Online Trading).

The main objectives of the stock exchange are:

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. To safeguard the interest of investing public having dealing on the exchanges.

To establish and promote honorable and just practices in securities transactions.

To promote, develop and maintain well-regulated market for dealing in securities.

To promote industrial development in then country in the country through efficient

resource mobilization by way of investment in corporate securities.

NATIONAL STOCK EXCHANGE (NSE):

The national stock exchange of India started its operation in 1994 at Mumbai. The

genesis of the NSE lies in the recommendation of the pherwani committee (1991). The main

promoters of NSE are IDBI, IFCI, LIC, GIC, SBI, Bank of Baroda, Canara Bank, Corporation

Bank, Indian Bank, and Union Bank of India, Punjab National Bank, IL&FS.

THE MAIN OBJECTIVES OF NSE ARE AS FOLLOWS.

To establish the nationwide trading facility for equities, debt instruments and hybrids.

To ensure equal access to investors all over the country through appropriate

communication network.

To enable shorter settlement cycle and book entry settlement system.

To meet current international standards of securities market.

ABOUT DEPOSITORY

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Depository is an organization where the securities of a shareholder are held in the

electronic form at the request of the shareholder through a medium of a Depository Participant

(DP). The principal function of a Depository is to dematerialize securities and enables their

transaction in book entry form electronically.

FOLLOWING TABLES COMPARES THE TWO

BANK DEPOSITORY

Hold funds in account Hold securities in accounts

Transfer funds between accounts Transfer securities between accounts

Transfer without physically handling money Transfer without physically handling

securities

Safekeeping of money Safekeeping of securities

In India the Depository Act defines a Depository to mean “ a company formed and

registered under the companies Act 1956 and which has been granted a certificate of registration

under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992

DEPOSITORIES IN INDIA

There are two depositories in India which provide dematerialization of securities. The

National Securities Depository Limited (NSDL) and Central Securities Depository Limited

(CSDL).

BENEFITS OF PARTICIPATION IN A DEPOSITORY

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Immediate transfer of securities

No stamp duty on transfer of securities

Elimination of risks associated with physical certificates such as bad delivery, fake

securities, etc.

Reduction in paperwork involved in transfer of securities

Reduction in transaction cost

Ease of nomination facility

Change in address recorded with DP gets registered electronically with all companies in

which investor holds securities eliminating the need to correspond with each of them

separately

Transmission of securities is done directly by the DP eliminating correspondence with

companies

Convenient method of consolidation of folios/accounts

Holding investments in equity, debt instruments and Government securities in a single

account; automatic credit into demat account, of shares, arising out of

split/consolidation/merger etc.

DEPOSITORY PARTICIPANT

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. The Depository provides its services to investors through its agents called depository

participants (DPs). These agents are appointed by the depository with the approval of SEBI.

According to SEBI regulations, amongst others, three categories of entities, i.e. Banks, Financial

Institutions and SEBI registered trading members can become DPs. The depository has not

prescribed any minimum balance. You can have zero balance in your account.

CUSTODIAN: A Custodian is basically an organization, which helps register and safeguard the

securities of its clients. Besides safeguarding securities, a custodian also keeps track of corporate

actions on behalf of its clients:

Maintaining a client’s securities account

Collecting the benefits or rights accruing to the client in respect of securities

Keeping the client informed of the actions taken or to be taken by the issue of securities,

having a bearing on the benefits or rights accruing to the client.

DEMATERIALIZATIONS OF SECURITIES:

In order to dematerialize physical securities one has to fill in a Demat Request Form

(DRF), which is available with the DP, and submit the same along with physical certificates one

wishes to dematerialize. Separate DRF has to be filled for each ISIN number. Odd lot share

certificates can also be dematerialized. Dematerialized shares do not have any distinctive

numbers. These shares are fungible, which means that all the holdings of a particular security

will be identical and interchangeable.

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. REMATERIALISATION.

If one wishes to get back your securities in the physical form one has to fill in the Remat

Request Form (RRF) and request your DP for rematerialisation of the balances in your securities

account. One can dematerialise his debt instruments, mutual fund units, government securities in

his single demat account.

LEGAL FRAMEWORK:

The Depositories Act 1956 provides for regulation of depositories in securities and for a

matter connected there with on incidental there to and came into from 20th of the September

1995.SEBI formulated the Depositories and participants Regulation Act, 1996 to Oversee the

matter regarding admission and working of Depositories and its participant. The Depositories

Act passed by parliament received the president’s assents on August 10, 1996. The Act enables

the setting up of multiple depositories in the country. Only a company registered under the

companies Act (1956) and sponsored by the specified categories of institution can setup

depository in India. The Depository offers services relating to holding of securities and facility

processing of transaction in such securities in book entry form. The transaction handled by

depositories include settlement of market trades, settlement of off-market trades, securities

lending and borrowing, pledge & hypothecations.

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FUNCTION OF DEPOSITORY PARTICIPANT

DEMATERIALIZATION:

One of the primary functions of depository is to eliminate or minimize the movement of

physical securities in the market. This is done through converting securities held in physical form

in to holdings in to back entry form.

ACCOUNT TRANSFER:

The depository gives effects to all transfer resulting from the settlement of trade and other

transaction between various beneficial owners by recording entries in the accounts of such

beneficial owners by recording entries in the accounts of such beneficial owners.

TRANSFER & REGISTRATION:

A transfer is a legal change of ownership of a security in the records of the insurer.

Transfer of securities under demat occur merely by passing book entries in the records of the

depositories, on the instruction of beneficial owners.

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. PLEDGE AND HYPOTHECATION:

Depositories allow the securities with them to be used as collateral to secure loans and other

credits. The securities pledged are transferred to a segregated or collateral account through book

entries in the records of the depository.

LINKAGE WITH CLEARING SYSTEM:

The clearing system performs the function of ascertainment in the pay in (sell) or payout

(buy) of brokers who leave traded on the stock exchange. Actually delivery of securities from the

clearing system from the selling brokers is and delivery of securities from the clearing system to

the buying broker is done by depository. To achieve this depositories and the clearing system are

linked electronically.

To handle the securities in electronic form as per the Depositories Act 1996 two

depositories are registered with SEBI.

They are

1) NSDL -- National securities depository limited.

2) CDSL -- Central depository service (India) limited.

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NSDL

India had a vibrant capital market, which is more than a century old, the paper-based

settlement of trades caused substantial problems like bad delivery and delayed transfer of title till

recently. The enactment of Depositories Act in August 1996 paved the way for establishment of

NSDL, the first depository in India. NSDL promoted by institutions of national stature

responsible for economic development of the country has since established a national

infrastructure of international standard that handles most of the trading and settlement in

dematerialized form in Indian capital market.

Using innovative and flexible technology systems, NSDL works to support the investors

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

soundness of Indian marketplaces by developing settlement solutions that increase efficiency,

minimizing risk and reduce costs. At NSDL, play a quiet central role in developing products and

services that will continue to nurture the growing needs of the financial services industry.

CDSL

CDSL was set up with the objective of providing convenient, dependable and secure

depository services at affordable cost to all market participants. CDSL received the certificate of

commencement of business from SEBI in February 1999.

Depository facilitates holding of securities in the electronic form and enables securities

transactions to be processed by book entry by a Depository Participant (DP), who as an agent of

the depository, offers depository services to investors. According to SEBI guidelines, financial

institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is

known as beneficial owner (BO)

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COMPANY PROFILE

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Introduction:

Motilal Oswal Security Ltd was founded in 1987 as a small sub-broking unit, with just

two people running the show. Focus on customer-first-attitude, ethical and transparent business

practices, respect for professionalism, research-based value investing and implementation of

cutting-edge technology has enabled us to blossom into an almost 2000 member team.

Today we are a well diversified financial services firm offering a range of financial

products and services such as Wealth Management , Broking & Distribution , Commodity

Broking, Portfolio Management Services , Institutional Equities, Private Equity , Investment

Banking Services and Principal Strategies.

We have a diversified client base that includes retail customers (including High Net

worth Individuals), mutual funds , foreign institutional investors, financial institutions and

corporate clients. We are headquartered in Mumbai and as of December 31st, 2009, had a

network spread over 581 cities and towns comprising 1,293 Business Locations operated by our

Business Partners and us. As at December 31st, 2009, we had 6,05,1986 registered customers

Headquarters Mumbai Area, India

Industry Financial Services

Type Public Company

Status Operating Subsidiary

Company Size 1001-5000 employees

Founded 1987

Website http://www.motilaloswal.c...

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Vision:

“To be the most respected and preferred Private Equity Manager in the mid size corporate

segment.”

Mission:

“To be well respected and preferred global financial services organization enabling wealth

creation for all our customers”.

Achievements and awards:

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Business streams

Investment banking

Private equity

Wealth managementPortfolio

management servicePrivate equityStructured productsInvestment banking serviceInsurance

Principal strategies

Institutional equities

Asset managementBroking and distribution

Equities and derivativesCommoditiesDepository servicePortfolio serviceMutual fundsIPO

MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Motilal Oswal Securities Ltd got starmine award 2009.

2005, Asiamoney Brokers ranked most the best Indian brokerage firm in India.

March 2006, AQ Research declared most the best research house for Indian stocks.

Product and Services:-

1. Equity and Derivative

2. Internet trading

3. Depository services

4. Equity Research

5. Mutual Funds, Bonds, IPOs

6. Life Insurance

7. Portfolio Management Services.

8. Commodity Futures

Equity:

Motilal Oswal Securities Ltd is a member of NSE and BSE, has a network of over 300 branches

in India and abroad, rendering quality equity trading services. Motilal Oswal Securities Ltd not

only has a strong offline presence but also provides automated online trading services.

Motilal Oswal Securities Ltd is retail spread caters to the need of individual investors. Trading

in equities is made simple, safe and interesting with smart advice from the research desk through

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. daily SMS alerts, market pointers, periodical research, stock recommendations and customer

meets organized frequently.

The online trading system allows customers to track the markets by setting up their own

market watch, receiving research tips, stock alerts, real-time charts and news and many more

features enable the customer to take informed decisions. The brokerage structure makes Motilal

Oswal Securities Ltd online trading all the more attractive:

Derivative:

Market with Index Futures being the first instrument. Now both the exchanges provide

trading in Index Futures and Options and Stock Futures and Options.

A derivative is a financial contract, between two or more parties, which is derived from

the future value of an underlying asset. At any point of time there will always be available near

three months contract periods. For e.g. in the month of Jan 2006 one can enter into Jan, Feb or

Mar contracts. The last Thursday of each month is the expiry day for that month’s contract.

When one contract expires, a new contract is introduced. For instance, on expiry of Jan 2006

contract, April contract shall get activated.

Currently, settlements of all Derivatives trades are in cash. There is Daily as well as Final

Settlement. As long as the position is open, the same will be marked to Market at the Daily

Settlement Price, the difference will be credited or debited accordingly and the position shall be

brought forward to the next day at the daily settlement price. Any position which remains open at

the end of the final settlement day (i.e., last Thursday) shall be closed out by the Exchange at the

Final Settlement Price, which will be the closing spot value of the underlying.

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. There are two types of margins collected on the open position, viz., Initial Margin which

is collected upfront and Mark to Market Margin to be paid on T+1 day. As per SEBI Guidelines

it is mandatory for clients to give margin, failing which the outstanding positions may be closed

out.

In June 2000 National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

started trading in Futures on Sensex and Nifty. Options trading on sensex and nifty commenced

in June 2001.

Internet trading:

If you have access to Internet then you can register with us to view your demat account

over the Internet. This is very beneficial as you can avail of a host of services at no extra cost.

You will be able to view your holdings, reports, and ledger and will have free access to our

research reports at any time

Depository:

A depository can be compared to a bank. It holds securities such as shares, debentures,

bonds, government securities, units etc. of investors in electronic form. There are two

depositories in India, The National Securities Depository Limited (NSDL) and Central

Depository Services Limited (CDSL). An individual who desires to avail the depository services

can approach a Depository Participant (DP). Banks, financial institutions, custodians, brokers or

any other entity eligible as per SEBI (Depositories and Participants) Regulations, 1996 can apply

to the Depository to become a Depository Participant. As on 31st December, 2005 there were

221 Depository Participants in India.

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Motilal Oswal Securities Ltd is a depository participant of NSDL. Investors can open

demat accounts with NSDL through MOSL. One can approach the nearest branch of Motilal

Oswal Securities Ltd for opening an account. Agreement charges (statutory charges) along with

Annual Maintenance Charge (AMC) are collected upfront while opening an account. It takes two

to three days to open a demat account.

Upon activation of the demat account, a Welcome Letter is sent to the customer along with the

Delivery Instruction Slip book

DP facilities and IPOs offered by Motilal Oswal Securities Ltd

De-materialization: You can convert your physical shares into electronic form by surrendering

the shares for dematerialization at the Motilal Oswal Securities Ltd branch.

Re-materialization: Re-materialization enables you to convert the dematerialized shares into

physical form.

Repurchase: This facility helps you to submit the units of open-ended Mutual Funds in case

of re-purchase.

Pledge: You can pledge securities to avail a loan.

Transfer: You can transfer securities from one demat account to another.

IPOs: In case you have applied for an IPO and receive an allotment then the securities are

transferred directly to your demat account. The same applies for bonus and rights issues.

Commodity De-mat Account: If you are a commodity player, you may need to open a

commodity de-mat account with Motilal Oswal Securities Ltd

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Speed-e: If you register for Speed-e services, then transfer instructions can be placed online

over the internet to pre-notified Clearing Members Pool a/c. This does away with the

need to submit a physical delivery instruction slip.

Internet services: If you have access to Internet then you can register with us to view your

demat account over the Internet. This is very beneficial as you can avail of a host of

Services at no extra cost. You will be able to view your holdings, reports, and ledger and

will have free access to our research reports at any time.

Research:

Motilal Oswal Securities Ltd has a team of experts who track the markets and related events very

closely. Sophisticated tools are used for technical analysis and research to offer

recommendations, technical analysis and research reports. Each day

Motilal Oswal Securities Ltd Research team brings to table information that helps you

profit from it.

Daily Market View:

Technical Analysis - Market, a daily report on markets gives a clear picture on the

expected market movements (NSE and BSE). It also covers the key support and resistance levels.

It also provides clues on market direction and the expected profit booking levels.

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Daily Stock View:

Technical Analysis - Stocks, a daily report on the stocks for the day. These are prepared

with "Departure Oscillators" tool that have a high degree of accuracy on stock readings; which in

turn helps investors, day traders, High Net worth Individual's with stock ideas that may benefit

them.

F&O Analysis:

F&O Analysis is a daily report that gives near 100% accurate reading on both Futures and

Options. Tools such as PC ratios, Open Interest and volatility combined with RSI indicator

are used for the purpose. It is helpful for day traders, long-term holders and HNI clients

SMS:

SMS alerts are sent to those who have registered for the service. These are prepared with

utmost care, ensuring that it is suitable for both the Bulls and the Bears. It provides instantaneous

buy/sell/hold recommendations purely on technical. It also provides option strategies with the

use of Implied/Historical Volatility study. SMS is especially handy for Index Traders.

Distribution:

Motilal Oswal Securities Ltd undertakes the distribution of variety financial instruments

such as mutual funds, bonds, life insurance products, fixed deposits etc. The wealth center team

understands the universe of investment options analyzes the risk and return from these options

and recommends investment options to clients to help them achieve their financial goals.

Portfolio Management Service:

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Motilal Oswal Securities Ltd a SEBI registered Portfolio Manager offers discretionary portfolio

management services. Motilal Oswal Securities Ltd has a team of experts who carefully take

investment decisions based on the clients' objectives. The Portfolio Management team has a

successful track record of more than 10 years in the capital market. The team has access to

Motilal Oswal Securities Ltd strong Equity Research, and Fundamental & Technical

Analysis.

Investment Objective

To generate medium to long-term capital growth (2-3 years) by identifying undervalued

stocks and those with growth opportunities from a select list of well researched stocks

Investment strategy:

The strategy aims to generate long term capital appreciation by creating a focused

portfolio of high growth stocks having the potential to grow more than the nominal GDP for next

5-7 years across market capitalization & which are available at reasonable market prices.

Organization structure:

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MANAGER

SENIOR EXECUTIVE

ASSISTANTMANAGER

JUNIOR EXECUTIVE


FUNCTIONS OF STAFF

1. DEALING

2. ACCOUNTING

3. CLEARING

CUSTOMER RELATIONS

Employees who deal with clients are expected to handle them with the utmost care. The

client deserves immediate and total attention. No client issue should ever be postponed.

Deal Sourcing:

Motilal Oswal Securities Ltd have benefit of utilizing resources of the Motilal Oswal

Group. With over 1293 business locations in over 581 cities, the Group has knowledge of

business and people from various parts of the country and acts as a valuable source of investment

leads in addition to being an excellent source of background and reference checks on prospective

investments.

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RESEARCH METHODOLOGY:

PROJECT TITLE:

“A Study On Investors Perception Towards Equity Shares”

Objectives of the Project.

To know, where the investors prefer to invest.

To know why investors stay invested in equity shares

To know overall satisfaction level in investing equities.

SCOPE OF THE STUDY

Investor survey was done through questionnaire & also by observation.

Analysis was done based on the responses given by respondents.

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METHODOLOGY

Methodology aims to present a clear idea of the research procedure used in this Study.

Since the value of systematic and scientific research lies in the methodology the goals should be

reached with accuracy using least amount of time.

Precise planning prevents the study from deviating from the aims and objectives, the

scope set forth. A clear understanding of the situation Analysis, problem statement, scope of the

study objectives, research design universe, sampling techniques and tools of data collection is

necessary as they lend credibility and will act as catalysts inputting the concept into practice

Data Source:

Data Sources are classified into:

1) Primary Data Source

2) Secondary Data Sources

1) Primary Data Sources:

Primary data is collected by direct interview with investors with the help of Questionnaire.

2) Secondary Data Sources:

Classified into Internal Secondary Data and External Secondary Data.

i) Internal Secondary Data: Internal source of data represents the data this is already

available with the company.

Product profile, Information relating to plant locations etc.

ii) External Secondary Data: External sources of data include all external information

needed for the study.

Newspapers, Business Magazines, Web sites are some important sources of information,

which are used in this project work.

Sampling Process

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Sample size - 50

Area covered: Davangere city.

Methods of Data Collection

The secondary data was collected from company website & prospectus. The primary data

was collected through interview schedules in the form of printed Questionnaires which were

direct and structured and self-administered. The interview schedules in the questionnaires

addressed all the broad headings as defined in the objectives. The data collection field work was

undertaken for about 25 days during which all the50 investors were contacted personally and

interviewed individually using the questionnaires.

Analysis of this made on the bases investor response collected through Questionnaire

Occupation:

Table1: Shows Occupation of Respondents

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Occupation Frequency Percentage

Business 38 38%

Student 20 20%

Employee 26 26%

Others 10 10%

MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Source: Survey

Interpretation:

From the above table, it is clear that out of 100-sample size 38% of the Investors are

businessperson, from this we come to know that most of the investors are businesspersons and

they play a vital role in the stock market. Here they need to target on retired group so that they

can acquire better market share.

Age Group:

Table no.2: Shows Age group of Respondents

Age Frequency Percentage

20-30 34 34%

30-50 35 35%

50-60 22 22%

Above 60 9 9%

Source: Survey

Interpretation: From the above table, it is clear that out of the total 50-samples 20 to 30 and 30

to 50 age group people are the major investors. So here, the Motilal Oswal Securities Ltd target

on these two groups because in these groups almost all businesspersons and employees are

Shrikant 9860604970... 39

MOTILAL OSWAL SECURITIES LTD, DAVANGERE. covered. Remaining part is shared by 50 to 60 age group and above 60 age group, which are 22%

and 9% respectively.

Annual Income

Table3: Shows Annual income of Respondents

Income Frequency Percentage

Above 1 lakh 34 34%

1-3lakh 53 53%

3-5lakh 8 8%

Above 5lakh 5 5%

Source: Survey

Interpretation: From the above table, it is clear that out of 100-sample size 53% of the investors

are having Rs 1-3 lakh annual income. From this, the middle-income level people are taking

important role in investment in stock market. Second place goes to people group whose annual

income is 34%. Rest of 8% and 5% of the investors are having the annual income Rs 3-5 lakh

and above five lakh.

1) Invested In:

Table4: Shows Area of investment of Respondents

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Source: Survey

Interpretation: From the above graph, it is clear that out of 50-sample size 12 investors invested

in infrastructure/cement .10 investors invested in power sector and the same in others. In

addition, 11 investors invested in FMCG and 7 investors invested in pharma

3) Trade in equities:

Table5:Table shows the how often investors trade in equities.

Trade Frequency percentage

Daily 16 16%

Twice in a week 20 20%

Once in a month 38 38%

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Investment sector Frequency percentage

Infrastructure/Cement 24 24%

Power 20 20%

FMCG 22 22%

Pharma/biotech 14 14%

Others 20 20%


Rarely 26 26%

Source: Survey

Interpretation: From the above table it is clear that out of total sample size, here 38% investors

trade in a month, 26% investors trade rarely, 20% trade twice in a week and 16% trade daily.

4) Investors pick the stocks based on the these factors

Table 5: shows the factors consider while selection of the stock

Source: Survey

Interpretation: From the above graph, it is clear that out of total -sample size, the factors

considered by the investors in selection of the stocks are, 34% of the investors pick the stocks on

the bases of future prospectus of the company, 28% investors pick the stocks on the bases of past

returns 24% investors based on M capitalization and 14% investors based on management of the

company.

5) Which type of shares would you prefer?

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Factors Frequency percentage

Past returns 28 28%

Future prospectus of the

company

34 34%

Management of the

company

14 14%

Based on M

capitalization

24 24%

MOTILAL OSWAL SECURITIES LTD, DAVANGERE. Table 6: Table shows which type of shares will prefer investors

Types of shares Frequency percentage

Defensive 14 14%

Aggressive 36 36%

Medium 50 50%

Source: Survey

Interpretation:

From the above table, it is clear that out of total sample size 50% of the Investors prefer medium

shares,36% investors prefer aggressive shares and 14% investors prefer defensive.

6) Objective of investment

Table 7: Shows Objective of investment of Respondents

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Future securityRegular return

Tax BenefitAsset accumulation

0

5

10

15

20

25

30

35

40

45

5046%

26%

16%

12%

Series2Series1

Interpretation: From the above table, it is clear that out of total-sample size, 46% investors are

having objective of future security.26% respondents having regular return, 12% are having asset

accumulation and 16%are having tax benefits.

7) Investment strategy of respondents after global market meltdown (2008)

Table 8: Shows investment strategy of respondents after global market meltdown (2008)

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Strategies Frequency Percentage

Investing in more equities 30 30%

No change in the investment pattern 22 22%

Investing less in equities 32 32%

No comments 22 22%

Source: Survey

05

101520253035

30%

22%

32%

Series2Series1

Interpretation: From above graph it is clear that out of total sample size 32% investors are

investing less in equities after global market down, 30% of investors investing more in equities

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. after global market down and 22% investors not changed in their investment after global market

down.

8) What percent investors book the profit?

Table 9: shows the percentage of the respondents in booking of the profit.

Profit Frequency Percentage

Less than 10% 12 12%

10-15% 60 60%

20-30% 22 22%

Above 30% 6 6%

Source: Survey

Interpretation: From above table it is clear that out of total sample size 60% of the investors

book their profits 10-15%, 22% of the investors book their profits 20-30%, 12% investors book

their profit less than 10% and 6% investors book their profit above 30%.

9) How often investors revise their portfolio

Table 10: shows the how respondents revise their portfolio

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Year Frequency Percentage

Less than 1 year 22 22%

1-3 yrs 70 70%

3-6 yrs 4 4%

6yrs & above 4 4%

Source: Survey

Interpretation: From above graph it is clear that out of total sample size 70% investors are

revise their portfolio between 1-3 yr, 22% of investors revise their portfolio less than 1 yr ,4% of

investors revise their portfolio between 3-6 yr.4% of investors revise their portfolio 6 yrs and

above.

10) Investors satisfaction in investment decision.

Table 11: shows the respondents satisfaction in investment decision.

Frequency Percentage

Very satisfied 22 22%

Satisfied 70 70%

Neutral 4 4%

Dissatisfied 4 4%

Source: Survey

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Very satisfied Satisfied Neutral Dissatisfied0

10

20

30

40

50

60

70

22%

70%

4% 4%

Series1

Interpretation: from above graph it is clear that out of total sample size 70% of the investors are

satisfied in their investment decision, 22% of the investors are very satisfied in their investment

decision , 4% of the investors are neutral and 4% of the investors are dissatisfied in their

investment decision.

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11) Investors convenience with share broker.

Table 12: shows the respondents convenience with share broker.

convenience Frequency Percentage

Ease of A/c

openings

4 4%

Exposure

given

10 10%

Less

brokerage.

12 12%

Near to my

home/office

16 16%

Good service 32 32%

Good tips

given

12 12%

Honesty 10 10%

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Ease

of A/c

openings

Exposu

re giv

en

Less b

roke

rage.

Near t

o my h

ome/office

Good servi

ce

Good tips give

n

Honesty

0

5

10

15

20

25

30

35

4%

10%12%

16%

32%

12%10%

Series2Series1

Source: Survey

Interpretation: from above graph it is clear that out of total sample size 32% of the investors

convenience with share broker by good service.

12) Investors interest among dividend shares, bonus shares, and right shares:

Interpretation: Out of total sample size it is clear that 50 respondents prefer first dividend

shares, second bonus shares and third right shares.

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FINDINGS

Investors study the markets, industry, firms before taking deciding about investment.

Out of 100 investors, 38% of them are businessman and 35% are of the age group between

30-50 years.

Income of an investor is an important factor, which affects his investment potential. In

addition, 53% of investors have their income level is between 1 to 3 rupees lakh per annum..

Main Objective of investments is future security and regular return.

Here out of 100 respondents, 24 % invested in infrastructure and 22% FMCG sectors.

Most of the investors trade once in a month.

Most of the investors pick the stocks based on future prospectus of the company.

Most of the investors go for medium shares.

48% of the investors objective is future security.

After market meltdown most of the investors have not changed their investment pattern.

Out of 100 respondents 70 respondents revise their portfolio between 1-3 years.

Out of 100 respondents 64 respondents satisfied with their investment decision.

32 respondents have the convenience with the share broker for their good service.

50 respondents prefer dividend shares first and bonus shares next and lastly they prefer right

shares.

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SUGGESTIONS:

Concentrate more on income group above 5 lakh per annum preferably businessmen &

salaried people. Because they invest only 5%. It is better to target these groups because their

earning is more and they can invest more.

Conduct seminars to the investors to create the awareness about Equity shares

Create more awareness about Motilal Oswal Securities Ltd in Davangere by appointing new

marketing persons.

Motilal Oswal Securities Ltd should conduct awareness program aggressively for its Stock

Brokering services.

Since the internet and web based communication is getting popular Motilal Oswal Securities

Ltd should update web site frequently and provide information up to date .

Since investors, investment decision is based on study of different sources of information.

Motilal Oswal Securities Ltd should start giving advertisement in business newspaper and in

business magazine.

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LIMITATIONS

The study covers Davangere city only.

People not having deep knowledge about equity shares.

There is possibility of results not being accurate due to the small size of the sample.

The respondents may have answered in a hurry without giving adequate consideration

especially due to lack of time.

The time constraint was a limiting factor as more in-depth analysis of the subject as well as

the responses could not be carried out.

Some of the responses may be biased, as the Investors were very careful in choosing their

responses.

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Conclusions:

Out of 100 respondents 38% investors are business people & 35% of the age group

30-50 years. Most of the investors invested in equity shares because of future security & regular

returns & their satisfaction level in equities good. Most of the investors pick the stocks based on

future prospects of the company.

Out of 100 respondents 70 investors go for medium shares because they don’t want to

take risk .& most of existing share holders first prefer dividend shares next bonus shares last

they prefer right shares. Because a bonus issue (or scrip issue) is a stock split in which a

company issues new shares without charge in order to bring its issued capital in line with its

employed capital (the increased capital available to the company after profits).

This usually happens after a company has made profits, thus increasing its employed

capital. Therefore, a bonus issue can be seen as an alternative to dividends. No new funds are

raised with a bonus issue. The whole idea behind the issue of Bonus shares is to bring the

Nominal Share Capital into line with the true excess of assets over liabilities.

Last they prefer right shares because if investor invests in dividend shares then only they will get

right shares.

Investors getting good returns in investing equities therefore investors satisfaction level in

equities is good.

Overall satisfaction of the investors in equity shares is good.

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Dear Sir/Madam,

I am Ms. Kavita.M.Mellalli student of Bapuji Academy Of Management & Research Davangere, pursuing MBA degree have undertaken a project on “A Study On Investors Perception Towards Equity Shares” in Davangere city as part of curriculum, so I kindly Request you to fill the following questionnaire and provide your sincere views. I ensure that it would used only for academic purpose.

Thanking you

Name: _____________________________________

Age Group: 20-30Yrs 30-50 yrs 50-60 yrs above 60yrs

Occupation: ____________________________________________________________

Annual Income: Below 1lakh 1-3lakh 3-5lakh Above 5lakh

1) In which sector you would like to invest?

a) Infrastructure/cement b) Power

c) FMCG d) Pharma/biotech

e) Others_____________________

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. 2) What is the percentage allocation of your savings among the following investment

avenues?

a) Bonds/debentures b) Gold

c) Insurance/ULIPS d) Shares

e) Real estate f) MF

g) Bank FD/PO h) Others _____

3) How often you trade in equities?

a) Daily b) Twice in a week

c) Once in month d) Rarely

4) I pick the stocks based on these factors

a) Past returns b) Future prospectus of the company

c) Management of the company d) Based on the M capitalization

5) Which type of shares would you prefer?

a) Defensive b) Aggressive

c) Medium

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MOTILAL OSWAL SECURITIES LTD, DAVANGERE. 6) Objective of your investment is:

a) Future security b) Regular returns

c) Tax benefits d) Asset accumulation.

7) What is your strategy for investment post global equity markets meltdown (2008)?

a) Investing more in equities b) No Change in the investment pattern

c) Investing less in equities d) No comments

8) Usually at what percent you book your profits?

a) Less than 10% b) 10-15%

c) 20-30% d) above 30%

9) How often you revise your portfolio?

a) Less than 1 year b) 1-3 yrs

c) 3-6 yrs d) 6yrs & above

10) Are you satisfied with your investment decision?

1. Very satisfied 2. Satisfied

4. Dissatisfied 3 Neutral

5. Very dissatisfied

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11) What convenience you see with your share broker?

a) Ease of A/c Opening b) Exposure given

c) Less Brokerage d) Near to my home/Office

e) Good service f) Good tips given

g) Honesty

12) Prioritize your interest among the following about equity shares corporate actions: 1 is

highest 3 is lowest.

1. Dividend

2. Bonus

3. Rights

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BIBLIOGRAPHY

WEBSITES

www.nseindia.com accessed on 03/02/2010

www.bseindia.com accessed on 27/2/2010

www.amfi.com accessed on 3/3/2010

www.moneycontrol.com accessed on 1/4/2010

www. motilaloswal.com accessed from 27/2/2010 to 15/3/2010

www.investopedia.com accessed on 11/3/2010

BOOK

Security Analysis and Portfolio Management

Author : Punithavathy Pandian

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Motilal Oswal Project

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