Professional Documents
Culture Documents
Final Mphil Project On Dmat Kotak
Final Mphil Project On Dmat Kotak
On
A STUDY OF DMAT ACCOUNT OF KOTAK SECURITIES LTD.
AKOLA
SUBMITTED TO
RASHTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY,
NAGPUR
SPECIALISATION
FINANCIAL MANAGEMENT
SUBMITTED BY
Miss. Deepali R. Khuje
Guided by
Dr. Mukul Burghate
(H.O.D.)
Through :-
DHANWATE NATIONAL COLLEGE,
CONGRESS NAGAR, NAGPUR.
YEAR 2012-13
CONTENT
1
TOPIC PAGE No.
Introduction 03
Company Profile 05
Research Methodology 08
Suggestions 11
Conclusions 11
Bibliography 12
2
INTRODUCTION
DMAT ACCOUNT:
The trading on stock exchanges in India used to take place through open outcry
without use of information technology for immediate matching or recording of
trades. This was time consuming and inefficient. This imposed limits on trading
volumes and efficiency. In order to provide efficiency, liquidity and
transparency, NSE introduced a nation-wide on-line fully automated screen
based trading system where a member can punch into the computer quantities of
securities and the prices at which he likes to transact and the transaction is
executed as soon as it finds a matching sale or buy order from a counter party.
Screen based electronic system electronically matches orders on a strict
price/time priority and hence cuts down on time, cost and risk of error, as well
as on fraud resulting in improved operational efficiency. It allows faster
incorporation of price sensitive information into prevailing prices, thus
increasing the informational efficiency of markets. It enables market
participants, irrespective of their geographical locations, to trade with one
another simultaneous, improving the depth and liquidity of the market.
What is DEMAT ?
3
In India , a demat account, the abbreviation for dematerialised account, is a type
of banking account which dematerializes paper-based physical stock shares.
Conversion of Securities from Physical (Paper) Mode into Electronic Mode is
Called Dematerialisation. The Client opens Demat Account with any DP. Upon
Demat, the Certificates are destroyed and credit entry of exactly equal number
of Securities is created in Depository in Electronic mode. The B.O. account of
holder is credited and the securities loose their identities. The dematerialised
account is used to avoid holding physical shares: the shares are bought and sold
through a stock broker.
This account is popular in India . The market regulator, securities and exchange
board of India (SEBI) mandates a demat account for share trading above 500
shares. As of April 2006, it became mandatory that any person holding a demat
account should possess a permanent account number (PAN), and the deadline
for submission of PAN details to the depository lapsed on January 2007.
4
COMPANY PROFILE:
KOTAK SECURUTIES
The companys offerings include stock broking through the branch and Internet,
Investments in IPO, Equity & Derivatives, Mutual funds and Portfolio
management service.
Kotak Securities Ltd. 100 % subsidiary of Kotak Mahindra Bank is one of the
oldest and largest stock broking houses in the Industry. In 1994 the Brokerage
and Distribution businesses of Kotak Mahindra Group incorporated into a
separate company - Kotak Securities Ltd. It is one of Indias leading stock
broking houses with a market share of around 10 percent. Kotak Securities has
843 outlets servicing over 8.5 lakhs customer accounts and coverage of 331
cities. Kotaksecurities.com, the online division of Kotak Securities Limited
offers Internet Broking services and also online IPO and Mutual Fund
Investments.
They handle more IPOs than any other brokerage. The company has a full-
fledged research division involved in macroeconomic studies, sectoral research
and company-specific equity research combined with a strong and well-
networked sales force, which helps deliver current market information and
news.
Kotak Securities Ltd has been the first in providing many products and services
which have now become industry standards. Some of them are: Facility of
Margin Finance to the customers Investing in IPOs and Mutual Funds on the
phone SMS alerts before execution of depository transactions Mobile
application to track portfolios AutoInvest A systematic investing plan in
Equities and Mutual funds Provision of margin against securities automatically
against shares in the customers Demat account
5
The company is also a depository participant with National Securities
Depository Limited (NSDL) and Central Depository Services Limited (CDSL),
providing dual benefit services wherein the investors can avail the companys
brokerage services for executing the transactions and the depository services for
settling them. Kotak Securities Ltd. processes more than 4,00,000 trades a day
which is much higher even than some of the renowned international brokers.
Kotak Securities Limited has over Rs. 3300 crore of Assets Under Management
(AUM) as of 31st March, 2008. The portfolio Management Service provides top
class service, catering to the high end of the market. Portfolio Management
from Kotak Securities comes as an answer to those who would like to grow
exponentially on the crest of the stock market, with the backing of an expert.
Unlike many other companies, Kotak Securities Ltd., has a Centralised Risk
Management System and an in-house Research Team which allows it to offer
the same levels of service to customers across all locations. Kotak Securities
network spans over 321 cities with 877 outlets, with an employee workforce
beyond 5100.
The Companies accolades and awards are as follows: 1)Best Brokerage Firm in
India by Asiamoney in 2008, 2007 & 2006 2)Best Performing Equity Broker in
India CNBC Financial Advisor Awards 2008 3)Avaya Customer
Responsiveness Awards (2007 & 2006) in Financial Services Sector 4)The
Leading Equity House in India in Thomson Extel Surveys Awards for the year
2007 5)Euromoney Award (2007 & 2006) Best Provider of Portfolio
Management: Equities )Euromoney Award (2005)-Best Equities House In India
7)Finance Asia Award (2005)-Best Broker In India 8)Finance Asia Award
(2004)- Indias best Equity House 9)Prime Ranking Award (2003-04)- Largest
Distributor of IPOs
6
Mission:
VISION:
Customer Promise
They are passionate about their customers' success and promise to deliver
exceptional service with every meeting, interaction and dealing. They strive to
offer simple, straightforward, friendly and trustworthy service. They are a
financial company with a different attitude.
KOTAK DEALING
7
SWOT ANALYSIS:-
Strength:-
Co-operative and Experienced Branch Managers
Good Database
Reliance Brand
Low pricing
Weakness:-
Inexperienced Staff
Low awareness due to lack of advertisement.
Lack of loyal clientage
Developing product.
Opportunity:-
Untapped Market
Increased spending power
Changing Mindset of Customers
Unpredictable Sensex
Threat:-
Reach
Stiff competition from existing players in the market
Better products
8
WHAT DOES KOTAK SECURITIES LTD. OFFERS
1. Personalized Service
Company believes in providing personalized service and individual
attention to each client to ensure that we understand their goals and
help them achieve it.
2. Professional Advice
Company offers expert advice on equity and debt portfolios with an
objective to provide consistent long-term return while taking calculated
market risks. Companies approach helps clients build a proper mix of
products, and not concentrate on just one individual product. Hence,
serving long-term objectives in the best way.
3. Long-term Relationship
Company believes that long-term vision is the only means to steady
wealth creation. However to achieve this one also needs to take
advantage of short-term market opportunities while not losing sight of
long-term objectives. Hence it partners all its clients in realizing their
long-term vision.
9
I was supposed to use the database provided by the company to make cold calls or
10
Eighty percent of our business comes from 20 percent of our customers" is a
frequent statement at any sales convention. There's hardly a sales executive who is
While talking to customers, I analyze their needs. Whether they want to go for
investment purpose or insurance or both. Suggest them the plan that best suits
them. If they agree to it then either we send across the agents to close the deal or
close it themselves.
11
People fear that KOTAK SECURITIES Being a Private company and a new
Misguidance by agents.
People risk appetite is very low, so they are afraid of mutual fund as well.
This account is popular in India. The Securities and Exchange Board of India (SEBI)
mandates a demat account for share trading above 500 shares. As of April
2006, it became mandatory that any person holding a demat account should
possess a Permanent Account Number (PAN), and the deadline for submission of
PAN details to the depository lapsed on January 2007.
12
(SEBI), has allowed trades of up to 500 shares to be settled in physical form,
nobody wants physical shares any more. So a demat account is a must for
trading and investing.
Why demat?
The demat account reduces brokerage charges, makes pledging/hypothecation
of shares easier, enables quick ownership of securities on settlement resulting in
increased liquidity, avoids confusion in the ownership title of securities, and
provides easy receipt of public issue allotments.
It also helps you avoid bad deliveries caused by signature mismatch, postal
delays and loss of certificates in transit. Further, it eliminates risks associated
with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat
account holders can also avoid stamp duty (as against 0.5 per cent payable on
physical shares), avoid filling up of transfer deeds, and obtain quick receipt of
such benefits as stock splits and bonuses.
The DP may revise the charges by giving 30 days notice in advance. SEBI has
rationalized the cost structure for dematerialization by removing account
opening charges, transaction charges for credit of securities, and custody
charges vide circular dated January 28, 2005.
13
Further, SEBI has vide circular dated November 09, 2005 advised that with
effect from January 09, 2006, no charges shall be levied by a depository on DP
and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers
all the securities lying in his account to another branch of the same DP or to
another DP of the same depository or another depository, provided the BO
Account/s at transferee DP and at transferor DP are one and the same, i.e.
identical in all respects.
Rights
1. You can open more than one depository account in the same name with
single DP/ multiple DPs.
2. No minimum balance is required to be maintained in a depository account.
3. You can give a onetime standing instruction to your DP to receive all the
credits coming to your depository account automatically.
Procedure
1. Fill account opening form (available with your DP).
2. Give your DP the duly filled account opening form with introduction
documents as may be required.
3. Sign agreement with DP (agreement will state rights & obligations of both
parties). The agreement will contain the fee structure of your DP. Your DP
would give you a copy of this signed agreement for your record.
4. DP would give you Client Id no. (Account no.) Once your depository account
is opened. This Client Id no. along with your DP Id no. Forms a unique
combination. Both these nos. should be quoted in all your future
correspondence with DP/NSDL / Issuing Company/their registrar &
transfer (R&T) agent.
5. Your DP would give you pre-printed instruction slips for depository services
viz., dematerialization, delivery instruction for trades, etc..Preserve these
carefully.
6. Your DP would give you a list of deadlines for giving instructions for various
depository activities viz., transfer for effecting sale, purchase etc.. If not,
check with the DP.
14
Required Documents
The extent of documentation required to open a demat Account may vary
according to your relationship with the institution. If you plan to open a demat
account with a bank, a savings account holder has an edge over the non-account
holder. In fact, banks usually offer additional incentives to customers who open
a demat account with them.
Along with the application form, your photographs (with co-applicants) and
proof of identity/residence/date of birth have to be submitted. The DPs also ask
for a DP-client agreement to be executed on non-judicial stamp paper. Here is a
broad list (you wont need all of them though):
PAN card
A canceled check,
Voters ID
Passport
Ration card
Drivers license
Photo credit card
Employee ID card
Bank attestation
IT returns
Electricity/ Landline phone bill
While they only ask for photocopies of the documents, they will need the
originals for verification. You will have to submit a passport size photograph on
which you sign across.
Procedure
1. Fill account opening form (available with your DP).
2. Give your DP the duly filled account opening form with introduction
documents as may be required.
3. Sign agreement with DP (agreement will state rights & obligations of both
parties). The agreement will contain the fee structure of your DP. Your DP
would give you a copy of this signed agreement for your record.
4. DP would give you Client Id no. (Account no.) once your depository account
is opened. This Client Id no. along with your DP Id no. forms a unique
combination. Both these nos. should be quoted in all your future
15
correspondence with DP/NSDL / Issuing Company/their registrar &
transfer (R&T) agent.
5. Your DP would give you pre-printed instruction slips for depository services
viz., dematerialization, delivery instruction for trades, etc..Preserve these
carefully.
6. Your DP would give you a list of deadlines for giving instructions for various
depository activities viz., transfer for effecting sale, purchase,etc.. If not,
check with the DP.
16
Its convenient
You can access KOTAK SECURITIESs services through
The internet
Transaction kiosks
Tools that help you plan your investments, tax, retirement, etc. in the
personal finance section
The benefits:-
17
Benefits of Demat Account
Nomination facility;
Demat account has become a necessity for all categories of investors for
the following reasons/ benefits:
18
SEBI has made it compulsory for trades in almost all scrips to be
settled in Demat mode. Although, trades up to 500 shares can be settled
in physical form, physical settlement is virtually not taking place for
etc.
Points To Remember
1. You may choose your DP based on your evaluation of their reputation,
service standards, charges, other conveniences, etc.
2. Open depository account with the same holding pattern as there on
existing physical securities. You will need to open separate accounts for
every different combination of holding pattern. Eg.: If 100 securities of
company ABC & 200 securities of company PQR are registered in the name
19
of X as first holder & Y as second holder, one account in name of X as first
holder & Y as second holder is sufficient. Whereas, if 100 securities of
company ABC are registered in the name of X as first holder & Y as second
holder & 200 securities of company PQR are registered in the name of Y as
first holder & X as second holder, you will need to open two accounts, one
in the name of X as first holder & Y as second holder and the second in the
name of Y as first holder and X as second holder.
3. Account opening procedure should typically take 2-5 days.
4. In case of holdings of a partnership firm, the account should be opened in
the name of the partner(s).
5. In case of holdings of a HUF, the account should be opened in the name of
the Karta.
6. In case of a minor, the depository account should be opened in the name
of the minor and the guardians name should be mentioned. The guardian
will sign as signatory on behalf of the minor. For selling the securities of
the minor, a court order should be obtained.
7. In case of any difficulties, contact your DP.
8. Only securities admitted by NSDL can be dematerialized. The list is
available with your DP.
9. Only securities registered in the name of the account holder can be
dematerialized.
10.Dematerialization is normally completed within 15 days after the share
certificates have reached the issuer/their R&T Agent. Thus it may take you
a month from the date you hand over shares, to receive demat credit.
11.Dematerialization would be done only when the issuer / their R&T Agent is
satisfied of genuineness of securities & ownership status
12. All the joint holders should sign the DRF.
13.The pattern of holding in the DRF should match the pattern of holding on
the share certificate & the pattern in which account is opened.
14.Demat requests with name(s) not matching exactly with the name(s)
appearing on the certificates merely on account of initials not being spelt
out fully or put after or prior to the surname, would be processed,
provided the signature(s) of the client(s) on the DRF tallies with the
specimen signature(s) available with the issuer/ their R & T agent.
15.If the signature in the DRF does not match with the signature available
with the issuer/ their R & T agent, the issuer/ their R & T agent may at the
time of demat confirmation, ask for additional documentation (like bank
attestation/ notarization, etc.) to prove that the certificate belongs to the
person who forwarded the DRF.
20
16.In case there is any problem in processing the DRF, contact your DP and if
he cannot resolve the problem you may contact NSDL.
INTRODUCTION
The procedure for buying and selling dematerialized securities is similar to the
procedure for buying and selling physical securities. The difference lies in the
process of delivery (in case of sale) and receipt (in case of purchase) of
securities.
In case of purchase:-
The broker will receive the securities in his account on the payout day
The broker will give instruction to its DP to debit his account and credit
investors account
Investor will give Receipt Instruction to DP for receiving credit by filling
appropriate form. However one can give standing instruction for credit in
to ones accounts that will obviate the need of giving Receipt Instruction
every time.
In case of sale:-
The investor will give delivery instruction to DP to debit his account and credit
the brokers account. Such instruction should reach the DPs office at least 24
hours before the pay-in as otherwise DP will accept the instruction only at the
investors risk.
21
Rights
1. Dematerialized securities can be traded on those stock exchanges
connected to NSDL. At present, NSE, BSE, CSE, DSE, LSE, BGSE, OTCEI, MSE,
ISE & ASE are connected to NSDL. At these stock exchanges, two segments
would be available to trade in dematerialized securities :
o Unified (erstwhile physical) segment - In this segment delivery
obligation can be met by delivering dematerialized or physical
securities at the option of the seller. However, for a select list of
securities prescribed by SEBI, securities cannot be delivered in physical
form in the unified segment, of stock exchanges connected to NSDL.
This list presently covers 160 securities. This list has been expanded to
cover a total of 200 securities with effect from January 17, 2000. Over
a period, this list would cover all actively traded securities.
o Exclusive demat segment - In this segment delivery obligation can
be met by delivering dematerialized securities only. Physical securities
cannot be delivered in the exclusive demat segment.
2. Procedure
Trading in dematerialized securities is done through your broker just like
trading in physical securities. After your broker executes the trade, your
DP will help to deliver shares to your broker (in case you sell) on the
basis of valid instruction given by you to your DP and receive shares
from your broker (in case you buy) on basis of valid instruction given by
your broker to his DP.
22
1. You purchase securities in any of the stock exchanges connected to NSDL
through a broker of your choice and make payment to your broker. Make
sure you tell your broker you want only demat shares.
2. Broker arranges payment to clearing corporation/ clearing house of the
stock exchange.
3. Broker receives credit in his clearing account with his DP on the pay-out
day. He can immediately transfer these securities to your depository
account, provided your account is already active.
4. Broker gives instructions to his DP to debit his clearing account and credit
your depository account.
5. You give instruction to your DP for receiving credit in your depository
account. If you have given standing instruction to receive credits, no
separate instruction for receiving credit will be required.
6. If the instructions match, your account with your DP is credited.
23
4. The broker receives payment from the clearing corporation / clearing
house.
5. You receive payment from the broker for the sale in the same manner you
would receive payment for a sale in the physical mode.
Points To Remember
1. Trading continues to be through brokers. In case of any problem in
execution of trade, contact your broker and if he fails to resolve the
problem you may contact the stock exchange.
2. When you buy securities through the stock exchange, your brokers
clearing account is credited to the extent of the securities purchased, on
receipt of instruction from clearing corporation/ clearing house of the
stock exchange. Your depository account is credited only when your
broker gives a delivery instruction to his DP. Securities are not directly
credited to your account by the clearing corporation/ clearing house of the
stock exchange. In case your broker does not give a delivery instruction,
contact him or concerned stock exchange or SEBI. If your depository
account is not credited, in spite of your broker giving valid instruction to
his DP, contact the DP and if he fails to resolve the same you may contact
NSDL.
3. When you sell securities, you have to give a delivery instruction to your DP
to transfer the securities to your brokers clearing account. They are not
automatically debited from your account by NSDL or by the clearing
corporation/ clearing house of the stock exchange. In case the DP defaults
in executing your instruction, the DP is liable to compensate you for the
loss incurred, provided your instruction was in
order and has been submitted to the DP at least 24 hours i.e. one working
24
day prior to the pay-in date or before the deadline prescribed by DP. In
case the DP fails to resolve your problem, you can contact NSDL.
The need of the study arises because of the reason that a trainee
must understand the company, its achievements and tasks,
products and services and also to collect information about its
competitors, its products and services offered. So that, after
understanding and collecting information about the organization and
its competitors, a trainee will be able to work well for the
organization.
From the study I have learned very much, about the company as
well as the strategy of the customers, which helps me a lot at my
working days.
25
COMPETITORS
HDFC Bank Demat services offers you a secure and convenient way to
keep track of your securities and investments, over a period of time,
without the hassle of handling physical documents that get mutilated or
lost in transit.
26
Pledging of Securities.
In case you need any more information or have any queries , feedback &
complaints , you may please mail us at dphelp@hdfcbank.com
27
Disclaimer:
Whatever have been stated above are in the good interest of the
Investor / Demat Applicants / holders to provide a brief picture about the
depository system. You are requested go through the guidelines of the
depositories before taking any further action. For detailed guidelines,
you are requested to approach your nearest HDFC Bank branch. HDFC
Bank will not be responsible for any misunderstanding / act based on the
above. Also HDFC Bank might ask for additional information /
documentation than what has been stated above to process your
application / instruction.
ICICI DIRECT
28
ICICI Direct (or ICICIDirect.com) is stock trading company of ICICI Bank.
Along with stock trading and trading in derivatives in BSE and NSE, it
also provides facility to invest in IPOs, Mutual Funds and Bonds.
29
2. Wise Investment Account
30
Disadvantages of ICICI Direct
RESEARCH METHODOLOGY
INTRODUCTION
31
The word research methodology comes from the word
advance learner s dictionary meaning of research as a
careful investigation or inquiry especially through research
for new facts in my branch of knowledge for example some
author have define research methodology as systematized
effort to gain new knowledge.
TYPES OF RESEARCH
ANALYTICAL RESEARCH:-
SAMPLE SIZE:
32
METHODS OF DATA COLLECTION
In dealing with real life problem it is often found that data at hand are
inadequate, and hence, it becomes necessary to collect data that is
appropriate. There are several ways of collecting the appropriate data which
differ considerably in context of money costs, time and other resources at the
disposal of the researcher.
The data collection for this study was done in the following manner:
Through questionnaire:-
Information to find out the investment potential and goal was found out
through questionnaires.
Through Tele-Calling:-
Information was also taken through telephone calls.
33
2. Secondary sources of data:
In the secondary sources of data is used. (Internet , mazazine
,books, journals)
TOOLS OF ANALYSIS
RESEARCH DESIGN
RESEARCH METHODOLOGY
34
INTRODUCTION
TYPES OF RESEARCH
ANALYTICAL RESEARCH:-
35
It has to used facts or information already available and analyze
these to make a critical evaluation of material.
SAMPLE SIZE:
In dealing with real life problem it is often found that data at hand are
inadequate, and hence, it becomes necessary to collect data that is
appropriate. There are several ways of collecting the appropriate data which
differ considerably in context of money costs, time and other resources at the
disposal of the researcher.
The data collection for this study was done in the following manner:
36
Through personal interviews:-
A rigid procedure was followed and we were seeking answers to many pre-
conceived questions through personal interviews.
Through questionnaire:-
Information to find out the investment potential and goal was found out
through questionnaires.
Through Tele-Calling:-
Information was also taken through telephone calls.
TOOLS OF ANALYSIS
RESEARCH DESIGN
37
For the proper analysis of data simple quantitative technique such as
percentage were used. It help in marketing more accurate
generalization From the data available .The data which was collected
from a sample of population was assumed to be representing entire
population was interested .Demographic factor like age, income and
educational background was used for the classification purpose .
38
DATA ANALYSIS AND
INTERPRETATION
Interpretation:
This shows that although the mutual funds market is on the
rise yet, the most favored investment continues to be in the Share Market. So,
with a more transparent system, investment in the Stock Market can definitely
be increased.
39
Aware of online share trading Percentage of respondent
Yes 72%
No 28%
Interpretation:
With the increase in cyber education, the awareness towards online share
trading has increased by leaps and bounds. This awareness is expected to
increase further with the increase in Internet education.
40
Result of Awareness of
KOTAK SECURITIES
48%
52% yes
no
Interpretation:
This pie-chart shows that reliance money has a reasonable amount of Brand
awareness in terms of a premier Retail stock broking company. This brand
image should be further leveraged by the company to increase its market
share over its competitors.
41
Awareness of KOTAK
SECURITIES
Facilities
36%
yes
64%
No
Interpretation:
Although there is sufficiently high brand equity among the target audience yet,
it is to be noted that the customers are not aware of the facilities provided by
the company meaning thereby, that, the company should concentrate more
towards promotional tools and increase its focus on product awareness rather
than brand awareness.
42
USER OF DEMAT ACCOUNT
Angel ICICI HDFC
28%
41%
31%
OBJECTIVE:
43
To find the market potential and market penetration of Kotak Securuties
product offerings in Akola and local area nearby them.
Alternative Hypothesis:
H1: Customers are satisfied with the services provided By Kotak
Securuties
H2: There are minimum formalities for the DMAT Process.
44
The study is limited to the different schemes available under the
Demat account selected.
The lack of information sources for the analysis part.
Geographical locations.
Extreme variability in MARKET.
SUGGESTIONS
Suggestion, if any will be enlisted after the completion of the research.
CONCLUSIONS
Conclusions will be made depending upon the results of data analysis
after the completion of the research.
BIBLIOGRAPHY
Websites:
www.kotaksecurities.com
www.hdfc.com
www.icicidirect.com
45
www.demataccount.com
www.google.com
www.sebi.gov.in
www.nseindia.com
www.bseindia.com
www.nseindia.com
Reference books:
46