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Investment & Financial Analysis of Retail Investor WRT Sherkhan-1
Investment & Financial Analysis of Retail Investor WRT Sherkhan-1
ON
SHARE KHAN
BY
ROMA MANDAL
SAHIBABAD
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ACKNOWLEDGEMENTS
A lot of effort has gone into this training report. My thanks are due to many people
I would like all those who have contributed in completing this project. First of all, I
would like to send my sincere thanks to Mr. YOGESH KUMAR for his helpful hand
I would like to thank my entire beloved family & friends for providing me monetary
as well as non – monetary support, as and when required, without which this project
would not have completed on time. Their trust and patience is now coming out in
ROMA MANDAL
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CONTENTS
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EXECUTIVE SUMMARY
After the securities are issued in the primary market, they are traded in the
secondary market by the investors. The stock exchanges along with a host of other
intermediaries provide the necessary platform for trading in secondary market and
also for clearing and settlement. The securities are traded, cleared and settled
within the regulatory framework prescribed by the Exchanges and the SEBI.
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My next argument is based on the well-known precept that secondary markets are a
barometer of the economy. The hypothesis of the efficiency of stock markets is the
cornerstone of finance wherein security prices are supposed to reflect, quickly and
unbiasedly, the impact of the occurrence of any major economic event. A booming
and smoothly functioning stock market is indicative of a healthy primary market, in
the absence of which the capital raising activities of the industrial sector can suffer a
great setback. As such, the secondary markets are expected to reflect the investment
climate prevailing in the country at any point of time.
Price discovery is one of the central functions of secondary markets. By providing the
actual prices at which trading takes place, they furnish very close estimates of the
inherent current value of these securities. Further, derivatives’ trading provides
information concerning expected future prices of a myriad of commodities,
currencies, precious metals, interest rates etc.
Secondary markets also enable corporates to figure out how well their issues will be
received before they actually put them on the market. Remember Lord Keynes used
to talk about animal instinct- that is investor sentiment. Nothing can help corporates
better than stock markets in gauging if investors are in a mood to respond actively to
new issues or not- and this gives them the ability to plan their capital raising activities
more efficiently.
Now that we have established that a strong and vigorous secondary market is essential
for an active and profitable primary market, its time to begin an analysis of the current
state of our stock market.
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CERTIFICATE OF COMPLETION
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CHAPTER I
INTRODUCTION TO THE TOPIC
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The investment decision
In many cases, for example R&D projects, a project may open (or close) paths of
action to the company, but this reality will not typically be captured in a strict NPV
explicit value on these options. So, whereas in a DCF valuation the most likely or
average or scenario specific cash flows are discounted, here the “flexibile and staged
nature” of the investment is modelled, and hence "all" potential payoffs are
considered. The difference between the two valuations is the "value of flexibility"
The two most common tools are Decision Tree Analysis (DTA) and Real options
analysis (ROA):
DTA values flexibility by incorporating possible events (or states) and consequent
an "event" generates a "branch" or "path" which the company could follow; the
probabilities of each event are determined or specified by management. Once the tree
is constructed: (1) "all" possible events and their resultant paths are visible to
management; (2) given this “knowledge” of the events that could follow, management
chooses the actions corresponding to the highest value path probability weighted; (3)
(assuming rational decision making) this path is then taken as representative of project
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value. See Decision theory: Choice under uncertainty. (For example, a company
would build a factory given that demand for its product exceeded a certain level
during the pilot-phase, and outsource production otherwise. In turn, given further
demand, it would similarly expand the factory, and maintain it otherwise. In a DCF
separately.)
ROA is used when the value of a project is contingent on the value of some other
asset or underlying variable. Here, using financial option theory as a framework, the
option - valuation is then via the Binomial model or, less often for this purpose, via
Black Scholes; see Contingent claim valuation. The "true" value of the project is then
the NPV of the "most likely" scenario plus the option value. (For example, the
viability of a mining project is contingent on the price of gold; if the price is too low,
management will abandon the mining rights, if sufficiently high, management will
develop the ore body. Again, a DCF valuation would capture only one of these
outcomes.)
Quantifying uncertainty
Given the uncertainty inherent in project forecasting and valuation, analysts will wish
to assess the sensitivity of project NPV to the various inputs (i.e. assumptions) to the
DCF model. In a typical sensitivity analysis the analyst will vary one key factor while
holding all other inputs constant, ceteris paribus. The sensitivity of NPV to a change
in that factor is then observed (calculated as Δ NPV / Δ factor). For example, the
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analyst will set annual revenue growth rates at 5% for "Worst Case", 10% for "Likely
Case" and 25% for "Best Case" - and produce three corresponding NPVs.
Using a related technique, analysts may also run scenario based forecasts so as to
observe the value of the project under various outcomes. Under this technique, a
(revenue growth rates, unit costs, etc...). Here, extending the example above, key
inputs in addition to growth are also adjusted, and NPV is calculated for the various
scenarios. Analysts then plot these results to produce a "value-surface" (or even a
a (subjective) probability for each scenario - the NPV for the project is then the
probability-weighted average of the various scenarios. Note that for scenario based
analysis, the various combinations of inputs must be internally consistent, whereas for
opposed to the traditional static and deterministic models as above. For this purpose,
the most common method is to use Monte Carlo simulation to analyze the project’s
NPV. This method was introduced to finance by David B. Hertz in 1964, although has
only recently become common; today analysts are even able to run simulations in
spreadsheet based DCF models, typically using an add-in, such as Crystal Ball.
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Using simulation, the cash flow components that are (heavily) impacted by
The simulation produces several thousand trials (in contrast to the scenario approach
above) and outputs a histogram of project NPV. The average NPV of the potential
investment - as well as its volatility and other sensitivities - is then observed. This
histogram provides information not visible from the static DCF: for example, it allows
for an estimate of the probability that a project has a net present value greater than
zero (or any other value). See: Monte Carlo Simulation versus “What If” Scenarios.
Here, continuing the above example, instead of assigning three discrete values to
(commonly triangular or beta). This distribution - and that of the other sources of
thousand realistic (but random) scenarios, and the output is a realistic, representative
set of valuations. The resultant statistics (average NPV and standard deviation of
NPV) will be a more accurate mirror of the project's "randomness" than the variance
Achieving the goals of corporate finance requires that any corporate investment be
financed appropriately. As above, since both hurdle rate and cash flows (and hence
the riskiness of the firm) will be affected, the financing mix can impact the valuation.
structure that results in maximum value. (See Balance sheet, WACC, Fisher
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The sources of financing will, generically, comprise some combination of debt and
equity. Financing a project through debt results in a liability that must be serviced—
and hence there are cash flow implications regardless of the project's success. Equity
financing is less risky in the sense of cash flow commitments, but results in a dilution
of ownership and earnings. The cost of equity is also typically higher than the cost of
debt (see CAPM and WACC), and so equity financing may result in an increased
hurdle rate which may offset any reduction in cash flow risk.Management must also
attempt to match the financing mix to the asset being financed as closely as possible,
in terms of both timing and cash flows.One of the main theories of how firms make
their financing decisions is the Pecking Order Theory, which suggests that firms avoid
external financing while they have internal financing available and avoid new equity
financing while they can engage in new debt financing at reasonably low interest
rates. Another major theory is the Trade-Off Theory in which firms are assumed to
trade-off the tax benefits of debt with the bankruptcy costs of debt when making their
banks and corporations can enhance investment return and company value over time
given economy and under given market conditions. One last theory about this
decision is the Market timing hypothesis which states that firms look for the cheaper
type of financing regardless of their current levels of internal resources, debt and
equity.
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The dividend decision
The dividend is calculated mainly on the basis of the company's unappropriated profit
and its business prospects for the coming year. If there are no NPV positive
opportunities, i.e. where returns exceed the hurdle rate, then management must return
excess cash to investors. These free cash flows comprise cash remaining after all
This is the general case, however there are exceptions. For example, investors in a
"Growth stock", expect that the company will, almost by definition, retain earnings so
and decide to retain cash flows; see above and Real options.
Management must also decide on the form of the distribution, generally as cash
perform a stock buyback, in both cases increasing the value of shares outstanding;
some companies will pay "dividends" from stock rather than in cash; see Corporate
action. Today, it is generally accepted that dividend policy is value neutral (see
Modigliani-Miller theorem).
Decisions relating to working capital and short term financing are referred to as
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As above, the goal of Corporate Finance is the maximization of firm value. In the
context of long term, capital investment decisions, firm value is enhanced through
The goal of Working capital management is therefore to ensure that the firm is able to
operate, and that it has sufficient cash flow to service long term debt, and to satisfy
both maturing short-term debt and upcoming operational expenses. In so doing, firm
value is enhanced when, and if, the return on capital exceeds the cost of capital; See
Decision criteria
That is, working capital is the difference between resources in cash or readily
convertible into cash (Current Assets), and cash requirements (Current Liabilities). As
a result, the decisions relating to working capital are always current decisions, i.e.,
In addition to time horizon, working capital decisions differ from capital investment
remain identical). These decisions are therefore not taken on the same basis as long
term decisions, and different criteria are applied here: the main considerations are
cash flow and profitability; cashflow is probably the more important of the two.
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The most widely used measure of cash flow is the net operating cycle, or cash
conversion cycle. This represents the time difference between cash payment for raw
materials and cash collection for sales. The cash conversion cycle indicates the firm's
ability to convert its resources into cash. Because this number effectively corresponds
to the time that the firm's cash is tied up in operations and unavailable for other
activities, management generally aims at a low net count. (Another measure is gross
operating cycle which is the same as net operating cycle except that it does not take
In this context, the most useful measure of profitability is Return on capital (ROC).
The result is shown as a percentage, determined by dividing relevant income for the
12 months by capital employed; Return on equity (ROE) shows this result for the
firm's shareholders. As above, firm value is enhanced when, and if, the return on
capital, exceeds the cost of capital. ROC measures are therefore useful as a
management tool, in that they link short-term policy with long-term decision making.
Guided by the above criteria, management will use a combination of policies and
techniques for the management of working capital. These policies aim at managing
the current assets (generally cash and cash equivalents, inventories and debtors) and
the short term financing, such that cash flows and returns are acceptable.
Cash management. Identify the cash balance which allows for the business to meet
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Inventory management. Identify the level of inventory which allows for uninterrupted
production but reduces the investment in raw materials - and minimizes reordering
costs - and hence increases cash flow; see Supply chain management; Just In Time
Debtors management. Identify the appropriate credit policy, i.e. credit terms which
will attract customers, such that any impact on cash flows and the cash conversion
cycle will be offset by increased revenue and hence Return on Capital (or vice versa);
Short term financing. Identify the appropriate source of financing, given the cash
conversion cycle: the inventory is ideally financed by credit granted by the supplier;
Risk management is the process of measuring risk and then developing and
risks that can be managed ("hedged") using traded financial instruments (typically
changes in commodity prices, interest rates, foreign exchange rates and stock prices).
Financial risk management will also play an important role in cash management.
This area is related to corporate finance in two ways. Firstly, firm exposure to
Secondly, both disciplines share the goal of creating, or enhancing, firm value. All
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large corporations have risk management teams, and small firms practice informal, if
Derivatives are the instruments most commonly used in Financial risk management.
Because unique derivative contracts tend to be costly to create and monitor, the most
Investment banking
Use of the term “corporate finance” varies considerably across the world. In the
United States it is used, as above, to describe activities, decisions and techniques that
deal with many aspects of a company’s finances and capital. In the United Kingdom
Corporate finance utilizes tools from almost all areas of finance. Some of the tools
developed by and for corporations have broad application to entities other than
other cases their application is very limited outside of the corporate finance arena.
Because corporations deal in quantities of money much greater than individuals, the
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analysis has developed into a discipline of its own. It can be differentiated from
OBJECTIVE
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CHAPTER II
LITRATURE REVIEW
INVESTMENT CONCEPTS
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investment scene over next few years. Basically, there are three concepts of
investment:
the street”
interested.
“Capital stock of society” means those goods, which are used in the
building, machineries etc.), which are used to produce other goods. These
inventories over the amount of equivalent goods that existed, say, one year ago
2. The everyday usage of the term investment can mean a variety of things, but
some sort. For example, a common man as an investment will perceive buying
a new house or a new car. But these are in very general or extended sense of
word as neither there is any rate of return involved or any financial return or
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3. Financial investment means an exchange of financial claims such as
businessman often use the term financial investments. For example, there is a
new plant or between pawning of a watch and planting of a field of corn. Here,
while others involve nature. The latter are “real” investments; the former are
“financial” investments.
Why is investment important or why do people invest? The simple answer to this
Donald and Mildred Other of New York lived quiet, unpretentious lives. Donald, who
University. Mildred, a former teacher, died in 1998. When they died, they both were
in there nineties. What came, as a shock to friends was that the others left a combined
estate worth about $800 million, the bulk of which was left to a variety of non-profit
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Simply put, the Othmers, like many other Americans, got rich by investing their money
sensibly, leaving it invested for a long period, and living modestly. In the early 1960s,
the Othmers turned over their life savings, then fifty thousand dollars, to famed
investor Warren Buffeti, an old family friend. In the early 1970s, the Othmers
companies such as American Express, Coca-Cola and Gillette. When the Othmers
received their Berkshire shares, the price was $42 per share; at the time of Mildred’s
death the price has risen to $77,000 per share. Although, the Othmers were smart, or
perhaps just lucky to pick Buffet to manage their money, a similar investment, made at
the same time, in the overall stock market would have grown to more than $100
monetary wealth, both current and future. By holding cash you forego the opportunity
to earn the rate on that cash. Investors are, usually, interested only in monetary
increasing their wealth. Investors also seek to manage their wealth effectively,
obtaining the most from it while protecting it from inflation, taxes and other factors.
To accomplish both the objectives, people invest. People also invest in order to meet
As far as a firm is concerned, investment provides not only the most important
decision, which an investor (business proprietor) has to make, but also with one of the
toughest. The decision will affect the operating environment of the firm throughout
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the entire life of the investment. The quality of such decisions will largely determine
However, it must be noted that investment alone, does not guarantee economic or
From the foregoing discussion, it can be concluded that investment is both important
and useful in the context of present day situations due to the following set of factors:
Investment decisions are important today because people living longer. Life
expectancies are rising in most countries, both developed and developing. A 65 Yr.
old in sound health can be expected to live for at least another twenty years. The main
retirement period. Thus, they will need more money when they retire accumulating
funds for retirement is one major reason why people invest. Further, the increasing
cost of health care will require setting aside greater reserves in order to maintain same
a manner that a portion should be put away as savings. Savings by themselves do not
increase do not increase wealth, but must be invested in such a way that the principal
and the return will be adequate enough for a longer retirement period. In other words,
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the investment decision made during one’s working life will be responsible for a
rise to both male and female workforce. However, one should not merely rely on
increasing personal income to improve one’s future standard of living. The key to
Now a days, the old ideal of working in a company and being there until retirement is
lifetime employment, has reduced its workforce by more than 100,000 in the past few
years. People will have to rely more on their own resources and less on corporate
cushion of resources to survive an unexpected fall because you never know when
savings. These are various forms of saving outlets in the form of investments that help
in bringing down the tax-rates. For example, investments in UTI certificates, LIC,
NSC, Post –office Cumulative Deposit Schemes etc. Hence, besides safety of
principal and high rates of interest, an investor should always bear in mind the
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taxation angle. An investment should such that the interest earned is compensated by
5. Inflation
Inflation has become a continuous problem since the last two decades. High rates of
environment, the purchasing power of cash diminishes. This results in fall of standard
of living and many other problems. An investor should search an outlet, which gives
him a high rate of return in the form of interest to cover any decrease due to inflation.
OBJECTIVES OF INVESTMENT
Investment is the sacrifice of certain present value for uncertain future reward. All
investment choices are made at points of time in accordance with the personal
securities are revocable, investment ends are transient and the investment
environment is fluid. As one conceives of the distant future, the reliable bases for
reasoned expectations become more and more vague. Investors in securities should,
therefore, reappraise and re-evaluate their various investment commitments from time
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Investment helps in arriving at numerous decisions that are not only continuous but
rational too. Investment decisions are found to be the outcome of three different but
The investor is provided with many streams of data that are taken together and
2. Expectational Premises:
Various environmental and financial facts are made available to the investors
investments though they are subjective and hypothetical. This not only limits
the range of investments, which may be undertaken but also the expectations
3. Valuational Premises:
These comprise the structure of subjective preferences for the size and
consistency of the income to be received and for the safety and negotiability of
development. The level of saving largely effects investment. All the people in an
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economy do not save for production. Their savings have to be mobilized for
productive purposes. Then only it will lead to capital formation, which is the very
core of economic growth. Saving is the excess of income over consumption. Thus,
something out of current consumption is kept aside for the creation of capital or
wealth. Investment is the process of applying such saving to the creation of specific
forms of capital.
For example, if a person having a deposit of Rs. 1 crore in his bank account, devotes
himself to the construction of a power house, and thereafter sells the power so
generated, he has used his one crore rupees in the creation of capital, and that capital
yields services in the form of “power”, which can be sold and reconverted into
like India where the process of economic development is quiet slow, it is very
necessary to step up the rate of investment so that the country accumulates a large
saving and investment in India are extremely low. Saving and investment are two
independent activities. With the increase in one, the other is also increased.
After securities have been evaluated, the next step is construction and
execution of the portfolio. This is the phase that is concerned with the
specific assets in which the investor should invest and determination of the
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investor makes two types of decisions while constructing portfolios – the asset
allocation decision and the security selection decision. The asset allocation
decision is the choice among broad asset classes, while the security selection
down and bottom up. Top down portfolio construction starts with asset
allocation and only after that, the investor decides on the particular securities
Cash 10
Income Stocks 20
Growth Stocks 38
Treasury Bills 17
Corporate Bonds 15
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Cash
Corporate 10%
Bonds
15%
Income Stocks
Treasury Bills 20%
17%
Growth Stocks
38%
6. Portfolio Revision
revise it. Portfolio revision involves the periodic repetition of the above steps.
The investment objectives of an investor may change over time and the current
portfolio may no longer be optimal for him. So the investor may form a new
portfolio by selling certain securities and purchasing others that are not held in
composition (i.e. the relative proportions of stock and bond components) may
change over time as stocks and bonds tend to fluctuate. As a result, some
securities that were not attractive initially may become attractive and vice-
versa. In response to such changes, the investors may like to revise and
7. Performance Evaluation
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The final step in the investment process is the performance evaluation
terms of risk and return. The key issue is whether the portfolio return is
commensurate with its risk exposure. This may provide useful feedback to
HISTORY
Sharekhan is one of the leading retail brokerage of SSKI Group which was running
successfully since 1922 in the country. The SSKI Group was founded by four brothers
named Srevatilal, Shantilal, Kantilal and Ishwarlal. It is the retail broking arm of the
Mumbai-based SSKI Group, which has over eight decades of experience in the stock
broking business. Sharekhan offers its customers a wide range of equity related services
including trade execution on BSE, NSE, Derivatives, depository services, online trading,
investment advice etc.
The firm’s online trading and investment site - www.sharekhan.com - was launched
on Feb 8, 2000. The number of trading members currently stands at over 8 Lacs.
Sharekhan alone accounts for 22 per cent of the volumes traded online.
The objective has been to let customers make informed decisions and to simplify
the process of investing in stocks. Sharekhan has 660 branches in 290 cities in India, The
Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are the
other investors. With a legacy of more than 80 years in the stock markets, the SSKI
group ventured into institutional broking.
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Sharekhan is driven by ethical and dynamic process for wealth creation. Based on this,
the company started its endeavour in the financial market.
Sharekhan is proud of being a truly professional financial service provider managed by a
highly skilled team, who have proven track record in their respective domains.
Sharekhan operations are managed by more than 1500 highly skilled professionals who
subscribe to Sharekhan philosophy and are spread across its country wide branches.
Today, we have a growing network of 150 branches and more than 300 business partners
spread across 180 cities in India and a fully operational international office at London.
However, our target is to have 350 branches and 1000 business partners in 300 cities of
India and more than 7 International offices by the end of 2007.
VaR is a technique used to estimate the probability of loss of value of an asset or group
of assets (for example a commodity or a portfolio of a few commodities), based on the
statistical analysis of historical price trends and volatilities. A VaR statistic has three
components: a time period, a confidence level and a loss amount (or loss percentage).
VaR Margin is at the heart of margining system for the cash market segment. VaR
margin is collected on upfront basis. In that respect, it is similar to the margin we have
seen in our example under question 1 while placing the order.
Let us try and understand briefly what we mean by ‘VaR’. The most popular and
traditional measure of uncertainty / risk is Volatility, which we have understood earlier.
While historical volatility tells us how the security price moved in the past, VaR answers
the question, “How much is it likely to move over next one day?" VaR is a technique
used to estimate the probability of loss of value of an asset or group of assets (for
example a share or a portfolio of a few shares), based on the statistical analysis of
historical price trends and volatilities. A VaR statistic has three components: a time
period, a confidence level and a loss amount (or loss percentage). Keep these three parts
in mind and identify them in the following example:
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With 99% confidence, what is the maximum value that an asset or portfolio may loose
over the next day?
You can see how the "VaR question" has three elements: a relatively high level of
confidence (99%), a time period (a day) and an estimate of loss (expressed either in
rupees or percentage terms). The actual calculation of VaR is beyond the scope of this
project.
VaR is computed using exponentially weighted moving average (EWMA) methodology.
Based on statistical analysis, 94% weight is given to volatility on ‘T-1’ day and 6%
weight is given to ‘T’ day returns.
To compute volatility for January 1, 2008, first we need to compute day’s return for Jan
1, 2008 by using LN (close price on Jan 1, 2008 / close price on Dec 31, 2007).
Take volatility computed as on December 31, 2007.
Use the following formula to calculate volatility for January 1, 2008:
Square root of [0.94*(Dec 31, 2007 volatility)*(Dec 31, 2007 volatility) + 0.06*(January
1, 2008 LN return)*(January 1, 2008 LN return)]
Volatility on December 31, 2007 = 0.0314
Closing price on December 31, 2007 = Rs. 360
Closing price on January 1, 2008 = Rs. 330
January 1, 2008 volatility =
Square root of [(0.94*(0.0314)*(0.0314) + 0.06 (0.08701)* (0.08701)]
= 0.037 or 3.7%
The Extreme Loss Margin aims at covering the losses that could occur outside the
coverage of VaR margins. The Extreme loss margin for any commodity is higher of 1.5
times the standard deviation of daily LN returns of the commodity price in the last six
months or 5% of the value of the position. This margin rate is fixed at the beginning of
every month, by taking the price data on a rolling basis for the past six months.
The VaRmargin rate for shares was 13%. Suppose that standard deviation of daily LN
returns of the security is 3.1%. 1.5 times standard deviation would be 1.5 x 3.1 = 4.65.
Then 5% (which is higher than 4.65%) will be taken as the Extreme Loss margin rate.
Therefore, the total margin on the security would be 18% (13% VaR Margin + 5%
Extreme Loss Margin). As such, total margin payable (VaR margin + extreme loss
margin) on a trade of Rs.10 lakhs would be 1, 80,000/-
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MTM is calculated at the end of the day on all open positions by comparing transaction
price with the closing price of the share for the day.
MTM Profit/Loss = [(Total Buy Qty X Close price) – Total Buy Value] - [Total Sale
Value - (Total Sale Qty X Close price)]
Example: If an investor owns 100 shares of a stock purchased for $40 per share, and that
stock now trades at $60, the "mark-to-market" value of the shares is equal to (100 shares
× $60), or $6,000, whereas the Book value might (depending on the accounting
principles used) only equal $4,000. : - Similarly, if the stock falls to $30, the mark-to-
market value is $3,000 and the investor has lost $1,000 of the original investment. If the
stock was purchased on margin, this might trigger a margin call and the investor would
have to come up with an amount sufficient to meet the margin requirements for his
account
Findings:
The volatility of Nifty 50 & Sensex is increasing yearly
The Volatility of Nifty 50 & Sensex is much more than that of Nasdaq
Composite
Increasing Inflation and Crude Oil prices have negative impact on turnover.
FII’s have a positive impact.
India ranks 18th in terms of World Traded Value.
In terms of dividend and P/E India ranks 5th
India contributes 1.51% of World Market Capitalization
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1. Equities & Derivatives: --Comprehensive services for independent
investors, active traders & Non-Resident Indians.
Our Retail Equity Business caters to the needs of individual Indian and Non-Resident
Indian (NRI) investors. Share khan offers broker assisted trade execution, automated
online investing and access to all IPO's.
Through various types of brokerage accounts, India bulls offers the purchase and sale of
securities which includes Equity, Derivatives and Commodities Instruments listed on
National Stock Exchange of India Ltd (NSEIL), The Stock Exchange, Mumbai (BSE)
and NCDEX.
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Building and maintaining your ideal portfolio demands objective, dependable
information. Share khan Equity Analysis helps satisfy that need by rating stocks based
on carefully selected, fact-based measures. And because we're not focused on investment
banking, we don't have the same conflicts of interest as traditional brokerage firms. This
objectivity is only one important difference in our ratings.
Type of categories-
Evergreen:- These stocks are steady compound, churning out steady growth rates year
on year. They are typically significant players in their markets, with sound strategies that
will help them achieve and sustain market dominance in the long run. They have strong
brands, management credentials and a consistent track record of achieving super normal
shareholder returns. We expect stocks in this category to compound at between 18-20%
per annum for the next five to ten years.
Apple Green:- These are stocks that have the potential to be steady compound and are
attempting to move upwards, to turn Evergreen. They rank a shade below the Evergreen
companies, only because their potential in the five to ten years' time is still not very
clear, although they might grow at rates faster than that of the Evergreen stocks in the
next year or two. They could grow at 25-30% per annum over the next two to three
years.
Emerging Star:- These are typically young companies, often in niche businesses, that
have the potential to grow and dominant their niches. Even better, they might turn out to
be real giants, if their niches explode into full-blown markets in their own rights. These
stocks are potential ten-baggers but you need to be patient.
Ugly Duckling:- These are companies that are trading below their fair value or at values
which are at a significant discount to that of their peer group, due to a combination of
circumstances. But things are now starting to happen in these companies or in their
markets that are likely to cause a re-evaluation of their prospects. These stocks could
double in two to three years' time.
Vulture's Pick:-These are companies with valuable assets or brands that have been
trashed to ridiculously low prices. Buy a Vulture's Pick and wait for a predator who finds
its assets undervalued to come along. This could be a long wait but the returns could be
startlingly high.
Cannonball:- These are companies with valuable assets or brands that have been trashed
to ridiculously low prices. Buy a Vulture's Pick and wait for a predator who finds its
Page 35
assets undervalued to come along. This could be a long wait but the returns could be
startlingly high.
3-Depository Services –
Share khan is a depository participant with the National Securities Depository Limited
and Central Depository Services (India) Limited for trading and settlement of
dematerialized shares. Share khan performs clearing services for all securities
transactions through its accounts. We offer depository services to create a seamless
transaction platform – execute trades through Share khan Securities and settle these
transactions through the India bulls Depository Services. Share khan Depository Services
is part of our value added services for our clients that create multiple interfaces with the
client and provide for a solution that takes care of all your needs
2.6 DIRECT COMPETITORS
Sharekhan
Religare
HDFC
2.7 FUTURE PLANS
Clients can access the customer service team through various media like toll-free
lines, emails and Internet- messenger chat for instant query resolution. The
Company’s customer service executives proactively contact customers to inform them
of key changes and initiatives taken by the Company. Business World rated the
Company’s customer service as ‘Best’ in their survey of online trading sites carried
out in December 2003.
Key features
o Membership on the Bombay Stock Exchange Limited and the National
Stock Exchange
o Registered with the NSDL as well as CDSL as a depository participant,
providing a one-stop solution for clients trading in the equities market
o Broking services in cash and derivative segments, online as well as
offline.
o Presence across 350 cities and towns with a network of over 850
business locations Equity client base of over 500,000 clients
o Provision of free and world-class research to all clients.
PMS
Page 36
Our Portfolio Management Service is a product wherein an equity investment
portfolio is created to suit the investment objectives of a client. We at Indiainfoline
invest your resources into stocks from different sectors, depending on your risk-return
profile. This service is particularly advisable for investors who cannot afford to give
time or don't have that expertise for day-to-day management of their equity portfolio.
You get recessions. You have stock market declines. If you don't understand that's
going to happen, then you're not ready; you won't do well in the markets. No need to
worry. We at India Infoline would take care of all issues related to managing your
hard earned money.
Our Portfolio Management Service is a product wherein an equity investment
portfolio is created to suit the investment objectives of a client. We at India Infoline
invest your resources into stocks from different sectors, depending on your risk-return
profile. This service is particularly advisable for investors who cannot afford to give
time or don't have that expertise for day-to-day management of their equity portfolio.
It is all about your money, being managed by the experts, while you continue with
your routine life. Isn't it simple and totally hassle free.
What's more, you can keep track of your dividends / bonus / rights issues with
paperless tracking. So you always know how fast your investment is growing. It
basically means assigning the right job to the right person.
Salient Features of India Infoline PMS:
Research
Sound investment decisions depend upon reliable fundamental data and stock
selection techniques. Indiainfoline Equity Research is proud of its reputation for, and
we want you to find the facts that you need. Equity investment professionals routinely
use our research and models as integral tools in their work.
They choose Ford Equity Research when they can clear your doubts.
Commodities
Page 37
Indiainfoline’s extension into commodities trading reconciles its strategic intent to
emerge as a one-stop solutions financial intermediary. Its experience in securities
broking has empowered it with requisite skills and technologies. The Company’s
commodities business provides a contra-cyclical alternative to equities broking. The
Company was among the first to offer the facility of commodities trading in India’s
young commodities market (the MCX commenced operations only in 2003). Average
monthly turnover on the commodity exchanges increased from Rs 0.34 bn to Rs 20.02
bn. The commodities market has several products with different and non-correlated
cycles. On the whole, the business is fairly insulated against cyclical gyrations in the
business.
Complete solution :
The Company provides a complete - advice to execution – solution facilitated by
information and advice on likely commodity trends in the Indian and international
environment.
Technology :
The Company has extended the trading terminal to the investor’s home/workplace
reinforced with real-time commodity information and ledger position.
Rates :
The Company harnessed technology to offer services at among the lowest rates in the
business.Membership: The Company widened client reach in trading on the domestic
and international exchanges.
Key Features
a. Enjoys memberships with the MCX and NCDEX, two leading Indian
commodities exchanges
b. Recently acquired membership of the DGCX
c. Multi-channel delivery model, making it among the select few to offer
online as well as offline trading facilities
d. Extended commodity trading to retail investors, among the few Indian
financial intermediaries to do so
e. Online business at 80% of revenues dominates commodities trading
revenues
Page 38
f. Provides regular commodity updates pertaining to the Indian and
international environment
Mortgages
During the year under review, Indiainfoline acquired a 75% stake in Moneytree
Consultancy Services to mark its foray into the business of mortgages and other loan
products distribution. The business is still in the investing phase and at the time of the
acquisition was present only in the cities of Mumbai and Pune. The Company brings
on board expertise in the loans business coupled with existing relationships across a
number of principals in the mortgage and personal loans businesses. Indiainfoline
now has plans to roll the business out across its pan-Indian network to provide it with
a truly national scale in operations.
Home Loans
Get expert advice that suits your needs
Loan against residential and commercial property
Expert recommendations
Easy documentation
Quick processing and disbursal
No guarantor requirement
click for more
o Personal Loans
Freedom to choose from 4 flexible options to repay
Expert recommendations
Easy documentation
Quick processing and disbursal
No guarantor requirement
click for more
Invest Online
Indiainfoline has made investing in Mutual funds and primary market so effortless.
All you have to do is register with us and that’s all. No paperwork no queues and No
registration charges.
INVEST IN MF
Page 39
Indiainfoline offers you a host of mutual fund choices under one roof, backed by in-
depth research and advice from research house and tools configured as investor
friendly.
APPLY IN IPOs
You could also invest in Initial Public Offers (IPO’s) online without going through
the hassles of filling ANY application form/ paperwork.
Stay connected to the market
The trader of today, you are constantly on the move. But how do you stay connected
to the market while on the move? Simple, subscribe to India Infoline's Stock
Messaging Service and get Market on your Mobile!
# There are three products under SMS Service: Market on the move.
# Best of the lot.
# VAS (Value Added Service )
Insurance
An entry into this segment helped complete the client’s product basket; concurrently,
it graduated the Company into a one-stop retail financial solutions provider. To ensure
maximum reach to customers across India, we have employed a multi pronged
approach and reach out to customers via our Network, Direct and Affiliate channels.
Following the opening of the sector in 1999-2000, a number of private sector
insurance service providers commenced operations aggressively and helped grow the
market. The Company’s entry into the insurance sector derisked the Company from a
predominant dependence on broking and equity-linked revenues. The annuity based
income generated from insurance intermediation result in solid core revenues across
the tenure of the policy.
Wealth Mangement Service
Imagine a financial firm with the heart and soul of a two-person organization. A
world-leading wealth management company that sits down with you to understand
your needs and goals. We offer you a dedicated group for giving you the most
personal attention at every level.
Newsletters
The Daily Market Strategy is your morning dose on the health of the markets. Five
intra-day ideas, unless the markets are really choppy coupled with a brief on the
global markets and any other cues, which could impact the market. Ocassionally an
investment idea from the research team and a crisp round up of the previous day's top
Page 40
stories. That's not all. As a subscriber to the Daily Market Strategy, you even get
research reports of India Infoline research team on a priority basis.
They say you mustn't trust a man till you know his house. Everyone likes hearing
people say “Wow, what a beautiful house you have!” From cave dwelling, we have
evolved and now a house provides far more than just shelter...it also becomes a source
of pride. A Housing Loan is used as finance to help you buy or modify that perfect
home.
They say you mustn't trust a man till you know his house. Everyone likes hearing
people say "Wow, what a beautiful house you have!" From cave dwelling, we have
evolved and now a house provides far more than just shelter...it also becomes a source
of pride. A Housing Loan is used as finance to help you buy or modify that perfect
home. The different Housing Loan products can be classified as:
Home Loan
Page 41
Home Extension Loans
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
As long as you want to buy a house in India, you can apply for a Home Loan. You
could be a Resident Indian or an NRI; you could want to buy a property now or in the
future, but you may still apply for a Home Loan. In case you go with the last option
and want to wait before you consider nests, all you have to be sure of is the amount
you are willing to spend on this property and the HfIs will let you know your
eligibility based on your income which will help you plan out your budget. To find
out your eligibility, please use our calculator.
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals. When
you're 18, you are allowed to go for that late night party on the condition that
someone drops you home before 12. Every step we take requires condition to be
fulfilled. Similarly, these are the general terms & conditions of a Home Loan. For
more details, please refer to the individual product.
LTV Ratio will not exceed a particular percentage. This percentage differs
from HFI to HFI and the components of the value of property are covered in
Cost of Property
Elastic can be stretched only to a certain extent. The loan tenure also will not
go beyond 20 years. However, HFIs do provide for different tenures with
different terms and conditions.
Your EMI normally does not exceed 50% of your Gross Monthly income.
The total monthly payment towards all the loans you have availed of,
including the present one, will normally not exceed 50% of your Gross
Monthly Income.
Page 42
Your loan eligibility is calculated using LTV, IIR and FOIR norms and the
lowest from the three is chosen.
Your profile is considered by the HFI before your repayment capacity is
judged.
If the HFI insists on a personal guarantor, you need to provide one before the
disbursement of your loan.
Your property should be both technically and legally clear before your loan
can get disbursed by the HFI.
In case you have bought an under construction property, your loan will be
partly disbursed, as per the stages of construction and PEMI needs to be paid
on it.
The disbursement, in most cases, will be in the name of the builder or the
seller or the society or the development authority unless you have made some
payment to them.
Repayment of the loan is either via Deduction Against Salary, Post Dated
Cheques, standing instructions or by cash / DD.
You can either choose to repay the loan using the Annual rests or Monthly
rests.
CHAPTER-III
SHARE KHAN
Page 43
Sharekhan is one of the top retail brokerage houses in India with a strong online
trading platform. The company provides equity based products (research, equities,
derivatives, depository, margin funding, etc.). It has one of the largest networks in the
country with 1200+ share shops in 400 cities and India’s premier online trading portal
www.sharekhan.com. With their research expertise, customer commitment and
superior technology, they provide investors with end-to-end solutions in investments.
They provide trade execution services through multiple channels - an Internet
platform, telephone and retail outlets.
Page 44
Sharekhan was established by Morakhia family in 1999-2000 and Morakhia family,
continues to remain the largest shareholder. It is the retail broking arm of the
Mumbai-based SSKI [SHRIPAL SHEWANTILAL KANTILAL ISWARNATH
LIMITED] Group. SSKI which is established in 1930 is the parent company of
Sharekhan ltd. With a legacy of more than 80 years in the stock markets, the SSKI
group ventured into institutional broking and corporate finance over a decade ago.
Presently SSKI is one of the leading players in institutional broking and corporate
finance activities. Sharekhan offers its customers a wide range of equity related
services including trade execution on BSE, NSE, and Derivatives. Depository
services, online trading, Investment advice, Commodities, etc. Sharekhan Ltd. is a
brokerage firm which is established on 8th February 2000 and now it is having all the
rights of SSKI. The company was awarded the 2005 Most Preferred Stock Broking
Brand by Awaaz Consumer Vote. It is first brokerage Company to go online. The
Company's online trading and investment site - www.Sharekhan.com - was also
launched on Feb 8, 2000. This site gives access to superior content and transaction
facility to retail customers across the country. Known for its jargon-free, investor
friendly language and high quality research, the content-rich and research oriented
portal has stood out among its contemporaries because of its steadfast dedication to
offering customers best-of-breed technology and superior market information.
Sharekhan has one of the best states of art web portal providing fundamental and
statistical information across equity, mutual funds and IPOs. One can surf across
5,500 companies for in-depth information, details about more than 1,500 mutual fund
schemes and IPO data. One can also access other market related details such as board
meetings, result announcements, FII transactions, buying/selling by mutual funds and
much more. Sharekhan's management team is one of the strongest in the sector and
has positioned Sharekhan to take advantage of the growing consumer demand for
financial services products in India through investments in research, pan-Indian
branch network and an outstanding technology platform. Further, Sharekhan's lineage
and relationship with SSKI Group provide it a unique position to understand and
leverage the growth of the financial services sector. We look forward to providing
strategic counsel to Sharekhan's management as they continue their expansion for the
benefit of all shareholders.
Page 45
SSKI Corporate Finance Private Limited (SSKI) is a leading India-based investment
bank with strong research-driven focus. Their team members are widely respected for
their commitment to transactions and their specialized knowledge in their areas of
strength. The team has completed over US$5 billion worth of deals in the last 5 years
- making it among the most significant players raising equity in the Indian market.
SSKI, a veteran equities solutions company has over 8 decades of experience in the
Indian stock markets. If we experience their language, presentation style, content or
for that matter the online trading facility, we'll find a common thread; one that helps
us make informed decisions and simplifies investing in stocks. The common thread of
empowerment is what Sharekhan's all about. "Sharekhan has always believed in
collaborating with like-minded Corporate into forming strategic associations for
mutual benefit relationships" says Jaideep Arora, Director - Sharekhan Limited.
Sharekhan is also about focus. Sharekhan does not claim expertise in too many things.
Sharekhan's expertise lies in stocks and that's what he talks about with authority. So
when he says that investing in stocks should not be confused with trading in stocks or
a portfolio-based strategy is better than betting on a single horse, it is something that
is spoken with years of focused learning and experience in the’ stock markets. And
these beliefs are reflected in everything Sharekhan does for us! Sharekhan is a part of
the SSKI group, an Indian financial services power house, with strong presence in
Retail equities Institutional equities Investment banking. In Ahmedabad, It is having
the branch at Dynamic house, opp. Child care hospital, Navrangpura road and over 40
franchisees in Ahmedabad. We have been given the centre at Navrangpura road,
Ahmedabad.
Page 46
Formal (organized) Informal (organized)
Financial system Financial system
Financial markets
Derivatives
Equity market
Future
Option
Swap
Primary market Secondary Forwards
market
Public issue
Rights issue NSE
Private BSE
placement
Preferential
allotment
In Sharekhan, under demat account there are two types of terminals.
Rs.10000 Nil
Rs.10000/25000 Nil
Page 47
Its core services are:
Equities, and Derivatives trading on the National Stock Exchange of India Ltd.
(NSE), and Bombay Stock Exchange Ltd. (BSE),
Commodities trading on National Commodity and Derivatives Exchange India
(NCDEX) and Multi Commodity Exchange of India Ltd. (MCX),
Depository services,
Online trading services,
IPO Services,
Dial-n-Trade
Portfolio management services,
Fundamental and Technical Research services,
In addition to this they also provide advisory services and distributions for
mutual funds.
Sharekhan ValueLine (a monthly publication with reviews of
recommendations, stocks to watch out for etc.)
Daily research reports and market review (High Noon & Eagle Eye)
Pre-market Report
Daily trading calls based on Technical Analysis
Cool trading products (Daring Derivatives and Market Strategy)
Personalized Advice
Live Market Information
Sharekhan First Step
The Sharekhan FirstStep is a brand new program designed especially for those who
are new to investing in shares. All one have to do is open a Sharekhan FirstStep
account and they guide us through the investing process.
Market Share
Page 48
Sharekhan enjoyed about 20 per cent market share in Web business (Internet trading)
in stock markets. Three years ago, Web trading showed lot of promise but with the
market witnessing a downturn, there was not much interest among retail customers.
Profits
The share of Web trading constituted 22 per cent of the revenue. As Sharekhan's daily
trading volume was over Rs 200 crore, the share of Web trading at about Rs 40 crore
a day was substantial and a larger part of the volume was coming from day traders.
FINANCIAL CAPABILITY
Taking in to consideration all its assets and liabilities company is valued at around Rs.
750-850 crores.
MISSION:
VISION:
To be the best retail brokering Brand in the retail business of stock market.
ACHIEVEMENTS OF SHAREKHAN:
A wired company along with Reliance, Hll, Infosys, etc by ‘Business Today’,
January 2004 edition.
Page 49
It was awarded ‘Top Domestic Brokerage House’ four times by Euro and Asia
money.
India’s most preferred brokers within 5 years. “CNBC Awaaz customers Award
2005”.
STRATEGY:
The main strategies used in our training were as follow.
DATA CALLING
In data calling we were provided data of mobile numbers and our job was to
generate appointments. After that we were required to convert that
appointment into closure. Apart from given data we also brought latest
business directory. We called to different business people and tried to generate
appointments.
CALLED CALLING
REFERENCE
Another important strategy was to use our reference means our family, friends,
relatives etc. In marketing or selling we can never neglect references & they
always play a major role.
STALL ACTIVITY:-
Stall activity means to
make stall at public place. Then
Page 50
our job was to give them a
newspaper with brochures and
to take their name and contact
number. So it was another
process of generating lead.
After that our job was to follow
up and try for appointment and
closure.
Page 51
HIERARCHY IN SHAREKHAN:
Regional Head
Vice president
Directors
Residence proof
Cheque ( Min Rs.10,000 margin balance)
Proofs of Identity:-
Address Proof
Customer can submit a photo copy of any one of the following
o Voter ID Card
o Driving License
o Passport
o Ration Card
o Telephone Bill
o Electricity Bill
o Leave-License
o Bank Passbook
o Latest Bank Statement
[2] Trading Account:
It is an electronic account which enables customers to trade in share through internet
without help to broker.
1) NSE/BSE/F&O/Commodity terminal live screen:-
1. HDFC Bank
2. CITI Bank
3. OBC Bank
4. YES Bank
5. UTI Bank
6. IDBI Bank
7. ICICI Bank
8. Union Bank
9. Indusind Bank
10. Bank of India
11. Deutsche Bank
A customer can allocate and transfer fund from your respective bank account to your
Sharekhan account for trading and transfer back to link bank account when and where
needed.
[4] Dial-N-Trade:-
Derivatives
Commodities online
IPO online
Insurance
Fixed deposits
Advisory products
Currency trading
SHARE ONLINE:
BENEFIT
1) Classic account
2) Trade Tiger
CLASSIC ACCOUNT:-
The Classic Account enables customers to trade online on the NSE and the BSE, invest in
IPO and Mutual Funds and access all the research and transaction reports through
Sharekhan’s website. This account is suitable for the retail investors.
In this account Shown the maximum script are 25 in the terminal and the technical chart
are not shown in this account.
The life time registration charge for this account is 750 rupees.
Features
o Two dedicated numbers for placing your orders with your cell phone or
landline.
o Automatic funds transfer with phone banking (for Citibank and HDFC
bank customers)
o Simple and Secure Interactive Voice Response based system for
authentication
o Get the trusted, professional advice of our telebrokers.
o After hours order placement facility between 8.00 am and 9.30 am
ADVANTAGES OF SHAREKHAN:
1. Online trading is very user friendly and one doesn't need any software to
access.
1. They provide good quality of services like daily SMS alerts, mail alerts, stock
recommendations etc.
Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC
Sec, etc., so investor not really needs to open an account with a particular bank as it can
establish link with most modern banks.
HIERARCHY IN Sharekhan
FAST TRADE:
Features
Streaming quotes.
Personalized market watch.
Single screen interface for cash, derivatives and Commodities.
New FastTrade is platform independent will support by all Operating System.
New FastTrade will support all browsers in the market.
New FastTrade is independent of existing website and can work even if
content website is down.
Trade tiger is a next-generation online trading product that brings the power of broker’s
terminal to customer pc. It is session to capitalize on intra-day price movement. Trade
tiger is an internet –based application available on a CD, which provides everything a
trader needs on one screen.
Key Features:-
A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX,
NCDEX, Mutual Funds, IPOs
Multiple Charts with Tick by Tick Intraday and End of Day Charting powered
with various Studies
Graph Studies include Average, Band- Bollinger, Know Sure Thing, MACD,
RSI, etc
Apply studies such as Vertical, Horizontal, Trend, Retracement & Free lines
User can save his own defined screen as well as graph template, that is, saving
the layout for future use
Advantages:-
As the internet has taken over the physical trade, the same is the situation in trading in
shares. Even the internet has not spared trading in shares and still the conventional
system of offline trading continues in today’s world.
Low brokerage
Less margin
Flexibility in credit period
Customized advice
DIAL-N-TRADE:
Sharekhan provides complete trading facility like they are giving Toll free numbers the
phone trading facility as an alternative of net trading where a customer can call “n”
number of times.
The national stock exchange of the India was the promoted by leading financial
institutions at the behest of the government of India, and was incorporated in November
1992 as a tax paying company. In April 1993, it was recognized as a stock exchange
under the securities contracts( Regulation) Act, 1956. NSE commenced its operation in
the wholesale Debt Market (WDM) segment in June 1994. The capital market (Equities)
segment of the NSE commenced operation in November 1994.
BSE:
The Bombay stock exchange is the oldest stock exchange in Asia. It is located at Dalal
Street, Mumbai, India.
The Bombay stock exchange was established in 1985. There are around 3500 Indian
companies listed with stock exchange, and has the significant stock volume. As of 29
may 2007, the market capitalization of the BSE is about Rs. 40.5 trillion. The BSE
SENSEX (SENSitive indEX), also called the “BSE 30”, is a widely used market index in
India and Asia. As of 2005, it is among the five biggest stock exchanges in the world in
terms of transactions volume.
Derivatives
Derivatives are financial contracts whose value/price is depends on the behavior
of price of one or more basic underling assets. These contracts are legally binding
agreement, made on the trading screen of stock exchange, buy or sell an asset in
future. The assets can be share, index, interest rate, bond, rupee- dollar exchange
rate, sugar, crude oil, soybean, cotton, coffee etc.
Future:-
Options:-
An Options is a contract which gives the right, but not but or sell the underlying at a
stated price, which a buyer of an option pays the premium and Options are of two types
– calls and put.
Calls
give the buyer the right but not the obligation to buy a given quantity of the underlying
asset, at a given price on or before a given future date. Calls also known as bulls.
Puts
give the buyer the right, but not obligation to sell a given quantity of the underlying asset
at a given price on or before a given date. Puts also known as bears.
Commodities online:-
COMMODITIES ONLINE:
Commodities are agreements to buy and sell virtually anything except, for some reason,
onions. The primary commodities that are traded are oil, gold and agricultural products.
Commodity derivatives comprise of raw materials and products that can be traded on
special commodity exchanges across the country. Commodities expands customer
investing horizon from investing in a metal company to trading in the metal itself.
Trading in commodity derivative provides unique market opportunities for a wider
section of participants like: investor, hedgers, arbitragers, traders, manufactures planters,
exporters and importers. While trading commodities through an exchange, there are no
transportation charges, no insurance costs, no storage charges and complete security
when customer trade though an exchange. Customer can trade in commodities at nominal
costs and carry the investment in paper from as customer want. The fundamentals for
commodities are quite simple: price is a function of demand and supply.
2) NCDEX
Indexes of commodities
MCX:
NCDEX:
NCDEX is the only commodity exchange in the country promoted by national level
institutions. This unique parentage enables it to offer a bouquet of benefits, which are
currently in short supply in the commodity markets. The institutional promoters of
NCDEX are prominent players in their respective fields and bring with them institutional
building experience, trust, nationwide reach, technology and risk management skills.
NCDEX is a public limited company incorporated on April 23, 2003 under the
Companies Act, 1956. It obtained its Certificate for Commencement of Business on May
9, 2003. It has commenced its operations on December 15, 2003. NCDEX is a nation-
level, technology driven de-mutualized on-line commodity exchange with an independent
Board of Directors and professionals not having any vested interest in commodity
markets. It is committed to provide a world-class commodity exchange platform for
market participants to trade in a wide spectrum of commodity derivatives driven by best
global practices, professionalism and transparency.
CHAPTER-IV
20
15 Physical
Dematerialized
10
Both
0
18-30 31-45 46-60 >60
Table -1 shows The highest preference of dematerialized shares is in the age group of 18-
30 and the highest preference for physical shares is in the age group of 46-60. Overall the
investors prefer dematerialized shares to physical shares.
20
15
10
9 3
Pleasant
46 friendly
Unpleasant
42 Rude
As seen from chart 3, 46% of the investors said that courtesy of the staff pleasant, 42%
said friendly, 9 % unpleasant and 3% claim about rude.
no 32
yes 68
0 10 20 30 40 50 60 70
As seen from table 4, Out of 85 respondents , 68% told that he faced the problem while
parking while 32% person told no.
9.42
17.64 Excellent
Good
Satisfactory
40 32.94
Not Satisfactory
An analysis of chart 4 shows that 15 investors (17.64%) expressed the opinion excellent
about the ambience and comfort at the Depository Participant office of Sharekhan. 28
Investors (32.94%) of the investor respondents feel the ambience and comfort of
Sharekhan is ‘good’ and 34 respondents (40%) say they are satisfied and the rest (9.42%)
are of the opinion ‘not satisfactory’.
6 showing opinion about the brokerage charges.
No. of respondents
0
4
15
16 Reasonable
Expensive
Normal
No comments
65
As seen from chart 6 . out of the 85 respondent only 15% people told that brokerage
charge is reasonable and 65 % told it is expensive. 16% told it is normal Rest of them
didn’t give any comment
10 showing experience for opening demat account in sharekhan .
No. of respondents
0
11 18
9 Easy
Tedious
Vague
Difficult
62
As seen from chart 10, 62% told tedious documentation while only 18% told it is easy
11 and chart showing status of the facility provided
38 happy
satisfied
not satisfied
53
As seen from table 11, 38% person told that they are happy with the facility And 53% are
satisfied and 9% not satisfied.
12 and chart showing Investment in different products of Sharekhan
Equities
Derivatives
38
55
Commodities
As seen from table 12, many respondents invest in derivatives and equities compared to
commodities. Almost 38% of the business is from derivatives and 55% of the business in
equities and remaining 7% towards commodities.
13 showing opinion about overall rating about sharekhan .
No. of respondents
20 20
Reasonable
Expensive
Normal
21
No comments
39
As seen from chart 13, 20% customer told Excellent , 39% told good And 18%
satisfactory
FINDINGS AND INFERENCES
Tapping Rural Market: The Indian rural investors market are relatively untapped, with
only small and private firms meeting the current demand. India Infoline Securities can
gain the “First Mover Advantage” over its competitors, especially in areas were
commercial crops are grown and the standard of living is high. These people do not have
much option to invest other than banks and post offices.
Reduce the initial account opening charges: The charge for opening a trading and
demat account in India Infoline securities is high compared to its competitors. This
influences the potential investors to open their account with another company which
provides the same at lower prices. Thus it acts as a mental barrier for potential customers,
who tend to overlook all other benefits offered by India Infoline . Hence India Infoline
should consider reducing their account opening charges.
Bring in more product differentiation: Product differentiation here means that India
Infoline securities should bring in more customized services and more value proposition
for large investors. It can reduce the brokerage charges for large investors which will
encourage them to invest more in the company.
Invest more on R&D: India Infoline should concentrate on its research and
development since most of its competitors are investing on R&D. This will help the
company to read the market better and will also be in a better position to understand the
needs of the customers. This can be extremely beneficial for India Infoline in the long
run.
LIMITATIONS
Many constraints were involved in doing this study. Some of them are as follows.
The most significant limitation has been the individuals involved in this study
were very busy and did not spare much time in discussion.
The sample size selected for the survey was too small as compared to large
population.
The project was carried out only in the Delhi, so findings on data gathered can be
best true for Delhi only and not applicable to other parts of state and country.
Indian stock market is a market where sentiments play a major role in price; hence 100%
accurate predictions cannot be made about its future path
RECOMMENDATION
Trading shares online is becoming a very popular way of making money and this means
that there are many options as to how you can get started. The easiest way is to do so on
the Internet by using an online share trading account. It will only take a few minutes to
set up and you can get you started straight away! However, it pays to take the time to
research the best brokers available to ensure you are getting the best service. Firstly you
should check that the service you choose provides you with help, should you need it. Not
only does this include technical support, but many share accounts will give you access to
information about trading, the latest figures, historical reports and much more. Some of
the top online brokers even offer personal trading advice!
Many online accounts will also let you sign up for free for a demo account. Whilst the
trades you make are not real, this is a great practice at the same time as being a good way
of comparing different available accounts. Use this time to test out their support if
possible. You also want to make sure that all of the systems and software they have in
place makes sense to you and is easy to use. Nothing should get in the way of your
success! Take some time to compare a few different accounts to make sure you find one
that suits your needs.
The Internet really has seen many changes in trading of shares. This is why finding the
right online share trading account for you is so important for your share trading success.
CONCLUSION
LTV Ratio will not exceed a particular percentage. This percentage differs from
HFI to HFI and the components of the value of property are covered in Cost of
Property
Elastic can be stretched only to a certain extent. The loan tenure also will not go
beyond 20 years. However, HFIs do provide for different tenures with different
terms and conditions.
Your EMI normally does not exceed 50% of your Gross Monthly income.
The total monthly payment towards all the loans you have availed of, including
the present one, will normally not exceed 50% of your Gross Monthly Income.
Your loan eligibility is calculated using LTV, IIR and FOIR norms and the lowest
from the three is chosen.
Your profile is considered by the HFI before your repayment capacity is judged.
If the HFI insists on a personal guarantor, you need to provide one before the
disbursement of your loan.
Your property should be both technically and legally clear before your loan can
get disbursed by the HFI.
In case you have bought an under construction property, your loan will be partly
disbursed, as per the stages of construction and PEMI needs to be paid on it.
The disbursement, in most cases, will be in the name of the builder or the seller or
the society or the development authority unless you have made some payment to
them.
Repayment of the loan is either via Deduction Against Salary, Post Dated
Cheques, standing instructions or by cash / DD.
You can either choose to repay the loan using the Annual rests or Monthly rests.
APPENDICES
Questionnaires
NAME
_______________________________________________________________________
AGE ______________________________ GENDER
____________________________
MOBILE
_______________________________________________________________________
OCCUPATION
_______________________________________________________________________
Q.3 What percentage of your monthly household income could be available for
investment?
Less than 5%
5% to 10%
10% to 15%
15% to 20%
More than 20%
Q.4 Where do you often invest your money?
Equity
Mutual fund
Insurance
Term deposits
Others
Bibliography
References