SUMMER INTERNSHIP REPORT

ON
“Comparative Study on Stock Position in Equity Market
between SBI &ICICI BANK”.
CARRIED OUT IN

Arcadia Share & Stock Brokers Pvt. Ltd.

Raipur (C.G)
BY
HEMA

Submitted in the partial fulfilment of the requirement of the

DISHA SCHOOL OF MANAGEMENT, Raipur (C.G.)

 A
SUMMER INTERNSHIP PROJECT
ON
Submitted for partial fulfilment of requirement for the award of degree
Of
Post Graduate Diploma in Management (PGDM)
Of
DISHA SCHOOL OF MANAGEMENT, Raipur (C.G.)

Session 2009-11
PROJECT GUIDE: INTERNAL GUIDE:
MR. PALASH BISHWAS PROF. S. BHATTACHARYA
Zonal Head Faculty of Management
Arcadia share & broker Pvt. Ltd. DSM, Raipur

Submitted by:

HEMA
0908015

DEPARTMENT OF MANAGEMENT

DISHA SCHOOL OF MANAGEMENT

AICTE Approved, Ministry of HRD Government of India (Disha Education Society)

Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud, Raipur (C.G.)492007

“No good work flows without the help from Faculty Members, Industry
Professionals, Colleagues, Organization and Friends.”

ACKNOWLEDGEMENT
Summer Internship is a nurturing period which is indispensable for joining any
company. On the voyage of learning I came across many hurdles but each hurdle
was a good experience for me. At each step of my training, my mentor gave me
full support which helped me in carrying positive attitude whenever I faced any
problem.

Firstly, I take this opportunity to thank………………….. who has always stood

by me and encouraged me to embark on the path of learning.

I wish to convey my special thanks to………………………, my company project

guide Mr. Mahesh Khelwani (Branch Manager) and all employees who have
helped me directly or indirectly in my difficulties at Arcadia Share & Stock Pvt.
ltd., Area Office, Durg. who have been a constant source of inspiration and
encouragement to me.

I wish to express my deepest and most sincere thanks to my Faculty Guide,

……………. and especially to ……………… and who have continuously guided
me throughout this project.

Last but not the least I would like to thank my fellow management trainees from
Disha School of Management . By interacting with them, I was able to generate
more meaningful ideas that have enabled me to further complete this project
successfully.
ABSTRACT

Banking Sector in India is one of the growing sectors with great dynamics. There
are various factors which affect the stock position and share prices of Banking
Companies. This report is all about what was the stock position of banking
companies in the stock market, how various factors (Internal and External) affect
the Banking Sector Share Prices. In this report a detailed analysis of the factors
affecting the share prices and what was the price means the fluctuatation in the
market. For analysis the researcher has taken SBI as Public Sector Company &
ICICI Bank As Private Sector Company.

Here, various internal factors (Bank‟s Profitability, Income, Expenses, and News
about the Bank.) and external factors (Government policies, CRR, Repo Rate,
Reverse Repo Rate, Rules and Regulations.) are considered which affect the prices
of the shares of Bank. Data’s are collected for all the quantifiable factors and for
the rest factors a theoretical explanation is given in detail.

And to know the which banking company has good market position in the market
& why, Researcher has used technical analysis of Companies financial statement,
which include ratio analysis, trend analysis, and graphical analysis etc.
TABLE OF CONTENTS

ACKNOWLEDGEMENT .............................................................................................................

ABSTRACT..................................................................................................................................

INTRODUCTION .........................................................................................................................

STOCK MARKET IN INDIA..............................................................

FACTOR AFFECTING BANKING SECTOR……………………….

OBJECTIVE OF THE STUDY ................................................................................................

PURPOSE, AND SCOPE……………................................................................................

COMPANY PROFILE……………………………………..
STATE BANK OF INDIA…………………………………..
ICICI BANK………………………………………………….

RESEARCH METHEDOLOGY......................................................
introduction
STOCK MARKET IN INDIA

The Indian security market has become one of the most dynamic and efficient
security markets in Asia today. The Indian market now conforms to International
Standards in terms of operating efficiency.

During the latter half of 19th century, shares of companies used to be floated in
India occasionally. There were share brokers in Bombay who assisted in the
floatation of shares of companies. A small group of stock brokers in Bombay
joined together in 1875 to form an association called Native Share & Stockbrokers
Association. The association drew up codes of conduct for brokerage business and
mobilizes private funds for investment in the corporate sector. It was this
association which later became the Bombay Stock Exchange, Mumbai or BSE

Later on in 1894 the brokers of Ahmedabad formed the Ahmedabad Stock

Exchange, the second stock exchange of the country. During the 1900s Kolkata
became another major center of share trading and as a result Kolkata Stock
Exchange was formed in 1908. Later on Chennai Stock Exchange was started in
1920. However, by 1923, it ceased to exist. Then the Madras Stock Exchange was
started in 1937. Three more stock exchanges were established before
independence, at Indore in 1930, at Hyderabad in 1943 and at Delhi in 1947.

Thus along with the increase in number of stock exchanges, the number of listed
companies and the capital of listed companies grown tremendously after 1985
which results into growth and development of stock market in India.

BSE SENSEX
Bombay Stock Exchange Sensitive Index is a value-weighted index composed of
30 stocks started in 01 of January, 1986. It consists of the 30 largest and most
actively traded stocks, representative of various sectors, on the Bombay Stock
Exchange. These companies account for around one-fifth of the market
capitalization of the BSE. The base value of the SENSEX is 100 on April 1, 1979,
and the base year of BSE-SENSEX is 1978-79.
At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and
modify its composition to make sure it reflects current market conditions. The
index is calculated based on a free-float capitalization method; a variation of the
market cap method. Instead of using a company's outstanding shares it uses its
float, or shares that are readily available for trading. The free-float method,
therefore, does not include restricted stocks, such as those held by company
insiders.

The index has increased by over ten times from June 1990 to the present. Using
information from April 1979 onwards, the long-run rate of return on the BSE
SENSEX works out to be 18.6% per annum, which translates to roughly 9% per
annum after compensating for inflation. There are five major indices in BSE,
thirteen sector specific indices and a BSE Dollex Index for dollar prices and
movements.

NSE & NIFTY 50

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock

exchange. It is the largest stock exchange in India in terms of daily turnover and
number of trades, for both equities and derivative trading. Though a number of
other exchanges exist, NSE and the Bombay Stock Exchange are the two most
significant stock exchanges in India and between them are responsible for the vast
majority of share transactions. The NSE's key index is the S&P CNX Nifty, known
as the Nifty, an index of fifty major stocks weighted by market capitalization.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance

companies and other financial intermediaries in India but its ownership and
management operate as separate entities. There are at least 2 foreign investors
NYSE Euro next and Goldman Sachs who have taken a stake in the NSE. As of
2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across
India. In October 2007, the equity market capitalization of the companies listed on
the NSE was US$ 1.46 trillion, making it the second largest stock exchange in
South Asia. NSE is the third largest Stock Exchange in the world in terms of the
number of trades in equities. It is the second fastest growing stock exchange in the
world with a recorded growth of 16.6%.
The Standard & Poor's CRISIL NSE Index 50 or S&P CNX Nifty nicknamed Nifty
50 or simply Nifty, is the leading index for large companies on the National Stock
Exchange of India. The Nifty is a well diversified 50 stock index accounting for 22
sectors of the economy. It is used for a variety of purposes such as benchmarking
fund portfolios, index based derivatives and index funds. There are seven major
Indices in NSE and fifteen sector specific Indices. CNX BANK INDEX or BANK
NIFTY is the index which has 17 banks listed on it and is a separate index to look
upon price movements of bank‟s share prices. A brief account of the same is given
below.

CNX Bank Index

The Indian banking Industry has been undergoing major changes, reflecting a
number of underlying developments. Advancement in communication and
information technology has facilitated growth in internet-banking, ATM Network,
Electronic transfer of funds and quick dissemination of information. Structural
reforms in the banking sector have improved the health of the banking sector. The
reforms recently introduced include the enactment of the Securitization Act to step
up loan recoveries, establishment of asset reconstruction companies, initiatives on
improving recoveries from Non-performing Assets (NPAs) and change in the basis
of income recognition has raised transparency and efficiency in the banking
system. Spurt in treasury income and improvement in loan recoveries has helped
Indian Banks to record better profitability. In order to have a good benchmark of
the Indian banking sector, India Index Service and Product Limited (IISL) has
developed the CNX Bank Index.

CNX Bank Index is an index comprised of the most liquid and large capitalized
Indian Banking stocks. It provides investors and market intermediaries with a
benchmark that captures the capital market performance of Indian Banks. The
index will have 12 stocks from the banking sector which trade on the National
Stock Exchange. The average total traded value for the last six months of CNX
Bank Index stocks is approximately 95.85% of the traded value of the banking
sector. CNX Bank Index stocks represent about 86.06% of the total market
capitalization of the banking sector as on January 30, 2009. The average total
traded value for the last six months of all the CNX Bank Index constituents is
approximately 14.86% of the traded value of all stocks on the NSE. CNX Bank
Index constituents represent about 8.63% of the total market capitalization on
January 30, 2009.
Companies raise funds by issuing equity shares to the public. We have a well
developed equity market in our country for secondary dealing in various securities
of various denominations. We basically have BSE and NSE to see the dealings and
the price fluctuations of these securities. There are several factors like interest
rates, company‟s internal factors, profitability of company, any news about
company, major events of the company, country scenario, political factors,
economical factors, social factors, international events, trends in international
market, investor‟s own mentality, predictions and approach etc.. which affect the
market price of these securities. Thus, my project basically revolves around how
all these factors affect the equity market. The project is based on a descriptive
study of various factors that affect the Indian equity market in various aspects.

FACTORS AFFECTING BANKING SECTOR

Starting off with the project, in the initial phase of SIP, I learnt the basics of the
stock market. As I had to work here in this market for 3.5 months this was the
basic necessity. In that phase I had a nice exposure of how to deal with clients,
how to handle the queries of the investors, it was a practical exposure to learn the
working of the market, how the market moves and all about the corporate culture.
Also I had learnt what factors basically affect the equity market. Then I decided to
limit my project to just Banking Sector, because it is one of the most dynamic
sector and also availability of time was not permitting me to go beyond this. There
are N number of factors which affect the share prices. They can be broadly
classified into two:

 INTERNAL FACTORS

 EXTERNAL FACTORS

INTERNAL FACTORS:

As the name suggests, Internal Factors are those which affect the share prices
internally, i.e. they are internal to the company or more specifically bank. Some of
the major internal factors that affect the share prices of a bank are as follows:
EARNINGS OF THE COMPANY:

How much Profit a company earns acts as a significant factor in price movements.
If the quarterly results are good for a bank, then the price goes up, and if the results
are not good, the investors show no interest in such bank‟s share and thus price
falls. Investors invest money in the companies who earn well and in turn give good
return on investment. Thus, a wealthy and a profitable company have good
investors and thus have positive price movements. Price/Earnings Ratio also gives
us idea about the same.

MARKET CAPITALIZATION:

Generally we commit one mistake that we guess the company‟s worth from the
price of its stock. It is the market capitalization of the company, rather than the
stock price, that is more important when it comes to determining the worth of the
company. We need to multiply the stock price with the total number of outstanding
stocks in the market to get the market capitalization of a company and that is the
worth of the company. Thus, a company or bank with high Market Capitalization
turns out to be more popular among investors. For example, HDFC BANK, ICICI
BANK and SBI are more popular among investors than other banks because they
have huge market share and market capitalization. As market capitalization
increases, the share price tends to increase and as market capitalization decreases,
the share price tends to decrease.

PRICE/EARNINGS RATIO:

Price/Earnings ratio or the P/E ratio gives us a fair idea of how a company's share
price compares to its earnings. If the price of the share is too much lower than the
earning of the company, the stock is undervalued and it has the potential to rise in
the near future. On the other hand, if the price is way too much higher than the
actual earning of the company and then the stock is said to overvalued and the
price can fall at any point. The earnings also have a direct relation with price which
is already explained above.
INTERNAL AFFAIRS OF THE COMPANY:

Any happening inside the company or any internal news does affect its share price.
For example any key person moving out of the company, acquisition or takeover or
merger news, share split, employee strike and any other thing internal to the affairs
of the bank affects the share price. A positive note from the internal affairs takes
the price to new highs and a negative does vice versa.

INTERST RATES:

Interest rates play a major role in determining stock market trends. Bull markets
(those in an upward market) are usually associated with low interest rates and high
Capital Gains, and bear markets (those in a downward trend) with high interest
rates and low Capital gains. Interest rates are determined by the demand for capital
– pushes them up and normally indicates that the economy is thriving and that
shares probably expensive. Low interest indicate low demand for capital, thus
liquidity builds up on the economy, driving share price down. Other interest rates
like that of on Deposits and Borrowings also have impact on share prices.

OTHER FACTORS:

Other factors like Growth of the company, figures of deposits, advances, balance
sheet, Profit and Loss Account, etc.. also affect the share prices drastically. A
discussion for the same is done in later part of the report

EXTERNAL FACTORS:

After studying the internal factors, lets take a look at some External Factors which
affect the Share Prices.

SENTIMENTS:

Investor sentiment is almost impossible to predict and can be infuriating if, for
example, you have bought shares in a company that you think is a good „buy‟ but
the price remains flat. Investor sentiment is influenced by a wide variety of factors.
Share prices can, for example, be flat during the summer simply because so many
major investors are on holiday or attending major sporting events such as Royal
Ascot and Wimbledon, hence the adage „sell in May and go away‟. Investor
sentiment can lead to irrational buying or selling of shares and result in bull and
bear markets. A bull market is when share prices rise while a bear market is when
they fall. In the technology boom of the late 1990s, for example, investors paid
extremely high prices for shares and ignored traditional valuation measures, such
as P/E ratios. This carried on until 2000 when investors belatedly realized these
shares has risen too far and resulted in a three year bear market in shares. Thus,
Sentiments of investors affect the share prices a lot and this is something
unpredictable and immeasurable factor, but still the most important one.

COMPANY NEWS and OTHER NEWS:

The way investors interpret news coming out of companies is also a major
influence on share prices. If, for example, a company puts out a warning that
business conditions are tough, shares will often drop in value. If, however, a
director buys shares in the firm, it may be a signal that the company‟s prospects
are improving.

Companies put out a great deal of news and most of the major announcements are
covered by the financial press. But some announcements not regarded as so
important and sometimes, particularly among smaller firms that are monitored less
by investors and financial journalists, indicators of the company‟s health can be
missed. Takeovers or even rumors of takeovers also have a big influence on prices.
This is because investors expect the bidder to pay a premium to shareholders. Also
any other news or speculation about factors like change in Repo Rate, Cash
Reserve Ratio, Reverse Repo Rate, any change or likely change in the policies of
government or RBI or SEBI, any new guidelines issued by the concerned
authority, etc. affect the price of the share.
A positive news in any of these respects leads to a rise in price and a negative
takes it to the other side. Thus, news in any respect is undoubtedly a huge factor
when it comes to stock price. Positive news about a company can increase buying
interest in the market while a negative press release can ruin the prospect of a
stock. Having said that, we must always remember that often times, despite
amazingly good news, a stock can show least movement. It is the overall
performance of the company that matters more than news. It is always wise to take
a wait and watch policy in a volatile market or when there is mixed reaction about
a particular stock.
DEMAND AND SUPPLY:

This fundamental rule of economics holds good for the equity market as well. The
price is directly affected by the trend of stock market trading. When more people
are buying a certain stock, the price of that stock increases and when more people
are selling the stock, the price of that particular stock falls. Now it is difficult to
predict the trend. Thus, we should be very careful while dealing in stocks as
buying or selling pressure may lead to steep rise or fall in price of the shares.

ANALYSTS’ REPORTS:

Reports produced by independent analysts also influence share prices. If an

analyst changes their recommendation from „sell‟ to „buy‟, for example, the
shares will often rise in value. Analysts‟ reports are produced primarily by
investment banks for professional investors, although some stockbrokers will make
their research available to private investors. We may find summaries of some
reports published on financial news websites or in newspapers and magazines.
Some investment banks also publish their reports on their websites for free. We
should remember that the recommendation an analyst puts on a company will
affect its share price very quickly and can become irrelevant within hours. This is
because the analyst will usually say a stock is a „buy‟ within a particular price
range. If the price moves above their targets the improvements the analyst expects
may be „priced in‟ and so the shares are not worth buying
But analysts‟ reports are always worth reading, even if the recommendation is out
of date. The reports usually contain a great deal of useful information on the
company and how its business is developing. They also often look at how the
company rates against its competitors.

THE ECONOMY:

The health of the global economy has a fundamental influence on share prices
because it is ultimately responsible for driving company profits. Broadly speaking,
if the economy is growing, company profits improve and shares will become more
highly valued. If the economy is weakening, company profits will fall and share
prices will go down. Investors look at a vast amount of data to try and work out
what is going to happen to the economy and shift their portfolios before the events
occur. This is why we will often see markets move well ahead of an actual event
occurring. For example, we could get little reaction from the stock market when
interest rates rise. This is because investors have already anticipated the shift
months in advance and adjusted their portfolios beforehand. We can usually
assume that the stock market will anticipate moves in the economy by around six
to nine months. So if we want to stay ahead of the game we need to follow
economic data as closely as the professionals. The kind of information we need to
play close attention to is: employment data, the reports put out by the Monetary
Policy Committee (to get an idea where interest rates are headed), trade with other
countries, retail sales and manufacturing. Sentiment surveys produced by trade
bodies such as the Confederation of British Industry are also important indicators
of where the economy is heading.
It is not only news about the US and UK economy that will impact on share prices.
The signals coming out of other major economies, particularly the US and UK‟s
major trading partners, such as the Europe and Asia will also affect US and UK
shares as what happens in these economies will have an impact on our own. When
looking at economic data, we need to think not only how the wider economy will
be affected but whether certain areas will be more affected than others. A rise in
interest rates is, for example, often bad news for house builders as people feel less
confident about taking on debt. Retailers are often badly affected too as people
spend less. Pharmaceutical companies are, however, usually unaffected as people‟s
demand for drugs is not influenced by the state of the economy. Companies whose
profits are closely tied to the health of the economy are known as cyclical‟ stocks.
Those businesses that aren‟t too affected by the economy are called „defensive‟
stocks. If economic conditions deteriorate you will often see investors shift from
cyclical stocks to defensives. Thus, the economic health of an Economy affects the
Share Prices.

PRESS and BROKING HOUSE RECOMMENDATIONS:

The financial pages of most national newspapers and investment magazines

usually contain share tips. Like analysts‟ reports these tips can have a major
influence on share prices. If a journalist recommends a share, the price will usually
rise and if they write a negative story the price will fall. These moves usually
happen very quickly so if we follow the recommendation it often makes sense to
do so as soon as possible. The Broking House also recommends BUY or SELL for
particular shares based on their own research analysis. They display these
recommendations in leading media such as Television and News Papers. Thus,
these recommendations affect the price of shares and lead the market in the
direction these recommendations take.
TECHNICAL INFLUENCES:

Share prices can rise and fall for a variety of technical reasons that may have
nothing to do with the actual outlook for an individual company or the outlook for
the market. It is, for example, a common occurrence for share prices to drop back
after a strong rally. This happens because investors take profits on some of the
shares that have risen in value, protecting their gains just in case the shares start to
slip back. Investors often refer to this as market consolidation. Another technical
reason for share prices to rise or fall is the quarterly adjustment in the FTSE 100™
index. Shares that are expected to enter the FTSE 100™ may experience a sharper
rise than one would expect in the weeks beforehand while shares that leave the
index can fall more sharply. This happens because funds that simply track the
index have to match the composition of the index. Some professional fund
managers who hold the affected stocks also adjust their portfolios as they do not
want their holding to be too far above or below the company‟s weighting in the
index. Share prices can also be affected by investors who use technical analysis to
drive their investment techniques. Technical analysis, also known as Chartism, is
simply the study of past share price movements and stock market index trends,
which are then used to forecast how shares and stock markets will behave in future.
Market makers can also influence prices. If they, for example, do not own enough
shares to balance their books they will have to buy more. Market makers also
influence prices if the market is looking flat, reducing prices to attract buyers.
Thus, technical reasons can also be a cause for the rise or fall in the prices of
shares.

OTHER FACTORS:

Some other factors which influence share prices are as follows

Change in Rates by RBI:

Looking at the changing scenario, RBI keeps on changing rates like Repo Rate,
Reverse Repo Rate and Cash Reserve Ratio. These rates have a direct relation with
the Bank‟s performance and in turn the share prices are linked with Bank‟s
Performance. Thus, a change in these rates or even a speculation of change in these
rates affects share prices.
Global Changes:

Any change in the global economy or in other words global changes also affects
Indian economy. Thus, the performance of an economy and its banks is affected by
these global changes. For example: The recession was first observed in the USA
and later on it caught its lead in other countries too. When it entered India, the
share market crashed literally. So, a careful and logical investor always keeps this
in mind that what global changes affect the market and thus leads to rise or fall in
share prices.

Change in Government Policies:

Keeping in mind the progress and well wishes about the country, the government
takes desired steps and keeps on reviewing its policies, rules and regulations and
procedures. A change in FDI and FII inflow restrictions, entry exit barriers for
foreign banks in India, EXIM regulations, change in Basel Norms, etc form part of
important government policies. Thus, a change in these policies affects the market
scenario. For example: if government allows entry of foreign Banks in India, then
the competition would rise and it might happen that those foreign Banks may
outperform and leave our own banks far behind. Then in this case, the investors
would be interested in investing in those foreign Banks and a government would
never like that the funds are invested in some foreign banks rather than our own
banks. Thus, some restriction would follow and this will definitely affect the share
prices.
OBJECTIVE OF STUDY
OBJECTIVE OF STUDY

The objective of the project is to identify, understand and analyze the BANKING
SECTOR and its stock position in the Indian Equity Market. The main focus will
be on understanding, analyzing and providing a valid explanation both
theoretically and technically, that what is the current market position of public
sector bank and private sector bank and there share price in the equity market.

By undertaking this study Researcher would like to keep her first step in the field
of research. This project will help her in enhancing her analytical skills and will
give her a better understanding of how things move on and are to be studied. At the
same time with this study Researcher will be providing the organization a list of
factors that affect the market, so that they can keep a watch on the same and use
the same for the benefit of clients and company and also increase their accuracy
and profits. This will be my contribution to this huge company.

PURPOSE
The PURPOSE of the report is to analyze how they retain with good market
position in stock market .To identify the banks stock position in the market it is
very essential to know the how The share prices are highly affected by various
internal and external factors. It is of great importance to understand, learn and
analyze the same. Thus, this report is a move in path of understanding those factors
and analyzing the impact of the same.

Banks are a major part of any economic system. They provide a strong base to
Indian economy too. Even in share markets, the performance of bank shares is of
great importance. This is justified by the proof that in both BSE and NSE we have
separate index for Banking Sector Shares. But for our study we have taken only
Bank Nifty which is a part of NSE. Thus, the performance of share market, the rise
and the fall of market is greatly affected by the performance of Banking Sector
Shares and this report revolves around all those factors, their understanding and a
theoretical and technical analysis of the same.

SCOPE OF STUDY

 It gave an opportunity to study the banking sector in a detailed manner.

 Researcher got knowledge of prevailing Market Scenario.

 It helped to researcher in learning the market dynamics, study the movement

of share prices and to give a proper justification for the same, theoretically
and technically.

 It helped to researcher in understanding and learning the corporate culture

 And above all, the concerned organization can get some valuable
recommendations, which can definitely improve the performance of the
organization.
COMPANY PROFILE
State Bank of India
State Bank of India is the largest banking and financial services company in India, by almost
every parameter - revenues, profits, assets, market capitalization etc. The bank traces its ancestry
to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of
Calcutta, making it the oldest commercial bank in the Indian Subcontinent. The Government of
India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a
60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stake
held by the Reserve Bank of India.

SBI provides a range of banking products through its vast network in India and overseas,
including products aimed at NRIs. The State Bank Group, with over 16000 branches, has the
largest branch network in India. With an asset base of $260 billion and $195 billion in deposits,
it is a regional banking behemoth. It has a market share among Indian commercial banks of
about 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation's loans.

SBI has tried to reduce over-staffing by computerizing operations and "golden handshake"
schemes that led to a flight of its best and brightest managers. These managers took the
retirement allowances and then went on to become senior managers in new private sector banks.

The State bank of India is the 29th most reputed company in the world according to Forbes.

State Bank of India is the largest of the Big Four Banks of India, along with ICICI Bank, Axis
Bank and HDFC Bank — its main competitors.

International presence
The bank has 131 overseas offices spread over 32 countries as on 31st Dec 2009. It has branches
of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs,
Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It has
offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in
Bhutan and Cape Town.

SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank,
State Bank of India (Mauritius).

In 1982, the bank established a subsidiary, State Bank of India (California), which now has eight
branches - seven branches in the state of California and one in Washington DC that it opened on
23 November 2009. The seven branches in California are located in Los Angeles, Artesia, San
Jose, Canoga Park, Fresno, San Diego and Bakersfield.

The Canadian subsidiary, State Bank of India (Canada) too dates to 1982. It has seven branches,
four in the greater Toronto area and three in British Columbia.

In Nigeria SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant
Bank and received permission in 2002 to commence retail banking. It now has five branches in
Nigeria.

In Nepal, SBI owns 50% of Nepal SBI Bank, which has branches throughout the country. In
Moscow SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In
Indonesia it owns 76% of PT Bank Indo Monex.

State Bank of India already has a branch in Shanghai and plans to open one up in Tianjin.

Associate banks
 State Bank of Indore
 State Bank of Bikaner & Jaipur
 State Bank of Hyderabad
 State Bank of Mysore
 State Bank of Patiala
 State Bank of Travancore

Group companies
 SBI Capital Markets Ltd
 SBI Mutual Fund (A Trust)
 SBI Factors and Commercial Services Ltd
 SBI DFHI Ltd
 SBI Cards and Payment Services Pvt Ltd
 SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)
 SBI Funds Management Pvt Ltd
 SBI Canada

Branches of SBI
 SBI has 21000 ATMs.
 SBI has 26500 branches, inclusive of branches that belong to its Associate banks.
 SBI alone has 18500 branches.
 SBI is the only bank consisting 26% participation in public sector banks and 39%
participation in commercial banks in India.
ICICI Bank
ICICI Bank (Industrial Credit and Investment Corporation of India) is a major banking and
financial services organization in India. It is the 4th largest bank in India and the largest private
sector bank in India by market capitalization. The bank also has a network of 1,700+ branches
(as on 31 March 2010) and about 4,721 ATMs in India and presence in 19 countries, as well as
some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and specialization subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank
is also the largest issuer of credit cards in India. ICICI Bank's shares are listed on the stock
exchanges at Kolkata and Vadodara, Mumbai and the National Stock Exchange of India Limited;
its ADRs trade on the New York Stock Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest international balance sheet among
Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representatives
offices in 19 countries, including an offshore unit in Mumbai. This includes wholly owned
subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savings
brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in
Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in
Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and
USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total
income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank's CASA
ratio increased to 30% in 2008 from 25% in 2007

ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Axis Bank
and HDFC Bank — its main competitors.

Acquisition of Bank of Rajashthan

On 23 May ICICI Bank announced merger with Bank of Rajasthan with it through share-swap in
a non-cash deal that values the Bank of Rajasthan at about Rs 3,000 crore. Each 118 shares of
Bank of Rajasthan will be converted into 25 shares of ICICI. It is said that this merger will also
expand ICICI Bank's branch network by 25%.
AN OVERVIEW:-
State bank of india Icici bank
Industry Banking, financial service Banking, financial service
Founded 1806 (culcutta) 1955
Headquarters Mumbai, Maharashtra, India Mumbai, Maharashtra, India
Key people o. p. Bhatt K.V.Kamath, Chanda Kochar, N.S.
Kannan
product Investment Banking, Consumer Investment Banking, Commercial
Banking, Commercial Banking Banking, Retail Banking, Private
Retail Banking, Private Banking Banking, Asset Management
Asset Management, Pensions Mortgages, Credit Cards
Mortgages, Credit Cards
Revenue Rs 113,535.99 crore (US$ 24.18 Rs 59,599.77 crore (US$ 12.69
billion) (2009) billion) (2009)
Profit Rs 10,998 crore (US$ 2.34 billion) Rs 4,843.41 crore (US$ 1.03
(2009) billion) (2009)

Research Methodology

To study, the first and the foremost requirement was to decide the boundaries of
study. As in this short time period a full fledged Analysis of whole market was not
possible so I chose to limit my project to certain boundaries.

Firstly, I decided on the sector to be studied and for that I chose BANKING
SECTOR. The reason being that the Bank stocks have out-performed the Sensex
and Nifty in this fiscal year. This out-performance can be attributed to favorable
macroeconomic conditions and banking sector specific development like quarterly
results and passing of the SBI Amendment Bill that paved the way for its
subsidiaries to list in stock markets.

Bank credits have grown at an average of 30 percent in the past three years led by
housing and retail sectors. Thus, on thus basis I chose Banking Sector*.
For a proper, detailed and valid study, I have chosen SBI as Public Sector Bank &
ICICI Bank as Private Bank. The reason behind choosing these 2 banks is their
huge turnover in the stock market, they have been given the highest weightage and
they serve as top leading banks in the sector. A small report of Market
Capitalization for 31st March, 2009 is also shown here.

Index/Exchang Company Close Price Mkt. Cap. in Rs Weightage

e Name Mn
CNX BANK Axis Bank Ltd. 414.95 148969.17 6.65
INDEX
CNX BANK Bank of Baroda 234.35 85365.83 3.81
INDEX
CNX BANK Bank of India 219.4 115222.91 5.14
INDEX
CNX BANK Canara Bank 165.7 67937 3.03
INDEX
CNX BANK HDFC Bank 973.4 414062.52 18.47
INDEX Ltd.
CNX BANK ICICI Bank Ltd. 332.8 370343.67 16.52
INDEX
CNX BANK IDBI Bank Ltd. 45.4 32902.6 1.47
INDEX
CNX BANK Kotak 282.2 97547.75 4.35
INDEX Mahindra Bank
Ltd.
CNX BANK Oriental Bank 110.1 27584.42 1.23
INDEX of Commerce
CNX BANK Punjab 411.45 129731.21 5.79
INDEX National Bank
CNX BANK State Bank of 1067.1 677480.68 30.23
INDEX India
CNX BANK Union Bank of 146.85 74176.56 3.31
INDEX India
TOTAL 2241324.34 100
*source of data:- www.rbi.org.in

*Source of data:- nseindia.com