A

PROJECT REPORT
ON
CAPITAL MARKET
AT
RELIGARE SECURITIES LTD
BY
THAKUR AMRITHA SINGH
H.T. NO: 1422-19-672-173
Submitted in partial fulfilment of the requirement for the award of the

MASTER OF BUSINESS ADMINISTRATION

(2019-2021)

DEPARTMENT OF BUSINESS ADMINISTRATION

CSI INSTITUE OF PG STUDIES

(Affiliated to Osmania University)
EAST MARREDPALLY, SECUNDERABAD
 DECLARATION

I THAKUR AMRITHA SINGH , hereby declare that the project report entitled “

CAPITAL MARKET AT RELIGARE SECURITIES LTD is my original work written

and

submitted by me in partial fulfillment of Master of Business Administration of CSI

INSTITUE OF PG STUDIES, OU, HYDERABAD. I also declare that this project has not

been submitted

earlier in any other university or institution.

THAKUR AMRITHA
SINGH
Date: 1422-19-672-173
 ACKNOWLEDGEMENT

I take this opportunity to extend my profound thanks and deep sense of gratitude to

the authorities of RELIGARE SECURITIES LTD for giving me the opportunity to

undertake this project work in their esteemed organization. I profusely thanks to Honorable

Mr. A.GIRIDHAR(Asst. Manager)

My sincere thanks to the respected Dr. PREETHI CHRYSOLITE, Principal and my

project Dr. P. SUHASINI HOD and my internal guide Mrs. N. ARCHANA for the kind

encouragement and constant support extended in completion of this project work.

I am also thankful to all those who have incidentally helped me through their valued

guidance, co-operation and unstinted support during the course of my project work.

THAKUR AMRITHA SINGH

H.T. NO: 1422-19-672-173

 ABSTRACT
Capital is one of the important factors of production in any economy.
In economy, a well organized financial system provides adequate
capital formation through savings, finance and investments . An
investment depends upon Savings and in turn Savings depends upon
earnings of an individual or profits of the organization. This system
may be viewed as a set of sub-systems with so many elements which
are interdependent and interlinking with each other to produce the
purposeful result with in the boundary.
Hence, the term system in the context of finance means a set of
complex and closely connected financial institutions, instruments,
agents, markets and so on which are interdependent and interlinking
with each other to produce the economic growth with in the country.
Transfer process is effectively fulfilled by the financial system to
facilitate economic growth through the channel of finance. This study
aims at analysing the
structure and functions of Capital Market in India.
 INDEX
S.No CHAPTER Page No
1 CHAPTER - I 01-04
INTRODUCTION
NEED OF THE STUDY
SCOPE OF THE STUDY
OBJECTIVES OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY
2 CHAPTER - II 05-56
s REVIEW OF LITERATURE
3 CHAPTER - III 57-83
INDUSTRY PROFILE
COMPANY PROFILE
4 CHAPTER - IV 84-94
DATA ANALYSIS &INTERPRETATION
5 CHAPTER - V 95-97
FINDINGS
SUGGESTIONS
CONCLUSION
BIBLIOGRAPHY 98

LIST OF TABLES

TABLE PAGE
PARTICULARS
NO NO
 4.1 STOCK PRICE OF RELIGARE SECURITIES LTD 85
4.2 STOCK PRICE OF FEDBANK 87

4.3 STOCK PRICE OF ADANIENTE 89

4.4 STOCK PRICE OF UNITECH 92

LIST OF CHARTS

GRAPH PAGE
PARTICULARS
NO NO
 4.1 CHARTS OF RELIGARE SECURITIES LTD 86
4.2 CHARTS OF FEDBANK 88

4.3 CHARTS OF ADANIENTE 90

4.4 CHARTS OF UNITECH 94

INTRODUCTION
A capital market is a market for securities (debt or equity), where
business enterprises (companies) and governments can raise long-term funds. It is
defined as a market in which money is provided for periods longer than a year, as the
raising of short-term funds takes place on other markets (e.g., the money market). The
capital market includes the stock market (equity securities) and the bond market
(debt). Financial regulators, such as the UK's Financial Services Authority (FSA) or
the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in
their designated jurisdictions to ensure that investors are protected against fraud,
among other duties.

Capital markets may be classified as primary markets and secondary markets. In

primary markets, new stock or bond issues are sold to investors via a mechanism
known as underwriting. In the secondary markets, existing securities are sold and
bought among investors or traders, usually on a securities exchange, over-the-counter,
or elsewhere.

The Capital market is a market for financial assets which have a long or
indefinite maturity. Generally, it deals with long term securities which have a
maturity period of above one year. Capital market may be further divided into three
types i.e., Industrial securities market, Government securities market and Long term
loans market. Industrial securities market is further divided into two types i.e.,
primary market or new issue market and secondary market or stock exchange.
Government securities market is also called as GiltEdged securities market. It is the
market where Government securities are traded. Long term loans market is divided
into three types Term loans market, Mortgages market and financial guarantees
market.
Absence of capital market instruments acts as a deterrent to capital formation and
economic growth. Resources would remain idle if finances are not funneled through
the capital market. The capital market instruments serves as an important source for
the productive use of the economy’s savings. It mobilizes the savings of the peoples
for further investment and thus avoids their wastage in unproductive uses. It provides
incentives to saving and facilitates capital formation by offering suitable rates of
interest as the price of capital. It provides an avenue for investors, particularly the
household sector to invest in financial assets which are more productive than physical
assets. It facilitates increase in production and productivity in the economy and thus,
enhances the economic welfare of the society.
A capital market is a market for securities (debt or equity), where business
enterprises (companies) and governments can raise long-term funds. It is defined as a
market in which money is provided for periods longer than a year, as the raising of
short-term funds takes place on other markets (e.g., the money market). The capital
market includes the stock market (equity securities) and the bond market (debt).
Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S.
Securities and Exchange Commission (SEC), oversee the capital markets in their
designated jurisdictions to ensure that investors are protected against fraud, among
other duties.

Capital markets may be classified as primary markets and secondary markets. In

primary markets, new stock or bond issues are sold to investors via a mechanism
known as underwriting. In the secondary markets, existing securities are sold and
bought among investors or traders, usually on a securities exchange, over-the-counter,
or elsewhere.

A market is any one of a variety of different systems, institutions, procedures, social

relations and infrastructures whereby persons trade, and goods and services are
exchanged, forming part of the economy. It is an arrangement that allows buyers and
sellers to exchange things. Markets vary in size, range, geographic scale, location,
types and variety of human communities, as well as the types of goods and services
traded. Some examples include local farmers’ markets held in town squares or
parking lots, shopping centers and shopping malls, international currency and
commodity markets, legally created markets such as for pollution permits, and illegal
markets such as the market for illicit drugs.In mainstream economics, the concept of a
market is any structure that allows buyers and sellers to exchange any type of goods,
services and information. The exchange of goods or services for money is a
transaction. Market participants consist of all the buyers and sellers of a good who
influence its price. This influence is a major study of economics and has given rise to
several theories and models concerning the basic market forces of supply and
demand. There are two roles in markets, buyers and sellers. The market facilitates
trade and enables the distribution and allocation of resources in a society. Markets
allow any tradable item to be evaluated and priced. A market emerges more or less
spontaneously or is constructed deliberately by human interaction in order to enable
the exchange of rights (cf. ownership) of services and goods.

Historically, markets originated in physical marketplaces which would often develop

into — or from — small communities, towns and cities.
OBJECTIVES OF THE STUDY

 To study about the Capital Market Instruments.

 To study about Dematerialization or Demit in the stock exchange for easy
transfer and error prone system.
 To study about the latest and future developments is the stock exchange
system.
 To study about recent development in derivatives market.

NEEDS & IMPORTANCE OF STUDY

Capital market deals with long term funds. These funds are subject to uncertainty and
risk. It supplies long term funds and medium term funds to the corporate sector. It
provides the mechanism for facilitating capital fund transactions. It deals with
ordinary shares, debentures and stocks and securities of the governments. In this
market the funds flow will come from savers. It converts financial assets in to
productive physical assets. It provides incentives to savers in the form of interest or
dividend to the investors.

SCOPE OF THE STUDY

The current study involves a variety of work in economics, accounting and finance in
this. Valuation of stocks and functions of the stock markets, valuation of bonds
convertible debentures and market for debt, issue market and merchant banking,
market efficiency, dividends, bonus and right issues rates of return and regulations.
 RESEARCH & METHODOLOGY
The data collection methods include both the Primary and Secondary Collection
methods.

Primary Collection Methods:

This method includes the data collected from the personal discussions with the
authorized clerks and members of the Exchange.
Secondary method: The secondary data collection method includes:

• Websites
• Journals
• Text books
Method Used For Analysis of Study
The methodology used for this purpose is Survey and Questionnaire Method. It is a
time consuming and expensive method and requires more administrative planning and
supervision.
It is also subjective to interviewer bias or distortion.
Sample Size: 100 respondents
Sampling Unit: Businessmen, Government Servant, Retired Individuals
Tools and techniques:
The SPV, also known as a SPRV or a SPE, is not owned by the issuing insurance
company; it is an off-balance sheet entity specifically created to act as a no admitted
reinsurer providing reinsurance to the issuer. All SPVs are located offshore for this
reason. However, a number of onshore captive domiciles have legislation permitting
the establishment of what are called Special Purpose Financial Captives (SPFC). A
SPFC can fulfill the role of the offshore SPV. Vermont and South Carolina allow
SPFCs.
The SPV requires a financial vehicle into which it deposits the investor funds, so a
trust is established for that purpose.
LIMITATIONS OF THE STUDY

 Forty five days were insufficient to go on with the study. since the time
constraint was not enough.

 Most of the implementation and strategies studied were not properly used.

 Improper communication channel with speculators.

 A small difference makes feel difficult about theory and practices.

 An improper absence of information about technology.

 CHAPTER –
II
REVIEW OF LITERATURE
REVIEW OF LITERATURE

There has been a wide range of studies concerning financial sector reforms in
general, and capital market reforms in particular, since mid 2080s in India. This
section highlights certain important studies that are context relevant. Several studies
such as Sahni (2085), Kothari (2086), Mookerjee (2088), Lal (2090), Chandra
(2090),

Franscis (2091), Ramesh Gupta (2091,2092), Raghunathan (2091), Varma (2091),

Gupta (2092), and Sinha (2093) comment upon the Indian capital market in general
and trading systems in the stock exchanges in particular and suggest that the systems
therein are rather antiquated and inefficient, and suffer from major weakness and
malpractices. According to most of these studies, significant reforms are required if
the stock exchanges are to be geared up to the envisaged growth in the Indian capital
market.

Baruaet al (2094) undertakes a comprehensive assessment of the private corporate

debt market, the public sector bond market, the govt. securities market, the housing
finance and other debt markets in India. This provides a diagnostic study of

the state of the Indian debt market, recommending necessary measures for the
development of the secondary market for debt. It highlights the need to integrate the
regulated debt market with the free debt market, the necessity for market making for
financing and hedging options and interest rate derivatives, and tax reforms.

Cho (2098) points out the reasons for which reforms were made in Indian capital
market stating the after reform developments. Shah (2099) describes the financial
sector reforms in India as an attempt at developing financial markets as an alternative
vehicle determining the allocation of capital in the economy.

Shah and Thomas (2003) review the changes which took place on India’s equity
and debt markets in the decade of the 2090s. This has focused on the importance of
crises as a mechanism for obtaining reforms.
Mohan (2004) provides the rationale of financial sector reforms in India, policy
reforms in the financial sector, and the outcomes of the financial sector reform
process in some detail.

Shirai (2004) examines the impact of financial and capital market reforms on
corporate finance in India. India’s financial and capital market reforms since the
early 2090s have had a positive impact on both the banking sector and capital
markets. Nevertheless, the capital markets remain shallow, particularly when it
comes to differentiating high-quality firms from low-quality ones (and thus lowering
capital costs for the former compared with the latter). While some high-quality firms
(e.g., large firms) have substituted bond finance for bank loans, this has not occurred
to any significant degree for many other types of firms (e.g., old, export-oriented
and commercial paper-issuing ones). This reflects the fact that most bonds are
privately placed, exempting issuers from the stringent accounting and disclosure
requirements necessary for public issues. As a result, banks remain major financiers
for both high- and low-quality firms. The paper argues that India should build an
infrastructure that will foster sound capital markets and strengthen banks’ incentives
for better risk management.

Chakrabarti and Mohanty (2005) discuss how capital market in India is evolved in the
reform period. Thomas (2005) explains the financial sector reforms in India with
stories of success as well as failure.

Bajpai (2006) concludes that the capital market in India has gone through various
stages of liberalization, bringing about fundamental and structural changes in the
market design and operation, resulting in broader investment choices, drastic
reduction in transaction costs, and efficiency, transparency and safety as also
increased integration with the global markets. The opening up of the economy for
investment and trade, the dismantling of administered interest and exchange rates
regimes and setting up of sound regulatory institutions have enabled time.

Gurumurthy (2006) arrives at the conclusion that the achievements in the financial
sector indicate that the financial sector could become competitive without involving
unhealthy competition, within the constraints imposed by the macro- economic policy
stance.
Mohan (2007) reviews India’s approach to financial sector reforms that set in process
since early 2090s. Allen, Chakrabarti, and De (2007) concludes that with recent
growth rates among large countries second only to China’s, India has experienced
nothing short of an economic transformation since the liberalisation process began in
the early 2090s.

Chhaochharia (2008) arrives at the conclusion that India has a more modern financial
and banking system than China that allocates capital in a more efficient manner.
However, the study is skeptical about who would emerge with the stronger capital
market, as both the country is facing challenges regarding their capital markets.
Prasad and Rajan (2008) argues that the time has come to make a more concerted
push toward the next generation of financial reforms. The study advocates that a
growing and increasingly complex market-oriented economy and its greater
integration with global trade and finance will require deeper, more efficient, and
well- regulated financial markets.

The survey and review of literature about the financial sector reforms in India
reveals that the reforms have been pursued vigorously and the results of the reforms
have brought about improved efficiency and transparency in the financial sector.
The reforms also brought into inter-linkage of financial markets across the globe
leading to new product development and sophisticated risk management tools.
Derivatives in general perform as an instrument to hedge the risk arising from
movement in prices not only in commodity markets but also in securities market.

Bose, Suchismita conducted research on (2006) found that Derivatives products

provide certain important economic benefits such as risk management or
redistribution of risk away from risk-averse investors towards those more willing and
able to bear risk. Derivatives also help price discovery, i.e. the process of
determining the price level for any asset based on supply and demand. These
functions of derivatives help in efficient capital allocation in the economy. At the
same time their misuse also poses threat to the stability of the financial sector and the
overall economy.

Routledge, Bryan and Zin, Stanley E of Carnegie Mellon University conducted

research on “Model Uncertainty and Liquidity” in year 2001. Extreme market
outcomes are often followed by a lack of liquidity and a lack of trade. This market
collapse seems particularly acute for markets where traders rely heavily on a specific
empirical model such as in derivative markets.

Sen Shankar Som and Ghosh Santanu Kumar (2006) studied the relationship between
stock market liquidity and volatility and risk. The paper also deals with time series
data by applying “Cochrane Orchutt two step procedures”. An effort has been made to
establish a relation between liquidity and volatility in their paper. It has been found
that there is a statistically significant negative relationship between risk and stock
market liquidity. Finally it is concluded that there is no significant relationship
between liquidity and trading activity in terms of turnover.

Shenbagraman (2004) reviewed the role of some non-price variables such as open
interests, trading volume and other factors, in the stock option market for determining
the price of underlying shares in cash market. The study covered stock option
contracts for four months from Nov. 2002 to Feb. 2003 consisting 77 trading

days. The study concluded that net open interest of stock option is one of the
significant variables in determining future spot price of underlying share. The
results clearly indicated that open interest based predictors are statistically more
significant than volume based predictors in Indian context.

All the existing studies found that the Equity return has a significant and
positive impact on the FII (Agarwal, 2097; Chakrabarti, 2001; and Trivedi & Nair,
2003). But given the huge volume of investments, foreign investors could play a
role of market makers and book their profits i.e., they can buy financial assets when
the prices are declining thereby jacking-up the asset prices and sell when the asset
prices are increasing (Gordon & Gupta, 2003). Hence, there is a possibility of bi-
directional relationship between FII and the equity returns.

Masih AM, Masih R, (2007), had studied “Global Stock Futures: A Diagstinoc
Analysis of a Selected Emerging and Developed Markets with Special Reference to
India”, by using tools correlation coefficients , granger’s causality test, augmented
Dicky Fuller test (ADF), Elliott, Rothenberg and Stock point optimal test. The
Authors, through this paper, have tried to find out what kind of relationship exists
between emerging and developed futures markets of selected countries.
Kumar, R. and Chandra, A. (2000), had studied that Individuals often invest in
securities based on approximate rule of thumb, not strictly in tune with market
conditions. Their emotions drive their trading behavior, which in turn drives asset
(stock) prices. Investors fall prey to their own mistakes and sometimes other’s
mistakes, referred to as herd behavior. Markets are efficient, increasingly proving a
theoretical concept as in practice they hardly move efficiently. The purely rational
approach is being subsumed by a broader approach based upon the trading sentiments
of investors. The present paper documents the role of emotional biases towards
investment (or disinvestment) decisions of individuals, which in turn force stock
prices to move.

Srivastava, S., Yadav, S. S., Jain, P. K. (2008), had conducted a survey of brokers in
the recently introduced derivatives markets in India to examine the brokers’
assessment of
market activity and their perception of benefits and costs of derivative
trading. The need for such a study was felt as previous studies relating to the impact
of derivatives securities on Indian Stock market do not cover the perception of market
participants who form an integral part of the functioning of derivatives markets. The
issues covered in the survey included: perception of brokers about the attractiveness
of different derivative securities for clients; profile of clients dealing in derivative
securities; popularity of a particular derivative security out of the total set; different
purposes for which the clients are using these securities in order of preference; issues
concerning derivatives trading; reasons for non usage of derivatives by some
investors.

The investors are using derivative securities for different purposes after its
penetration into the Indian Capital market. They use these securities not only for risk
management and profit enhancement but also for speculation and arbitrage. High net
worth individuals and proprietary traders account for a large proportion of broker
turnover. Interestingly, some retail participation was also witnessed despite the fact
that these securities are beyond the reach of retail investors (because of complexity
and high initial cost).

Naresh, G., (2006), studied the dynamic growth of the Derivatives market,
particularly Futures & Options and the perceived risks to the financial sector
continue to stimulate debate on the proper regulation of these instruments. Even
though this market was initially fuelled by various expert teams survey, regulatory
framework, recommendations byelaws and rules there is still a debate on the
existing regulations such as why is regulation needed?
When and where regulation needed? What are reasonable and attainable goals of
these regulations? Therefore this article critically examines the views of market
participants on the existing regulatory issues in trading Derivative securities in
Indian capital market conditions.

CAPITAL MARKET:
A capital market is a market for securities (debt or equity), where business
enterprises (companies) and governments can raise long-term funds. It is defined as a
market in which money is provided for periods longer than a year, as the raising of
short-term funds takes place on other markets (e.g., the money market). The capital
market includes the stock market (equity securities) and the bond market (debt).
Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S.
Securities and Exchange Commission (SEC), oversee the capital markets in their
designated jurisdictions to ensure that investors are protected against fraud, among
other duties.
Capital markets may be classified as primary markets and secondary markets.
In primary markets, new stock or bond issues are sold to investors via a mechanism
known as underwriting. In the secondary markets, existing securities are sold and
bought among investors or traders, usually on a securities exchange, over-the-counter,
or elsewhere.

INDIAN CAPITAL MARKET

The Indian Capital Market is one of the oldest capital markets in Asia which
evolved around 200 years ago.
 Chronology of the Indian capital markets:

2030s: Trading of corporate shares and stocks in Bank and cotton Presses in Bombay.

2050s: Sharp increase in the capital market brokers owing to the rapid
development of commercial enterprise.

2060-61: Outbreak of the American Civil War and ' Share Mania ' in India.

2094: Formation of the Ahmadabad Shares and Stock Brokers

Association.

2008: Formation of the Calcutta Stock Exchange Association.

A market is any one of a variety of different systems, institutions, procedures, social

relations and infrastructures whereby persons trade, and goods and services are
exchanged, forming part of the economy. It is an arrangement that allows buyers and
sellers to exchange things. Markets vary in size, range, geographic scale, location,
types and variety of human communities, as well as the types of goods and services
traded. Some examples include local farmers’ markets held in town squares or
parking lots, shopping centers and shopping malls, international currency and
commodity markets, legally created markets such as for pollution permits, and illegal
markets such as the market for illicit drugs.

In mainstream economics, the concept of a market is any structure that allows buyers
and sellers to exchange any type of goods, services and information. The exchange of
goods or services for money is a transaction. Market participants consist of all the
buyers and sellers of a good who influence its price. This influence is a major study of
economics and has given rise to several theories and models concerning the basic
market forces of supply and demand. There are two roles in markets, buyers and
sellers. The market facilitates trade and enables the distribution and allocation of
resources in a society. Markets allow any tradable item to be evaluated and priced. A
market emerges more or less spontaneously or is constructed deliberately by human
interaction in order to enable the exchange of rights (cf. ownership) of services and
goods.
Historically, markets originated in physical marketplaces which would often develop
into — or from — small communities, towns and cities.

Types of markets

Although many markets exist in the traditional sense — such as a marketplace

— there are various other types of markets and various organizational structures to
assist their functions. The nature of business transactions could define markets.

Financial markets

Financial markets facilitate the exchange of liquid assets. Most investors prefer
investing in two markets, the stock markets and the bond markets. NYSE, AMEX,
and the NASDAQ are the most common stock markets in the US. Futures markets,
where contracts are exchanged regarding the future delivery of goods are often an
outgrowth of general commodity markets.

Currency markets are used to trade one currency for another, and are often used
for speculation on currency exchange rates.

The money market is the name for the global market for lending and borrowing.

Prediction markets

Prediction markets are a type of speculative market in which the goods

exchanged are futures on the occurrence of certain events. They apply the market
dynamics to facilitate information aggregation.

Organization of markets

A market can be organized as an auction, as a private electronic market, as a

commodity wholesale market, as a shopping center, as a complex institution such as a
stock market, and as an informal discussion between two individuals.
Markets of varying types can spontaneously arise whenever a party has interest in a
good or service that some other party can provide. Hence there can be a market for
cigarettes in correctional facilities, another for chewing gum in a playground, and yet
another for contracts for the future delivery of a commodity. There can be black
markets, where a good is exchanged illegally and virtual markets, such as eBay, in
which buyers and sellers do not physically interact during negotiation. There can also
be markets for goods under a command economy despite pressure to repress them.
Mechanisms of markets

In economics, a market that runs under laissez-faire policies is a free market. It

is "free" in the sense that the government makes no attempt to intervene through
taxes, subsidies, minimum wages, price ceilings, etc. Market prices may be distorted
by a seller or sellers with monopoly power, or a buyer with monophony power. Such
price distortions can have an adverse effect on market participant's welfare and reduce
the efficiency of market outcomes. Also, the level of organization or negotiation
power of buyers, markedly affects the functioning of the market. Markets where price
negotiations meet equilibrium though still do not arrive at desired outcomes for both
sides are said to experience market failure.

Study of markets

The study of actual existing markets made up of persons interacting in space

and place in diverse ways is widely seen as an antidote to abstract and all-
encompassing concepts of “the market” and has historical precedent in the works of
Fernand Braudel and Karl Polanyi. The latter term is now generally used in two ways.
First, to denote the abstract mechanisms whereby supply and demand confront each
other and deals are made. In its place, reference to markets reflects ordinary
experience and the places, processes and institutions in which exchanges occurs.
Second, the market is often used to signify an integrated, all-encompassing and
cohesive capitalist world economy. A widespread trend in economic history and
sociology is skeptical of the idea that it is possible to develop a theory to capture an
essence or unifying thread to markets.. For economic geographers, reference to
regional, local, or commodity specific markets can serve to undermine assumptions of
global integration, and highlight geographic variations in the structures, institutions,
histories, path dependencies, forms of interaction and modes of self-understanding of
agents in different spheres of market exchange Reference to actual markets can show
capitalism not as a totalizing force or completely encompassing mode of economic
activity, but rather as “a set of economic practices scattered over a landscape, rather
than a systemic concentration of power”

C. B. Macpherson identifies an underlying model of the market underlying

AngloAmerican liberal-democratic political economy and philosophy in the
seventeenth and eighteenth centuries: Persons are cast as self-interested individuals,
who enter into contractual relations with other such individuals, concerning the
exchange of goods or personal capacities cast as commodities, with the motive of
maximizing pecuniary interest. The state and its governance systems are cast as
outside of this framework.). This model came to dominant economic thinking in the
later nineteenth century, as economists such as Ricardo, Mill, Jevons, Walras and
later neo-classical economics shifted from reference to geographically located
marketplaces to an abstract “market”. This tradition is continued in contemporary
neoliberalism, where the market is held up as optimal for wealth creation and human
freedom, and the states’ role imagined as minimal, reduced to that of upholding and
keeping stable property rights, contract, and money supply. This allowed for
boilerplate economic and institutional restructuring under structural adjustment and
post-Communist reconstruction.

Similar formalism occurs in a wide variety of social democratic and Marxist

discourses that situate political action as antagonistic to the market. In particular,
commodification theorists such as Georg Lukács insist that market relations
necessarily lead to undue exploitation of labour and so need to be opposed in toto. ,).
Pierre Bourdieu has suggested the market model is becoming self-realizing, in virtue
of its wide acceptance in national and international institutions through the 2090s. ).
The formalist conception faces a number of insuperable difficulties, concerning the
putatively global scope of the market to cover the entire Earth, in terms of penetration
of particular economies, and in terms of whether particular claims about the subjects
(individuals with pecuniary interest), objects (commodities), and modes of exchange
(transactions) apply to any actually existing markets.

Debt and equity

Securities are traditionally divided into debt securities and equities

Debt

Debt securities may be called debentures, bonds, deposits, notes or commercial

paper depending on their maturity and certain other characteristics. The holder of a
debt security is typically entitled to the payment of principal and interest, together
with other contractual rights under the terms of the issue, such as the right to receive
certain information. Debt securities are generally issued for a fixed term and
redeemable by the issuer at the end of that term. Debt securities may be protected by
collateral or may be unsecured, and, if they are unsecured, may be contractually
"senior" to other unsecured debt meaning their holders would have a priority in a
bankruptcy of the issuer. Debt that is not senior is "subordinated".

Corporate bonds represent the debt of commercial or industrial entities. Debentures

have a long maturity, typically at least ten years, whereas notes have a shorter
maturity. Commercial paper is a simple form of debt security that essentially
represents a post-dated check with a maturity of not more than 270 days.

Money market instruments are short term debt instruments that may have
characteristics of deposit accounts, such as certificates of deposit, and certain bills of
exchange. They are highly liquid and are sometimes referred to as "near cash".
Commercial paper is also often highly liquid.

Euro debt securities are securities issued internationally outside their domestic
market in a denomination different from that of the issuer's domicile. They include
eurobonds and euronotes. Eurobonds are characteristically underwritten, and not
secured, and interest is paid gross. A euronote may take the form of euro-commercial
paper (ECP) or euro-certificates of deposit.

Government bonds are medium or long term debt securities issued by sovereign
governments or their agencies. Typically they carry a lower rate of interest than
corporate bonds, and serve as a source of finance for governments. U.S. federal
government bonds are called treasuries. Because of their liquidity and perceived low
risk, treasuries are used to manage the money supply in the open market operations of
non-US central banks.

Sub-sovereign government bonds, known in the U.S. as municipal bonds,

represent the debt of state, provincial, territorial, municipal or other governmental
units other than sovereign governments.

Supranational bonds represent the debt of international organizations such as the

World Bank, the International Monetary Fund, regional multilateral development
banks and others.

Equity

An equity security is a share of equity interest in an entity such as the capital

stock of a company, trust or partnership. The most common form of equity interest is
common stock, although preferred equity is also a form of capital stock. The holder of
an equity is a shareholder, owning a share, or fractional part of the issuer. Unlike debt
securities, which typically require regular payments (interest) to the holder, equity
securities are not entitled to any payment. In bankruptcy, they share only in the
residual interest of the issuer after all obligations have been paid out to creditors.
However, equity generally entitles the holder to a pro rata portion of control of the
company, meaning that a holder of a majority of the equity is usually entitled to
control the issuer. Equity also enjoys the right to profits and capital gain, whereas
holders of debt securities receive only interest and repayment of principal regardless
of how well the issuer performs financially. Furthermore, debt securities do not have
voting rights outside of bankruptcy. In other words, equity holders are entitled to the
"upside" of the business and to control the business.

Hybrid

Hybrid securities combine some of the characteristics of both debt and equity
securities.

Preference shares form an intermediate class of security between equities and

debt. If the issuer is liquidated, they carry the right to receive interest and/or a return
of capital in priority to ordinary shareholders. However, from a legal perspective, they
are capital stock and therefore may entitle holders to some degree of control
depending on whether they contain voting rights.

Convertibles are bonds or preferred stock which can be converted, at the election
of the holder of the convertibles, into the common stock of the issuing company. The
convertibility, however, may be forced if the convertible is a callable bond, and the
issuer calls the bond. The bondholder has about 1 month to convert it, or the company
will call the bond by giving the holder the call price, which may be less than the value
of the converted stock. This is referred to as a forced conversion.

Equity warrants are options issued by the company that allow the holder of the
warrant to purchase a specific number of shares at a specified price within a specified
time. They are often issued together with bonds or existing equities, and are,
sometimes, detachable from them and separately tradable. When the holder of the
warrant exercises it, he pays the money directly to the company, and the company
issues new shares to the holder.
 Warrants, like other convertible securities, increases the number of shares
outstanding, and are always accounted for in financial reports as fully diluted earnings
per share, which assumes that all warrants and convertibles will be exercised.

The securities markets

Primary and secondary market

In the U.S., the public securities markets can be divided into primary and secondary
markets. The distinguishing difference between the two markets is that in the primary
market, the money for the securities is received by the issuer of those securities from
investors, typically in an initial public offering transaction, whereas in the secondary
market, the securities are simply assets held by one investor selling them to another
investor (money goes from one investor to the other). An initial public offering is
when a company issues public stock newly to investors, called an "IPO" for short. A
company can later issue more new shares, or issue shares that have been previously
registered in a shelf registration. These later new issues are also sold in the primary
market, but they are not considered to be an IPO but are often called a "secondary
offering". Issuers usually retain investment banks to assist them in administering the
IPO, obtaining SEC (or other regulatory body) approval of the offering filing, and
selling the new issue. When the investment bank buys the entire new issue from the
issuer at a discount to resell it at a markup, it is called a firm commitment
underwriting. However, if the investment bank considers the risk too great for an
underwriting, it may only assent to a best effort agreement, where the investment
bank will simply do its best to sell the new issue.

In order for the primary market to thrive, there must be a secondary market, or
aftermarket which provides liquidity for the investment security, where holders of
securities can sell them to other investors for cash. Otherwise, few people would
purchase primary issues, and, thus, companies and governments would be restricted in
raising equity capital (money) for their operations. Organized exchanges constitute
the main secondary markets. Many smaller issues and most debt securities trade in the
decentralized, dealer-based over-the-counter markets.

In Europe, the principal trade organization for securities dealers is the International
Capital Market Association. In the U.S., the principal trade organization for securities
dealers is the Securities Industry and Financial Markets Association, which is the
result of the merger of the Securities Industry Association and the Bond Market
Association. The Financial Information Services Division of the Software and
Information Industry Association (FISD/SIIA) represents a round-table of market data
industry firms, referring to them as Consumers, Exchanges, and Vendors.

Public offer and private placement

In the primary markets, securities may be offered to the public in a public offer.
Alternatively, they may be offered privately to a limited number of qualified persons
in a private placement. Sometimes a combination of the two is used. The distinction
between the two is important to securities regulation and company law. Privately
placed securities are not publicly tradable and may only be bought and sold by
sophisticated qualified investors. As a result, the secondary market is not nearly as
liquid as it is for public (registered) securities.

Another category, sovereign bonds, is generally sold by auction to a specialized

class of dealers.

Listing and OTC dealing

Securities are often listed in a stock exchange, an organized and officially

recognized market on which securities can be bought and sold. Issuers may seek
listings for their securities in order to attract investors, by ensuring that there is a
liquid and regulated market in which investors will be able to buy and sell securities.

Growth in informal electronic trading systems has challenged the traditional

business of stock exchanges. Large volumes of securities are also bought and sold
"over the counter" (OTC). OTC dealing involves buyers and sellers dealing with each
other by telephone or electronically on the basis of prices that are displayed
electronically, usually by commercial information vendors such as Reuters and
Bloomberg.

There are also eurosecurities, which are securities that are issued outside their
domestic market into more than one jurisdiction. They are generally listed on the
Luxembourg Stock Exchange or admitted to listing in London. The reasons for listing
eurobonds include regulatory and tax considerations, as well as the investment
restrictions.

Market
 London is the centre of the eurosecurities markets. There was a huge rise in the
eurosecurities market in London in the early 2080s. Settlement of trades in
eurosecurities is currently effected through two European computerized
clearing/depositories called Euroclear (in Belgium) and Clearstream (formerly
Cedelbank) in Luxembourg.

The main market for Eurobonds is the EuroMTS, owned by BorsaItaliana and
Euronext.
There are ramp up market in Emergent countries, but it is growing slowly.

Physical nature of securities

Certificated securities

Securities that are represented in paper (physical) form are called certificated
securities.
They may be bearer or registered.

Bearer securities

Bearer securities are completely negotiable and entitle the holder to the rights
under the security (e.g. to payment if it is a debt security, and voting if it is an equity
security). They are transferred by delivering the instrument from person to person. In
some cases, transfer is by endorsement, or signing the back of the instrument, and
delivery.

Regulatory and fiscal authorities sometimes regard bearer securities negatively, as

they may be used to facilitate the evasion of regulatory restrictions and tax. In the
United Kingdom, for example, the issue of bearer securities was heavily restricted
firstly by the Exchange Control Act 2047 until 2053. Bearer securities are very rare in
the United States because of the negative tax implications they may have to the issuer
and holder.

Registered securities

In the case of registered securities, certificates bearing the name of the holder are
issued, but these merely represent the securities. A person does not automatically
acquire legal ownership by having possession of the certificate. Instead, the issuer (or
its appointed agent) maintains a register in which details of the holder of the securities
are entered and updated as appropriate. A transfer of registered securities is effected
by amending the register.

Non-certificated securities and global certificates

Modern practice has developed to eliminate both the need for certificates and
maintenance of a complete security register by the issuer. There are two general ways
this has been accomplished.

Non-certificated securities

In some jurisdictions, such as France, it is possible for issuers of that jurisdiction

to maintain a legal record of their securities electronically.

In the United States, the current "official" version of Article 8 of the Uniform
Commercial Code permits non-certificated securities. However, the "official" UCC is
a mere draft that must be enacted individually by each of the U.S. states. Though all
50 states (as well as the District of Columbia and the U.S. Virgin Islands) have
enacted some form of Article 8, many of them still appear to use older versions of
Article 8, including some that did not permit noncertificated securities.

In the U.S. today, most mutual funds issue only non-certificated shares to
shareholders, though some may issue certificates only upon request and may charge a
fee. Shareholders typically don't need certificates except for perhaps pledging such
shares as collateral for a loan.

Global certificates, book entry interests, depositories

In order to facilitate the electronic transfer of interests in securities without

dealing with inconsistent versions of Article 8, a system has developed whereby
issuers deposit a single global certificate representing all the outstanding securities of
a class or series with a universal depository. This depository is called The Depository
Trust Company, or DTC.
DTC's parent, Depository Trust & Clearing Corporation (DTCC), is a non-profit
cooperative owned by approximately thirty of the largest Wall Street players that
typically act as brokers or dealers in securities. These thirty banks are called the DTC
participants. DTC, through a legal nominee, owns each of the global securities on
behalf of all the DTC participants.
 All securities traded through DTC are in fact held, in electronic form, on the
books of various intermediaries between the ultimate owner, e.g. a retail investor, and
the DTC participants. For example, Mr. Smith may hold 100 shares of Coca Cola,
Inc. in his brokerage account at local broker Jones & Co. brokers. In turn, Jones &
Co. may hold 1000 shares of Coca Cola on behalf of Mr. Smith and nine other
customers. These 1000 shares are held by Jones & Co. in an account with Goldman
Sachs, a DTC participant, or in an account at another DTC participant. Goldman
Sachs in turn may hold millions of Coca Cola shares on its books on behalf of
hundreds of brokers similar to Jones & Co. Each day, the DTC participants settle their
accounts with the other DTC participants and adjust the number of shares held on
their books for the benefit of customers like Jones & Co. Ownership of securities in
this fashion is called beneficial ownership. Each intermediary holds on behalf of
someone beneath him in the chain. The ultimate owner is called the beneficial owner.
This is also referred to as owning in "Street name".

Among brokerages and mutual fund companies, a large amount of mutual fund
share transactions take place among intermediaries as opposed to shares being sold
and redeemed directly with the transfer agent of the fund. Most of these
intermediaries such as brokerage firms clear the shares electronically through the
National Securities Clearing Corp. or "NSCC", a subsidiary of DTCC.

Other depositories: Euroclear and Clearstream

Besides DTC, two other large securities depositories exist, both in Europe:
Euroclear and Clearstream.

Divided and undivided security

The terms "divided" and "undivided" relate to the proprietary nature of a security.

Each divided security constitutes a separate asset, which is legally distinct from
each other security in the same issue. Pre-electronic bearer securities were divided.
Each instrument constitutes the separate covenant of the issuer and is a separate debt.
With undivided securities, the entire issue makes up one single asset, with each of
the securities being a fractional part of this undivided whole. Shares in the secondary
markets are always undivided. The issuer owes only one set of obligations to
shareholders under its memorandum, articles of association and company law. A
 share represents an undivided fractional part of the issuing company. Registered debt
securities also have this undivided nature.

Fungible and non-fungible security

The terms "fungible" and "non-fungible" relate to the way in which securities are
held.

If an asset is fungible, this means that if such an asset is lent, or placed with a
custodian, it is customary for the borrower or custodian to be obliged at the end of the
loan or custody arrangement to return assets equivalent to the original asset, rather
than the specific identical asset. In other words, the redelivery of fungibles is
equivalent and not in specie In other words, if an owner of 100 shares of IBM
transfers custody of those shares to another party to hold them for a purpose, at the
end of the arrangement, the holder need simply provide the owner with 100 shares of
IBM which are identical to that received. Cash is also an example of a fungible asset.
The exact currency notes received need not be segregated and returned to the owner.

Undivided securities are always fungible by logical necessity. Divided securities

may or may not be fungible, depending on market practice. The clear trend is towards
fungible arrangements.

The primary market is that part of the capital markets that deals with the issuance
of new securities. Companies, governments or public sector institutions can obtain
funding through the sale of a new stock or bond issue. This is typically done through
a syndicate of securities dealers. The process of selling new issues to investors is
called underwriting. In the case of a new stock issue, this sale is an initial public
offering (IPO). Dealers earn a commission that is built into the price of the security
offering, though it can be found in the prospectus.

Features of primary markets are:

• This is the market for new long term equity capital. The primary market is the market
where the securities are sold for the first time. Therefore it is also called the new issue
market (NIM).

• In a primary issue, the securities are issued by the company directly to investors.
• The company receives the money and issues new security certificates to the investors.
• Primary issues are used by companies for the purpose of setting up new business or
for expanding or modernizing the existing business.

• The primary market performs the crucial function of facilitating capital formation in
the economy.

• The new issue market does not include certain other sources of new long term
external finance, such as loans from financial institutions. Borrowers in the new issue
market may be raising capital for converting private capital into public capital; this is
known as "going public."

• The financial assets sold can only be redeemed by the original holder
Methods of issuing securities in the primary market are:

• Initial public offering;

• Rights issue (for existing companies);

• Preferential issue.
The secondary market, also known as the aftermarket, is the financial market
where previously issued securities and financial instruments such as stock, bonds,
options, and futures are bought and sold.. The term "secondary market" is also used to
refer to the market for any used goods or assets, or an alternative use for an existing
product or asset where the customer base is the second market (for example, corn has
been traditionally used primarily for food production and feedstock, but a "second" or
"third" market has developed for use in ethanol production). Another commonly
referred to usage of secondary market term is to refer to loans which are sold by a
mortgage bank to investors such as Fannie Mae and Freddie Mac.

With primary issuances of securities or financial instruments, or the primary

market, investors purchase these securities directly from issuers such as corporations
issuing shares in an IPO or private placement, or directly from the federal government
in the case of treasuries. After the initial issuance, investors can purchase from other
investors in the secondary market.

The secondary market for a variety of assets can vary from loans to stocks, from
fragmented to centralized, and from illiquid to very liquid. The major stock exchanges
are the most visible example of liquid secondary markets - in this case, for stocks of
publicly traded companies. Exchanges such as the New York Stock Exchange,
Nasdaq and the American Stock Exchange provide a centralized, liquid secondary
market for the investors who own stocks that trade on those exchanges. Most bonds
and structured products trade “over the counter,” or by phoning the bond desk of
one’s broker-dealer. Loans sometimes trade online using a Loan Exchange

Function

Secondary marketing is vital to an efficient and modern capital market.In the

secondary market, securities are sold by and transferred from one investor or
speculator to another. It is therefore important that the secondary market be highly
liquid (originally, the only way to create this liquidity was for investors and
speculators to meet at a fixed place regularly; this is how stock exchanges originated,
see History of the Stock Exchange). As a general rule, the greater the number of
investors that participate in a given marketplace, and the greater the centralization of
that marketplace, the more liquid the market.

Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e.,
the investor's desire not to tie up his or her money for a long period of time, in case
the investor needs it to deal with unforeseen circumstances) with the capital user's
preference to be able to use the capital for an extended period of time.

Accurate share price allocates scarce capital more efficiently when new projects are
financed through a new primary market offering, but accuracy may also matter in the
secondary market because: 1) price accuracy can reduce the agency costs of
management, and make hostile takeover a less risky proposition and thus move
capital into the hands of better managers, and 2) accurate share price aids the efficient
allocation of debt finance whether debt offerings or institutional borrowing.

Related usage

Term may refer to markets in things of value other than securities. For example, the
ability to buy and sell intellectual property such as patents, or rights to musical
compositions, is considered a secondary market because it allows the owner to freely
resell property entitlements issued by the government. Similarly, secondary markets
can be said to exist in some real estate contexts as well (e.g. ownership shares of time-
share vacation homes are bought and sold outside of the official exchange set up by
the time-share issuers). These have very similar functions as secondary stock and
bond markets in allowing for speculation, providing liquidity, and financing through
securitization.

Private Secondary Markets

Partially due to increased compliance and reporting obligations enacted in the

SarbanesOxley Act of 2002, private secondary markets began to emerge. These
markets are generally only available to institutional or accredited investors and allow
trading of unregistered and private company securities.

In private equity, the secondary market (also often called private equity
secondary’s or secondary’s) refers to the buying and selling of pre-existing investor
commitments to private equity funds. Sellers of private equity investments sell not
only the investments in the fund but also their remaining unfunded commitments to
the funds.

Fig 3.1

EQUITY SHARES:

They are also called as common stock. The common stock holders of a
company are its real owners, the own the company and assume the ultimate risk
associate with ownership. Their liability, how ever is restricted to the amount of their
investment in the event of liquidation, these stock holders have a residual claim on the
assets of the company after the claims of all creditors and preferred stock holders,are
settled in full. Common stock like preferred stock, as no maturity date.NSE started
trading in the equities segment (Capital Market segment) on November 3, 2094 and
within a short span of 1 year became the largest exchange in India in terms of
volumes transacted.Trading volumes in the equity segment have grown rapidly with
average daily turnover increasing from Rs.20 crores during 2094-95 to Rs.14,148
corers during FY 2007-08. During the year 2007- o8,NSE reported a turnover of
Rs.3,551,038 crores in the equities segment.The Equities section provides you with an
insight into the equities segment of NSE and also provides real-time quotes and
statistics of the equities market. In-depth information regarding listing of securities,
trading systems &processes,clearing and settlement, risk management, trading
statistics etc are available here.
AUTHORIZED, ISSUED AND OUTSTANDING SHARES:
An authorized shares is the maximum no. of shares that the articles of
association
(AOA) of
thecompany permit it to issue in the market. A company can however amend its AOA
to increase the number. The number of shares that the company has actually issued
out these authorized shares is called as issued shares. A company usually likes to have
a number of shares that a authorized but un-issued. These un-issued allow flexibility
in granting stock options, pursuing merger targets andsplitting the stock. Outstanding
shares refer to the number of shares issued and actually held by public. The
corporation can buy back part of its issued stock and hold it as a treasury
stock.Parvalue , book value and liquidating value :The par value of a share of stock is
merely a recorded figure in the corporate charter and is of little economic
significance. A company should not, however, issue common stock at a price less
than par value, because any discount from par value ( amount by which the issuing
price is less than the par value) is considered a contingent liability of the own wrest
to the creditors of the company. In the event of liquidation, the share holders would
be legally liable to creditors of any discount from par value.
Example: suppose that xyz inc. is ready to start business for the first time and sold
10000 shares rupees 10 each . the share holders equity portion of the balance sheet
would be common stock @ 10 each at par value:10000 shares issued and outstanding
RS100000 Total shares holders equity RS100000.The book value per share of
common stock is the shareholders equity – total assets minus liabilities and preferred
stocks as listed on the balance sheet- dividing by the number of shares outstanding
.suppose that xyz is now 1 year old has generated RS 500000 after- tax profits, but
pays number dividing. Thus, retained earnings are RS 50000. the share holders equity
is now RS 100000+ RS 50000 =150000 and the book value per share is rs
1500000/10000=RS 25.Although one might expect the book value per share of stock
to correspond to the liquidating value (per share) of the company, most frequently
does not. Often assts are sold for less than their values, particularly when liquidating
costs are involved.

Market value
Market value per share is the current price at which the stock is traded. For
actively traded stocks, market price quotations are readily available. For the many in
active stocks that have thin markets, price are difficult to obtain. Even when
obtainable, the information may reflect only the sale of a few shares of stock of
common stock and not typify the market value of the firm as the whole. The market
value of a share of common stock will usually differs from its book value and its
liquidating value. Market value per share of common stock is a function of the current
and expected future dividends of the company and the perceived risk of the stock on
the part of investors.

Rights of common share holders:

1.Rights of income:

If the company fails to pay contractual interest and principle and

payments to creditors, the creditors are able to take legal action to insure that
principle payments are made of company is liquidated. Common share holders, on the
other hand, have legal recourse to a company for not distributing profits. only if
management, the board of directors, or both engaged in fraud may share holders take
their case to court and possibly force the company to pay dividends.

1. voting rights:
The common shares of a company are its owners and they are entitled to
elect a board of directors. In a large corporations shares holders usually exercise only
indirect control through the board of directors they elect. The board, in turn, select
the management, and the management actually controls the operations of the
company. In a sole proprietorship, partnership, or small corporation, the owners
usually control the operation of the business directly.

2. Proxies and proxy contests:

Common share holders are entitled to one vote for each share of stock that they own
.it is usually difficult, both physically and financially, for the most share holders to
attend a corporation’s annual meetings. Because of this, many share holders vote of
means of a proxy, a legal document by which share holders assign their right to vote
to another person.

3. Voting procedures:
Depending on the corporate charter, the board of directors is elected
under either

Majority rule voting system or a cumulative voting system. Under the majority rule
system, stock holders have one for each share of stock that they own, and they must
vote for each director position that is open. Under cumulating voting system, a stock
holder is able to accumulate votes and cast them for less than the total number of
directors being elected. The total number of votes of each share holders is equal to the
number of shares the stock holder times the number of directors being elected.
ISSUE MECHNISM:
The success of an issue depends, partly, on the Issue Mechanism.
The methods by, which new issues are made of
1. public issue through prospectus.
2. Offer for sale.
3. Placement.
4. Rights issue.
1.Public Issue Through Prospectus:

Under this method, the issuing companies themselves offer directly to general
public a fixed number of shares at a stated price, which in the case of new companies
is invariably the face value of the securities, and in the case of existing companies, it
may something include a underwritten to ensure arising out of unsatisfactory public
response. Transparency and wide distributions of shares are its important and
advantages. The foundation of the public issue method is a prospectus, the minimum
contents of which are prescribed by the Companies Act 2056. It also provides both
civil and criminal liabilityfor any misstatement in the prospectus. Additional
disclosure requirements are also mandated by the SEBI.

The content of the prospectus, inter aria, include:

• Name and registered office of the issuing company.

• Existing and proposed activities.
• Board of directors.
• Location of the industry.
• Authorized, subscribed and proposed issued of capital to public.
• Dates of opening and closing of subscription list.
• Names of broker, underwriter, and other from whom application forms along
with copies

• prospectus can be obtained.

• Minimum subscription.
• Names of underwriter , if any, along with a statement that in the opinion of the
directors.

• resources of the underwriter are sufficient to meet the underwriting obligation.

• A statement that the company will make an application stock exchange for the
permission to deal in or for a quotation of its and so on.

2. offer for sale:

Broker to their own client of securities which have been previously purchased or
subscribed”. Under this method, securities are acquired by the issue houses, as in
offer for sale method, but instead of being subsequently offered to the public, they are
placed with the client of the issue houses, both individual and institutional investors.
Each issue house has a prepared to subscribe to any securities which are issued in
this manner. Its procedure is the same with the only Difference of ultimate investors.
In this method, no formal underwriting of the issue is required as the placement itself
Amount to underwriting since the houses agree to place the issue with their clients.
The main Advantages of placing, as a method issuing new securities, are its relative
cheapness. There is a cost cutting on account of underwriting commission, expense
relating to applications, allotment of shares and the stock exchange requirements
relating to contents of the prospectus and its advertisement. This method is generally
adopted by small companies with unsatisfactory financial performances. Its
weakness arises from the point of distribution of securities. As the securities are
offered only to a select group of investors, it may lead to the concentration of shares
in to a few hands that may create artificial scarcity of scripts in times of hectic
dealings in such shares in the market.

3.Rights Issue :
Only the existing companies can use this method. In the case of companies
whose shares are already listed and widely-held , shares can be offered to the existing
shareholders. This is called right issue. Under this method, the existing shareholders.
Are offered the right to subscribed to new shares in proportion to the number of
shares they already hold. This is made by circular to existing shareholders only.
In India, section 81 of the companies act 2056 provides that where a company
increases its subscribed capital by the issue of new shares, either after two years of
its formation or after one year of first issue of shares whichever is earlier, these have
to be first offered to the existing shareholders with this requirement by passing a
special resolution to the same effect. The chief merit of rights issues is that it is an
inexpensive method.
Sweat equity shares:
Under section 9Aof the companies Act , 2056, a company can issue sweat
equity shares to its employees or directors at discount or for consideration other than
cash for providing know-how making available rights in the nature of intellectual
property rights or value additions etc on the following.

Conditions:

The issue of sweat equity share is authorized by a special resolution passed by the
company in the general meeting.

2. The resolution specifies the number of shares, current market, Price, resolution, if
any, and the class or classes of directors Or employees to whom such equity
shares are to be issued.

3. The company is entitled to issue sweat equity shares after completion of one
year from the date of Commencement Of business.

4. The equity shares of the company must be listed on a recognized stock exchange.

5. The issue of sweat equity shares must be listed on a accordance with the
regulations made by the SEBI in the behalf.

6. An unlisted company can issue sweat equity shares in accordance with the
prescribed guidelines made for this purpose.

7. All the limitations, restrictions and provision relating to equity shares shall be
applicable to sweat equity shares.

PREFERENCE SHARES:
 Preference shares are a hybrid security because it has both ordinary shares and
bonds. Preference shareholders have preferential rights in respect of assets and
dividends. In the event of winding up the preference share holders have a claim on
available assets before the ordinary shareholders. In addition, preference
shareholders get their stated dividend before equity shareholders can receive any
dividends.

TYPES OF PREFERENCE SHARES:

1. Cumulative and Non-cumulative preference shares:The cumulative preference

gives rights to demand the unpaid dividends of any year, during the subsequent ears
when the profits and ample. All preference dividends arrears must be paid before
any dividends can be paid to equity shareholders. The non cumulative preference
share carry a right to a fixed dividend out of the profits to any year. In case profits
are not available in a year, the holders get nothing, nor can they claim unpaid
dividends in subsequent years.

2. Cumulative convertible preference shares:

The cumulative convertible preference (CCP) share is an instruments that embraces
features of both equity shares and shares and preference shares, but which essentially
is a preference shares. Since the CCP shares capital would constitute a class of
shares, distinct from purely equity and purely preferences share capital, the rights of
the instrument holders must be stated either in a general body resolution or in the
articles or in the terms of issues in the offer documents viz., prospectus /letter of offer.

3. Participating and non participating preference shares:

Participating preference shares are those shares which are entitled
to a fixed preferential dividend and. in addition, carry a right to participate in the
surplus profits along with equity shares holders after dividend at a certain rate has
been paid to equity share holders. Again in the event of winding up, if after paying
back both preference and equity share holders, there is still any surplus left, then the
participating preference share holders get additional shares in the surplus assets of
the company. Unless expressly provided, preference share holders get only the fixed
preference dividends and return on capital in the event of winding up out of realized
values of assets after meeting all external liabilities and nothing more. The rights to
participate may be given either in the memorandum or articles or by virtue of terms of
issue.

4. Redeemable and Irredeemable preference shares:

Subjects to an authority in the articles of association, a public limited company may

issue redeemable preference shares to be redeemed either at a fixed date or after a
certain period of time during the life time of the company. The companies act, 2056
prohibits the issue of any preference share which is irredeemable or is redeemable
after the expiry of a period of twenty years from the date issue.
Power to Issue Redeemable Preference
Shares:

Section 80 of the companies act 2056 permits a company to issue

Redeemable preference shares if:

• The company is limited by shares.

• Its article of association authorizes the issue of redeemable preference shares.
• Those shares are redeemable at the option of the company.

A company is allowed to issue redeemable preference shares in the following

circumstances:

• Such preference shares shall be redeemed only out of profits of the company,
which would otherwise be available for dividend.
• Such redemption can also be made out of the proceeded of fresh issues of shares
made of the purpose of redemption.

• Before redemption, such shares must be fully paid up.The premium on

redemption shall be provided out of profits of the company or out of securities
premium account, before the share are redeemed.

• Where shares are redeemed out of profits to a separate account called ‘capital
• The redemption of preference shares under this section shall not be taken as
reducing the authorized capital of the company.

• The capital redemption reserve account may usedfor issue of fully paid bonus
shares.Companies are not allowed to issued irredeemable preference shares or
preference shares which are redeemable after the expire of a period of 20 years
from the date of its issue.In case of default, the company and every officer of the
company who is indefault shall be punishable with a fine which may extend to Rs
10000.
Deferred/ Founders shares:

A private company any issue what are known as deferred or founder’s shares.
Such shares are normally held by promoters and directors of the company. That is
why they are usually called of a smaller denomination, say on rupee each. How ever
they are generally given. equal voting rights with equity shares, which may be of
higher denomination, say Rs10 each. Thus, by investing relatively lower amounts,
the promoter may gain control over the management of the company. As regards the
payment of dividends have been declared on the preference and equity shares. It is
because of this deferment of the dividend payment that these shares are also called
deferred shares. The promoters, founders and directors tend to have direct interest in
the success of the company they will receive dividends on these shares only if the
profits are high enough to leave a balance of after paying dividends to preference an
equity shareholders. Besides greater the profits of the company , the higher will be
dividends paid on these shares.

Issued share at a premium:

 When a company issues shares at a premium, whether or cash
or consideration other than cash, the premium collected on those shares shall be
transferred to a separate account called ‘securities premium account’.The provision
of the act relating reduction of shares capital shall also apply to the securities
premium account may be applied by the company in the following ways:
In paying up un issued shares of the company to be issued to members of the
company as fully paid up shares.

• In writing off the preliminary expenses of the company.

• In writing off the expenses of, or the commission paid or discount allowed on,
any issue of shares debentures of the company.

• In providing for the premium payable on redemption of any preference shares or

debentures.

Issued share at a Discount:

1. The issued of shares at a discount must be of a class of shares issued by the
Company.
2. The issue of shares at a discount must be authorized by a resolution passed in
the general meeting and sanctioned by the central government.

1. The resolution shall specify the maximum rate of Discount at which the shares are to
be issued.
2. The maximum rate of discount must not exceed 10% unless the central government is
of the Opinion that higher percentage of discount may be allowed in special
circumstances.

3. The shares must be issued within two months from the date of sanction by the or
within such extended time as the central government may allow.

4. The issue of shares at a discount can be done by a company only a year after the
Commencement of the business by the company.
5. In case of revival and rehabilitation of sick industry companies under chapter VIA,
the issue of shares at discount shall be sanctioned by the ‘Tribunal’ instead of
‘central government’.
6. Every prospectus relating to issue of shares shall contain the details of discount
allowed on the issue of shares or the unwritten off amount f discount at the date of
issue of prospectus.
7. In case of default, the company and every officer of the company who is in default
shall be punishable with fine which may extend to Rs.500.Shares issued for
consideration other than cash
8. to the underwriters of shares and promoters by way of payment remuneration or for
Expenses incurred.
9. To the vendor from whom the running business is purchased, as purchase price or
Consideration.
10. Issued of bonus shares out of the reserves to the existing shareholders of the company.

DEBENTURES:
“Acknowledge of debt, given under the seal of the company and containing a contract
for the repayment of the principal sum at a specified date and for repayment of the
principal sum at a specified date and for the payment of interest at fixed rate percent
until the principal sum is repaid,and it may or may not give the charge on the assets
to the company as security of the Loan”.
Kind of debentures:
1. Bearer debentures: Bearer debentures are similar to share warrants in that too
are negotiable instruments, transferable by delivery. The interest on bearer
debentures is paid by the means of attached coupons. On maturity, the principal sum
is paid to the bearers.
2. Registered debentures: These are debentures which are payable to the registered
holders i.e.. persons whose names appear in the register of debenture holders. Such
debentures are transferable in the same way as shares.
3. Perpetual or Irredeemable debentures: A debenture which contains no clause
as to payment or which contains a clause that it shall not be paid back is called a
perpetual or : irredeemable debenture. These debentures are redeemable only on the
happening of a contingency on the expiration of a period, however long. It follows
that debentures can be made perpetual, i.e. the loan is repayable only on winding up
or after a long period of time.
4. Redeemable debentures : These debentures are issued for a specified period of
time. On the expiry of the specified time the company has the right to pay back the
debenture holders and have its properties released from the mortgage or charge.
Generally, debentures are redeemable.
5. Debentures Issued as Collateral Security for a Loan: The term collateral
security or secondary security means, a security which can be realized by the party
holding it in the event of the loan being not paid at the proper time or according to
the agreement of the parties. At times, the lenders of money are given debentures as a
collateral security for loan.
The nominal value of such debentures is always more than the loan. In case the loan is
repaid, The debentures issued as collateral security are automatically redeemed.

1. Naked debentures: Normally debentures are secured by a mortgage or a charge

on the company’s assets. However debentures may be issued without any charge on
the assets of the company. Such debentures are naked or unsecured debentures. They
are mere acknowledgment of a debt due from the company, creating no rights beyond
those secured creditors.
2. Secured debentures: when any particular or specified property of the company
is offered as security to the debenture holders and when the company can deal with it
only subject to the prior right of the debenture holders, fixed charge on the
undertaking of the company i.e.. whole of the property of the company, both present
and future, an when it can deal with the property in the ordinary course of business
until the charge crystallized i.e.. when the company goes in to liqudation or when a
receive is appointed, the charge is said to be floating charge. When the floating
charge crystallizes, the debentures holder have right to be paid out of the assets
subjects to the right of the preferential creditor but prior to making any payment to
unsecured creditors.

Methods of redemption of debentures:

A company may issue redeemable as well as irredeemable debentures.

 There are two important ways of redeeming the debentures according to the terms
of the issue.

FURTURE TERMINOLOGY:

SPOT PRICE:
The price at which an asset trades in the spot market.
FURTURE PRICE:
The price at which the future contract trades in –the futures market.

CONTRACT CYCLE:
The period over which a contract trades. The index futures contracts on the NSE
as well as BSE have one-month and two-month and three-month expiry cycles, which
expire on last Thursday of the month. Thus a July expiration contract would expire on
the last Thursday of July. On the Friday following the last Thursday, a new contract
having a three - months expiry would be introduced for trading. More generally we
can say, on the first trading day after the day of the expiry of the month’s future
contract a new contract having a three - month’s expiry would be introduced for
trading.
EXPIRY DATE:
It is the date specified in the future contract. This is the last day on which the
contract will be traded. I will cease to exist by the end of that day.

CONTRACT SIZE:

The amount of asset that has to be delivered under one contract. The contract size
of the stock index futures on NSE nifty is 200 and the contract size of the stock index
futures on BSE Sensex is 50.
BASIS:
 Basis is usually defined as the spot price minus the futures price. There will be a
different basis for each delivery month for same asset at any point in time. On 20 th
June 2001 nifty closed at 1206.65. August 2001 nifty futures closed at 1208.90.
Therefore the basis for the August nifty futures is -2.25 index points. In a normal
market, basis will be negative. This reflects the fact that the underlying asset is to be
carried at a cost for delivery in the future.
COST OF CARRY:
The relationship between futures prices can be summarized in terms of what is
known as the cost of carry. These measures the Storage cost plus the interest that is
paid to finance the asset less the income earned on the asset. In the case of stocks,
dividend will be the income earned on the asset. The storage cost will be negligible.
INITIAL MARGIN:
The amount that must be deposited in the margin account kept with the broker at
the time a futures contract is first entered into is known as initial margin. Margins are
to be strictly collected in the future and options markets by brokers as per the
exchange regulations. Otherwise the exchange cannot guarantee the trades to all
participants in the market.
MARKING TO MARKET
In the futures market, at the end of each trading day, the margin account is a
adjusted to reflect the investor’s gain or loss depending upon the futures closing price
or settlement price.
This is called Marking-to-Market.
MAINTENANCE MARGIN:
If the balance in the margin account falls below the maintenance margin, the
investor receives a margin call and is expected to top up the margin account to the
initial margin level before trading commences on the next day.

BETA:
Beta is a concept to be used futures and options for hedging. Beta measures the
sensitivity of a share or a portfolio to that of the index. Beta of a share is found out by
relating the daily price changes of a share to the daily changes in a stock price index.
If a graph is drawn with daily changes of the share price on y axis and daily changes
in the index on x axis the slope of the straight line fitted will be the value of beta.
mathematically it is found by regression method. If the beta of Tisco is found to
bel.23,it implies if the index increases by 10% in a period, price of Tisco will increase
by 12.3%. Beta of the portfolios is found by weighted average of the betas of the
shares in the portfolios. For example, an investor’s portfolio has equal value in Tisco
and Infosys. Tisco has a beta of 1.23 and Infosys has a beta 1.37. the portfolio beta is
the average of 1.23 and 1.37 which is 1.3.NSE website is providing values of beta for
a large number of shares.

SPECULATORS AND HEDGERS IN FUTURES:

Speculators buy and sell derivatives to make profit, while hedgers buy and sell
derivatives to reduce risk. Speculators are vital to derivatives markets. They facilitate
hedging and provide liquidity. It is highly unlikely that hedger wishing to buy futures
will precisely match hedgers selling futures in terms of contracts to be traded. If
hedgers are net sellers there will be tendency for futures prices to fall. Speculators
will buy such under period futures. Such purchases by speculators allow net sales on
the part of hedgers. In so doing, they tend to maintain price stability since they are
buying into a falling market. Proper speculation thus provides stability to prices in
markets.In a liquid market, hedgers can make their transactions with ease and with
little impact costs. Speculative transactions add to market liquidity. Speculators by
definition do a lot of information search and processing to forecast future behavior of
prices. Therefore they make markets more information ally efficient. In the stock
index futures markets speculators have two alternative strategies. If they are bullish
on the index they can go long on index Futures. If the spot prices go up, future prices
follow them along with their carry premiums and the speculators make the profits.If
the speculator is bearish he can go short on the index futures. If the spot Index goes
down, futures price also will go down and speculator makes a profit. The two
speculative strategies can be summarized as:

Bullish market, long index futures

Bearish market, short index futures

ARBITRAGE IN FUTURE AND SPOT MARKET:

Future prices and spot prices are tightly linked by the fair price formula. Also on
the day of the expiry, the final settlement price of the future is made equal to the spot
index price. thus at the end , the spot and futures prices converge. Any deviation
between the fair price and actual price of a future can be utilized for earning risk less
profits by agents who are willing to buy in the spot market and deliver in future at
expiry. Such operations are called as arbitrage operations. Buying in the spot and
delivering in the future market is resorted to when actual futures price in the market is
higher than the fair price. if the actual future price is lower than the fair, then futures
are bought and shares are sold in the spot market to carry out the arbitrage operations.

Introduction to options:
Options give the holder or buyer of the option the right to do something. If the option
is called option, the buyer or holder has the right to buy the number of shares
mentioned in the contract at the agreed strike price. if the option is a put option, the
buyer of the option has the right to sell the number of shares mentioned in the contract
at the agreed strike price. the holder or the buyer does not have to exercise this right.
Thus on the expiry of day of the contract the option may or may not be exercised by
the buyer. In the contrast, in a futures contract, the two parties to the contract have
committed themselves to doing something at future date. To have this privilege of
doing the transaction at a future only if it is profitable, the buyer of options has to a
premium to the seller of options.

HISTORY OF OPTIONS:

In 2083 trading on stock index options contracts started. Since 2083, trading on
options of individual options decreased as most of the trading shifted to index options.
One of the reasons is that volatilities of the individual scripts is high and therefore
premiums on individual scripts is also high. In India stock index options were
introduced in june 2001.
OPTION TERMINOLOGY:
INDEX OPTION:
An option having the index as the underlying asset. Like index futures contracts,
index option contract are also called cash settled.

STOCK OPTIONS:

Stock options are options on individual stocks. A contract gives the holder the
right to buy or sell shares at the specified price.

AMERICAN OPTIONS:
American options are options that can be exercised any time up to the expiration
date.
This name is only a classification and does not imply that they are available only in
America.
EUROPEAN OPTIONS:
European options are options that can be exercised only on the expiration date.
European options are easier to analyze than American options, and properties of
American options are frequently deducted from those of its European counterpart.

CALL OPTIONS:
A call option gives the holder the right but not the obligation to buy an asset by a
certain date for a certain price.
PUT OPTIONS:
A put option gives the holder the right but not the obligation to sell an asset by
a certain date for a certain price.

BUYER OF OPTIONS:
The buyer of the option, calls or put, pays the premium and buys the right but not the
obligation to exercise his option on the seller/writer.

WRITER OF AN OPTION:
The writer of a call/put option is the one who receives the option premium and is
thereby obliged to sell/buy the asset if the buyer exercises on him. Option writer is the
seller of the option contract.
STRIKE PRICE:
The price specified in the option contract at which buying or selling will take
place is known as the strikeprice or the exercise price.
OPTIONS PRICE:
Option price is the premium, which the option buyer pays to the option seller or
writer.
Black and scholes formula is widely used for determining the fair value of share.
EXPIRATION DATE:
It is the date on which the European option is exercised. It is also called as
exercise date, strike date or maturity date.

INTRINSIC VALUE OF AN OPTION:

The option premium cab be broken down into two components- intrinsic value
and time value.The intrinsic value of an option is the amount, which the holder will
get by exercising his option and immediately selling or buying the acquired shares in
the spot market. For example, if the strike price of a call option on Reliance shares is
Rs.325 and current market price is Rs.350. The holder of the option can buy the
Reliance share at Rs.325 by exercising the option and can make a profit of Rs.25 by
immediately selling them in the market. In this case the intrinsic value of the call
option is Rs.25.
TIME VALUE OF THE OPTIONS:
The time value of an option is the difference between its premium and its intrinsic
value.
AT-THE-MONEY:
An option is called at-the-money option when the strike price equals, or nearly
equals, the spot price of the share. For example, if the strike price of stock index
option on Nifty index is also at 1080, the option is called at-the-money option.

ARBITRAGE WITH OPTIONS:

Arbitrage involves making risk less profits from miss pricing; relatively under
priced options are bought and relatively overpriced are sold. Pure arbitrage requires
that none of the arbitragers own capital is used. He should be able to borrow all the
capital required. If the arbitrager uses his own capital, the process is called quasi-
arbitrage. There will be number of situations providing arbitrage opportunity as three
markets, spot, futures and options are involved
SUMMING UP:
Options are used by hedgers and speculators. Options provide a variety of ways
in which they can be used to attain the hedging and speculative objectives. Thus
trading interest comes from different participants with different motives. Arbitrageurs
will have opportunities whenever option premiums are out of line with the fair prices.
A fully developed option market provides a good market for traders to display their
trading expertise and hedgers an alternative-hedging medium.
FORWARD CONTRACTS:
In order to avoid this risk one way could be that the farmer may sell his crop at an
agreed-upon rate now with a promise to deliver the asset, i.e., crop at a pre-
determined date in future. This will at least ensure to the farmer the input cost and a
reasonable profit. Thus, the farmer would sell wheat forward to secure himself
against a possible loss in future. It is true that by this way he is also foreclosing upon
him the possibility of a bumper profit in the event of wheat prices going up steeply.
But the, more important is that the farmer has played safe and insured himself against
any eventuality of closing down his source of livelihood altogether. The transaction
which the farmer has entered into is called a forward transaction and the contract
which covers such a transaction is called a forward contract.
QUICK AND LOW COST TRANSACTIONS:
Futures contracts can be created quickly at low cost to facilitate exchange of
money for goods are delivered at future date. Since these low cost instruments lead to
a specified delivery of goods at a specified price on a specified date, it becomes easy
for the finance managers to take optimal decisions in regard to production,
consumption and inventory. The costs involved in entering into future contracts in
significant as compared to the value of commodities being traded underlying these
contracts.
Price discovery function:
 The price of futures contracts incorporates a set of information based on which
the producers and the consumers can get a fair idea of the future demand and supply
position of the commodity and consequently the futures spot price. This is known as
the ‘price discovery’ function of futures.

Advantage of informed individuals:

Individuals, who have superior information in regard to factors like commodity

demand supply, market behavior, technology changes etc., can operate in futures
markets and impart efficiency to the commodity’s price determination process. This
in turn leads to a more efficient allocation of resources.
Hedging Advantage:
Adverse price changes, which may lead to losses, can be adequately and efficiently
hedged against through futures contracts. An individual who is exposed to the risk of
an adverse change while holding a position, either long or short a commodity will
need to enter into a transaction which could protect him in the event of such an
adverse change. For example a trader who has imported a consignment of copper and
the shipment is to reach within a fortnight may sell copper futures if he foresees fall in
copper prices. In case copper prices actually fall, the trader will lose on sale of copper
but will recoup through futures. On the contrary if copper prices rise, the trader will
honour the delivery of the futures contract through the imported copper stocks already
available with him.
Employee stock option plans:
“ Employees stock options means the options given to the whole-time directors,
officers or employees of acompany, which gives such directors, officers or employees
the benefit or right to purchase or subscribe at a future date, the securities offered by
the company at a predetermined price”. Stock option is defined as the “right to buy a
designated stock at an option of the holder at any time within a specified period at a
determinable price. it can also represents the right to sell designated stock within an
agreed period at a determinable price.
Benefits of ESOPs:

The ESOPs will benefit the organization in the following ways:

 It is used as a HRD tool by the management in connection with restriction of
higher turnover of the employees and retaining the best talents with the organization.

• The plan is used as a technique of corporate financing modernization, expansion,

spin-off a division, acquisition etc.

• Issuing share, alternative to cash, have no immediate effect until they are
converted into cash Affecting new monetary supply into the real company.

• Employees stock ownership plans in USA is used to avoid hostile takeover.

• Without any financial strains the employees are rewarded by Printing of
share certificated only.
Studies undertaken in USA on ESOPs suggest that they tend to outperform their
traditionally organized counterparts in variety of ways, better survival rates, higher
productivity, a better employment and sales growth and higher net operating margins.
List of Bond:

1. Zero Interest Bond:

It refers to those bonds which are sold at a discount from their eventually
maturity value and have zero interest rate. These certificates are sold to the investors
for discount the difference between the face value of the certificates and the
acquisition cost is the gain to the investors. The investors are not entitled to any
interest and are entitled to only repayment of principle sum of the maturity period.
The individual prefers ZIB because of lower investment cost and low rate of
conversion to equity if ZIBs are fully or partly convertible bonds. This is also a means
of tax planning because the Bond doesn’t carry any interest, which otherwise taxable.
Company also find ZIB quite attractive because there is no immediate commitment.
On maturity the bond can be converted into equity share or convertible debentures
depending on the requirement of capital structure of a company.
2. Deep Discount Bond (DDB):
The IDBI for the first time issued DDB for a deep
discount price of Rs 2700/- an investor gets bond with a face value of Rs 100000/-.
The DDB appreciates to its face value over the maturity period of 25 Years. The
unique advantage of DDB is the elimination of investment risk. It allows an investor
to lock in the yield to maturity or keep on withdrawing from the scheme periodically
after 5 years by returning the certificate.The main advantage of DDB is that the
difference between the sell price and the original cost of acquisition will be treated as
Capital gain, if the investor sends the bonds on stock exchange.The DDB is safe, solid
and liquid instrument. nvestors can take advantage of these new instruments in
balancing their mix of securities to minimize the risk and maximize returns.
3. Callable Bonds:
A callable bonds is a bond which the issuer has the right to call in and
payoff at a price stipulated in the bond contract. The price the issuer must pay to retire
a callable bond when it is called is termed as call price. The main advantage in
callable bond is the issuers have an incentive to call their existing bonds if the current
interest rate in the market is sufficiently lower than the bonds coupon rate. Usually
the issuer cannot call the bond for a certain period after issue.
4. Option tender bonds:
The option tender bonds are bonds with put option which give the bond
holders the right to sell back their bonds to the issuers normally at par. Issuers with
put are aimed both at investors who are pessimistic about the ability of interest rates
to decline over the long term and at those who simply prefer to take cautious
approach to their bond buying.
5. Guaranteed Debentures:
Some businesses are able to raise long term money because their debts are
guaranteed, usually by their parents companies. In some instances the state
governments guaranteed the bonds issued by the state government undertaking and
corporation like electricity supply board, irrigation corporation etc.

6. subordinated debentures:
A subordinated debenture is an unsecured debt, which is junior to
all other debts i.e.. Other debt holders must be fully paid before the subordinated
debenture holders receive anything. This type of debt will have a higher interest rate
than more senior debt and will frequently have rights of conversion into ordinary
shares. Subordinated debt is often called mezzanine finance because it ranks between
equity and standard debt.
7. Floating rate bond:
 The interest paid to the floating Rate bondholders changes periodically
depending on the market rate of Interest payable on thegilt-edged securities these
bonds are called adjustable interest bond or variable rate bonds.
8. Junk bond:
Junk bonds are a high yield security which because a widely used source of
finance in take overs and leveraged buyouts. Firms with low credit ratings willing to
pay 3 to 5 % more than the high grade corporate debt to compensate for the greater
risk.
9. Indexed bonds:
Fixed income are fixed sum repayments are uneconomic in times of rapid
inflation. Indexed bond is financial instrument which retain the security and fixed
income of the debenture but which also provides some safeguard against inflation.

10. Inflation adjusted bond:

IABs are bonds which promise to repay both the principal and
interest, by floating both these amounts upwards in line with the movements in the
value of the specific index of commodity prices.
 CHAPTER-
III

INDUSTRY PROFILE& COMPANY

PROFILE

The Securities Industry and Financial Markets Association (SIFMA) is a leading

securities industry trade group representing securities firms, banks, and asset
management companies in the U.S. and Hong Kong. SIFMA was formed on
November 1, 2006, from the merger of The Bond Market Association and the
Securities Industry Association. It has offices in New York City and Washington, D.
C.

In October 2008, SIFMA laid off over 25% of its staff in the United States due to the
"industry upheaval" which left its member firms in financial straits, and the loss of
three of it primary member firms—Lehman Brothers, Bear Stearns, and Merrill
Lynch. The dismissals came at the same time as the United States Congress pledged
to revamp the country's financial regulatory structure.

SIFMA announced in May 2009 that it would also shed its London-based European
operation. That operation will be merged into the London Investment Banking
Association (LIBA).

The 350-member American Securitization Forum (ASF) formerly operated as a forum

of SIFMA. On January 15, 2010, ASF announced that it had chosen to terminate its
affiliation with SIFMA as well.

Mission, members, and offices

US operation

SIFMA brings together the shared interests of more than 650 securities firms, banks,
and asset managers. SIFMA's mission is to promote effective and efficient regulation,
facilitate more open, competitive, and efficient global capital markets, champion
investor education, retirement preparedness, and savings, and ensure the public’s trust
in the securities industry and financial markets. SIFMA represents its members’
interests in the U.S. and in Hong Kong. It has offices in New York and Washington,
D.C., and its associated firm, the Asia Securities Industry & Financial Markets
Association (ASIFMA), is based in Hong Kong.

In June 2009, SIFMA began a campaign to combat the “populist overreaction” against
Wall Street’s role in the global financial crisis. It hired two aides who had worked for
Henry Paulson when he was Treasury Secretary, to help cleanse Wall Street’s image
in the eyes of average Americans. The effort is aimed at policymakers and the media
worldwide, and designed to beat back public skepticism over Wall Street’s
commitment to change. SIFMA is paying $85,000 a month for polling, lobbying, and
public relations to counter the "lynch mob", according to an internal SIFMA memo.
In internal memos about confidential meetings with top financial executives, SIFMA
said that the securities industry "must be perceived as part of the solution, which will
allow it to better defend against populist overreaction."

In January 2010, SIFMA announced that it had hired the law firm Sidley Austin to
consider filing a lawsuit challenging the Obama administration's banking levy. But an
attorney familiar with the matter said: "I suspect SIFMA got out ahead of its key
members." One person with a large bank said SIFMA had not consulted the bank
about its position, and that it was "wildly premature" to pursue legal action.

In October, 2010, CEO Tim Ryan announced the organization's opposition in the
residential real estate market to a "system wide moratorium on all foreclosures,"
reacting to problems and pullbacks in the market by a number of SIFMA members,
saying a moratorium "would be catastrophic." Financial writer Felix Salmon drew
attention to the position, terming it "unhelpful," detailing it as "bizarre" and "sad, ...
an inchoate and unhelpful blast of opposition ... [without] constructive solutions"
proposed.

Political giving and lobbying

"SIFMA's political action committees gave more than $1 million during the 2006
election season, putting the organization in the top 25 of all PACs. Its combined $8.5
million in spending on federal lobbying last year placed it in the top 30. The financial-
services industry is the biggest corporate player in national politics. Only organized
labor donates more money to candidates for federal offices."

European operation

SIFMA also has offices in London, though it announced in May 2009 that it would
shed its European operation. The European High Yield Association (EHYA) in
London is a trade association representing participants in the European high yield
market. Members include banks, investors, issuers, law firms, accounting firms,
financial sponsors, and other participants in the European high yield market. The
European Securitisation Forum (ESF) promotes the efficient growth and continued
development of securitisation throughout Europe. It advocates the positions,
represents the interests, and serves the needs of its members—European securitisation
market participants.

Groups

SIFMA has three product and customer-based groups that focus on the U.S.: Capital
Markets, Private Client, and Asset Management. The Capital Markets Group focuses
on the primary and secondary markets for equity and fixed income securities. Its
customer focus is issuers, underwriters, traders, and institutional investors. The
Private Client Group focuses on investment products sold to private clients, as well as
individual investor education. The Asset Management Group focuses on investment
products about which asset managers provide investment advice or investment
management services, and on institutional investors and hedge funds.

Senior management

T. Timothy Ryan, Jr., is SIFMA's CEO & President. He took the position after pulling
his name from consideration for a Treasury Department international policy advisor
position in April 2007, after problems were noted concerning Ryan's financial
portfolio, and he refused to take certain steps demanded by the Treasury Department's
ethic lawyers. SIFMA's other senior management consists of Kenneth E. Bentsen
(EVP, Public Policy and Advocacy),
Ileane F. Rosenthal (EVP, Global Communications & Member Engagement), Randy
Snook (EVP), and Ira Hammerman (Senior Managing Director & General Counsel).

In August 2008, SIFMA hired Michael Paese, former Deputy Staff Director of the
Committee on Financial Services of the House of Representatives, as EVP, Global
Advocacy; eight months later Paese left SIFMA to become director of government
affairs at Goldman Sachs. Scott DeFife, who had reported to Paese, left SIFMA in
December 2009.

After the 2006 merger which created SIFMA, the organization had a co-CEO
structure, with the SIA's Marc E. Lackritz and BMA's Micah S. Green filling the
positions. As a 2007 report summarized it, "Lackritz [then 60] ha[d] been a friend,
colleague and mentor of Green's [then 49] for two decades." However, with slower-
than-hoped-for integration of the merged organization's operations, and with
questions about the handling of executive loans by BMA, Green resigned abruptly
that year and Lackritz assumed the role of sole CEO. Nine months later, Lackritz
retired and T. Timothy Ryan was named CEO.

Board of directors

SIFMA's Chairman of the Board is Blythe Masters (Head of Global Commodities,

JPMorgan Chase), and Vice Chair is Bernard Beal (CEO of M.R. Beal & Company).
Other directors include Samir Assaf (HSBC Bank plc), ShigesukiKashiwagi (Nomura
Holdings America Inc.) and Sallie Krawcheck (former Chairman & CEO, Citi Global
Wealth Management), among others.

Peter Madoff, brother of fraudster and "money manager" Bernard L. Madoff, and
chief compliance officer and senior managing director of the Madoff investment
advisor and broker dealer businesses, stepped down from the SIFMA Board of
Directors in December 2008. His resignation came amid growing criticism of the
Madoff firm’s links to Washington, and how those relationships may have contributed
to the $50 billion Madoff fraud.

The Madoff family had long-standing ties to SIFMA. Bernard Madoff sat on the
board of directors of the Securities Industry Association, which merged with the Bond
Market Association in 2006 to form SIFMA. Peter Madoff served two terms as a
member of SIFMA’s Board of Directors. Over the years 2000-08, the two Madoff
brothers personally gave $56,000 to political action committees controlled by SIFMA
or its predecessor organizations in addition to dues paid to SIFMA by their firm, and
tens of thousands of dollars more to sponsor SIFMA industry meetings. In addition,
Bernard Madoff's niece Shana Madoff, who served as a compliance attorney at the
Madoff firm, was active on the Executive Committee of SIFMA's Compliance &
Legal Division, but resigned her SIFMA position shortly after her uncle's arrest.

Finances
In 2007 SIFMA had $105 million in both revenues and expenses. SIFMA's highest-
paid officers that year were Donald Kittel (then CFO), $2.1 million, Marc Lackritz
(then President & CEO), $1.5 million, and Randolph Snook (SMD), $1.1 million.

SIFMA's highest-paid officer in 2008 was its new President & CEO Tim Ryan (at
approximately $2 million, for January-October). Ryan had been hired to replace
Lackritz in January 2008, at a 43% ($600,000) higher level of compensation, for less
than a full year. In related news, ironically, Ryan wrote in a USA Today editorial in
August 2009 that compensation practices at financial services firms should align with
long-term, not shortterm, performance.

SIFMA's top three highest paid officers in the fiscal year ending 31 October 2009
were CEO Tim Ryan at $2.43 million, Executive Vice President Randolph Snook at
$1.04 million and General Counsel Ira Hammerman at $777,000. SIFMA received
total revenue that year of $75 million, had total expenses of $82 million, and finished
the year with a fund balance of $40 million
COMPANY
PROFILE
COMPANY PROFILE
Religare is an emerging markets financial services group with a presence across Asia,
Africa, Middle East, Europe, and the Americas. In India, Religare’s largest market,
the group offers a wide array of products and services including broking, insurance,
asset management, lending solutions, investment banking and wealth management.
With 10,000-plus employees across multiple geographies, Religare serves over a
million clients, including corporate and institutions, high net worth families and
individuals, and retail investors.
Vision
"To be the leading emerging markets financial services group driven by
innovation, delivering superior value for all stakeholders globally".

Religare is established in the January 30th 2084. It is one of the leading integrated
financial services institutions of India, backed by a blue chip promoter pedigree and a
proven track record. Religare’s businesses are broadly clubbed across 3 key verticals,
the retail, institutional and the wealth spectrum, catering to a diverse and wide base of
clients spread across the length and breadth of the country. Structurally, all business is
operated through various subsidiaries held through the holding company Religare
Enterprises Limited. The company offers a diverse bouquet of services and through
it’s consolidated network reach, Religare is present in more than 1300 locations
across more than 400 cities and towns. As part of its recent initiatives the group has
also started expanding globally. Religare has also successfully partnered with Aegon,
one of the global leaders to launch Life Insurance, Mutual Fund and Pension products
in India and with Macquarie Bank, for a wealth management joint venture.
The vision of the company is to build Religare as a globally trusted brand in the
financial services domain and present it as the ‘Investment Gateway of India’. All
employees of the group relentlessly strive to provide financial care, driven by the core
values of diligence and transparency
Mission-To provide financial care driven by the core values of diligence &
transparency
Brand Essence– The company Core essence is diligence and ethical and dynamic
processes for wealth creation drive it.
Brand Identity
Religare is a Latin word that translates as 'to bind together'. This name has been
chosen to reflect the integrated nature of the financial services the company offers.
The name is intended to unite and bring together the phenomenon of money and
wealth to co-exist and serve the interest of individuals and institutions, alike.
Symbol
The Religare name is paired with the symbol of a four-leaf clover. The four-leaf
clover is used to define the rare quality of good fortune that is the aim of every
financial plan. It has traditionally been considered good fortune to find a single four
leaf clover considering that statistically one may need to search through over 10,000
three-leaf clovers to even find one four leaf clover.

The first leaf of the clover represents Hope. The aspirations to succeed. The
dream of becoming. Of new possibilities. It is the beginning of every step and
the foundation on which a person reaches for the stars.

The second leaf of the clover represents Trust. The ability to place one’s own
faith in another. To have a relationship as partners in a team. To accomplish a
given goal with the balance that brings satisfaction to all, not in the binding, but
in the bond that is built.

The third leaf of the clover represents Care. The secret ingredient that is the
cement in every relationship. The truth of feeling that underlines sincerity and
 the triumph of diligence in every aspect. From it springs true warmth of service
and the ability to adapt to evolving environments with consideration to all.

The fourth and final leaf of the clover represents Good Fortune. Signifying that
rare ability to meld opportunity and planning with circumstance to generate
those often looked for remunerative moments of success.

Hope. Trust. Care. Good Fortune. All elements perfectly combine in the
emblematic and rare, four-leaf clover to visually symbolize the values that bind
together and form the core of the Religare vision.

Top Management Team

• Mr. Sunil Godhwani - CEO & Managing Director, Religare Enterprises Limited
• Mr. ShachindraNath - Group Chief Operating Officer, Religare Enterprises Limited

• Mr. Anil Saxena- Group Chief Finance Officer, Religare Enterprises Limited

Board of Directors - Religare Enterprises Limited

• Mr. Malvinder Mohan Singh - Chairman (Non Executive)

• Mr. Sunil Godhwani - CEO & Managing Director

• Mr. Shivinder Mohan Singh - Non Executive Director

• Mr. Harpal Singh - Non Executive Director

• Mr.DeepakRamchandSabnani - Independent Director

• Mr.PadamBahl - Independent Director

• Mr. Baldev Singh Johal - Independent Director

• Mr. R. K. Shetty - Alternate to Mr. J. W. Balani

• Capt.G.P.S.Bhalla - Alternate to Mr. Deepak Sabnani

Awards & Accolades

• Religare Commodities Limited has been awarded the "Best Commodity Broker" at the
Bloomberg UTV Financial Leadership Awards 2015-16.

• Religare Enterprises Ltd presented the theBest Retail Marketing Campaign of the
Year 2015-16 at Asia Retail Congress.

• ReligareFinvest Limited has been awarded the Finnoviti 2012 award in the
“Innovation in Process” category.

• Religare Securities Limited has been awarded the "Best Investor Education &
Category Enhancement – Currency Broker" at the Bloomberg UTV Financial
Leadership Awards.

• Religare Commodities Limited has been awarded the "Best Commodity Broker" at the
Bloomberg UTV Financial Leadership Awards.

• Religare Broking TVC (archery creative) won Silver Abby in the Sound and Design
craft category at Goafest 2011.
• Religare Capital Markets Limited has been awarded the coveted Starmine award
for the 'Best Brokerage Research House'.
• Religare Commodities Ltd has been awarded the 'The Best Commodity Broker of
the year' at the Bloomberg UTV's financial Leadership awards.
• Religare Enterprises Ltd presented the theBest Retail Marketing Campaign of the
Year 2010 at Asia Retail Congress.
• Religare Enterprises Ltd received the coveted Master Brand Award for 2010 and
Best Marketing Campaign of the year at World Brand Congress 2010.

RELIGARE SPECTUM
1.Retail spectrum
• Equity Trading

• Commodities Trading

• Online Investment Portal

• Personal Financial Services

• Personal Credit

2. Wealth Spectrum
• Wealth Advisory

• Portfolio Management Services

• Arts Initiative

• Priority Client Equity Services

2. Institutional Spectrum
• Institutional Broking Services
• Investment Banking

• Corporate Finance

• Insurance Advisory

RETAIL SPECTRUM
Equity Trading
Trading in Equities with Religare truly empowers you for your investment needs. A
highly process driven, diligent approach backed by powerful Research & Analytics
and one of the “best in class” dealing rooms ensures that you have a superlative
experience.
Further, Religare also has one of the largest retail networks, with its presence in more
than 1,218 locations across more than 392 towns & cities. This means, you can walk
into any of these branches and connect toreligare’shighly skilled and dedicated
relationship managers to get the best services. You could also choose to enjoy the
freedom to execute your own trades through Religare’s online mechanism
Commodities Trading
Religare Commodities Limited (RCL) was initiated to spearhead Exchange based
Commodity Trading. As a member of NCDEX, MCX and NMCE, RCL is a trade
facilitator providing the platform to trade in commodities. Grounded in the Religare
 philosophy, highly skilled and dedicated professionals strive to offer the client best
investment solutions across the country.
Online Investment
Investing online will never be the same again withreligare’s360 degree portal
www.religareonline.com Now you can not just invest online in Equities, IPOs,
Mutual Funds, Commodities and much more but, also get TRADE REWARDS each
time you invest.

Personal Financial Services

Religare has recently entered into personal financial advisory services. It caters to the
financial needs of individuals by advising them on various financial plans. Religare’s
Personal financial advisors, also called financial planners or financial consultants, use
their knowledge of investments, tax laws, and insurance to recommend financial
options to individuals in accordance with the individual’s short-term and long-term
goals. Some of the issues that planners address are general investments, retirement
and tax planning.

Product offerings
• Mutual Funds

• Insurance - Life & Non - Life

• Bonds

• Deposits

• IPO’s

• Small Savings Instruments

PHILOSOPHY
Define… Refine…. Achieve
At ReligareThe Company believes “Our clients are people, not accounts” hence
successful investment management relationship begins with a clear understanding of
each client’s specific needs, concerns and long term objectives. Religare’s investment
philosophy applies a disciplined approach to building a customized strategy designed to
meet your individual financial goals and tolerance for risk.
PROCESS

The Religare Edge

• Pan India foot print

• Dedicated team of trained and skilled advisors

• Strong pedigree driven by diligent processes and ethical business practices

• Wide & varied platter of products & services to choose from

• Backed by strong & Credible research

Their Process
 WEALTH SPECTRUM
Wealth Management @ Religare
• To provide investment advisory and execution services

• To work hand in hand with clients to identify and analyze their long-term goals, risk
tolerance and existing asset base

• To Utilize Religare’s full-suite platform with an open architecture along with a fully
focused client centric approach to offer customized solutions for clients

• Supported by dedicated team of highly skilled and qualified wealth managers and
research professionals.

Critical Steps in Religare’s Client Centric Operating Process

• Risk Profiling

• Research & Asset Allocation

• Product Recommendations

• Review & Rebalancing

International Advisory Funds Management Services (AFMS) - A new horizon for

international investments Religare’s wealth clients is an opportunity to invest in
international financial instruments (currently limited to the US). Equities, Mutual
 Funds and Debts are some the key instruments available and the clients have the
option to choose from various asset allocation modules.
Portfolio Management Service
Religare offers PMS to address varying investment preferences. As a focused service,
PMS pays attention to details, and portfolios are customized to suit the unique
requirements of investors.
Religare PMS currently extends five portfolio management schemes - Panther,
Tortoise, Elephant, Caterpillar and Leo. Each scheme is designed keeping in mind the
varying tastes, objectives and risk tolerance of Religare’s investors

Investment Philosophy
We believe that Religare’s investors are better served by a disciplined investment
approach, which combines an understanding of the goals and objectives of the
investor with a fine tuned strategy backed by research.
• Stock specific selection procedure based on fundamental research for making sound
investment decisions.

• Focus on minimizing investment risk by following rigorous valuation disciplines.

• Capital preservation.

• Selling discipline and use of Derivatives to control volatility.

• Overall to enhance absolute return for investors.

Schemes
Panther
The Panther portfolio aims to achieve higher returns by taking aggressive positions
across sectors and market capitalization. It is suitable for the “High Risk High
Return” investor with a strategy to invest across sectors and take advantage of various
market conditions.

Tortoise
The Tortoise portfolio aims to achieve growth in the portfolio value over a period of
time by way of careful and judicious investment in fundamentally sound companies
having good prospects. The scheme is suitable for the “Medium Risk Medium
Return” investor with a strategy to invest in companies, which have consistency in
earnings, growth and financial performance.
Elephant
The Elephant portfolio aims to generate steady returns over a longer period by
investing in
Securities selected only from BSE 100 and NSE 100 index. This plan is suitable for
the “Low Risk Low Return” investor with a strategy to invest in blue chip companies,
as these companies have steady performance and reduce liquidity risk in the market.
Caterpillar
The Caterpillar portfolio aims to achieve capital appreciation over a long period of
time by investing in a diversified portfolio. This scheme is suitable for investors with
a high-risk appetite. The investment strategy would be to invest in scrips which are
poised to get a rerating either because of change in business, potential fancy for a
particular sector in the coming years/months, business diversification leading to a
better operating performance, stocks in their early stages of an upturn or for those
which are in sectors currently ignored by the market.
Leo
Leo is aimed at retail customers and structured to provide medium to long-term
capital appreciation by investing in stocks across the market capitalization range. This
scheme is a mix of moderate and aggressive investment strategies. Its aim is to have a
balanced portfolio comprising selected investments from both Tortoise and Panther.
Exposure to Derivatives is taken within permissible regulatory limits.
The Religare Edge
We serve you with a diligent, transparent & process driven approach and ensure that
your money gets the care it deserves.
PMS brought to you by Religare with its solid reputation of an ethical and scientific
approach to financial management. While The Company offers you the services of a
Dedicated Relationship Manager who is at your service 24x7, The Company do not
depend on individual expertise alone. For you, this means lower risk, higher
 dependability and unhindered continuity. Moreover, you are not limited by a
particular individual’s investment style.
The company ensures that a part of the broking at Religare Portfolio Management
Services is through external broking houses. This means that your portfolio is not
churned needlessly. Using more broking firms gives us access to a larger number of
reports and analysis, enabling us to make better, more informed decisions.
Furthermore, your portfolio is customized to suit your investment objectives.
Religare Portfolio Management Services gives you daily updates on your investment.
You can pinpoint where your money is being invested, 24x7, instead of waiting till
the end of the month to keep track.
No charge till you profit*.So sure are The company of religare’s approach to Portfolio
Management that The company do not charge you for Religare’s services, until your
investments start showing profit. With customized investment options Religare
Portfolio Management Services invites you to invest across five broad portfolios to
suit your investment needs

Institutional Broking Services

The mission of this division is to institutionalize and implement a process driven
approach to cater to the needs of leading corporate houses and institutions.
The division would like to be seen as a one-stop investment gateway and knowledge
repository for its clients servicing their unique and sophisticated needs.
The division is structured as a separate SBU and is housed out of HYDERABAD,
manned by a small yet fleet footed and extremely skilled group of top-notch
professionals drawn from the best in the industry.
The key highlights of Religare’s service platter are:
• Highly skilled, dedicated dealing, research and sales teams

• Dealing capabilities on the NSE, BSE and in the cash and derivatives segment

• In-depth, detailed and insightful coverage of more than 60 stocks across diverse
sectors. The sectors covered are FMCG, Hotels, Media, Pharma, Auto, Cement, Steel
pipes, Logistics, Telecom, Construction and much more.
 Company’s Current clientele includes some major domestic mutual funds, insurance
companies, banks and FII’s We provide innovative, integrated and best-fit solutions
to Religare’s corporate customers. It is Religare’s continuous endeavor to provide
value enhancement through diverse financial solutions on an on-going basis, through
offerings like corporate debt, private equity, IPO, ECB, FCCB, GDR/ADR etc.
Religare's Investment Banking Division offers the following services:
Corporate Finance
It focuses on finding partners for Religare’s clients, who not only help in adding
value, but also improve the future valuation of the organization. The company
specializes in structured financing and in providing advisory services related to
financial planning, modeling and advising on financial requirements.
Placement of Debt
 Syndication of Domestic Loan / Foreign Currency Loan

 Securitisation

 Debt Swap & Loan Restructuring

 Short Term Corporate Debt

 Working Capital (Cash Credit & Short term Loan)

 Capital Market Instruments

 Overseas Acquisition

Placement of Equity (Private Equity)

 Both for listed and unlisted companies

Merchant Banking
• IPO/FPO/RIGHTS

• Mergers & Acquisitions

• Corporate Advisory Services

• ADR/GDR/FCCB

• Buy Back Of Shares

 Service Offerings

Research Services
We at Religare believe in providing independent research for clients to make
investment decisions, with strict emphasis on self-regulation, avoiding possible conflict
of interest in objectivity.
Varied research reports are prepared on different categories of Equities like
• Fundamental research

• Technical research

• Daily reports

• Intraday trading tech calls

• Intraday Derivative call

• Directional F&O calls

• Structured products

• Index Arbitrage
 – Arbitraging between Index (NIFTY) Futures and its constituents
(Underlying Stock Futures).
• Volatility Trading

– Arbitrage between volatilities i.e. between implied volatility of

Options and forecasted volatility of underlying stock futures.
Financial Data
Historically, we conducted business as separate companies. Their business was
carried on by Fortis.
Securities Limited, Fortis Comdex Limited and Fortis Finvest Limited, some of which
were subsidiaries of certain of our Promoter Group companies. In order to integrate
our financial services operations under the Religare name, the Company acquired a
controlling stake in Fortis Securities Limited, Fortis Comdex Limited and Fortis
Finvest Limited and subsequently, acquired a 100% stake in these entities and in
Religare Insurance Broking Limited and Religare Venture Capital Private Limited.
These entities are now our Company’s subsidiaries. For further details regarding our
acquisitions and subsidiaries, see the sectionistory and Certain Corporate Matters”
We have set forth in this Draft Red Herring Prospectus the following financial
statements:
· Stand-alone financial statements of Religare Enterprises Limited for Fiscal 2003,
2004, 2005, 2006 and
2007 prepared in accordance with Indian GAAP and restated in accordance with
SEBI Guidelines;
· Stand-alone financial statements of Religare Securities Limited for Fiscal 2003,
2004, 2005, 2006 and
2007 prepared in accordance with Indian GAAP and restated in accordance with
SEBI Guidelines;
· Stand-alone financial statements of ReligareFinvest Limited for Fiscal 2003, 2004,
2005, 2006 and
2007 prepared in accordance with Indian GAAP and restated in accordance with
SEBI Guidelines;
· Stand-alone financial statements of Religare Commodities Limited for Fiscal 2004,
2005, 2006 and
2007 prepared in accordance with Indian GAAP and restated in accordance with
SEBI Guidelines;
· Stand-alone financial statements of Religare Insurance Broking Limited for Fiscal
2006 and
2007,
Prepared in accordance with Indian GAAP and restated in accordance with SEBI
Guidelines.
Currency of Presentation
All references to “Rupees” or “Rs.” or “INR” are to Indian Rupees, the official
currency of the Republic of India. All references to “$”, “US$”, “USD”, “U.S. $”,
“U.S. Dollar(s)” or “U.S. Dollar(s)” are to United States Dollars, the official currency
of the United States of America.
This Draft Red Herring Prospectus contains translations of certain U.S. Dollar and
other currency amounts into Indian Rupees (and certain Indian Rupee amounts into
U.S. Dollars and other currency amounts).
These have been presented solely to comply with the requirements of Clause 6.9.7.1
of the SEBI
Guidelines. These translations should not be construed as a representation that such
Indian
Rupee or U.S.Dollar or other amounts could have been, or could be, converted into
Indian Rupees, at any particular rate, or at all. Unless otherwise specified, all currency
translations provided herein have been made based on the exchange rates specified at
www.oanda.com, a currency web site.
Industry and Market Data
Unless stated otherwise, industry data used throughout this Draft Red Herring
Prospectus has been obtained from industry publications. Industry publications
generally state that the information contained in those publications has been obtained
from sources believed to be reliable but that their accuracy and completeness are not
guaranteed and their reliability cannot be assured. Although the Company believes
that the industry data used in this Draft Red Herring Prospectus is reliable, it has not
been verified by any independent source. Further, the extent to which the market data
presented in this Draft Red Herring Prospectus is meaningful depends on the reader’s
familiarity with and understanding of the methodologies used in compiling such data
and methodologies and assumptions may vary widely among different industry
sources.

INTERNAL RISK FACTORS

1. There are certain criminal proceedings against one of our Promoters and
Directors. Mr. Malvinder Mohan Singh, our Promoter and Director, is involved in a
criminal proceeding wherein a Mr. Tarsem Lal has claimed that Mr. Singh and others
have dishonestly received Rs. 0.40 million from him. The High Court of Punjab and
Haryana has stayed the proceedings before the concerned judicial authority. The
defendants have filed a petition in the High Court of Punjab and Haryana to quash the
complaint. The matter is currently pending. For further details, see the section
Titled “Outstanding Litigation and Material Developments” beginning on page 377.
2. We have been in the past and may in the future be barred by securities
regulators from dealing in the securities of certain Indian companies.
From time to time, we are subject to SEBI investigations or other regulatory scrutiny
in connection with our securities broking business. Typically, our equity broking
business involves trading on national stock exchanges. Our clients use our terminals
to trade on these stock exchanges and may engage in activities that result in price
manipulation of the securities in which they trade. While we believe that our business
is conducted in accordance with applicable regulations and market conduct norms, we
cannot control every trading activity of our clients apart from implementing the
prescribed “Know Your Client” norms. Share price manipulation by our clients may
result in the SEBI or other regulatory authority commencing investigations or
imposing sanctions on us.
On January 18, 2007, the SEBI barred us along with five other day-traders from
dealing in the securities of Nissan Copper Limited (“Nissan Copper”). This
prohibition has been imposed on us as an interim measure pending SEBI
investigations into allegations that we and other entities may have Manipulated
Nissan Copper’s share price following its listing on the BSE and the NSE in
December 2006. SEBI has not currently concluded that we and other barred day-
traders have manipulated Nissan Copper’s share price but the role played by each of
us in trading Nissan’s shares will be examined during the investigation.
In the matter of IndTra Deco Limited, the SEBI observed a sharp increase in price and
trading volume in the scrip of IndTra Deco Limited and issued an interim order, dated
October 5, 2005, restraining RSL (along with other stockbrokers) and the promoters
and directors of IndTra Deco Limited from buying, selling or dealing in the securities
of IndTra Deco Limited, directly or indirectly, from October 5, 2005 until the receipt
of further orders. Subsequently, the SEBI confirmed its interim order on June 20,
2006.
The SEBI in the matters of IFSL Limited, Mega Corporation Limited, Karuna Cables
Limited and Millennium Cybertech Limited, issued orders restraining RSL, among
other stock brokers, from buying, selling or dealing in the shares of the companies
mentioned above, directly or indirectly, on behalf of certain promoters, directors and
clients specified by the SEBI from the date of the respective orders until the receipt of
further orders. SEBI is also investigating trading in the shares of Vijay Textile
Limited, and has directed RSL to explain its reasons for entering into transactions.
In these shares on behalf of certain clients, which allegedly resulted in artificial
increases in the Vijay Textiles’ share price? The SEBI has also directed RSL to
provide reasons for having undertaken certain transactions on behalf of its clients.
The BSE, the NSE and the NSCCL have, in the period from April 2004 till date,
issued various letters and show cause notices against RSL. An aggregate penalty/ fine
of approximately Rs. 3.16 million has been imposed upon RSL in these matters. In
addition, the National Securities Depositories Limited has levied penalties
aggregating to Rs. 0.11 million on RSL.
We intend to cooperate fully with all SEBI, stock exchange and other regulatory
investigations and respond promptly to any notices. The outcome of any such
investigations cannot be predicted and could result in our being censured, fined,
deregistered, suspended or disqualified from dealing in the securities market,
including as an underwriter or an asset management company. Any such action would
restrict our trading activities and growth plans, severely impair our equity brokerage
business, harm our reputation and materially and adversely affect our business,
financial condition and results of operations. For details regarding other legal
proceedings to which we are a party, see the section titled “Outstanding Litigation and
Material Developments”.
SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY
We are a financial services company in India, offering a wide range of financial
products and services targeted at retail investors, high net worth individuals and
corporate and institutional clients. We are promoted by the promotes of Ranbaxy
Laboratories Limited. We operate from six regional offices and 25 sub-regional
offices and have a presence in 330 cities and towns controlling 979 locations
managed by us and our Business Associates all over India, as well as a representative
office in London. While the majority of our offices provide the full complement of
our services, we also have dedicated offices for our investment banking, institutional
brokerage, portfolio management services and priority client services.
Religare Enterprises Limited is the holding company for our subsidiaries. Our
principal subsidiaries include:

Retail Spectrum covers equity brokerage services, commodity brokerage services,

personal financial services (financial planning for the retail investor, including the
distribution of mutual funds, savings products, life insurance and initial public
offerings (“IPOs”) and personal credit (personal loans services (“PLS”) and loans
against shares (“LAS”). Historically, the services offered in this spectrum have been
the most substantial part of our business. Our Retail Spectrum services in India are
being offered through a network of 979 business locations spread across 330 cities
and towns and also through our online platform, www.religareonline.com,which is
being developed as an integrated portal to offer financial and other services. Our
business locations include intermediaries, or our “Business Associates”, who deliver a
standard quality of service offering on the basis of a pre-determined revenue sharing
ratio for the business generated through them. Our Retail Spectrum focuses on clients
who keep less than Rs. 2.5 million on a continuing basis, in the form of either equity
trading account margin, mutual fund investment, portfolio management investments
or insurance premiums paid up. We have also increased our local commodity
locations (or “mandis”) to 42 as of March 31, 2007 in order to expand our retail
commodity brokerage services.
Wealth Spectrum
Covers products and services which are geared to service high net worth individuals
and Provide wealth advisory services (on an asset allocation model), PMS
(discretionary equity investments), priority client equity services (non-discretionary
equity trading services), art initiatives (an art fund which we intend shortly to launch
as an investment diversification product) and international equity investment advisory
services. We have entered into an exclusive arrangement with Wall Street Electronics,
Inc., a New York broker dealer, to give Indian clients access through us to U.S.
markets. Our Wealth Spectrum focuses on clients who keep at least Rs. 2.5 million on
a continuing basis or more in the form of equity trading account margins, mutual fund
investments, portfolio management investment or insurance premiums paid up.

Institutional Spectrum
Covers products and services which cater under one service offering to corporate and
institutional clients, including domestic mutual funds, FIIs, banks and corporate
customers. The Institutional Spectrum provides services to the institutional investor
community through institutional brokerage and
RISK FACTOR
· This is a public issue of 11,364,162 Investment in equitys for cash at a price of Rs.
per Investment in equity including a share premium of Rs. per Investment in equity
aggregating to Rs. million. The Issue would constitute 16% of the post Issue paid-up
capital of our Company. Our Company is exploring the possibility of a Pre-IPO
Placement. If the Pre-IPO Placement is completed, the number of Investment in
equitys issued pursuant to the Pre-IPO Placement, will be reduced from the Issue,
subject to a minimum Issue size of 10% of the post-Issue share capital.
· In terms of Rule 20 (2) (b) of the SCRR, this being an issue for less than 25% of the
post– Issue capital, the Issue is being made through the 100% Book Building Process
wherein at least 60% of the Issue will be allocated on a proportionate basis to
Qualified Institutional Buyers (“QIBs”), out of which 5% shall be available for
allocation on a proportionate basis to Mutual Funds only.
The remainder shall be available for allocation on a proportionate basis to QIBs and
Mutual Funds, subject to valid Bids being received from them at or above the Issue
Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire
application money will be refunded forthwith.
Further, up to 10% of the Issue will be available for allocation on a proportionate
basis to Non-Institutional Bidders and up to 30% of the Issue will be available for
allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids
being received at or above the Issue Price.
· Under-subscription, if any, in the Non-Institutional Portion and Retail Individual
Portion would be met with spill over from other categories at the sole discretion of
our Company in consultation with the BRLMs. For more information, see the section
titled “Issue Procedure - Basis of Allotment” beginning on page 444.
· The average cost of acquisition of investment in equitys (on ‘first in first out’ basis)
by each of our Promoters, Mr. Malvinder Mohan Singh and Mr. Shivinder Mohan
Singh is Rs. 18.33. For detail see the section titled “Capital Structure” beginning on
page 24. The average cost of acquisition of Investment in equitys by our Promoters
has been calculated by taking the average of the amounts paid by them to acquire the
Investment in equitys currently held by them.
· The net worth of our Company, on a consolidated basis, is Rs. 3,209.88 million as at
March 31, 2007, respectively, as per restated consolidated financial statements of our
Company under Indian GAAP in the section titled “Financial Statements” beginning
on page 132.
· The net asset value/book value per Investment in equity of Rs. 10 each was Rs.
49.85 as at March 31, 2007, as per restated consolidated financial statements of our
Company included in this Draft Red Herring Prospectus. For further information, see
the section titled “Capital Structure” beginning on page 24.
· Our Promoters, Directors and key managerial personnel are interested in our
Company to the extent of remuneration and the Investment in equitys held by them or
their relatives and associates or held by the companies, firms and trusts in which they
are interested as directors, member, partner and/or trustee and to the extent of the
benefits arising out of such shareholding, if any, in our Company. For further details,
see the sections titled “Capital Structure”, “Our Promoters and Promoter Group” and
“Our Management” beginning on pages 24, 105 and 92, respectively.
· Other ventures promoted by our Promoters are interested to the extent of their
shareholding in our Company. For details, see the section titled “Capital Structure”
· Certain of our Promoter Group entities are engaged in similar businesses as ours,
resulting in a conflict of interest with respect to our business strategies. For further
details, see the sections titled “Risk Factors” and “Our Promoters and Promoter
Group” beginning on pages xii and 105, respectively.
· Except as disclosed in the section titled “Capital Structure” beginning on page 24,
we have not issued any Investment in equitys for consideration other than cash.

Industry

Fax : +91 11 39126050 Email : info@religare.in

Email : info@religare.in
Website: www.religare.in
 CHAPTER – IV
DATA ANALYSIS
AND
INTERPRETATION
STOCK MARKET
Stock Prices
Company : RELIGARE SECURITIES LIMITED ( 532106 )
Period ( 01-Jan-2020 to 31-Jan-2020)
Op Hig Clo No. of No. Total
en h Lo se of Turnover
W Shares
Date Pri Pri w Trad
Pri AP (Rs.)
Pri ce es
ce ce
ce
1-01- 43. 43. 42. 43. 43. 1,82,10 1,046 78,76,672
20 20 60 85 10 25 6
2-01- 43. 44. 43. 44. 43. 1,87,10 1,464 82,03,362
20 20 50 20 10 84 7
3-01- 44. 45. 44. 45. 45. 3,88,56 2,278 1,75,71,610
20 55 85 35 00 22 4
4-01- 45. 45. 43. 44. 44. 1,27,73 1,200 56,90,920
20 10 15 90 10 55 4
7-01- 44. 44. 44. 44. 44. 92,155 912 41,05,228
20 40 95 10 35 55
8-01- 44. 46. 44. 46. 45. 3,86,43 2,565 1,76,47,452
20 50 50 45 05 67 7
9-01- 45. 47. 45. 47. 46. 7,65,52 3,796 3,58,45,260
20 95 85 50 45 82 4
12-01- 47. 49. 47. 49. 48. 12,59,8 5,915 6,12,41,940
20 95 60 40 20 61 08
12-01- 49. 50. 46. 47. 48. 10,53,4 4,830 5,14,25,510
20 90 25 70 20 81 96
14-01- 47. 47. 46. 46. 46. 2,10,23 1,451 97,40,861
20 20 20 05 20 56 3
 15-01- 46. 46. 44. 44. 45. 4,49,89 1,684 2,04,49,899
20 40 40 00 85 46 3
20-01- 44. 45. 43. 44. 45. 5,00,22 2,340 2,25,24,008
20 30 80 65 95 03 0
20-01- 45. 45. 44. 44. 44. 3,59,20 1,805 1,61,58,203
20 00 60 55 90 98 1
20-01- 43. 45. 43. 43. 44. 3,65,12 1,387 1,62,20,480
20 25 00 25 95 42 0
21-01- 43. 47. 43. 46. 46. 9,55,64 4,612 4,40,53,990
20 50 20 50 10 10 8
22-01- 46. 49. 46. 48. 48. 20,38,6 8,107 9,90,02,539
20 50 85 15 85 56 20
23-01- 48. 49. 47. 48. 48. 8,25,92 4,220 4,02,66,363
20 95 80 60 50 75 1
24-01- 48. 48. 47. 48. 48. 3,49,52 2,209 1,68,26,351
20 60 90 20 00 14 0
29-01- 47. 50. 47. 50. 49. 6,93,98 3,303 3,42,26,632
20 95 50 05 00 32 3
30-01- 50. 50. 48. 49. 50. 6,63,30 3,810 3,32,01,020
20 25 80 80 15 05 0
31-01- 49. 49. 48. 48. 48. 2,45,45 1,348 1,20,14,941
20 50 65 05 65 95 2

Table 4.1

5000
4500
4000
3500 Open
3000 High
2500 Low
2000 Close
1500
WAP
1000
Trades
500
No. of
0
01-01-2020 to 31-01-20

Fig 4.1

INTERPRETATION:
 On 1 st Jan open value has decreased to 43.10 than compared to lower value of EPS
41.25. Then coming to higher price to 49.29 wholly the conclusion is 43.67.
Then coming to the volume on the same dates or days volume are increased.
Because totally this month RELIGARE SECURITIES LIMITED . EPS value is decreased
i.e.
percentage 03.52%.

Company: FEDBANK ( 500469 )

Period ( 01-Jan-2020 to 31-Jan-2020 )
Ope Hig Low Clos No. of No. Total
n h Pric e WA of Turnover
Date Share
Pric Pric e Pric P s Tra (Rs.)
e e e des
1/01/2 235. 243. 235. 242. 240. 847 1,10,70,120
0 35 50 35 45 68 45,995
2/01/2 250. 250. 243. 248. 246. 1,06,2 2,62,37,525
0 00 00 50 05 87 79 1,296
3/01/2 250. 252. 241. 244. 248. 1,05 1,61,01,503
0 00 50 10 25 61 64,766 1
4/01/2 244. 247. 241. 242. 244. 527 45,26,643
0 00 50 10 65 38 20,523
7/01/2 244. 246. 242. 242. 243. 467 56,05,125
0 85 10 00 30 61 23,010
8/01/2 241. 249. 241. 248. 245. 545 89,94,520
0 25 00 25 00 22 36,680
9/01/2 250. 251. 245. 248. 248. 1,28 1,85,94,943
0 00 50 00 75 68 74,775 8
10/01/ 251. 251. 246. 248. 248. 797 1,06,40,995
20 00 00 00 65 55 42,812
12/01/ 250. 252. 244. 246. 246. 597 1,05,82,682
20 80 00 00 00 86 42,870
14/01/ 248. 248. 244. 244. 246. 491 1,27,70,058
20 00 00 05 90 32 51,843
15/01/ 245. 246. 235. 236. 239. 697 2,25,22,220
20 50 40 00 05 98 93,850
20/01/ 237. 240. 233. 237. 234. 5,39,3 661 12,66,36,232
20 00 00 10 25 79 59
20/01/ 239. 241. 237. 240. 239. 506 71,50,961
20 50 50 15 05 22 29,893
20/01/ 243. 243. 237. 239. 238. 325 1,03,30,482
20 00 00 50 35 75 43,269
21/01/ 239. 241. 238. 239. 239. 379 92,24,706
20 90 95 00 20 57 38,505
22/01/ 240. 242. 240. 241. 240. 220 61,33,910
20 80 00 00 00 98 25,454
23/01/ 243. 244. 241. 242. 242. 325 51,84,704
20 50 80 15 25 99 21,337
24/01/ 244. 245. 239. 241. 241. 435 77,47,452
20 90 00 05 55 79 32,042
29/01/ 245. 245. 237. 238. 241. 582 1,21,92,205
20 90 90 30 35 36 50,514
30/01/ 239. 240. 235. 237. 237. 1,75,6 4,20,93,769
20 30 70 00 45 33 78 1,020
31/01/ 239. 243. 233. 235. 239. 720 2,35,05,522
20 25 00 70 75 37 98,206

Table 4.2
 FEDBANK
300

250

200 Open
150 High

100 Low

50 Close
WAP
0
01-01-2020 to 31-01-20

Fig 4.2

INTERPRETATION:

On 1 st Jan open value has increased to 242.45 than compared to higher value of EPS
285.63. Then coming to higher price to 296.32 wholly the conclusion is 245.23.
Then coming to the volume on the same dates or days volume are increased.
Because totally this month FEDBANK OF INDIA. EPS value is increased i.e. percentage
10.37%.

company: ADANIENTE ( 512599 )

Period ( 01-Jan-2020 to 31-Jan-2020 )
Ope Hig Low Clos No. of No. Total
n h Pric e WA of Turnover
Date Share
Pric Pric e Pric P s Tra (Rs.)
e e e des
1/01/20 834. 834. 820. 821. 822. 845 1,73,99,664
20 20 00 10 72 21,149
2/01/20 830. 830. 815. 820. 822. 748 1,60,36,556
00 00 15 50 30 20,502
3/01/20 821. 825. 820. 820. 820. 661 2,20,71,937
10 50 05 25 12 26,791
4/01/20 820. 848. 820. 830. 834. 2,20 5,41,68,683
00 00 00 70 20 64,938 9
7/01/20 755. 868. 755. 840. 840. 1,47 2,95,50,751
00 00 00 30 39 35,203 8
8/01/20 842. 857. 833. 842. 848. 2,44 7,95,87,862
45 50 00 10 55 93,793 5
9/01/20 840. 858. 831. 844. 845. 2,38 6,60,91,496
00 00 00 85 94 78,128 1
10/01/2 397. 432. 397. 429. 427. 1,60 3,61,91,037
0 00 70 00 00 94 84,570 7
12/01/2 433. 437. 424. 425. 430. 1,15 1,72,20,330
0 00 00 70 60 76 39,960 7
14/01/2 430. 433. 423. 424. 426. 734 1,05,49,479
0 10 00 10 55 69 24,724
15/01/2 428. 429. 415. 420. 420. 582 90,80,121
0 00 00 10 25 40 21,599
20/01/2 420. 425. 415. 423. 422. 652 1,05,79,386
0 00 00 45 70 45 25,043
20/01/2 420. 427. 420. 424. 425. 443 57,68,806
0 00 90 00 80 37 20,562
20/01/2 420. 429. 420. 424. 425. 446 1,01,10,614
0 40 85 95 20 71 23,750
21/01/2 424. 425. 420. 422. 422. 512 1,78,02,848
0 25 75 20 85 89 42,108
22/01/2 424. 425. 420. 420. 421. 541 1,98,60,828
0 00 80 00 60 30 47,142
23/01/2 420. 427. 420. 426. 423. 575 1,81,69,379
0 00 00 00 15 28 42,925
24/01/2 426. 431. 422. 430. 427. 658 1,65,82,347
0 80 25 60 05 42 38,796
29/01/2 437. 437. 428. 429. 432. 531 1,03,60,971
0 90 90 00 35 10 23,978
30/01/2 431. 444. 427. 434. 435. 7,81,2 34,05,33,964
0 00 40 25 25 93 02 2,920
31/01/2 437. 441. 432. 436. 438. 3,38,9 964 14,86,74,349
0 40 80 00 15 57 99

Table 4.3
 ADANIENTE
1000
900
800
700
Open
600
500 High
400
Low
300
200 Close
100 WAP
0
01-01-2020 to 31-01-20

Fig 4.3

INTERPRETATION:

On 1st Jan open value has decreased to 821.10 than compared to higher value of EPS
868.00. Then coming to higher price to 865.21 wholly the conclusion is 863.58.
Then coming to the volume on the same dates or days volume are decreased.
Because totally this month ADANIENTE. EPS value is decreased i.e. percentage
06.38%.

Company: UNITECH ( 507878 )

Period ( 01-Jan-2020 to 31-Jan-2020 )
 Op Hi Lo Cl No. of No. Total
en gh w ose W of Turnover
Date AP Shares
Pri Pri Pri Pri Tra (Rs.)
ce ce ce ce des
1/01/2 80. 89. 79. 88. 85. 3,30,51,4 99,7 2,82,61,20,25
0 00 60 60 75 51 71 63 1
2/01/2 90. 92. 88. 88. 90. 1,79,20,7 63,1 1,61,24,12,78
0 35 00 25 85 01 58 56 7
3/01/2 89. 91. 89. 90. 90. 1,30,55,7 45,7 1,20,46,10,42
0 75 90 00 00 73 31 50 0
4/01/2 89. 89. 85. 88. 88. 1,12,24,6 35,6 98,20,68,206
0 00 90 10 25 25 08 07
7/01/2 88. 89. 86. 86. 87. 75,40,27 25,8 66,34,06,523
0 05 65 30 90 98 6 35
8/01/2 86. 91. 86. 91. 89. 1,20,56,2 39,0 1,01,32,29,41
0 80 80 05 05 22 95 10 0
9/01/2 85. 91. 85. 89. 90. 1,57,27,9 50,6 1,41,88,55,27
0 00 80 00 55 21 89 38 7
10/01/ 89. 90. 88. 88. 89. 97,14,12 33,1 86,50,55,972
20 00 20 20 55 05 5 59
12/01/ 89. 90. 85. 86. 87. 92,71,85 32,2 81,54,66,206
20 20 30 30 65 95 0 75
14/01/ 87. 88. 86. 86. 87. 73,50,43 26,6 63,99,23,604
20 50 25 00 45 06 6 95
15/01/ 86. 87. 84. 85. 86. 1,04,53,0 30,2 90,59,27,927
20 55 90 30 60 67 61 00
20/01/ 85. 85. 83. 84. 84. 77,20,49 27,3 65,34,31,576
20 20 70 55 40 65 7 76
20/01/ 84. 85. 81. 82. 82. 1,44,32,9 41,0 1,20,48,24,02
20 40 05 45 55 78 12 45 3
20/01/ 82. 82. 79. 80. 80. 1,34,03,5 45,8 1,08,46,04,89
20 40 40 55 05 92 34 99 8
21/01/ 80. 80. 78. 78. 79. 1,05,40,8 33,6 83,94,01,276
20 00 95 00 35 63 88 44
22/01/ 78. 80. 78. 79. 79. 68,59,46 23,7 54,60,14,064
20 90 35 50 60 60 4 24
23/01/ 80. 82. 80. 81. 81. 85,56,69 32,4 69,58,15,750
20 10 40 00 90 32 5 73
24/01/ 82. 83. 81. 82. 82. 91,69,70 32,4 75,63,31,547
20 50 50 35 00 48 2 72
29/01/ 81. 82. 81. 81. 82. 44,73,30 20,5 36,78,20,331
20 45 85 45 95 23 4 69
30/01/ 82. 83. 81. 82. 82. 72,52,44 27,8 60,08,34,458
20 60 70 45 65 85 0 32
 31/01/ 82. 84. 82. 82. 83. 45,81,37 20,6 38,03,74,122
20 90 10 10 30 03 7 10

Table 4.4
Stock Prices

CHART

UNITECH
100
90
80
70
Open
60
50 High
40
Low
30
20 Close
10 WAP
0
01-01-2020 to 31-01-20

Fig 4.4

INTERPRETATION:

On 1st Jan open value has increased to 88.75 than compared to higher value of EPS
91.80 Then coming to higher price to 89.36 wholly the conclusion is 86.58.
Then coming to the volume on the same dates or days volume are increased.
Because totally this month UNITECH. EPS value is increased i.e. percentage 20.32%.
CHAPTER –
V
FINDINGS
AND
SUGGESTION
S
 FINDINGS & SUGGESTIONS

• There must be prohibition on disposal of promoters share holding, and also restrictions
and the expansion without prior approval of the financial institutions for declaration of
higher amount/ rate.

• The availability of derivative products in eluding index futures, index options, individual
stock futures and individual stock options re-enforces the overall attractiveness of this
market to foreign and domestic investors.

• Volume of paper work is small but it is very complicated to maintain data in system so
tries to reduce that by regular audit and updating data.

• Most of the DPs do not have the necessary infrastructure to handle the high work load of
transactions leading to may error by DPs, so by giving full infrastructure information to
every DO can avoid this problem.

• The pool account doesn’t know the true owner of the share and hence dividends are paid
to the broker instead of owners by this the broker can do any manipulation or any fraud
with the owner, for this the owner can loose his dividend.

• Hence for this try to pay the dividend directly to the owner.

• If the shares are fake/forged which delivery by the broker the share holder can loose that
shares an have to receive another lot of issued shares from the broker in 21 days, this
system stands abused.

• So minimize that waiting days are deliver the issued shares to the share holder as soon as
Possible.
 CONCLUSION

• The comprehensive study of capital market instrument at RELIGARE SECURITIES

LIMITED Connected stock exchange has been an enlightening experience stressing on the
positive aspects on Dematerialization.

• And settlement of shares, derivative market and capital instruments has done in whole lot
of good to the issuer, investor companies and country.

• The depository systems has reduced the lag in delivery and settlement of securities but
also supported the cause of providing more liquidity to the security holder, the need for
setting up of a depository paper less trading.

• Through online trading system and settlement became inevitable and unavoidable for the
smooth and the efficient functioning of the capital market.

• This system has proved its worthiness by increasing in the speed of transactions within
T+3 days which are earlier T+5 days.

• Now there is a proposal that the settlement will be done within T+1days in near future
which is in it an indication of a boon in the system of demat and capital market
instruments.

• It has been fairly long since derivative trading started off on the Indian Indexes.
• Actively has failed to really take off with low figures being transacted in terms of value
and volumes.

• The introduction of derivative trading was hailed by the punters in the capital markets but
has not really brought about a wave so as to speak.

• There are several factors, which impede the growth of the derivative markets in India.
• Of these factors the absence of clear guidelines on tax-related issues and the high cost of
transactions are the most prominent.

• Now it is T+2days started from 1 April 2020.

BIBLIOGRAPHY

Web sites Referred:

www.sharekhan.comw
ww.indiainfolie.com

• RELIGARE SECURITIES LIMITED .com

• Sebi.com

• Nseindia.com

• Yahoo.com

• Economywatch.com

Referred Text Book:

V.K. Balla “Financial Investment”

Gordon & Natarajan “Financial Markets and Services”