PROJECT REPORT

COMPARATIVE ANALYSIS OF DEMAT

ACCOUNTS

SUBMITTED BY:

RAKHI TRIPATHI

MBA (Finance)

PUNJAB TECHNICAL UNIVERSITY

2009-2010

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 ACKNOWLEDGEMENT

“THE TASTE OF ACCOMPLISHMENT CAN ONLY BE TASTED WHEN

WE GET PROPER GUIDANCE NO MATTER HOW BIG OR SMALL THE

TASK IS”

The immense help and support received from IDBI CAPITAL JABALPUR limited

overwhelmed me during the project.

My sincere gratitude to Mr. ALOK TIWARI(Associate Relationship Manager) IDBI Capital and

Mr. ATUL SHARMA(Team Leader)IDBI Bank Jabalpur for there support and patience in the

completion of my summer internship project. I remember all the lesson given by them to me for

my entire life.

I am grateful to mrs.SHRUTI PUNJ(faculty)PTU for her encouraging and valuable suggestions

in completing my project work which is not possible without her support and suugestions.Iam

grateful to all the faculty members of PTUwho have helped me directly or indirectly in the

completion of summer internship program.

Iam thankful to my teachers,parents and my friends who have supported me directly or indirectly

in the completion of this project.

“Iam thankful to all the staff members of IDBI”

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 DECLARATION

I, RAKHI TRIPATHI do here by declare that the project

report”COMPARATIVE ANALYSIS OF DEMAT ACCOUNTS” is a genuine
research work undertaken by me and it has not been published any where earlier.

Date:

RAKHI TRIPATHI

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 INTRODUCTION

Introduction

Page 4
India's capital markets
Unlocking the door to future growth

 India’s capital markets have experienced sweeping changes since the beginning of the

last decade.

Its market infrastructure has advanced while corporate governance has progressed faster than in

many other emerging market economies. But in contrast to several developed countries and

Asian economies,

India’s capital markets are still shallow, implying that further reforms are needed to make India a

world-class financial centre.

 At nearly 40% of GDP, the size of India’s government bond segment is comparable to

many other emerging market economies.

Its corporate bond market, however, remains small and is dwarfed by those of the United States,

South Korea and Malaysia.

 India boasts a dynamic equity market.

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The sharp rise in India’s stock markets since 2003 reflects its improving macroeconomic

fundamentals. However, the large size of insider holdings and the small presence of institutional

investors belie these impressive figures.

 Innovative products such as securitized debt and fund products based on alternative

assets are starting to break ground.

But an enabling environment is not yet in place and there remains an overriding need to increase

domestic investors’ knowledge regarding the merits and risks of capital market investing.

 A vibrant, well-developed capital market has been shown to facilitate investment and

economic growth.

We believe that persistent reforms in the sector can support India’s already impressive growth

trend in the coming years.

Improving macroeconomic fundamentals, a sizeable skilled labour force and greater integration

with the world economy have increased India’s global competitiveness, placing the country on

the radar screens of investors the world over. The global ratings agencies Moody’s and Fitch

have awarded India Investment Grade Ratings, indicating comparatively low sovereign risks.

These positive dynamics have led to a sustained surge in India’s equity markets since late 1990’s

and further boost was provided in the early 21st century, attracting sizeable capital from foreign

investors. Net cumulative portfolio flows from 2003-2006 (bonds and equities) amounted to

USD 35 bn. Moreover, India’s stock market has outperformed world indices in recent years.

And, despite its increasing correlation with world markets in recent years , India still offers

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diversification in global portfolios. The bond market is dominated by government bonds.

Government bond issuances, resulting from persistently high fiscal deficits, as well as specific

regulatory requirements, have underpinned the supply and demand conditions in India’s debt

capital markets. Nearly 90% of total domestic bonds outstanding are government issuances (i.e.

Treasury bills, notes and bonds), squeezing out corporate and other marketable debt securities .

Initiatives to lift the corporate bond market from its nascent stages have been slow to progress,

leaving companies unable to realise their optimum capital structure as a result. And unlike the

derivative instruments that are available for equities, those for fixed income instruments (e.g.

options in interest rates) in the organised exchanges have failed to take off, limiting the price

discovery in the secondary markets. We believe that India’s economic transformation is

irreversible. Against this backdrop, greater efficiency in financial intermediation is required to

support investment and growth, but this will require structural changes in India’s public finances

and the dismantling of unwieldy regulations. The paper follows an analysis of supply (bonds,

equities and derivatives) and demand conditions (household and institutional investors) in

India’s capital markets.

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Objective of research:

 The main objective of this project is concerned with getting the opinion of people

regarding Demat Accounts.

 To do a comparative analysis of COMPANIES providing services of demat accounts

in Jabalpur.

 To meet prospective clients and convert them to customer.

 How to solve doubts of customers and their queries related to demat accounts.

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 RESEARCH METHODOLOGY

Research Process :

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 Research design

Research design basically consists of the way the research work will going to be conducted and

the amount of finance that will be required for conducting it in an effective manner. In this

research work, the expenses that were incurred was on

 designing and printing of the questionnaires

 conveyance

Sample design

The study was conducted in the city of Jabalpur.

The sample size was 100.

They were selected on the basis of Non-Probability based Deliberate Sampling and the

benchmarks for inclusion in the sample were experience, knowledge, interests in equity

investments etc.

Data collection

Both Primary and Secondary data were required for conducting this research work.

Primary data is the first hand information collected directly from the respondents . The tool

used here is questionnaire. Primary Data is collected through survey of various respondents

Secondary data is collected through internet , books, data banks etc.

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 Limitations

 Time limitation

 Research has been done only at Jabalpur

 Some of the persons are not so responsive

 Possibility of error in data collection

 Possibility of error in analysis of data due to small sample size

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REVIEW OF

LITERATURE

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 REVIEW OF LITERATURE

A) REVIEW CONCEPTS AND THEORIES

Meaning of demat account:-

To start dealing in securities in electronic form, one needs to open a demat account with a DP of

his choice. An investor already having shares in physical form should ensure that he gets the

account opened in the same set of names as appearing on the share certificate; otherwise a new

account can be opened in any desired pattern by the investor.

Demat account is a safe and convenient means of holding securities just like a bank account is

for funds. Today, practically 99.9% settlement (of shares) takes place on demat mode only.

Thus, it is advisable to have a Beneficiary Owner (BO) account to trade at the exchanges.

Demat refers to a dematerialised account.

Though the company is under obligation to offer the securities in both physical and demat

mode, you have the choice to receive the securities in either mode.

If you wish to have securities in demat mode, you need to indicate the name of the depository

and also of the depository participant with whom you have depository account in your

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application.

It is, however desirable that you hold securities in demat form as physical securities carry the

risk of being fake, forged or stolen.

Just as you have to open an account with a bank if you want to save your money, make cheque

payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks.

So it is just like a bank account where actual money is replaced by shares. You have to approach

the DPs (remember, they are like bank branches), to open your demat account. Let's say your

portfolio of shares looks like this: 150 of Infosys, 50 of Wipro, 200 of HLL and 100 of ACC. All

these will show in your demat account. So you don't have to possess any physical certificates

showing that you own these shares. They are all held electronically in your account. As you

buy and sell the shares, they are adjusted in your account. Just like a bank passbook or

statement, the DP will provide you with periodic statements of holdings and transactions.

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Is a demat account a must?

Nowadays, practically all trades have to be settled in dematerialised form. Although the market

regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500

shares to be settled in physical form, nobody wants physical shares any more.

So a demat account is a must for trading and investing.

Most banks are also DP participants, as are many brokers.

You can choose your very own DP.

To get a list, visit the NSDL and CDSL websites and see who the registered DPs are.

A broker is separate from a DP. A broker is a member of the stock exchange, who buys and

sells shares on his behalf and on behalf of his clients.

A DP will just give you an account to hold those shares.

You do not have to take the same DP that your broker takes. You can choose your own.

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Benefits Of Demat Account

1. A safe and convenient way of holding securities (equity and debt instruments both).

2. Transactions involving physical securities are costlier than those involving

dematerialised securities (just like the transactions through a bank teller are costlier than

ATM transactions). Therefore, charges applicable to an investor are lesser for each

transaction.

3. Securities can be transferred at an instruction immediately.

4. Increased liquidity, as securities can be sold at any time during the trading hours

(between 9:55 AM to 3:30 PM on all working days), and payment can be received in a

very short period of time.

5. No stamp duty charges.

6. Risks like forgery, thefts, bad delivery, delays in transfer etc, associated with physical

certificates, are eliminated.

7. Pledging of securities in a short period of time.

8. Reduced paper work and transaction cost.

9. Odd-lot shares can also be traded (can be even 1 share).

10. Nomination facility available.

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11. Any change in address or bank account details can be electronically intimated to all

companies in which investor holds any securities, without having to inform each of them

separately.

12. Securities are transferred by the DP itself, so no need to correspond with the companies.

13. Shares arising out of bonus, split, consolidation, merger etc. are automatically credited

into the demat account of the investor.

Opening a Demat Account

To start dealing in securities in electronic form, one needs to open a demat account with a

DP of his choice. An investor already having shares in physical form should ensure that

he gets the account opened in the same set of names as appearing on the share certificate;

otherwise a new account can be opened in any desired pattern by the investor.

Getting started Documents to be attached

1. Choose a DP • Passport size photographs

2. Fill up an account opening • Proof of residence (POR) -

form provided by DP, and Any one of Photo Ration

sign an agreement with DP Card with DOB / Photo

in a standard format Driving License with DOB /

prescribed by the Passport copy / Electricity

depository. bill / Telephone bill

3. DP provides the investor • Proof of identity (POI) -

with a copy of the Any one of Passport copy /

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 agreement and schedule of Photo Driving License with

charges for his future DOB / Voters ID Card /

reference. PAN Card / Photo Ration

Card with DOB

4. DP opens the account and

provides the investor with a • PAN card

unique account number,

also known as Beneficiary

Owner Identification

Number (BO ID).

MEANING OF DEMATERIALISATION:-

Dematerialisation is the process of converting physical shares (share certificates) into an

electronic form. Shares once converted into dematerialised form are held in a Demat account.

Dematerialisation Process:-

An investor having securities in physical form must get them dematerialised, if he intends to sell

them. This requires the investor to fill a Demat Request Form (DRF) which is available with

every DP and submit the same along with the physical certificates. Every security has an ISIN

(International Securities Identification Number). If there is more than one security than the equal

number of DRFs has to be filled in. The whole process goes on in the following manner:

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Page 19
THINGS INVESTORS SHOULD KNOW ABOUT ACCOUNT OPENING AND

DEMATERIALISATION:-

Providing the bank account details at the time of account opening

It is mandatory for an investor to provide his bank account details at the time of opening a demat

account. This is done to safeguard investor's own interests. There are two major reasons for this:

1. The interest and dividend warrants can't be en-cashed by any unauthorized person, as the

bank account number is mentioned on it.

2. It is convenient and time saving, as dividends and interests given by the companies can be

directly credited to the investor's bank account (through ECS facility, wherever available).
Change in bank account details

It is possible for an investor to make changes to the details of his bank account. The investor

must inform any change in his bank account details to his DP. This enables him to receive the

cash corporate benefits (such as dividends, interests) directly into his account in time and

discourages any unauthorized use by any second party.

Change in the address of investor as provided to the DP

Any change in your address should be immediately informed to DP. This enables DP to make

necessary changes in the records and informing the concerned companies about the same.

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Opening multiple accounts

An investor is allowed to open more than one account with existing DP or with different DPs.

Minimum balance of securities required in demat account

There is no stipulated minimum balance of securities to be kept in a demat account.

Account opening and ownership pattern of securities

One must make sure to open a demat account in the same ownership pattern in which the

physical securities are held. For example: If you have two share certificates, one in your

individual name (say 'X') and the other held jointly with some other individual (say 'XY'), then in

such a case you will have to open two different accounts in respective ownership patterns (one in

your name i.e. 'X' and the other account in the name of 'XY').

Same combination of names on certificates but different sequence of names on the

certificates or demat account

Regulations provide that the client receives a contract note indicating details like order number,

trade number, time, price, brokerge, etc. within 24 hours.of the trade. In case of any doubts about

the details of the contract note, you (investor) can avail the facility provided by NSE, wherein

you can verify the trades on your website www.nseindia.com/content/equities/eq_trdverify.htm.

The Exchange generates and maintains an audit trail of orders/trades for a number of years.and

you can counter check detais of order/trade with the Exchange.

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Holding a joint account on "Either or Survivor" basis like a bank account

No investor can open a demat account on "E or S" basis like a bank account.

Allowing somebody else to operate your Demat account

It is possible for an account holder (Beneficiary Owner) to authorize some other person to

operate the demat account on his behalf by executing a power of attorney. After submitting the

power of attorney to the DP, that person can operate the account on behalf of the beneficiary

owner (BO)..

Addition/deletion of the names of the account holders after opening the account

It is not possible to make changes in the names of the account holders of a BO account. A new

account has to be opened in a desired holding/ownership pattern.

Closing a demat account and transfer of securities to another account with same or

different DP

An investor, if he wants, can also close his demat account with one DP and transfer all the

securities to another account with existing or a different DP. As per a SEBI circular issued on

November 09, 2005, there are no charges for account closure or transfer of securities by an

investor from one DP to another

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Freezing/Locking a demat account

The account holder can freeze his demat account for a desired time period. A frozen account

prevents securities to be transferred out of (Debit) and transferred into (Credit) the account.

Dematerialised shares do not have any distinctive number

Dematerialised securities are fungible assets. Therefore they are interchangeable and identical.

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Rematerialisation:-

The process of getting the securities in an electronic form, converted back into the physical form

is known as Rematerialisation. An investor can rematerialise his shares by filling in a Remat

Request Form (RRF). The whole process goes on as follows:

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B) REVIEW PREVIOUS RESEARCH FINDINGS

According to the Webster’s dictionary, literature is “the writings that pertain to a particular

branch of learning, and printed matter”. And review means “to examine again, to study

carefully”.

Therefore literature review is the printed matter which we study very carefully during our

work. This project is also a collection of insight into the different printed material.

In the year 2006 Mr. Rajarajen Vanjeko has presented a report on “Investors’ Response to

Market Reform on Dematerialization”. This paper presents a the opinion of one such

participant i;e, individual investors, on the important area of reform ,namely, the

dematerialization introduced in the capital market. This study brings out hitherto untapped

information about the capital market reforms, can make necessary modifications and give new

policy directives not only to retain the existing individual investors but also to attract new

investors to capital market. Thus, the study provides a number of suggestions to improve equity

cult in the country.

During the past decade, Indian capital market witnessed revolutionary changes. With the aim of

improving market efficiency, enhancing transparency, preventing unfair trade practices, and

building investor confidence in the securities market a package of capital market reform,

consisting of measures to liberalize, regulate and develop securities market, were introduced.

The Government ofIndia established the Securities and Exchange Board of India(SEBI) as a

regulator for the capital market, first as an administrative body in April 1988, and then,

conferred the statutory recognition in January 1992, pursuant to SEBI Act, 1992, with powers to

protect the interests of investors and promote the development of and to regulate the securities

Page 25
market and matters connected or incidental thereto. It is an intermediaries in the securities

market with distinctive roles, duties, and responsibilities. SEBI initiated various reform measures

from time to time through various committees formed for the purpose . These reforms changed

the fact of the Indian capital market from a sober to vibrant one. In the process these reforms had

their impact on various participants in the capital market.

The objective of this study are:

• To develop a profile of sample Indian investors in terms of their demographics;

• To find out the extent of dematerialization of shares done by the individual

investors; their reasons for partial dematerialization if any; and to know about the

investors’ knowledge regarding charges levied by DPs;

• To bring out the opinion of investors on dematerialization on an overall basis and

across different cities;

• To bring out their opinion related to dematerialization on an overall basis and

across different cities;

Period of Study

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The survey was conducted from January 2005 to March 2006. During this period many

development took place in the Indian capital market. Stock market barometers both BSE Sensex

and S&P CNX Nifty gyrated to unprecedented levels reflecting the movements of the

international bellwether market indices such as NASDAQ composite and Dow Jones and the

developments in the domestic economy. This is the period when union budget provided certain

tax benefits for the mutual funds. Certain additional incentives were extended to infrastructure

and export-oriented industries. These developments had some impact on the behavior of equity

investors.

Investors’ Opinion Relating to Demat

The sample investors were asked to give their opinions on Likert type statements relating to

dematerialization with the opinion levels ranging from ‘strongly agree’ to ‘strongly disagree’.

The level of agreement expressed by investors for various reasons was analyzed. For analysis

purposes, while entering the data ‘strongly agree’ option was assigned a weight of 5 and

‘strongly disagree’ option was assigned a weight of 1. In between two extremes other levels of

agreement such as ‘agree’, ‘neither agree or disagree’, and ‘disagree’ were assigned weights of

4,3, and 2 respectively. Based on the mean value, the level of agreement of investors with the

statements was identified.

Implication of the study

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To conclude, this study brought out the investors’ experiences and their expectations regarding

dematerialization reform. Nearly 95% of the sample investors have a demat account. However,

still a large number of them have physical shares with them. They cite ‘concerned companies

have not joined depository’ and ‘high demat and account maintenance charges’ as the major

reasons for the partial dematerialization of shares. They, thus, echo the views of Gupta and

Jain(2003) on demat charges: “Given the Indian situation, it would be appropriate for the policy-

making and market regulatory authorities to consider the provision of an economical paperless

system for providing purely ‘safe-keeping’ facility for the huge number of huge investors. This

is an urgent need in the interest of the whole lot of small and middle class investors.” More two-

third of the sample investors did not have an idea about the various charges levied by the DPs.

The sample investors are aware of the changes bought in by the dematerialization. they accept

that demat helps in speedy transfer of ownership, put an end to problems of fake certificates and

forgeries, and has increased the volume of transactions on the bourses. But they want SEBI to

bring down the transaction and other charges associated with dematerialization. these opinions

almost similar across all of the cities.

The investors are very much disappointed with the SEBI’s inaction regarding manipulators in the

capital market. A majority of the sample investors want the SEBI to fix a greater responsibility

on the merchant bankers and hold them responsible for the promoters’ dubious acts. Also they

want SEBI to create legal provisions to pull up the promoters for their misdeeds and proceed

against them under criminal laws and confiscate all their ill-gotten wealth.

Understanding individual investors is a challenging problem faced by the policymakers in the

Department of Corporate Affairs and SEBI. The people at the helm of policy making, armed

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with this sort of information, i.e., the opinion of investors about the ongoing capital market

reform, can make necessary modifications and give new policy directives not only to retain the

existing individual investors but also to woo new investors to capital market. This will go a long

way in improving the equity cult in the country.

References

1. Gupta L C and Jain N (2003), “Indian Securities Depository System-What has Gone

Wrong?”,Economic and Political Weekly, Vol.XXXVIII, No.18,pp. 1969-74

2. Gupta L C, Jain N and Choudhury U(2003), “Stock Market and Corporate Governance

Reforms in India”, Society for Capital Market Research & Development, New Delhi

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COMPANY OVERVIEW

COMPANY OVERVIEW

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IDBI Capital Market Services Ltd., (IDBI Capital) is a wholly owned subsidiary of IDBI Bank

Ltd and is a leading Investment Banking & Securities Company.

IDBI Capital offers a full suite of products and services to Corporates, Institutional and

Individual clients. The range of services include:-

 Investment Banking

 Capital Market Products

 Private Equity

 Corporate Advisory Services

 Mergers & Acquisitions

 Project Appraisals & Debt Syndication

 Stock Broking - Institutional & Retail

 Distribution of Financial Products

 Debt Placement and Underwriting

 Fund Management (Managing Clients' Assets-Pension/PF Fund Managers)

 Research Group

IDBI Capital is highly regarded for safety and trust and enjoys a credit rating of “AAA” by

CARE for its medium-term borrowings and P1+ by ICRA for its short-term borrowings.

Page 31
SWOT ANALYSIS OF IDBI CAPITAL

Page 32
MILESTONES;-

Jan 2006 Launched the online investing portal –

www.idbipaisabuilder.in
2006 IDBI Capital bags CNBC TV18 'Best National Financial

September Advisor-Institutional' award.

2006 IDBI Capital ties up with Punjab National Bank and Bank

November of Rajasthan Bank.

2007 IDBI Capital ties up with Oriental Bank of Commerce

March
2007 May IDBI Capital ties up with Karur Vysya Bank (KVB)
2008 IDBI Capital bags CNBC TV18's prestigious National

January Financial Advisor Award

2008 IDBI Capital ties up with Union Bank of India

March

Page 33
 INTRODUCTION TO IDBI CAPITAL:-

IDBI CAPITAL is a subsidiary to IDBI BANK and fully owened by IDBI bank. The IDBI

CAPITAL was launched by IDBI bank in January 2006 when the INDIAN CAPITAL market

was emerging one of the favourite destination for FORGEIN DIRECT INVESTMENT(FDI) and

still it is. In the year 2006 IDBI Capital launched the “online investment portal” and in the very

short spam of time it has begged various awards in the field of “FINANCIAL ADVISOR”.

IDBI Capital as an institutional player provides the entire gamut of Capital Market services

encompassing:

1. Public Offerings

2. Qualified Institutional Placements

3. Buyback

4. Takeover

5. Preferential Allotments

6. External Commercial Borrowings, FCCBs, etc.

The above activities entails liasioning with institutional investors such as treasury departments of

Domestic Institutions, Banks and corporates, fund managers of mutual funds, private equity

firms, FIIs, HNIs.

Retail Broking & Distribution:-

Page 34
In addition to offering services to corporate, institutional clients, IDBI Capital also offers a

gamut of financial products and services that cater to a varied cross section of investors.

IDBI Capital also offers to financial planners, retail intermediaries and consumers to deliver

lasting, innovative solutions.

Looking at the opportunities in our market and the growth of our country, we believe it is high

time investors are educated about the nuances of investments. The knowledge and awareness

gained will empower investors and help them create wealth. We firmly believe brokers, media

and regulators have a pivotal role in assisting the individuals to become wealthy. We will go

extra mile to empower the investors in managing their wealth to ensure a more rewarding future.

IDBI Capital aims to provide a single-point source for retail investors in their requirements for

trading and investment products. The services offered include –

 Online investing

 IPO distribution

 Mutual fund distribution

Online Investing:-

Online investing provides investors with a convenient method to take part in today’s financial

markets. With our commitment to enhancing investor education and awareness as a foundation

stone, we have created an online investing website www.idbipaisabuilder.in for trading and

depository services. This platform enables easy and informed investing in Equity shares, Futures

Page 35
& Options (F&O), IPO’s and Mutual Funds, for the retail investors with a wealth of information,

news, analysis and tools sourced from the best in the industry. It also brings a large database of

information about companies which will assist them in making an informed investment decision.

IPO Distribution:-

We market and distribute IPOs of all lead investment bankers, including our owned lead

managed issues. In IPO distribution, the marketing effort is the key, which enables us to carry

out the vigorous exercise of

 Putting the banners of the IPO on our portal and all across our branches.

 Sending the emails to all our investors about the impending IPOs and the product note.

 Sending SMS to all of them.

 Making available the IPO application forms, in all our branches.

All our branches are in marketing & distribution of IPO application forms, where we accept and

bid the application forms to the exchange.

Mutual Fund Distribution:-

Several factors need to be taken into account when choosing an instrument for investment –

among these being safety, liquidity & return related to the risk undertaken. Coming to the choice

of instruments, we have equity, debt, money market, commodity based or even global equities.

Page 36
Mutual funds provide all this and more.

Mutual funds offer an investment portfolio which can be either diversified in nature or specific

in category with risk skewed towards debt to equity in varying proportions, all in one under one

umbrella. Mutual Funds cater to the specific requirement of the Investor be it Institutional or

Individual.

IDBI Capital Market Services Ltd. is into Mutual Fund Distribution, Advisory and Fund

Management. We address the needs of any type of investor from corporate, banks, trusts, firms,

and societies to NRIs, HNIs and individual retail clients

We have been recognized as among the best financial advisers in the country, and have been

conferred with the CNBC TV 18 Financial Advisor Awards as the Best Performing National

Financial Advisor –Institutional segment in India for the past two consecutive years.

As a distributor registered with almost all the SEBI Registered Mutual Funds in India, we have

also started offering Mutual funds to our retail customers, both off-line and on-line.

Page 37
Reasons for not investing in stock market

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Awareness about all the insvestment instruments available in the

market

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Money investment options

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Awareness about the demat service provider in city

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Best service provider in your city

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Customer satisfaction of IDBI CAPITAL

Page 43
Do you follow the Stock Market

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Time period for entering into a Stock Market

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Initial amount of money invested in Stock Market

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Risk capacity of a Customer

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Duration a customer wants to be in Stock Market

Page 48
 COMPETITIVE ANALYSIS OF DEMAT ACCOUNTS

BROKERAGE CHARGE BY DIFFERENT BANKS AND

BROKING HOUSES

FOLLOWING RATES ARE APPLICABLE TO RESIDENTS OF INDIA ONLY

A) DELIVERY-BASED TRANSACTIONS (MONTHLY)

Total Eligible Brokerage Per Leg (%)

Turnover per Month

Up to Rs. 2,00,000 0.50

Rs. 2,00,001 - Rs. 0.45

5,00,000
Rs. 5,00,001 - Rs 0.40

10,00,000
Rs. 10,00,001 - Rs 0.35

20,00,000
Rs. 20,00,001 - Rs 0.30

40,00,000
Rs. 40,00,001 - Rs. 0.25

1,00,00,000
Rs. 1,00,00,001 - Rs. 0.20

5,00,00,000
Above Rs. 0.15

5,00,00,000

Page 49
 Minimum Brokerage

2 paise per share for Delivery subject to an overall

minimum of Rs. 20 per contract, whichever is higher.

Contracts will be separate for NSE and BSE, normal

segment and for Trade to Trade segment.

Securities Transaction Tax and Service Tax would be charged extra on actuals.

B) INTRADAY TRANSACTIONS

Total Eligible Turnover Brokerage Per Leg (%)

per month
Up to Rs. 2,00,00,000 0.050

Page 50
 Rs. 2,00,00,001 - Rs. 0.045

4,00,00,000
Rs. 4,00,00,001 - Rs. 0.040

6,00,00,000
Rs. 6,00,00,001 - Rs. 0.035

8,00,00,000
Rs. 8,00,00,001 - Rs. 0.030

10,00,00,000
Rs. 10,00,00,001 and Inquire with us

above
Minimum Brokerage

1 paisa per share for intraday square off subject to an

overall minimum of Rs. 20 per contract, whichever is higher.

Contracts will be separate for NSE and BSE.

Securities Transaction Tax and Service Tax would be charged extra on actuals.

Please note the following:

If DELIVERY transactions are SQUARED-OFF within the same Day / Settlement,

INTRA-DAY BROKERAGE will be charged for all such transactions (both sides).
For NSE Trades Brokerage is calculated on a per share basis and is rounded off to the second

decimal.
Service Tax of 12.36% of Brokerage is charged additional and is calculated per share and

rounded off to the fourth decimal.

Securities Transaction Tax (STT) - is calculated on the Weighted Average Price of the

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client for a particular day. This is also calculated on the value and rounded off to the second

decimal.
o STT at the rate of 0.125% of turnover will be charged in addition to the Brokerage on

all Delivery Trades.

o STT at the rate of 0.025% of turnover will be charged in addition to the Brokerage on

Sell leg of all Intraday Trades.

The Final value of the Brokerage and Service Tax is arrived at by multiplying the per share

value in four decimals with the Quantity and then rounding it off to second decimal.
Minimum Brokerage is Rs. 20/- and Service Tax and STT will be charged additional as per

the applicable rate.

COMPARATIVE ANALYSIS OF MAJOR PLAYERS IN BROKING INDUSTRY IN

COMPARISON WITH IDBI CAPITAL

Page 52
 Particula IDBI ICICI HDFC Indiabulls Reliance

rs Capital Securities Money

1.Account Rs. 750 Rs. 750 Rs. 750 Rs. 900 Rs.500/75

Opening 0/ 1350/2500
Deliver Intraday Delivery Intraday Delivery Intraday Delivery Intraday Delivery Intraday
2. Brokerage
0.05 0.15 0.15 0.10 1
y 0.75 0.75 0.50
charges 1
0.50 paisa
paisa
3. Rs. 3 per Rs. 2 per Rs. 3 per Rs. 2 per

Dematerializ certificate, certificate, certificate, certificate plus

ation plus Rs. 30/- plus Rs. 35/- plus Rs. 35/- Rs. 25 courier

per request per request per request charges

4. Rs. 20 per Rs. 20 per At actuals, as

Rematerialis certificate certificate levied by the

ation Depository

Currently Rs.

10/- per

certificate
5. Exposure NIL 2 NIL 4 NIL 4 2/4 12 NIL 5

on Cash times times times times times times

6.Exposure 50% of the NIL NIL 75% of NIL

on Securities Market Value
Market value
7. Equity Rs. 6 per 0.04 % of the Rs. 17 per 0.0

Transaction transaction value of the transaction

– Sell transaction
8. Equity NIL NIL NIL NIL NIL

Transaction

– Buy
9.Intra day 3 pm 3 pm 3 pm 3:10 pm 3.00 pm

cut off time

10. Folio Free for Rs. 500/- (Rs Rs. 500.00 per Rs. 500.00 per Rs. 50 per year

Maintenan- default demat 450/- for demat account demat account

Page 53
ce A/c with customers per annum per annum

idbipaisabuil receiving
GRAPHICAL COMPARISON OF BROKERAGES CHARGHED BY

DIFFERENT BROKING HOUSES

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RESEARCH FINDINGS AND CONCLUSIONS:-

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 The research was conducted on 100 people, 65% have already invested in the stock

market and out of remaining 35%, 28% are interested in investing money in stock

market but have kept their decision on hold on account of lack of awareness. The

remaining 7% do not want to invest at all So there is enough scope for the brokers to

convert the 28% category as investors through their communication skills and

convincing power.

 Now, when those 35 people were asked why they don’t invest in stock market, then most

of the people held their ignorance responsible for that. Out of these 35 participant 7

people have stopped investing in stock market because of losses they have faced ,

remaining, 28 have never invested because they lack in knowledge require for investing

in stock market.

 When all the 100 participants where asked whether they are fully aware of the

instruments sold in stock market than only 60% participants said yes, 30% said no and

remaining 10% have no idea about stock market.

 When all the 100 participants where asked whether they are know all the demat service

provider in their city only 60% know and rest 40% don’t know about them. There is lack

of awareness among 40% participants either they are not interested or some other

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 reasons, there is a very good chance for IDBI Capital to convert these participants as a

future customers.

 When all the 100 participants where asked where they like to invest their money 50 have

said they have invested in Bank ,15 in Mutual Funds ,25 in Insurance and 10 in stock

market, therefore IDBI Capital can convert those 50 participants into potential investors

in stock market.

 In other questioner when all the 100 participants have been asked whether they are

satisfied with the services provide by IDBI out of 100, 68 are satisfied whereas 20 are not

and there are 12 participants don’t have account in IDBI CAPITAL

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Recommendations:

 The vital problem is spotted is the ignorance. The investors are not fully aware about the

benefits of the stock market. The IDBI CAPITAL can avail the necessary information

related to stock market to its existing customers.

 Most of the investors are not aware of what is a DEMAT ACCOUNT. It is an

opportunity for the IDBI CAPITAL to convert these prospective customers.

 All the participants where not aware of the instruments available in the stock market.

IDBI CAPITAL has the added advantage over its competitors if they can convert these

participants into its customers.

 IDBI CAPITAL has not marketed its product properly, the product awareness was not

amongst the participants. It is required that the IDBI CAPITAL promote its product

properly.

Page 58
Bibliography

Websites:

www.idbibank.com

www.idbi.com

www.idbicapital.com

www.idbifortis.com

www.icicidirect.com

www.axisbank.com

www.reliancemoney.com

www.karvy.com

www.hdfcbank.com

Page 59
ANNEXURE

Page 60
Exhibit 1

Questionnaire:

 Have you ever invested/ interested to invest in Stock Market?

Yes {}

No {}

Earlier now stopped {}

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 What is the most important reason for not investing in stock market?

Lack of knowledge of stock market {}

Enjoys investing in other options {}

Fluctuations in stock market {}

No trust over brokers {}

 Do you know all types of instruments sold in stock market?

Yes {}

No {}

Some of the commodities {}

 Do you know the name of institutions providing demat account in your city?

Yes {}

No {}

 Where do you like to invest your money in?

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 Bank {}

Mutual funds {}

Insurance policy {}

Stock market {}

 Who is the best demat service provider in your city?

ICICI {}

IDBI CAPITAL {}

HDFC {}

OTHERS {}

 Are you satisfied with the services of IDBI CAPITAL?

Yes {}

No {}

Don’t have account in IDBI CAPITAL {}

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 How long you stay in stock market?

3 months or more {}

1 – 2 years {}

2 – 3 years {}

3 – 5 years {}

 How much money would you like to invest in the stock market initially?

Rs 1000 {}

Rs 2500 – 5000 {}

Rs 6000 – 7000 {}

Depends on the type of share {}

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  What is the right time to enter in stock market?

When market is down {}

When market is moderate {}

Don’t know {}

 How much risk you can bear?

The amount I have invested {}

More than I have invested {}

Depends on my financial condition

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 Do you follow the stock market?

Yes {}

No {}

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