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"Review of Indian Equity Market": A Summer Training Project Report ON
"Review of Indian Equity Market": A Summer Training Project Report ON
"Review of Indian Equity Market": A Summer Training Project Report ON
ON
“Review of
Indian
Equity Market”
ACKNOWLEDGEMENT
For the successful and timely completion of the project report, I convey my
sincere feeling of gratitude towards all those who have been with me throughout.
Signature
Neha kashyap
(Student)
PREFACE
Knowledge attains maturity and perfection through application in the
particular field. Application of management principles in all branches whether
production, personnel, finance or marketing etc., all result in more efficient
and effective utilization of the available resources. This report has been
compiled firstly in the partial fulfilment of the requirement for the MBA
course, secondly to share the practical experience gained because of
continued association with the company’s Finance department. The details
mentioned in this report are based strictly on the real situation.
Table of contents
S. Particulars Pages
No.
1. EXECUTIVE SUMMARY 5
2. ABOUT RELIGARE 7
3. INVESTMENT 20
4. 25
RESEARCH METHODOLOGY
8. DEPOSITORY SYSTEM 35
12. BIBLIOGRAPHY 60
EXECUTIVE SUMMARY
The Indian Brokerage Industry consists of companies that primarily act as agents
for the buying and selling of securities (e.g. stocks, shares, and similar financial
instruments) on a commission or transaction fee basis. In actuality the brokerage
industry continues to develop rapidly. Many of the traditional restrictions against
banking activities within the brokerage industry are being eliminated and the
barriers are disappearing. Due to this, some commercial banks have as
subsidiaries, brokerage houses that offer discounts and some of them have
available accounts that offer all of the services that are offered by a checking
account.
The summer training done in Religare securities limited was done with the
objective to study the working of capital market in India , How actually trade
takes place once if order is being entered in the system, Signals are transferred
from broker to NSE’s mainframe office through VSAT lines. If order finds a match
order is being executed else it goes into a pending option and it gets executed
once it finds a perfect match. Then in my project work how order management
takes place how orders are entered modified and cancelled and then
understanding about clearing and settlement procedure is explained. how share
trading is done and how trading is carried out, done online as well as offline. If we
look from India’s point of view although online share trading is growing at a very
fast pace but still maximum investor goes for offline trading because of lack of
internet facility and also because of various disadvantages attached to online
share trading.
OBJECTIVE OF PROJECT:
(A) PRIMARY OBJECTIVE:
About Religare
Religare
Religare Wealth
Securities Ltd management
service ltd
Religare
Religare Religare
Commodities
Ltd
Enterprise Capital
Market Ltd
Limited
Religare
Religare
Insurance
Finance Ltd
broking Ltd
Religare
Realty Ltd
Religare is a member of NCDEX and MCX and provides platform for trading in
commodities, which is an online facility also.
Religare Finvest
Religare has been taking care of financial services for long but there was a missing
link. Financial planning is incomplete without protective measure i.e. structured
products to take care of event of things that may go wrong.
Consequently, Religare is soon coming up with
Religare Insurance Advisory Services Limited. As composite insurance broker, we
would deal in both insurance and reinsurance, providing our clients risk transfer
solutions on life and non-life sides.
This service will take benefit of Religare’s vast business
empire spread throughout the country -- providing our valued clients insurance
services across India. We aim to have a wide reach with our services – literally!
That’s why we are catering the insurance requirements of both retail and
corporate segments with products of all the insurance companies on life and non-
life side. Still, there is more in store. We also cater individuals with a complete
suite of insurance solutions, both life and general to mitigate risks to life and
assets through our existing network of over 150 branches – expected to reach 250
by the end of this year!
For corporate clients, we will be offering value based
customised solutions to cover all risks which their business is exposed to. Our
clients will be supported by an operations team equipped with the best of
technology support.
Religare Insurance Advisory aims to provide neutral,
transparent and professional risk transfer advice to become the first choice of
India.
Vision
Providing integrated financial care driven by the relationship of trust and
confidence.
Mission
To be India's first Multinational providing complete financial services solution
across the globe.
Management profile
Religare team is led by a very eminent Board of Directors who provide policy
guidance and work under the active leadership of its CEO & Managing Director
and support of its Central Guidance Team.
Board Of Directors
Following is the list of Directors of Religare Securities Limited
PRODUCT PROFILE
2) Nse Cash,
NSE, F&O,
BSE and
Commodities
3) Real time X
Quotes
4) Alerts X
5) Hot-key X
function
6) Online fund
transfer
through
7) Technical X X
charting
8) Derivative X X
chains
9) Futures and
options
calculator
10) Interest
to clients
11) Call n
trades service
12) Access
your ledger
balance and
account
information
over internet
and phone
t activation
charge
required
Strengths
1. It is a Ranbaxy promoter Group Company.
2. provides multi-channel access to all its customers through a strong online
presence with www.religare.in, 580 branches in 130 cities and a call-center
based Dial-n-Trade facility has dedicated research teams for fundamental
and technical research, Which constantly track the pulse of the market
and provide timely investment advice free of cost.
Weakness
1. Localized presence due to insufficient investments for countrywide
expansion.
2. Lack of awareness among customers because of non- aggressive
promotional strategies (print media, newspapers, etc).
3. Lesser emphasis on customer retention.
4. Focuses more on HNIs than retail investors which results in meager
market-share as compared to close competitors.
Opportunities
1. Can easily tap the retail investors with small saving through promotional
channels like print media, electronic media, etc.
2. more and more small investors are entering into stock market.
3. Increasing usage of Internet through broadband connectivity.
Threats
1. Aggressive promotional strategies by close competitors may hamper
Religare’s acceptance by new clients.
2. Lack of sufficient branch-offices for speedy delivery of services.
3. More and more players are venturing into this domain.
4. current market condition is very bad, so its not easy to convince
clients to trade in share market.
INVESTMENTS
3)Comfort factor:
This refers to the peace of mind associated with an
investment. Avoiding discomfort is probably a greater need than receiving
comfort. Reputation plays an important part in delivering the comfort factor.
4)Tax efficiency:
Legitimate reduction in the amount of tax payable is an
important part of the Indian psyche. Every rupee saved in taxes goes towards
wealth accumulation.
5)Life Cover:
Many investors look for investments that offer good return with
adequate life cover to manage the situations in case of any eventualities.
6)Income:
This refers to money distributed at intervals by an investment,
which are usually used by the investor for meeting regular expenses. Income
needs tend to be fairly constant because they are related to lifestyle and are well
understood by investors.
7)Simplicity:
Investment instruments are complex, but investors need to
understand what is being done with their money. A planner should also
deliver simplicity to investors.
8)Ease of withdrawal:
This refers to the ability to invest long term but withdraw
funds when desired. This is strongly linked to a sense of ownership. It is normally
triggered by a need to spend capital, change investments or cater to changes in
other needs. Access to a long-term investment at short notice can only be had at
a substantial cost.
9)Communication:
This refers to informing and educating investors about the
purpose and progress of their investments. The need to communicate increases
when investments are threatened.
After understanding the concept of investment, the investors would like to know
how to go about the task of investment, how much to invest at any moment and
when to buy or sell the securities, This depends on investment process as
investment policy, investment analysis, valuation of securities, portfolio
construction and portfolio evaluation and revision. Every investor tries to derive
maximum economic advantage from his investment activity.
RESEARCH DESIGN:
This work is no based on primary data; secondary data is being used for my
project work Apart from this, information gathered was by tele calling, personal
interactions with clients for the purpose of analyzing the awareness of Religare as
a brand and also for analysis of other graphs, Interaction with RM as well as my
personal experience was used to gain understanding about capital market and
also a help was taken from NCFM module.
SCOPE OF THE STUDY:
I was faced with problem about what can be defined as a work on capital markets.
A variety of work in economics, accounting and finance has some linkages with
capital markets. For my project therefore, I considered functioning of the stock
markets.
LIMITATION:
PRIMARY MARKET:
The primary 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.
In primary market certain companies issue their shares directly to the public,
collect applications and after sorting out the good issues, they put in their
applications. The share brokers get their brokerage on the transactions made.
SECONDARY MARKET:
The secondary market is that market in which trading is done of securities that
have already been issued in an initial private or public offering. The secondary
market comprises of brokerage that a broker earns in the buying and selling of
companies that are listed in the stock exchange. These stock broker are in charge
of the conformation and carrying out of transactions. Orders are taken and
executed on behalf of the clients. The fluctuation of rates in the share market
makes the activity in a trade market a dynamic process. It is necessary for a
broker to have adequate knowledge about the economic and political factors as
they affect the share market.
Indian Capital Market
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.
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 Dalal 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.
The working of stock exchanges in India started in 1875. BSE is the oldest stock
market in India. The history of Indian stock trading starts with 318 persons taking
membership Native Share and Stock Brokers Association, which we now know by
the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent
recognition from the Government of India. National Stock Exchange comes
second to BSE in terms of popularity. BSE and NSE represent themselves as
synonyms of Indian stock market. The history of Indian stock market is almost the
same as the history of BSE.
The 30 stock sensitive index or Sensex was first compiled in 1986. The Sensex is
compiled based on the performance of the stocks of 30 financially sound
benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time.
It crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in
the stock market was the liberal financial policies announced by the then financial
minister Dr. Man Mohan Singh.
The up-beat mood of the market was suddenly lost with Harshad Mehta scam. It
came to public knowledge that Mr. Mehta, also known as the big-bull of Indian
stock market diverted huge funds from banks through fraudulent means. He
played with 270 million shares of about 90 companies. Millions of small-scale
investors became victims to the fraud as the Sensex fell flat shedding 570 points.
To prevent such frauds, the Government formed The Securities and Exchange
Board of India, through an Act in 1992. SEBI is the statutory body that controls
and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio
managers investment advisors etc. SEBI oblige several rigid measures to protect
the interest of investors. Now with the inception of online trading and daily
settlements the chances for a fraud is nil, says top officials of SEBI.
The stock market is booming in spite of the low agriculture output. The Monsoon
is good in an overall sense but still the question remains about who will take the
credit for it. The answer is the karma of the people. I would like to appreciate the
Indian politicians and the industrialists who are pawns of destiny for doing many
things positive and productive. India as a country is running a very good period
and the very position of the planets in transit are giving wonderful result.
1.Only less than 1 per cent of the population own stocks and less than
1,000 individuals control the market, the majority being the FIIS, the promoters of
the company. The credit should go to the media for making stock markets the
headlines.
First of all, Indian bourses in the future will be one of the best
investments in the world. There will be a time when it can even reach
3000 points in the Nifty. India will begin one of the best dasa of sun
which will work in its favour. So before 2009 Indian bourses should go
from high to high from time to time.
Now this Bull Run will continue.
There can be some correction in the BSE Sensex at the 7500 points
level.
The market will hover between the 6000-7000 till mid-August.
There will be huge fluctuations. Better for many investors and new
entrants for the market to cool down a bit and let it come well below
7000.
In any case, if you are long-term players, then step in and buy now and
forget for another 10 years. You will make a killing in the Indian
markets.
Most of the tech companies and the main index will do well but
slightly on the lower side of expectations.
The stock market is a central market place for raising funds by Governments and
various corporations to expand their businesses and shareholding base. This is
usually done by issuing shares in a company which can then be bought and sold.
What is a stock exchange?
A share is a basic unit of ownership in a company. When you buy a share, you
become a part-owner of a company. Ownership of that company is divided into
millions of parts. These parts are called shares and each person who buys a share
is a shareholder.
Major part of the liberalization process was the repeal of the Capital
Issues (control) Act, 1947, in May 1992. With this, Government’s control over
issues of capital, pricing of the issues, fixing of premium and rates of interest on
debentures etc. ceased, and the office which administered the Act was abolished:
the market was allowed to allocate resources to competing uses. However, to
ensure effective regulation of the market, SEBI Act, 1992 was enacted to establish
SEBI with statutory powers for:-
FUNCTIONS OF SEBI
(a) Regulating the business in stock exchanges and other securities markets
(b) Registering and regulating the working of stock brokers, sub brokers,
share transfer agents, bankers to an issue, trustees of trust deeds,
registrars to an issue, merchant bankers, underwriters, portfolio
managers, investment advisers and such other intermediaries who may
be associated with securities markets in any manner;
(c) Registering and regulating the working of depositories, participants,
custodians of securities, foreign institutional investors, credit rating
agencies and such other intermediaries as SEBI may, by notification,
specify in this behalf;
(d) Registering and regulating the working of venture capital funds and
collective investment schemes including mutual funds;
(e) Promoting and regulating self regulatory organizations;
(f) Prohibiting fraudulent and unfair trade practices relating to securities
market;
(g) Promoting investor’s education and training of intermediaries of
securities markets;
(h) Prohibiting insider trading in securities;
(i) Regulating substantial acquisition of shares and take over of companies;
(j) Calling for information from, undertaking inspection, conducting inquiries
and audits of the stock exchanges, mutual funds and other persons
associated with the securities market and self regulatory organizations in
the securities market;
(k) Performing such functions and exercising according to securities contracts
(Regulation) Act, 1956, as may be delegated to it by the Central
Government;
(l) Levying fees or other charges for carrying out the purpose of this section;
(m) Conducting research for the above purpose.
DEPOSITORY SYSTEM
In the depository system, the ownership and transfer of securities takes place by
means of electronic book entries. At the outset, this system rids the capital
market of the dangers related to handling of paper. NSDL provides numerous
direct and indirect benefits, like:
No stamp duty for transfer of any kind of securities in the depository. This
waiver extends to equity shares, debt instruments and units of mutual
funds.
(CDSL)
All leading stock exchanges like the National Stock Exchange, Calcutta Stock
Exchange, Delhi Stock Exchange, The Stock Exchange, Ahmedabad, etc have
established connectivity with CDSL.
As at the end of Dec 2005, over 5000 issuers have admitted their securities
(equities, bonds, debentures, commercial papers), units of mutual funds,
certificate of deposits etc. into the CDSL system.
Although 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. This depository promoted by institutions of national stature responsible for
economic development of the country has since established a national
infrastructure of international standards that handles most of the securities held
and settled in dematerialised form in the 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, minimise risk and reduce costs. At NSDL, we
play a quiet but central role in developing products and services that will continue
to nurture the growing needs of the financial services industry.
Although 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. This depository promoted by institutions of national stature responsible for
economic development of the country has since established a national
infrastructure of international standards that handles most of the securities held
and settled in dematerialised form in the 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, minimise risk and reduce costs. At NSDL, we
play a quiet but central role in developing products and services that will continue
to nurture the growing needs of the financial services industry.
BENEFITS
The Bombay Stock Exchange uses the BSE Sensex, an index of 30 large, developed
BSE stocks. This index gives a measure of the overall performance of the Bombay
Stock Exchange, and is closely followed around the world. Based on the Sensex,
the BSE equity market has grown significantly since 1990.
In addition to individual stocks, the BSE also has a market in derivatives, which
was the first to be established in India. Listed derivatives on the exchange include
stock futures and options, index futures and options, and weekly options.
The Bombay Stock Exchange is also actively involved with the development of the
retail debt market. The debt market in India is considered extremely important, as
the country continues to develop and depends on this type of investment for
growth. Until recently, the debt market in India was limited to a wholesale
market, with banks and financial institutions as the only participants. The Bombay
Stock Exchange believes that a retail market will bring great opportunities to
individual investors through better diversification.
The National Stock Exchange is one the most advanced and largest stock markets
in the world. The NSE is the world’s third largest stock exchange in terms of
transactions and dealings. It is located in Mumbai, which is considered to be the
financial capital of India. It opened for trading in the year of 1994 and the
instruments traded are treasury bills, government securities and bonds issued by
public sector companies. The NSE group consists of:
Dematerialization:
Features:
(a) Holdings in only those securities that are admitted for dematerialization by
National Securities Depository Ltd (NSDL) can be dematerialized.
(b) Structure of holding in the securities should match with the account
structure of the depository account. Now shares in different order of names
can also be dematted.
(c) If the shares are in the name of X and Y, the same cannot be dematerialized
into the account of either X or Y alone. However if the shares are in the
name of X first and Y second, and the account is in the name of Y first and
X second, then these shares can be dematerialized in this account.
(d) Only those holdings that are registered in the name of the account holder
can be dematerialized. Physical shares which have not been transferred and
are still there with a transfer deed cannot be dematted. Only a few
companies have been given the permission to offer Transfer-cum-Demat.
The list of these companies can be viewed here.
Rematerialization:
Rematerialization is the process by which a client can get his electronic holdings
converted into physical certificates. The client has to submit the dematerialization
request to the DP with whom he has an account along with a Remat request form.
The physical shares will be posted by the company directly to the clients.
Trades:
For all sales made by clients, the shares will have to be given to the broker, so that
the Pay In can be made by the broker to the stock exchange concerned. For that it's
essential that the shares be transferred to the account of the broker well before the
deadline date.
You must confirm with your broker the settlement date and
settlement number and then submit your instructions to your DP. Also it's
important to give the instructions to your DP as early as possible.
DEMAT FORM V/S PHYSICAL FORM
The Process:
Listing of securities
Listing means admission of securities of an issuer company to trading ,
dealing on a stock exchange through a formal agreement. The prime objective of
admission to dealing on the exchange is to provide liquidity and marketability to
security so that security can be bought and sold by various investor and as also to
provide a mechanism for effective control and supervision of trading.
Listing agreement
It does agreement with the stock exchange. The listing agreement specifies
the terms and condition of listing and the disclosers that shall be made by a
company on a continuous basis to the exchange.
Delisting of securities
Permanent removal of a listing security of a listing company on a stock
exchange.
CONCLUSION, FINDING AND SUGGESTION
CONCLUSION:
FINDING:
SUGGESTION:
BOOKS:-
MAGAZINES:-
BUSINESS WORLD
NEWSPAPERS:-
ECONOMIC TIMES
WEBSITES
www.google.com
www.scrib.com
www.religare.com
www.icicidirect.com
www.nse.com