A

RESEARCH REPORT

ON PERCEP

'INVESTOR'S ATTITUDE TOWARDS PRIMARY MARKET

SUBMITTED TO

KURUKSHETRA UNIVERSITY, KURUKSHETRA

SUBMITTED FOR THE PARTIAL FULFILMENT OF THE DEGREE

OF

MASTER OF BUSINESS ADMINISTRATION

SESSION: (2015-2017)

UNDER THE GUIDANCE OF SUBMITTED BY

SHELLY GUPTA GANGA

COLLEGE ROLL NO: 73151238

 CERTIFICATE

This is to certify that GANGA a student of MASTER OF BUSINESS

ADMINISTRATION has worked on research report title INVESTORS ATTITUDE
TOWARDS PRIMARY MARKET, CHANDIGARH in partial fulfilment of the
requirement for the program. This is her original work to the best of my knowledge.

MISS SHELLY GUPTA

ASSISTANT PROFESSOR

(GALAXY GLOBAL GROUP OF INSTITUTIONS)

 PREFACE
This research project is a part of the Business Administration Course being taken up
at Department Of Management Studies, Galaxy Global Group of Institution
affiliated to Kurukshetra University. The topic assigned to me was INVESTORS
ATTITUDE TOWARDS PRIMARY MARKET

This project has been of great help in providing me an insight in to the real life
working of an organization; it gave me a chance to apply, all I had learnt to practical
situations, enhancing my understanding and image of the business world. This
experience in decision making and practical application of knowledge has
contributed greatly to my growth both as a person and manager.

As MBA course requires equal attention towards practical as well as theoretical

aspects of business, various problems are to be dealt with in that course .Thats why
research programs are there to give deep as well as thorough knowledge of subjects
and problems which are practical whenever one enters in the profession.

Research programs are included in the curriculum of various management courses

so as to provide students with practical knowledge and exposure to professional life.

The project entitled INVESTORS ATTITUDE TOWARDS PRIMARY MARKET. The first
task will to know about the concept on which the project was based. Then we will
have to set criteria, on the basis of which the above concept will value. The factors,
on the basis of which the research has been done, analyzed, evaluated and then
presented. The research was design and extensive analysis brought to light several
facts.

Certain questions were asked to people and on the basis of the answers, various
findings have been given. A sincere effort has been made to bring about clear facts
and there is a hope that this report meets the given expectations and various
requirements of the research.
 (GANGA)

ACKNOWLEDGEMENT

I express my gratitude to Dr. Raj Kumar Director General, Galaxy Global Group
of Institutions, Dinarpur (AMBALA) & Dr. Monika Gupta Vashisht Head, Faculty of
Management, Galaxy Global Group of Institutions, Dinarpur (AMBALA) for following
me to undergo the research report.

I would like to give special thanks to , Faculty of Management, Galaxy Global Group
of Institutions, Dinarpur (AMBALA), research report guide for guiding from time to
time, right from giving direction to the research to prepare the report. He provides
with valuable suggestions and information related to the project & really co-
operated a lot during research report.

I also thankful to all friends, family members and the respondents who help in
fulfilling the research report.

The research project report has added to my practical knowledge and build up my
confidence. I thank once again guide with the active support of whom I was able to
complete research report, successfully.
 (GANGA)

DECLARATION

I, Diksha, student of MBA 4th semester, galaxy global group of institutions, Dinarpur
(ambala) hereby declare that project titled INVESTORS ATTITUDE TPWARDS
PRIMARY MARKET in Regenta Almeida Hotel, Chandigarh is an authentic work
under the guidance of MISS SHELLY GUPTA , Assistant Professor done by me. The
matter presented has not been copied from any source and not submitted anywhere
for the completion of any course.
 (Signature of Student)

(GANGA)

CERTIFICATE
PREFACE I
ACKNOWLEDGEMENT II
DECLARATION

TABLE OF CONTENTS

CHAPTE PARTICULARS PAGE

R NO.
NO.
INTRODUCTION TO TOPIC

1
2 INDUSTRY AND COMPANY
PROFILE

3 LITERATURE REVIEW

4 RESEARCH METHODOLOGY

5 DATA ANALYSIS AND

INTERPRETATION

6 FINDINGS &SUGGESTIONS
 CONCLUSION

BIBLIOGRAPHY
QUESTIONNAIRE

CHAPTER -1

INTRODUCTION
 INTRODUCTION

The past twenty five years have witnessed a process of accelerating

change in the worlds financial markets. Driven by an interacting process of
liberalization and innovation, regulations have been removed, New product
have emerged and old boundaries between financial intermediaries have
been blurred.

At the same time, growth of capital markets has posed new challenges
to economic and financial stability.

The role of Indian capital market which is to provide long term

resources required by industries for investment has observed buoyancy in
share market with the liberalization of industries and fiscal policies of the
government. Finance, the lie blood of industry is mobilized especially through
New Issue Market or Primary Market.

The primary market, also called the new issue market, is the market for
issuing new securities. Many companies, especially small and medium scale,
enter the primary market to raise money from the public to expand their
businesses. They sell their securities to the public through an initial public
offering. The securities can be directly bought from the shareholders, which
is not the case for the secondary market. The primary market is a market for
new capitals that will be traded over a longer period.

In the primary market, securities are issued on an exchange basis. The

underwriters, that is, the investment banks, play an important role in this
market: they set the initial price range for a particular share and then
supervise the selling of that share.

Investors can obtain news of upcoming shares only on the primary

market. The issuing firm collects money, which is then used to finance its
operations or expand business, by selling its shares. Before selling a security
on the primary market, the firm must fulfill all the requirements regarding
the exchange.

After trading in the primary market the security will then enter the
secondary market, where numerous trades happen every day. The primary
market accelerates the process of capital formation in a country's economy.

The primary market categorically excludes several other new long-term

finance sources, such as loans from financial institutions. Many companies
have entered the primary market to earn profit by converting its capital,
which is basically a private capital, into a public one, releasing securities to
the public. This phenomena is known as "public issue" or "going public."

There are three methods though which securities can be issued on the
primary market: rights issue, Initial Public Offer (IPO), and preferential issue.
A company's new offering is placed on the primary market through an initial
public offer.

Meaning of Primary Market

New Issues Market is that part of capital market where dealing

exchanges takes the boundaries de-marketing the financial services are fast
eroding. Thanks to the innovations in the financial services, the movement
towards made by existing companies are known as further issues.

The primary market is that part of the capital markets that deals with the issuance of new
securities. Companies, governments or public sector institutions can obtain funding through the
sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers.
The process of selling new issues to investors is called underwriting. In the case of a new stock
issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the
price of the security offering, though it can be found in the prospectus.

Mutual funds are seemingly the easiest and the least stressful way to
invest in the stock market. Quiet a large amount of money has been invested
in mutual funds during the past few years. Any investor would like to invest
in a reputed Mutual Fund organization. UTI is one such organization that
provides a better overview of the Mutual Fund industry. Understanding the
attitude of investors on their investment would help the company to increase
their profits. In UTI they believe that the investors attitude would result in
profits.

Features of primary markets are:

This is the market for new long term equity capital. The primary market
is the market where the securities are sold for the first time. Therefore it is
also called the new issue market (NIM).
In a primary issue, the securities are issued by the company directly to
investors.
The company receives the money and issues new security certificates
to the investors.

Primary issues are used by companies for the purpose of setting up

new business or for expanding or modernizing the existing business.

The primary market performs the crucial function of facilitating capital

formation in the economy.
 The new issue market does not include certain other sources of new
long term external finance, such as loans from financial institutions.
Borrowers in the new issue market may be raising capital for converting
private capital into public capital; this is known as "going public."

The financial assets sold can only be redeemed by the original holder.

Primary market

1. Market in which buyers and sellers negotiate and transact business

directly, without any intermediary such as resellers.

2. Financial market in which newly issued securities are offered to the

public.

Market

Actual or conceptual place in commercial world where forces of

demand and supply operate, and where buyers and sellers interact (directly
or through intermediaries) to trade goods, services, or contracts or
instruments, for money or barter. Markets include mechanisms or means for
(1) determining price of the traded item, (2) communicating the price
information, (3) facilitating deals and transactions, and (4) effecting
distribution. Market for a particular item is made up of existing and potential
customers who need it and have the ability and willingness to pay for it. All
markets, ultimately, consist of people also called marketplace.
Buyer

1. Party which acquires, or agrees to acquire, ownership (in case of

goods), or benefit or usage (in case of services), in exchange for
money or other consideration under a contract of sale also called
purchaser.

2. Professional purchaser specializing in a specific group of materials,

goods, or services, and experienced in market analysis, purchase
negotiations, bulk buying, and delivery coordination.

Seller

Entity that makes, or offers or contracts to make, a sale to an actual or

potential buyer. Also called vendor, particularly the one selling a real
property.

Negotiation

1. General: Bargaining (give and take) process between two or more

parties (each with its own aims, needs, and viewpoints) seeking to
discover a common ground and reach an agreement to settle a matter
of mutual concern or resolve a conflict.

2. Banking: Accepting or trading a negotiable instrument.

3. Contracting: Use of any method to award a contract other than

sealed bidding.

4. Trading: Process by which a negotiable instrument is transferred from

one party (transferor) to another (transferee) by endorsement or
 delivery. The transferee takes the instrument in good faith, for value,
and without notice of any defect in the title of the transferor, and
obtains an indefeasible title.

Business

Economic system in which goods and services are exchanged for one
another or money, on the basis of their perceived worth. Every business
requires some form of investment and a sufficient number of customers to
whom its output can be sold at profit on a consistent basis.

Intermediary

Firm or person (such as a broker or consultant) who acts as a mediator

on a link between parties to a business deal, investment decision,
negotiation, etc. In money markets, for example, banks act as intermediaries
between depositors seeking interest income and borrowers seeking debt
capital. Intermediaries usually specialize in specific areas, and serve as a
conduit for market and other types of information. Also called a middleman.
See also intermediation.

Reseller

One who buys goods from a manufacturer and resells them to

customers unchanged

Primary Market

The primary market, also called the new issue market, is the market for
issuing new securities. Many companies, especially small and medium scale,
enter the primary market to raise money from the public to expand their
businesses. They sell their securities to the public through an initial public
offering. The securities can be directly bought from the shareholders, which
is not the case for the secondary market. The primary market is a market for
new capitals that will be traded over a longer period.

In the primary market, securities are issued on an exchange basis. The

underwriters, that is, the investment banks, play an important role in this
market: they set the initial price range for a particular share and then
supervise the selling of that share.

Investors can obtain news of upcoming shares only on the primary

market. The issuing firm collects money, which is then used to finance its
operations or expand business, by selling its shares. Before selling a security
on the primary market, the firm must fulfill all the requirements regarding
the exchange.

After trading in the primary market the security will then enter the
secondary market, where numerous trades happen every day. The primary
market accelerates the process of capital formation in a country's economy.

The primary market categorically excludes several other new long-term

finance sources, such as loans from financial institutions. Many companies
have entered the primary market to earn profit by converting its capital,
which is basically a private capital, into a public one, releasing securities to
the public. This phenomena is known as "public issue" or "going public."

There are three methods though which securities can be issued on the
primary market: rights issue, Initial Public Offer (IPO), and preferential issue.
A company's new offering is placed on the primary market through an initial
public offer.
Recent Developments in Primary Commodity Markets

Since mid-1997 - that is, just before the beginning of the crisis in
Thailand s financial and foreign exchange markets - prices of primary
commodities as a group have fallen by more than 10 percent.(1) These price
declines are sufficiently great in magnitude to have far reaching implications
for producers and consumers around the world.

Effects of the Asian Crisis

To a large degree these price declines are associated with the Asian
crisis. During the early and mid-1990s, consumption of primary commodities
in most Asian developing countries increased at rates much higher than in
the rest of the world. Asian developing countries accounted for about two-
thirds of the increase in world consumption of petroleum products over the
period 1992-96, and their share in world consumption increased from 12
percent to 15 percent. Korea and the ASEAN-4 countries (Indonesia,
Malaysia, the Philippines, and Thailand), in turn, accounted for about one-half
of the increase in consumption of petroleum products in Asian developing
countries, and the share of these five countries in world consumption rose
from 5 percent to 6 1/2 percent. A similar pattern of growth in consumption is
observed for base metals, rubber, coarse grains, oil meals, and fats and oils.
For most of these non-fuel commodities, the share of Asian countries in world
consumption in 1996 was much greater than their share in the world
consumption of petroleum products. China's contribution to the growth in the
markets for these commodities, however, has tended to be much greater
than that of Korea plus the ASEAN-4.

In the countries most directly affected, the Asian crisis has brought in
its wake much reduced construction activity, much higher import costs in
terms of national currencies, less available credit to finance imports, and, at
a minimum, sharp reductions in demand. These conditions have led to
reductions in the rate of growth of demand, not only in the ASEAN-4
countries and Korea but also, through the spillover and contagion effects of
the crisis, in many other countries in Asia and elsewhere. Thus certain
commodity markets that as recently as mid-1997 were expected to show a
high rate of growth of demand are now facing a period of considerable
uncertainty with regard to demand prospects. Furthermore, for some non-
fuel commodities such as timber, rice, natural rubber, and vegetable oils, the
large depreciations of currencies of the southeast Asian countries may also
have had supply effects insofar as they create incentives to increase exports
from current inventories and to increase current and prospective production.

Effects of Weather

This year weather conditions generally favorable to crop production

have also been an important factor that has tended to weaken the prices of
several agricultural commodities. This seems true notwithstanding the
unusual weather patterns in many parts of the world that have been
attributed to El Nino and have received much press coverage. At least so far,
the adverse consequences of El Nino for commodity production that are
sufficiently great to have discernible effects on world prices for individual
commodities have been limited to the fish catches off the west coast of
South America and to palm oil production in southeast Asia. Elsewhere - for
example, in the case of cereal production in southern Africa - El Nino may
have reduced production locally, but the consequence for world prices is not
of great importance. In addition, warmer than usual weather this winter in
the Northern Hemisphere has reduced the demand for heating oil and hence
contributed to the downward trend in the price of petroleum and other
energy commodities.

Developments in Specific Markets

The interplay of the Asian crisis and other factors affecting commodity
markets in recent months comes more into focus in a review of
developments in specific primary commodity markets. Price decreases in
excess of 10 percent (with prices measured in terms of SDRs) over the period
June 1997 through January 1998 that were in some way associated with the
effects of weaker demand from Asian countries were recorded for nearly one-
third of the commodities included in the IMF's commodity price index. The
price declines for five commodities - copper, nickel, natural rubber, wool, and
hides - appear to be associated mainly with the Asian crisis. The Asian crisis
also played an important role, but probably not the predominant role, in the
price declines of four other commodities - crude petroleum, timber, zinc, and
lead. For certain other commodities, such as aluminum, iron ore, meat,
maize, and soybean meal, ...

Problems of Indian Primary Market

There are several problems of the Indian primary market. But these
problems can be overcome too by mere application of simple rules( end of
the article). These remedies have been suggested by experts. Economists
attribute these problems to various factors some of which are highlighted
below.

The function of the primary market with respect to the market for IPO
or initial public offering is to see that various companies are provided with
opportunities for the acquisition of growth capital. The primary market has
withstood the tests of time.

Inappropriate allotment of shares:

There are many existing problems of the Indian primary market. Some
of the instances include the inappropriate assignment of shares to the public
as was the case of the ONGC public issues. Due to this there was a lot of
confusion among the investors.

INITIAL PUBLIC OFFERINGS (IPO)

A corporate may raise capital in the primary market by way of an initial public offer,
rights issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the
public in the primary market. It is the largest source of funds with long or indefinite maturity for
the company.

IPO Stocks: When the company wants to release their shares into the market for the first time,
they will invite the public to participate in an exercise called the IPO (Initial Public Offering).
This is when you see people filling in application forms and buying bank drafts to purchase the
company's shares (some countries do it electronically). Some call it "applying for new shares".

Prices when applying for new shares are always much cheaper than what it should be
listed in the market later. However, if it is a very attractive company, there will be more people
who will participate in the IPO exercise and the draw-lots method will be used to determine who
will be allocated the shares.

Then, after the first stage, the company's shares will be listed in the stock market. That is
when if you have managed to purchase the shares during the IPO offering, you will be able to
sell them into the market to buyers who want a part of these shares. Buying stocks through
applying for IPO shares in general is always a safer method of investing in the stock market as
most companies price them attractively.

A NEW CONCEPT OF IPO MARKETBOOK BUILDING

SEBI guidelines defines Book Building as "a process undertaken by which a demand for
the securities proposed to be issued by a body corporate is elicited and built-up and the price for
such securities is assessed for the determination of the quantum of such securities to be issued by
means of a notice, circular, advertisement, document or information memoranda or offer
document".

Book Building is basically a process used in Initial Public Offer (IPO) for efficient price
discovery. It is a mechanism where, during the period for which the IPO is open, bids are
collected from investors at various prices, which are above or equal to the floor price. The offer
price is determined after the bid closing date.

As per SEBI guidelines, an issuer company can issue securities to the public though
prospectus in the following manner:

1. 100% of the net offer to the public through book building process

2. 75% of the net offer to the public through book building process and
25% at the price determined through book building. The Fixed Price
portion is conducted like a normal public issue after the Book Built
portion, during which the issue price is determined.

The concept of Book Building is relatively new in India. However it is a common practice in
most developed countries.

Difference between Book Building and Public Issue

In Book Building securities are offered at prices above or equal to the floor prices, whereas
securities are offered at a fixed price in case of a public issue. In case of Book Building, the
demand can be known everyday as the book is built. But in case of the public issue the demand is
known at the close of the issue.

The book building process:

The company approaches lead manager for IPO

The company and lead manager suggest a price band at which shares are to be offered

Application are invited

 Based on demand for the shares a certain price is established by promoters and the lead
manger

The allotment is made on the basis of the market clearance price

Post issue the price stabilization is undertaken by the lead manager.

WHAT SEBI DID TO ENCOURAGE RETAIL INVESTOR

SEBI has announced a series of measures to encourage retail participation in the primary
market. This is perhaps the first instance where the market regulator has got the timing of reform
measures spot on.

Coming close on the heels of the hugely successful Maruti IPO, these measures should
arouse retail interest in some of the big public offers expected in the near future BPCL, Idea
Cellular, TCS and Nalco. The principle of these changes seems to be that greater participation of
retail investors in the primary market is possible only when they have a reasonable chance of
making gains, certainly not the case earlier. To enable such participation, Sebi has adopted a two-
fold approach. First, the market watchdog has made sure that retail investors actually get an
allotment in book-built IPOs. Hence, the 10% increase in the allocation for retail investors. But
more significant is the change in the definition of what constitutes retail from those applying
for up to 1,000 shares to applications for shares worth Rs 50,000 or less. This would ensure that
retail is truly retail. Take the i-flex IPO, priced at Rs 530 a share. An application for 1,000
shares entailing investment of Rs 5.3 lakh would have qualified for the retail category. Second, to
ensure some quality, the regulator has introduced the concept of net tangible asset, making
certain that issuing company has some pre-IPO history. Additionally, to discourage fancy ideas
being sold to public and subsequently abandoned (plantation schemes), issuers have been asked
to tie-up funds for a project before the issue. Of course, willful defaulters have been barred.
Lastly, to fix accountability, the CEOs or the CFOs of the issuing company would have to certify
disclosures in the offer document.

These measures should translate into higher allotment for retail

investors and keep a check on the quality of issuers as well. The decision to
disallow withdrawal of bids by institutional investors and the shift to price
band instead of a floor price will prevent manipulation in pricing and
subscription, both inimical to retail interest while the availability of a green
shoe option should deliver price stability post listing in the case of over
subscription. Beyond this, there is precious little a regulator can do. The rest
is upto the market and investors.

THE EVALUATION PROCESS

Backed by aggressive merchant bankers, the pink papers, and gung ho
TV channels. Rs. 40,000 crore is hard to resist. But dont forget that your
personal rs 4000 are as valuable to you as it will be with a couple of zeroes
more. Before you jump on to the bandwagon. Do your homework. Its not
easy to analyze the performance even of al listed company that has been
around for a while and has a record of market performance; for a company
making an initial public offer, this analysis is rather more difficult. But some
point to be considered are as follows

THE BUSINESS
Make sure you understand the companys business. The attempt
should be to understand the long-term sustainable advantage of the
business and the companys position in it. The prospectus has a section
dedicated for such information and this is a must read. A voluminous offer
document can seem daunting but if you focus on the key aspects, it gets less
tedious. Study the document to understand product portfolio, competitive
strengths, new business initiatives and strategy, regulations and so on.
THE COMPANY
Next, choose companies with leadership positions. Three successful
recent issues have been Maruti, TV today and Patni computers. Maruti is an
industry leader and the largest passenger car manufacturer in India with a
diverse product portfolio, which includes 10 basic models with over 50
variants. In 2003, Marutis share stood at 54.6 percent; the balance was
divided among nine other manufacturers. Similarly, TV Today is Indias
leading news broadcaster and Patni computer is Indias largest IT services
company.

THE PROMOTER
An old business adage says, its better to have an a team with a c team with an a
product, and even better to have an a team with a a product. After all its people who run the
business. Hence, its important to focus on the credentials of the promoter and key management
figures. Invest in companies with a proven management track record, since its the management
philosophy and ability that determines attitude towards minority shareholders and the likely
success of a venture. For instance, the promoters of Indraprastha gas and Maruti have proven
management credentials. On the other hand, theres a Tips industry, where there were allegations
against one to the promoters in the Gulshan Kumar murder case such issues are best avoided.

THE LOCK IN
During an IPO, the underwriter makes the companys key shareholders
sign a lock-in agreement. The agreement is legally binding on the promoters
and other key shareholders, prohibiting them from selling their shares for a
specified period of time. The inevitable supply overhang when these
previously restricted investors are permitted to sell shares can put downward
pressure on the stock price. For example, in Patni computers, the lock in
period for key promoters is three years, but for general Atlantic, a foreign
venture capital investor holding 28.3 percent of outstanding shares, the lock
in period is 180 days from listing.

THE FINANCES
A good management and a sound business model count, but what
matters most is performance. Check for consistency in revenue and profit
growth and margins for at least three years before the IPO. Also, check if the
company has an overly high debt equity ratio, or carries contingent liabilities,
or has disputed tax claims, or faces litigation in short, factors bearing on the
companys operations and results.

THE RISK
This is the most relevant part of the offer document. Although the offer
document is tailor made to sell the issue, the risk factors help you get a fair
idea of the impact of such risks on the companys operations. For example,
in the case of Bharti Televenture the biggest risk came from regulations
governing Indian telecom. Increased competition in cellular services,
unrestricted competition in fixed line services and the decision to allow fixed
line operators to provide limited mobility using WLL were some of the risks at
the time of the IPO.

THE OBJECTS
In bull markets, price increases defy fundamentals, and companies are
prone to capitalize on this sentiment to raise money. If you study the objects
of the issue, you will be able to weed out the chaff. For example, if the
money is being raised to repay loans or to provide and exit option to existing
investors investigate. If the business is doing well, the company should not
need to raise fresh capital to repay its debt.
 However, a proceeds of the issue going towards research, marketing, or capacity
expansion paints a better picture. Companies like Bharti and Divis have used the funds raised to
create infrastructure, which will drive growth for these companies in future. On the other hand,
BAG films had earmarked 60 percent of he issue proceeds towards production to feature films,
which exposes it to significant risks considering that film production is not a safe business,
especially when the company does not have prior experience in it.

THE FINE PRINT

Often, the most critical bits of information on a companys financial
health are buried in the prospectus. Expect the red flags, in particular, to be
lost in acres of fine print. For example, BAG films converted its 14 percent
fully convertible debentures and accumulated interest into equity shares and
issued them to UTI and IDBI at a 10 percent discount to the issue price at Rs.
9 per share.

Rarely, some good news also gets buried and goes unnoticed. The
discounts and royalty waivers by Suzuki to Maruti, for instance, will result in
savings of over Rs.80 crore, which will directly flow to the bottom line. This
means Marutis Rs.146 crore net profit in 2003 will get a boost of 40 percent
by just this little clause.

THE PRICE
The pricing of the issue determines the demand for the stock. Although
issues are usually attractively priced to attract investors, benchmarking it
with valuations of comparable listed companies is a good idea. This will give
you a sense o f the relative attractiveness of the issue and scope for
appreciation. For valuation purposes, compare the companys profit margins,
capital efficiency, price earning ratio and other financial parameters with that
of similar payers. For example, Patni scores high on the valuation front but
low on performances parameters like operating margins.
THE HYPE
Given that there is only one IPO for a company, they are often
presented as not to be missed opportunity and much hype is created by lead
managers and brokers to get as much attention as possible. Remember that
it is their business to make clients buy and sell stocks. Our advice: dont buy
stocks just because they are making a debut in the market.

THE BROKER
The lead managers track record is as important as that of the
companys. History suggests that the best merchant bankers usually
undertake some due diligence before associating themselves with an issue.
Since business fortunes of merchant bankers depend on their track record,
there is more reason for them to handle only quality issues. Look for known
lead managers like Kotak investment, SBI capital markets, DSP Merill lynch,
Enam, JM Morgan. Be wary of smaller investment banks that may be willing
to make any company public.
 CHAPTER -2

COMPANY PROFILE

COMPANY PROFILE
 ORGANIZATION HISTORY

Company Profile
Milestones
AR Core Strengths
Management Team

About Anand Rathi

Anand Rathi (AR) is a leading full service securities firm providing the entire gamut of
financial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a pan
India presence as well as an international presence through offices in Dubai and
Bangkok. AR provides a breadth of financial and advisory services including wealth
management, investment banking, corporate advisory, brokerage & distribution of
equities, commodities, mutual funds and insurance, structured products - all of which
are supported by powerful research teams.

The firm's philosophy is entirely client centric, with a clear focus on providing long
term value addition to clients, while maintaining the highest standards of excellence,
ethics and professionalism. The entire firm activities are divided across distinct client
groups: Individuals, Private Clients, Corporate and Institutions and was recently
ranked by Asia Money 2006 poll amongst South Asia's top 5 wealth managers for the
ultra-rich.

In year 2007 Citigroup Venture Capital International joined the group as a financial
partner.
Equity & Derivatives Brokerage

Anand Rathi provides end-to-end equity solutions to institutional and individual

investors. Consistent delivery of high quality advice on individual stocks, sector
trends and investment strategy has established us a competent and reliable research
unit across the country.

Clients can trade through us online on BSE and NSE for both equities and derivatives.
They are supported by dedicated sales & trading teams in our trading desks across
the country. Research and investment ideas can be accessed by clients either
through their designated dealers, email, web or SMS.

Milestones

1994:

Started activities in consulting and Institutional equity sales with staff of 15

1995:

Set up a research desk and empanelled with major institutional investors

1997:

Introduced investment banking businesses

Retail brokerage services launched

1999:

Lead managed first IPO and executed first M & A deal

2001:
Initiated Wealth Management Services

2002:

Retail business expansion recommences with ownership model

2003:

Wealth Management assets cross Rs1500 crores

Insurance broking launched

Launch of Wealth Management services in Dubai

Retail Branch network exceeds 50

2004:

Commodities brokerage and real estate services introduced

Wealth Management assets cross Rs3000crores

Institutional equities business re-launched and senior research team put in place

Retail Branch network expands across 100 locations within India

2005:

Real Estate Private Equity Fund Launched

Retail Branch network expands across 200 locations within India

2006:

AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange
(DGCX)
Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money
2006 poll

Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the
High Net worth Individuals (HNI) Category

Ranked 9th in the Retail Category having more than 5% market share

Completes its presence in all States across the country with offices at 300+ locations
within India

2007:Citigroup Venture Capital International picks up 19.9% equity stake

Retail customer base crosses 100 thousand

Establishes presence in over 350 locations

AR Core Strengths

Breadth of Services

In line with its client-centric philosophy, the firm offers to its clients the entire
spectrum of financial services ranging from brokerage services in equities and
commodities, distribution of mutual funds, IPOs and insurance products, real estate,
investment banking, merger and acquisitions, corporate finance and corporate
advisory.

Clients deal with a relationship manager who leverages and brings together the
product specialists from across the firm to create an optimum solution to the client
needs.

Management Team

AR brings together a highly professional core management team that comprises of

individuals with extensive business as well as industry experience.

In-Depth Research
Our research expertise is at the core of the value proposition that we offer to our
clients. Research teams across the firm continuously track various markets and
products. The aim is however common - to go far deeper than others, to deliver
incisive insights and ideas and be accountable for results.

Management Team

The senior Management comprises a diverse talent pool that brings together rich
experience from across industry as well as financial services.

Mr. Anand Rathi - Group Chairman

Chartered Accountant

Past President, BSE

Held several Senior Management positions with one of India's largest industrial
groups

Mr. Pradeep Gupta - Vice Chairman

Plus 17 years of experience in Financial Services

Mr. Amit Rathi - Managing Director

Chartered Accountant & MBA

Plus 11 years of experience in Financial Services

ACQUISITION:
ANZ Grind lays : $ 1.34 bn from August
2000.

Hong Kong Consumer Bank : $ 1.32 bn

Thailand Nakornthan Bank : $ 320 million

Indonesians Bank Per-Mata : $ 366 million from Oct.

2004.

Korea First Bank : $ 3.3 bn from Apr. 2005.

Standard Chartered PLC is listed on both the London Stock Exchange and the Stock
Exchange of Hong Kong and is in the top 25 FTSE-100 companies, by market
capitalization. Top 100 companies list, no other bank present except Bank of
Americas position 69th and position of standard chartered bank is 74 th.

Offices of ANANDRATHI are in 197 cities across 28 states & it has also branches in
Dubai & Bangkok with more than 44000 employees. It has daily turnover in excess of
Rs.4bn. It has 1, 00,000+ clients nationwide. It is also leading distributor of IPOs.

In India where ANANDRATHI is present in 21 STATES:

Andhra Pradesh
 Assam

Bihar

Chhattisgarh

Delhi

Goa

Gujarat

Haryana

Jammu & Kashmir

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Orissa

Punjab

Rajasthan

Tamil Nadu

Uttar Pradesh

Uttaranchal

West Bengal

LIST OF PRODUCTS :

Demat Accounts
 Mutual Funds
Derivatives
Commodities
Bonds
Trading Account
Insurance

MISSION

To be India's first Multinational providing complete financial services solution across the globe

VISION

Providing integrated financial care driven by the relationship of trust and confidence.
 CHAPTER -3

RESEARCH METHODOLOGY
 RESEARCH METHODOLOGY

The research methodology for the project completed in two phases:

First Phase is the collection of Secondary Data:

This involves the collection of Secondary data using internet and internal sources
for comparison of Online trading account of other Broking houses in the market like
SBI Capital Securities, MOTILAL Oswal, Religare and Reliance Money etc. This also
involves talking to their executives regarding various features provided to the
customer along with their Brokerage structure.

Second Phase is Collection of Primary Data and Analysis:

After collecting the Secondary data the next phase will be collection of primary
data using Questionnaires. The questionnaire will be filled by around 100 people who
will be mainly from Jaipur. The sample will consist of people who are employed or
work as free lancers dealing in investment options to know their financial
requirements. Based on these requirements different investments will be informed to
them for further perusal. The data collected will be then entered into MS-excel for
analysis of the data collected.
 RESEARCH DESIGN

Non probability

The nonprobability respondents have been researched by selecting the persons

who do the stock trading. Those persons who do not trade in stocks have not been
interviewed.

Exploratory and descriptive research

The research is primarily both exploratory and descriptive in nature. The sources
of information are both primary and secondary. The secondary data has been taken
by referring to various magazines, newspapers, internal sources and internet to get
the figures required for the research purposes. The objective of the exploratory
research is to gain insights and ideas. The objective of the descriptive research study
is typically concerned with determining the frequency with which something occurs.
A well structured questionnaire was prepared for the primary research and personal
interviews were conducted to collect the responses of the target population.

SAMPLING METHODOLOGY

Sampling Technique
 Initially, a rough draft was prepared a pilot study was done to check the accuracy
of the Questionnaire and certain changes were done to prepare the final
questionnaire to make it more judgmental.

Sampling Unit

The respondents who were asked to fill out the questionnaire in the National
Capital Region are the sampling units. These respondents comprise of the persons
dealing in stock trading. The people have been interviewed in the open market, in
front of the companies, telephonic interviews and through other sources also.

Sample Size

The sample size was restricted to only 1OO respondents.

Sampling Area

The area of the research was Jaipur.

OBJECTIVES

To Know About Investors Preference For Difference Sectors Or

Difference Industries .
To Know About Factor Which Affect Their Investment Decision While
Making Decision
Any New Primary Issue Market.
To Find Out The Sources Of Information .

LIMITATIONS OF THE STUDY

The various limitations of the study are:

People were not willing to fill the entire questionnaire due to the less time
available to them.
Some respondents might be hesitant to divulge personal and financial
information which can affect the validity of all responses.
There is lack of awareness among people about investing in stock market. So
the people who are aware of such things were found in specific areas for survey
purposes.
Most people are comfortable with traditional system in small towns and like to
trade from their respective brokers, hence not providing a true opinion of theirs.
Some of the respondents who did not do online trading were able to respond to
only few questions.
The survey was done in the Jaipur region and may not truly express the opinion
of whole country.
 CHAPTER - 4 DATA

INTERPRETRATION AND DATA ANYLYSIS

Q.1. Have you ever invested in stock market?
Invested in Stock Market No. of Respondents

Yes 150

No 30

17%

Yes
No

83%
INTERPRETATION:

The above diagram shows that 150 respondents said that they are invested in
the stock market and 30 respondents said that they did not invest in the stock market.