INTRODUCTION

RANBAXY
India's first multinational company

Bhai Mohan Singh was the founder of what can be termed India's first multinational
company.

Ranbaxy - a pioneer of India's pharmaceuticals industry, 89-year-old Bhai Mohan Singh

was the survivor of many a courtroom and boardroom battles, be it to regain hold over
the company or to claim rights to products and patents.

The origin
The early days saw Bhai Mohan Singh take over Ranbaxy from Mr. Ranjit Singh and Dr
Gurbux Singh of Amritsar, who were distributors for A. Shionogi, a Japanese
pharmaceutical company manufacturing vitamins and anti-TB drugs. In fact, Ranbaxy's
name was a fusion of the two earlier promoters.

Later he collaborated with Italian pharma company Lapetit Spa (Milan), and
subsequently bought out its business. Ranbaxy Laboratories Ltd went public in 1973 and
the sleeping pill Calm pose catapulted the company to the big league.

It was then that Bhai Mohan Singh placed his eldest and favorite son Dr Parvinder Singh
in the driving seat, who later rose to become the company's Managing Director in 1982.

As the company grew from strength to strength, he also inducted his other two sons, Mr.
Manjit Singh and Mr. Analjit Singh, into the company. However, their stints were short
lived and soon the two brothers moved on to other businesses.

Ranbaxy Laboratories Ltd. (RLL) is the largest pharmaceutical company incorporated in

India. It is also amongst the top league globally and is ranked 9th largest generic
company worldwide. Ranbaxy is also credited with the tag of true Indian multinational.
The company traces its roots to a chemist shop in Delhi. It is one of the first Indian
pharmaceutical company to start a joint venture abroad. Rapid growth of Ranbaxy is
attributed mainly to its focused research and joint ventures in India and abroad. It is also
innovation and market driven, with a strong distribution network. The company was able
to grow successfully in highly competitive markets. In the current business scenario,
Ranbaxy is focusing on innovation, alliances, mergers and globalisation to achieve its
long-term vision of becoming a global pharmaceutical giant with a turnover of $1 billion
by 2004. The fruits of such efforts are evident in the latest financial result, as a large
chunk of its income comes from new products and exports of generics. The growth of
Ranbaxy can be attributed to its ability to identify good windows of opportunity and its
ability to grow by leveraging innovation, regulatory knowledge and alliances.
RELIGARE

RELIGARE is RANBAXY promoters company

Religare is one of the leading integrated financial services institution of India. The
company offers a large and diverse bouquet of services ranging from equities,
commodities, insurance broking, to wealth advisory, portfolio management services,
personal finance services, Investment banking and institutional broking services.

Religare Enterprises Limited is the holding company for all its businesses, structured and
being operated through various subsidiaries.

Background
Religare’s businesses, routed through subsidiaries in which it holds 75-100 per cent
stakes, span stock broking, loans against shares, commodities broking, personal lending,
depository services, wealth management, venture capital, insurance broking, real-estate
investing, insurance and arts advisory services. These are offered to retail and
institutional clients.

Religare’s retail network spreads across the length and breadth of the country with its
presence through more than 1,217 locations across more than 392 cities and towns.
Having spread itself fairly well across the country and with the promise of not resting on
its laurels, it has also aggressively started eyeing global geographies

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.
 Among top Among top 10 generic pharma co. across the globe and largest Pharma
Company in India.

• Manufacturing operations in 7 countries

•
• Products sold in 125 countries
•
• Sales of US $ 1.17 billion
•
• Manufactures & Markets
•
• Generics and Branded Generics

South & South East Asia’s largest Pathology labs network

• Global accreditations and Compliance

•
• Comprehensive range of tests
•
• Focus on R&D
•
• 550 Sample Collection Centers in 360 cities across the globe
•
• Over 1.5 mn satisfied customers every year

.One of the second largest hospital chain in India

. Currently1600 beds across

• India; target of 5,500 hospital

•
• Beds by 2008
•
• 8 hospitals in National Capital
•
 • Region; 25 hospitals across India
•
• Engaged in healthcare
•
• Telemedicine, education & research
•

Religare is among India’s largest financial services house having more

than 150 offices and 300 partner locations

The Mileston
Corporate Structure

RELIGARE ENTERPRISES L IMITED

Religare Securities Ltd.

• Retail Equity Brokerage & Research

•
• Institutional Equity Brokerage & Research
•
• Depository
•
• Portfolio Management Services
•
• Merchant Banking (Proposed)
•

Religare Finvest Ltd.

• Lending Services – Equity & Others

•
• Corporate Finance - Equity & Debt
•
• Mutual Fund Distribution Business
•
• IPO Distribution

Religare Comdex Ltd.

 • Religare Commodity Brokerage and Research
•
• Commodity Advisory Services

Religare Insurance Advisory

Services Ltd.

. Insurance Distribution Services

• Reinsurance Service

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.

Each leaf of the four-leaf clover has a special meaning in the sphere of Religare.

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
The second leaf of the clover represents Trust. The ability to place ones own
foundations on which a person reaches for the stars.
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.

Vision - To build Religare as a globally trusted brand in the financial services domain
and present it as the ‘Investment Gateway of India’

Mission -Providing financial care driven by the core values of diligence and
transparency.

Brand Essence -Religare is driven by ethical and dynamic processes for wealth creation.

Services

• Online access to our Institutional and Technical research.

• We provide contract note through electronic format as well as in physical

form.
 • Online access of your ledger balance, stock, dividends.

• Dedicated Relationship Managers for assisting multiple investments needs.

• NSE-BSE cash segment, NSE F&O on a single platform.

• Trade online and on phone (offline) at branch.

• Online and offline transfer of funds through multiple banks such as ICICI,
HDFC, and Axis bank.

• Live Broker Terminal.

Objective
The main objective of our on the job training is to provide us the relevant
knowledge and information regarding the share market and investment in it.
And also to provide with the practical knowledge of the corporate
environment and exposure also. With the help of the sip programme I know
that how to work in corporate area and how to fulfilled our requirement. I
also know that how we face problem and how we can solve the problem. My
main object was to get more knowledge about market and marketing area.

Learn corporate environment

The main objective of on the job training is to learn practical corporate

environment so that the intern can be aware of the practical look in the
company. For example in the Religare Securities we learn its working
culture, environment and to satisfy the customer.

Contribute for the SIP company

When a company assigns an intern for itself then it hopes his/her

contribution for it during summer internship program. So the contribution
for the SIP Company is to be an affective of on the job training. An SIP
intern should contribute lot for the SIP Company so that he/she can get the
final placement and delight the organization. For the example to open d-mat
accounts in the Religare Securities will benefit it.

CLIENT INTERFACE:-
Retail Spectrum- To cater to a large number of retail clients by offering all
products under one roof through the Branch Network and Online mode

• Equity and Commodity Trading

• Personal Finance Services
 Mutual Funds
 Insurance
 Saving Products
d
• Personal Credit
 Personal Loans
 Loans against Share
 Online Investment Portal

Institutional Spectrum:-To Forge & build strong relationships with

Corporate and Institutions

• Institutional Equity Broking

• Investment Banking
• Merchant Banking
• Transaction Advisory
• Corporate Finance

Wealth Spectrum - To provide customized wealth advisory services to

High Net worth Individuals

• Wealth Advisory Services

• Portfolio Management Services
 • International Advisory Fund Management Services
• Priority Equity Client Services
• Arts Initiative

PRODUCTS:-

Religare securities deals in equities and commodities as well. There are mainly two
types of trading which are R-ALLY and R-ACE. R-ALLY is ODIN based platform
which is also known as online trading and R-ACE is Asian CERC platform. R-
ALLY is mainly divided into three products. Products are as follows…..

(1)RALLY BASIC –
In this product/service, Company offer a DMAT and TRADING Account to our
customers. They can trade through Phone or physical presence at office campus. We
provide all facility in office campus. There is a trading hall where all dealers
buy/sell the share according to orders of clients. Thus, we provide this service to
customer with the charge of Rs. 500/- only. After opening account they can buy/sell
shares through our company. The all work done by dealer in this service, he will
buy/sell share on the behalf of client through his client code.

(2)RALLY LITE
In this product/service, company offers the all service online through webpage. It is
a web based services. Customer can sell/buy shares through net himself. In this
service there is no need to call to dealer or physical presence of client. They can do
own. This facility is free, the account opening charge is Rs. 500/-, but in this product
customer have to pay minimum Rs. 5000/- only for using this service. This is not
security money. It is usable money for any buying shares. A client can use this
money.

(3)RALLY PRO

In this product/service, company offers software Odin Diet. Customer can sell/buy
shares from this software. There is no need to call or physical presence for trading.
This software is downloaded to client’s Pc. He can use it at own computer or own
place. This software is also free, but there is a brokerage commitment in these
service charges. If client cross the brokerage limit across the rs. 1800/- only then this
is refundable money for client. It is credited to client’s account. Means the
brokerage is adjusted against this amount.

Now the customer analysis is depended their preference or requirement. If a client

usually do the business of share trading. He is able to come at office then he prefers
Rally Basic. Or a person who is busy with other business then he can use telephonic
services, and then he is also prefer of Rally Basic.

A person has Personal computer. His working on computer. He has no time to come
at office or call again and again then he can prefer Software or online Services.
Thus it is depended on customer’s convenience.

The mainly thing is brokerage Rate in competition to other companies. Company

offers 3 paisa and 30 paisa on Intra-Day and Delivery to their clients. If client does
work more or higher turnover then it is negotiated.

History of Indian Stock Market

 India has a well-established securities market with a long history of
organized trading. The earliest recorded capital market dealings in India has
transactions in loan stocks of the East India Company towards the end of
18th Century. By 1830, a wide range of bank and cotton mill securities were
being trade in Mumbai and Calcutta. The Enactment of the Companies Act,
1850, which introduced the concept of limited liability to India, served to
stimulate activity in the securities markets.
Trading in securities is taking place in India right from the close of
the 18th century. The first Stock exchange in India was set up in 1875 in
Bombay known as Native Stock Exchange. This was the first Stock
Exchange set up in Asia as the Tokyo Stock Exchange was set up in 1878.
The first Stock exchange in the world was set up about two hundred years
ago in London.
The stock exchange were placed under the exclusive regulation of the
Government through proclamation in 1950 of the Constitution of India.
Under the securities contracts (Regulation)Act., 1956, only those stock
exchanges recognized by the Government were permitted and the
Government was vested with wide poers of supervision and control of Stock
Exchanges, Soon after the implementation of this Act, the Government
recognized the exchanges at Bombay, Calcutta, Ahmedabad, Delhi, Madras,
Hyderabad and Indoor.
Meaning of Stock Exchange
The Stock Exchange is an organized market for purchase and sale of
listed industrial and financial securities. The securities traded on stock
Exchanges include shares and Debentures of public limited Companies,
Accordingly to the Securities Contract(Regulation)Act 1956, Stock
exchange is an association, organization or body of individuals, whether
incorporated or not, established for the purpose of assisting, regulating and
controlling business in buying, selling and dealing securities.
The growth in the Stock Exchange of the country is spectacular and
can be attributed to increase in number of instruments offered, listed
companies and tight credit policy of banks as a result of which Indian
corporate sector has been relying upon capital markets for raising funds for
their needs.
Definition
What the term Stock Exchange implies is evident from the
following features of an exchange.
S. Security provided for investors.
T. Tax benefits, planning and exemptions.
O. Optimum return on investment.
C. Cautious approach.
K. Knowledge of market.
D. Eligibility for accruals.
X. Xchange of Securities Transacted.
C. Cyclopedia of listed companies.
H. High yield.
A. Authentic Information.
N. New Entrepreneurs encouraged.
G. Guidance of investors and companies.
E. Equity cult.

Conclusion
 A Stock Exchange thus fulfils a vital function in the economic
development of the nation. Its main function is to liquefy capital by enabling
a person who has invested money in shares of a company to convert it into
cash by disposing of his shares in the company to some one else.

Regulation of stock exchange:

The need to regulate stock exchanges was felt in 1921 first when
Atlay Committee recommended Bombay Stock Exchange Securities
Contract Control Act. Passed in 1925. Later on, Securities contract
(Regulation) Act was made in 1956 and Securities Contract (Regulation)
Rule in 1957. Certain powers now vest with SEBI Wef. 30th January 1992,
on promulgation of SEBI Act, 1992.

The Securities Contracts, (Regulation) Act, 1956 was enacted to

prevent undesirable transactions in securities by regulating the business of
dealing therein, by prohibiting options and by providing for certain, by
prohibiting matters. The provisions and rules enable smooth functioning of
the Stock Exchange. The Act, empowers the Stock Exchange to regulate the
functioning of Exchanges through their bye-laws such as

1. Maintains of a clearing house for all business transacted at the

Exchange.
2. Determination and declaration of market rates.
3. Regulation of blank transfers and carry over business.
4. Regulation of jobbing business.
5. Limitation of business done by members.
6. Fixation of margins, brokerage, fine fee, etc.

The Stock Exchange are governed by a Board of Directors of Council of

management which is now comprised of elected brokers, SEBI,
Government and public representatives. The Board has powers to make,
and operate rules, bye laws and regulations and has jurisdiction over all
its members.

Need of Stock Exchange

The main function of the Stock Exchange is to act as a medium by
which Securities can be converted into cash and vice-versa. Stock
Exchange has a set mechanism the price of securities on the basis and
supply of securities. The importance of the stock exchange is as follows:-

1. Providing regular market to the securities.

2. Encouraging investment habits in general public.
3. Providing Liquidity to the securities.
4. Providing a mechanism for continue our evolution.
5. Encouraging capital formation.
6. Acting as an intermediary between buyers and sellers.
7. Providing stability in the prices of securities.
8. Publishing regularly stock price quotation.
9. Providing facility of a trading hall for the member to transact
businesss.
 ROLE OF STOCK EXCHANGE IN THE CAPITAL MARKET

Capital market provides long term capital to the industrial sector for the
expenditure on land, plant and machinery, building etc. which are permanent
and used for production. The long term finance is met by the market.

Capital Market is of two types

1. Primary Capital Market.
2. Secondary Capital Market.
In simple term primary capital market is called the market of new
issues and secondary capital market is called the market of exiting issues.

PRIMARY AND SECONDARY MARKETS

Also termed as new market is concerned with primary issue of
securities by enterprises for their establishment. Expansion, modernization
and reorganization etc. Primary market is related to the generation of capital
through new issue of shares, debentures and bonds, where investors may
directly apply for the allotment of securities. The operation of primary market
includes (1) new issue by existing or new company. (2) right issue and (3)
issue of debentures and bonds. Primary market is considered to be the easiest
way through funds may be collected for cooperate sector.

The SEBI has issued certain procedural guideline for the simplification
and standardization of liberation economic policy, the primary market has
shown a tremendous growth in the last few years.
SECONDARY MARKET
 It is that market where securities are regularly bought and sold. The
primary market is related with the issue whereas the secondary market relates
to the trading of such securities. The secondary market provides liquidity to
the investor. Trading in secondary market is governed by the bye laws and
regulation of the stock exchange concerned. After the securities are listed on a
recognized market these can be freely transferred through its members. The
trading operations are carried for a fixed number of hour in a trading hall
called trading ring. The stock exchange provides necessary information to the
investor. The SEBI has issued various guideline to regulate and control the
operations of secondary markets there are different type of secondary markets
operating in the country.

1. Recognized Stock Exchange

Recognized Stock Exchange means a stock exchange which for
the time being has been recognized by the central government under
section – 4 of the securities contract (Regulation) Act1956. According
to SEBI directions all operations in securities must be transacted only
through recognized stock exchange in the country.

2. Kerb Market
This is an unofficial market where the transactions are made after
the normal trading hours of the recognized by the central
government under the securities contracts (Regulation) Act 1956.
section of this act states that no person, expect with the
permission of the central government, shell organize or assist in,
organizing or be a member of the stock exchange (other than
recognized stock exchange) for the purpose of assisting in,
entering into or performing any contract in securities. Under
section 23 of the securities contracts (Regulation) Act 1956. any
person who violates the provision of selection 19 shall be
punishable with imprisonment for a team, which may extend to
one year, or with fine or both.

SENSEX – THE BAROMETER OF INDIAN

 CAPITAL MARKETS
For the premier Stock Exchange that pioneered the stock broking
activity in India 128 yrs of experience seems to be a proud milestone. A lot
has changed since 1875 when 318 persons became members of what today is
called “The Stock Exchange, Mumbai” by paying a princely amount of Re 1.
Since then the country’s capital market have passed to both good and
bad periods. The Stock Exchange, Mumbai (BSE) in 1986 came out with a
stock index that subsequently became the barometer of the Indian Stock
Markets. SENSEX is the basket of 30 constituent stocks representing a sample
of large, liquid and representative companies.
The base year of SENSEX is 1978 – 79 and the base value is 100. The
index is widely reported in both domestic and international markets through
print as well as electronic media.
The index was initially calculated based on the “Full Market
Capitalization” methodology with effect from September 1, 2003. The “Free-
float Market Capitalization” methodology of index construction is regarded as
an industry best practice globally. All major index providers like MSCI,
FTSE, STOXX, S&P and Dow Jones use the Free-float methodology.
Due to its wide acceptance amongst the Indian investors: SENSEX is
regarded to be the purse of the Indian stock market. Small wonders, the
SENSEX has over the years become one of the most prominent brands in the
country.

NATIONAL STOCK EXCHANGE (NSE)

 The National Stock Exchange of India Limited has genesis in the report
of the High Powered Study Group on Establishment of New Stock Exchanges,
which recommended promotion of the National Stock Exchange by financial
institutions to provide access to investors from all across the country on an
equal footing. Based on the recommendations, NSE was promoted by leading
Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock
exchanges in the country.

On its recognition as a stock exchange under the securities contracts

(Regulation) Act 1956, in April 1993, NSE commenced operations in the
Wholesale Debt Market (WDM) segment in june 1994. The Capital Market
(Equities) segment commenced operations in November 1994 and operations
in Derivatives segment commenced in june 2000.

BOMBAY STOCK EXCHANGE

 The Stock Exchange, Mumbai popularly known as “BSE” was
established in 1875 as “The Native Share and Stock Brokers Association”. It
is the oldest one in Asia, even older than the Tokyo Stock Exchange, which
was established in 1878. It is a voluntary non-profit making Association of
Persons (AOP) and is currently engaged in the process of converting itself
into demutualised and corporate entity. It has evolved over the years into its
present status as the premier Stock Exchange in the country. It is the first
Stock Exchange in the country to have obtained permanent recognition in
1956 from the Govt. of India under the securities contracts (Regulation) Act
1956.
The Exchange, while providing an eefficient and transparent market for
trading in securities, debt and derivatives upholds the interests of the investors
and ensures redressal of their grievances whether against the companies or its
own member-brokers. It also strives to educate and enlighten the investors by
conducting investor education programmes and making available to them
necessary informative inputs.
A Governing Board having 20 directors is the apex body, which
decides the policies and regulates the affairs of Exchange. The Governing
Board consists of 9 elected directors, who are from the broking community
(one third of them retire every year by rotation), three SEBI nominees, six
public representatives and an Executive Director & Chief Executive Officer
and a Chief Operating Officer. The Executive Director as the Chief Executive
Officer is responsible for day-to-day administration of the Exchange and he is
assisted by the Chief Operating Officer and other Heads of Department.

OVER THE COUNTER EXCHANGE OF INDIA

MEANING
OTCEI can be defined as an exchange without a specified trading floor.
It does not have the market place physically and the market is spread across
the country through counter. All the counters are connected through a
computer network and transactions takes place through satellite
communication.

INCORPORATION AND RECOGNITION

Over the counter Exchange of India (OTCEI) was promoted as a non –
profit making Organization and has been registered as a limited company
under section 25 of the Companies Act, 1956. OTCEI is a company limited by
shares but because of its status Under section 25 of companies Act 1956, it
does not use the word limited with its name.

Difference between OTC Exchange and other Stock Exchanges

 With the recognition of OTC exchange, the securities market in India
has become two tiered the first one being the main Stock Exchange like
Bombay, Delhi, Madras and other one being the OTC Exchange. The basic
differences between them are as under-:
1. Usual stock exchanges are localized and operate in a particular area.
But OTC Exchange is not localized and its area of operation extends to the
whole of India.
2. Usual stock exchanges have trading rings where the brokers come
together and deal in securities in conventional manner. But in OTC exchange
there will be no trading and the deals will be struck only through wide spread
on-the-line computer network.
3. In usual stock exchanges, the eligibility criteria for listing is that the
company must have the minimum issued equity capital of Rs. 3.00 crores. But
for listing in OTC exchange, a company can have minimum issued Equity
capital of Rs. 30.00 Lacs out of the which minimum public offer should be
Rs.20.00 Lacs in face value.
4. In Stock exchanges, there is no upper limit fixed on issued equity share
capital, but in OTC Exchange a company having an issued equity share
capital of more than Rs.25.00crores is not eligible for listing.
5. A company can directly enter the other stock exchanges and get its
shares listed, but it is not so in the case of OTC Exchange. For listing in OTC
exchange, a Company will have to appoint a member of the OTC exchange as
‘Sponsor’. The member appraises the project and after being satisfied about
the viability of the project and its investment worthiness accepts to become its
sponsor.
SEBI’S ROLE AS A REGULATOR
 According to the preamble to the SEBI Act the objective of setting up
SEBI was to protect the interest of the investors. SEBI has thus three
objectives cast upon it by the Act.
• Protect the investors in Securities Market
• To promote the development of Securities Market
• Regulate the Securities Market

Following powers have ban given to SEBI with the enactment of SEBI with
enactment of SEBI Act 1992:

• Power to call for periodical returns from recognized Stock Exchanges.

• Power to call any information or explanation from recognized stock
exchanges or its members.
• Power to direct inquiries to be made in relation to affairs of stock
exchanges or opts members.
• Power to grant approval to bye-laws of recognized exchanges.
• Power to make or amend bye-laws of recognized exchanges.
• Power to declare applicability of section 17 of the Securities Contract
(Regulation) Act in any State or area to grant licenses to dealers in securities.
• Power to compel listing of securities by public companies.
• Power to control and regulate stock exchanges.
• Power to grant registration to market intermediaries.
• Power to register and regulate working of collective investment
schemes including mutual fund.
• Power to promote and regulate self-regulatory bodies.
• Power to prohibit fraudulent and unfair trade practices relating to
securities.
• Power to prohibit inside trading.
• Power to promote investor’s education and trading of intermediaries in
capital.
• Power to regulate substantial acquisition of shares and takeover of
companies
• Power to levy fees.
• Power to conduct research and other functions.

SEBI, as a regulatory and development agency has wide and varied powers
SEBI’s efforts so far includes measures for efficiency, reforms and
transparency in primary and secondary markets, regulation of mutual funds
and market intermediaries. A lot of investor protection guidelines have
also been framed and implemented. SEBI’s aforesaid powers and functions
are not exhaustive in nature.

STOCK MARKET CONCEPTS

What’s a Stock Index?

 An index is a number used to represent the changes in a set of values
between a base time period and another time period.

What’s a Stock Index?

A Stock Index is a number that helps you measure the levels of the
market. Most stock indexes attempt to be proxies for the market they exist in.

Why do we need an index?

Students of modern port folio theory will appreciate that the aim of
every portfolio manager is to beat the market.
In order to benchmark the portfolio against the market we need some
efficiency proxy for the market.
Indexes arose out of this need for a proxy.

What does the number mean?

The index value is arrived at by calculating the weighted average of the
prices of a basket of stocks of a particular portfolio.
This portfolio is called the index, portfolio attempts a high degree of
correlation with the market.
Indexes differ based on the method of assigning the weight ages to the
stocks in the portfolio.

But why the portfolio? Why not the entire market?

 This is because for someone who wishes to replicate the return on the
market it is infinitely more expensive to buy the whole market and for small
port folio size it is almost impossible.
The alternative is to choose a portfolio that has a high degree of
correlation with the market.
How are the Stocks in the portfolio weighted?

There are basically three types of weighing:

 Market capitalization weighted
 Price weighted
 Equal weighted

As may be discerned, the stocks in the index could be weighted based

on there individual prices, their market capitalization or equally.

What is the better weighing option?

The market capitalization weighted model is the most popular and
widely considered to be the best way of determining the index values. In India
both the BSE-30 Sensex and the S&P CNX Nifty are market, capitalization
weighted indexes.

Who owes the index? Who computes it?

Typically exchanges around the world compute their own index and
own it too. The sensex and the Nifty are case in point.
 There are notable exceptions like the S&P 500 Index in the U.S.
(Owned by S&P which is a credit rating company) and the strait times Index
in Singapore (Owned by the newspaper of the same name).
Who decides what stocks to include? How?
Most index providers have a index committee of some sort that decides
on the composition of the index based on standardization selection and
elimination criteria. The criteria for selection of course depends on the
philosophy of the index and its objective.

Most indexes attempt to strike a balance between the following criteria.

 Better industry representation.
 Maximum coverage of market capitalization.
 Higher Liquidity or Lower Impact cost.

Industry Representation
Since the objective of any index is to be a proxy for the market it
becomes imperative that the board industry sectors are faithfully represented
in the index too.
Though this seems like an easy task, in practice it is very difficult to
achieve due to a number of issues, not least of them being the basic method of
industry classification.

Market Capitalization
Another objective that most index providers try to achieve it, to ensure
coverage of some minimum level of the capitalization of the entire market.
 As a result within every industry the largest market capitalization stock
tend to select themselves.
However, it is quite a balancing act to achieve the same minimum level
for every industry.

Liquidity or Impact cost.

It is important from the point of usability for all the stocks that are part
of the index to be highly liquid the reasons are two fold.
An liquid stock has state prices and this tends to give a flawed value to
the index. Further for passive fund managers, the entry and exist cost at a
particular index level is high if the stocks are illiquid. This cost is also called
the impact cost of the index.

What is the Benchmark Index?

An index which acts as the benchmark in the market has an important
role to play. While it has to be responsive to the changes in the market place
and allow for new industries or give up on dead industries, at the same time it
should also maintain a degree of continuity in order to survive as a benchmark
index.
What are the popular indexes in India?
* BSE-30 Sensex * S&P CNX Nifty
* BSE-100 Natex * S&P CNX Nifty Jr.
* BSE Dollex * S&P CNX Difty
* BSE-200 * S&P CNX Midcap
* BSE-500 * S&P CNX 500

What are the sectoral indexes?

 These indexes provide the benchmark for sector specific funds. Fund
managers and other investors who track particular sector of the economy like
Technology, Pharmaceuticals, Financial sector, Manufacturing or
Infrastructure use these index to keep track of the sector performance.

What are the uses of an Index?

Index based funds
These funds tend to replicate the index as it is in order to match the
returns on the market. This is also known as passive management. Their
argument is that it is not possible to beat the market over a sustained period of
time through active management and hence it is better to replicate the index.
Examples in India are:-
 IDBI M F’s fund on Nifty.
 UTI’ fund on the Sensex

Exchange traded funds (ETFS)

These are similar to index funds that are traded on an exchange. These
are pretty popular world wide with non-resident investors who like to take an
exposure to the entire market. S&P and WEBS products are amongst most
popular products.

What is a book-closure date?

Companies close their share registry books for a few days for the
purpose of decimating corporate benefits like dividend or bonus. No request
for change of ownership is entertained during this period.
 Physical shares cannot be sold on an exchange, bearing a date on the
transfer deed earlier than the book closure. In this case the best way out is to
send the shares for transfer before the book closure date to avoid any hassles.

What is record date?

The record date is a cut off date announced by the company on which
the shareholders registered in the Register of members maintained by the
company and are entitled of receiving the benefits announced by the company
such as Dividend, Bonus etc.

What is no-delivery period?

When ever companies announce book closure or record dates, stock
exchanges set up no- delivery periods for the concerned securities. Though
trading is permitted during the period but no physical exchange of shares take
place. This is a sort of extended settlement period for the securities. Investors
are advised to look for the No Delivery period of the stocks since if the shares
are sold during the no delivery period. Payment shall be received only after
the end of this period. Speculative activity in the stock normally increases
during the no delivery period.
If any dividend, bonus or right declaration has been made by a
company, investor purchasing the share before record date becomes entitled to
this dividend etc. also. He is called to have purchased the shares cum-
dividend/cum-bonus/cum-right.
As soon as these entitlements gets detached from the share it becomes
ex-dividend/ex-Bonus/ex-right. Obviously, price of shares decreases the
moment it becomes ex-dividend.
 By purchasing shares cum-dividend and selling them ex-dividend, tax
free dividend income can be earned and simultaneously a capital loss can be
booked which can be claimed as set off against any other capital gain. This is
called dividend stripping.

KIND OF BROKERS

There are six kinds of brokers. In other words we can say that the
brokers function on the Internet trading are of six types. When brokers works
differently then they called by different names. We will discuss these one by
one.

Commission Broker
Near about all the brokers buy and sell securities for earning a
commission, from investors point of view he is the most important person and
his responsibility is to buy and sell securities of his customers. It means that
he acts as an agent of investor and earns commission for his services rendered.
The broker is also an independent dealer in securities. He purchases and sells
securities in his own name but he is not allowed to deal with non-member.

Jobber
He is a professional speculator who works for a profit called ‘turn’ he
makes a Continuous auction in the market in the stock in which he is
specialized. He trades in the market even for small differences in the prices
and helps to maintain liquidity in the stock exchange.

Floor Broker
 The floor broker buys and sells shares for the other broker on the floor
of the exchange. He is an individual member owes his set and receives his
own commission on the orders he execute.

Odd lot dealer

For trading in stock exchange there is a certain number of shares, a
fixed to be transacted In a lot, this is known as round lot which is usually, a
100 shares. Anything less than the round lot is add lot. If a person is in a
possession of add lot of share i.e. 10,20,30,40 etc. They will have to look for
the add lot dealer. The dealer gets his profit on the basis of the difference in
the price at which he buys or sells the shares in odd lot, gets the price less than
the prices of the round noted.

Budliwala
He is the person who finance or provide credit facilities to the market,
for this service he charges a fee called contango or backwardation charges.
The budliwala gives a fully Secured loan for period of 2 to 3 weeks.

Arbitrageur
A person who is specialist in dealing with securities in different stock
exchange centers at the same time. He makes a profit by the difference in the
price prevailing in different centers of the market activity. For example the
rate of certain scrip is higher in some Stock Exchange than other. In this case
the broker will buy the scrip from the marked lower price and will sell the
scrip in the market at higher price. The profit of the Arbitrageur depends on
the ability to get prices from the different centers before trading in other Stock
Exchanges.

VARIOUS DEPARTMENTS OF STOCK EXCHANGE.

TRADING

The Exchange, which had an open outcry trading system, had switched
over to a fully automation computerized mode of trading known as BOLT
(BSE on line Trading) System. Through the BO System the members now
enter orders from Trader work Stations (T W Ss) installed in their office
instead of assembling in the trading ring.

Earlier, the member of the exchange were permitted to open trading

terminals only in Mumbai. However, in October 1996, the Exchange obtained
permission from SEBI for expansion of its BOLT network to locations outside
Mumbai. In terms of the permission granted by SEBI and certain modification
announced later, the members of the Exchange are now free to install their
trading terminals at any place in the country.

In order to expand the reach of BOLT network to centers outside

Mumbai and support the smaller regional, Stock Exchanges, the Exchange has
as on August, 31, 2002 admitted subsidiary companies formed by 13 Regional
Stock Exchanges as its members. The members of these Regional Stock
Exchanges work as sub-brokers of the member-brokers of the Exchanges.

The objective of the granting membership to the subsidiary companies

formed by the Regional Stock Exchanges were to reach out to investors in
these centers via the members of these Regional Exchanges and provide the
investors in these areas access to the trading facilities in all scrips listed on the
Exchanges.

Trading on the BOLT System is conducted from Monday to Friday

between 9:55 a.m. and 3.30 p.m. the scrips traded on the exchange under ‘A’
‘B2’ ‘F’ and ‘Z’ groups. The number of scrips listed on the Exchange under
‘A’ B!’, ‘B2’ and ‘Z’ groups, which represents the debt market (fixed income
securities) segment wherein 748 securities were listed as on August 31, 2002.
The ‘A’ group was introduced by the Exchange in July 1999 and covers the
complaints which have failed to comply with listing requirements and/or
failed to resolve investor complaints or have not made the required
arrangements with both the Depositiories Viz, Central dematerialization of
their securities by the specified date, i.e., September 30,2001. Companies in
“Z” groups for not complying with the provisions of the listing Agreement
and/or pending investor complaints and the balance companies were on
account of not making arrangements for dematerialization of their securities
with both the depositories. 1516 companies have been put in “Z” group as a
temporary measure till they make arrangements for dematerialization of their
securities. Once they finalize the arrangements for dematerialization of their
securities trading and settlement in their scrips would be shifted to their
respective erstwhile groups.
 The Exchange has also the facility to trade “C” group which covers the
odd lot securities in ‘A’ ‘B1’ ’B2’, and “Z” groups and Rights renunciations
in all the groups of scrips in the equity segment. The Exchange thus, provides
a facility of market participants of on-line trading in odd, lots of securities and
Rights renunciations. The facility of trading in odd lots of securities not only
offers an exit route to investors to dispose of their odd lots of securities but
also provides them an opportunity to consolidate their securities into market
lots.

The “C” group can also be used by investors for selling up to 500
shares in physical form in respect of scrips of companies where trades are to
be compulsory settled by all investors in demat mode. This scheme of selling
physical shares in compulsory demat scrips is called as Exit Route Scheme.

With effect from December, 3,2001, trading in all securities listed in

equity segment of the Exchange takes place in one market segment, viz,
compulsory rolling Settlement Segment.
 ROLLING SETTLEMENT

In keeping with international best practice. SEBI introduced

compulsory rolling settlement in ten selected scrip on Jan. 10, 2000. All the
ten selected feature in the compulsory demat list and had a daily turnover of
rate one crore. Though 153 more scrip have been added to the list one of them
enjoy care forward trading facility. The feedback from market participant as
well a sthe result of the study undertaken by the SEBI indicates the need
forfacility like continuous net settlement (CNS), carry forward in rolling
settlement andd the automated lending and borrowing mechanism. As an
experiment many scrip in the popularity of rolling settlement. As an
experiment many scrip in the present compulsory rolling have been allowed
with the facility of CNS, CRFC, AIBRS. Some stock exchange has
commenced these facilities.

DELEIVERY TO BE RECEIVED
A statement is prepared which includes name of all those brokers and
scrips, which are to be received during same clearing.

DELIVERIES TO BE MADE
 This statement includes the names of all those brokers and scrips for
which a broker is liable to make deliveries. This is simply the abstract form of
the delivery orders which a broker receive for his convenience.
Those two statements are meant for personal use of the brokers in these,
two the standers rate are mentioned.

MONDAY
Routine work is done and Friday errors are rectified .This day cheque
received on Saturday is logged into bank. He errors which we came to know
regarding the 1 form are supplied to the brokers . Same day those are rectified
and given bank. These corrected errors of 1 form are corrected in the copy of
clearing house and then entries are made.

TUESDAY
This day along with the daily work, the daily sauda statement of 2nd
clearing is prepared after the rectification of Monday’s errors.

Concerning the 1st clearing two statements is prepared as all the

transaction has been cleared of 1st form also so the statement regarding there
final payment from the buyers are prepared. In it the computerized settlement
amount of 1st form are included. Moreover information regarding the
dishonored cheque will be available which we help us in debiting the brokers
whose cheques have been dishonored.
The statement are called.
1. Cheque to received.
2. Cheque to be made.
 Regarding the cheques to be made the amount is transferred to the
receiver’s amount, and cheques to be issued list by an executive of the
stock exchange. He asks all those broker to pay the cheques of amount
specified in the statement (Cheque to receive) if a broker does not
cheque, the entry into the trading hall is banned.

THURSDAY
Routine work will be done, as the errors of Wednesday will be
rectified regarding the first clearing, all the broker. Four lists prepare on
Wednesday will distribute among the broker.
Seller broker on the basis of the basis of this document will
deposit in the documents with clearing house i.e.
1. SECURITY CERTIFICATE
2. TRANSFER DEED
3. SELLER TICKET (along with carbon copy)

After receiving the deliveries by Stock Exchange. The deed and

seller ticket exchange for being a good delivery and delivery is
provide with a number which helps the clearing house in sorting
in securities on Saturday the original seller ticket is given back to
the seller broker immediately for the deliveries he has made.

FRIDAY
This day is called seller ticket exchange day, today trading takes place
up to 1.30 p.m. after the trading, seller tickets along with three copies of
delivery order. Buying seep one copy of delivery order and return the left two
copies of delivery order duty stamped to seller broker.
 Seller broker deposits one copy of those two copies of delivery order to
clearing house. All this is done to inform the buyer that scrips have been
deposited to the clearing house and he can collect from them.
After the completion of the exchange on the basis of the deposited
delivery order clearing house would correct their office copy of delivery
order. Then with the help of that corrected entries are made to know the
pending position.

SATURDAY
On Saturday, buyer who have collected or received the seller tickets
and delivery order will deposit the cheques (amount calculated by themselves
along with the 1st and 2nd form)

1ST Form:-
Buyer’s brokers quote in it the number of seller’s tickets (given by the
clearing house), scrip’s name and brokers name regarding all the seller they
receive.
So three instruments called cheques 1st form 2nd form is submitted. On
the basis of 2nd form sorting takes place for all scrips according to each broker.
Regarding the 1st form the entries are made and errors are found out the
same day. This Day FINAL BALANCE SHEET of comprised settlement is
also printed which shows the Net positions of each brokers after the
deliveries.
After this clearing the seller member could not affect the delivers, the
buyer Members have an option to give auction notice against the defaulter
member. The buyer Member has not given the auction; the cut off rate will be
applied that is closing rate of Floor trading day after the clearing example, if
clearing day is Saturday the cut off rate will be application on Monday.

The same procedure will be applicable in case of newly permitted scrip

after clearing the first clearing, it is important to note that if theree is
difference in the auction rate and of transaction, the difference will be paid by
the seller broker who is defaulter. For example if the transaction earlier took
place @ Rs. 100 for 100 shares and in auction the 100 Shares are bought @
110/- then difference of rupees 1000 (100*100) will be paid by the seller
broker defaulter.
 LISTING
The term ‘listing’ means admission of securities of a company to
dealing on a recognized stock exchange. The term ‘securities’ and recognized
stock exchange have been defined U/s 2 of the securities Contracts
(Regulation) Act,1956 but ‘listing’ has not been defined.

NECESSITY OF LISTING
It is not obligatory for a company to enlist its share or other securities
but it becomes mandatory in the following circumstances

• When public financial institutions stipulate a condition to the loan for

the borrower company to have its securities listed on any recognized stock
exchange.
• When a company declares in the prospectus to enlist its securities and is
bound by section 73 of the Companies Act, 1956.
• When Central Government may require a company to do so under
section 21 of the Securities Contract (Regulation) Act, 1956.
TYPES OF LISTING

LISTING OF SECURITIES CAN BE OF VARIOUS TYPES. These

MAY be:-
1. Initial listing- If the shares or securities are to be listed for the
first time on the exchange, it is called initial listing.
2. Listing of shares/debentures of public issue- A company
whose shares are listed on stock exchange, if comes out with the public issue
of securities has to get its shares listed.
3. Listing of securities issued on right basis – Companies whose
securities are listed on stock exchange may issue shares/ debentures to its
existing shareholders on right basis. The listing of such newly issued
securities of an already listed company falls under this category.
4. Listing of bonus shares-Shares issued as a result of
capitalization of profits or bonus issue are also require to be listed on a
recognized stock exchange.
5. Listing of shares issued as a result of merger or
amalgamation –New shares issued by there amalgamated company to the
shareholders of the amalgamating company are also required to be listed for
dealing on the stock exchange.
 PROCEDURE OF LISTING
The securities of the company cannot be listed if certain steps are not
followed:
1. Initial discussion
The company secretary of the concerned company should discuss
with the stock exchange authorities to have an overall idea of the
various compliances to be complied with for listing of its
securities.
2. Approval of articles of associations
The article of association of a company going for listing must
contain.
• A common form of transfer shall be used.
• The company will not forfeit any dividend unless barred by the
law.
• There should be no provision of the company going for listing, it
should be flexible enough to accept the necessary amendments as required
under the rule a 1(2) of the securities contract (regulation) rule will be made in
the next annual general meeting and in the mean time the company shall act
strictly in accordance with the provision of clauses.
3. Approval of the draft prospects
 The company secretary should prepare a draft prospectus and
discuss with the stock exchange authorities. It must be classified
that whatever condition have been put by the stock exchange to
be contained in the prospectus cannot be deleted.

The prospectus should be deleted if:-

a) If the paid up capital is more than 5 crore than it has to enlisted itself
in one or more stock exchange other than regional stock exchange. While
giving the name of regional stock exchange where it intends to enlist its
securities.
b) The total period for which the subscription list remained opened
must be mention. The subscription list must be kept opened for a minimum
period of three working days which may be extend upto 10 working days at
the discretion of the board of directors.

4. Center of acceptance of application money

Application money shall be accepted at the centers where
recognized stock exchange are situated.
5. Minimum subscription allotment
As per SEBI guide line application from the public have to be
invited for a minimum amount of Rs. 5000 i.e. 500 shares @ 10
each or 50 shares @ 100 each.

6. Required for calling application

The prospectus should state that the application must be made.
• On a prospectus form
• For a minimum of shares or multiples
• In a single name/joint name not more than three
• In the name of individual, limited company statory
corporations and not in the names of foreign nations.
NOTE:An individual who have only one application or two or more
application in single join names, would liable for rejection if the first
application is the same.

7. Quantum of public offer

The prospectus on its first page should state the size of the public
issue number of shares/debentures as the case may be, in case
they are issued at premium the amount of premium should also
be stated. Out of the total issue of securities the quantum of issue
reserved for allotment to promoters foreign collaboration should
be stated. Reservation made for preferential allotment to the
employees of the company including the working director should
be mentioned.

8. Underwriting agreement
Undertaking in India is obligatory for any public issue.
Underwriting arrangement made by the company with the public
finance institute banker, active member of the stock exchange
should be stated in the prospectus along with the amount agree to
be under written.
The listed has to be granted within 10 weeks from the date
of closing of subscription list. The stock exchange on receipt of
 application complete in all respect grants listing to the securities
of the company and acknowledge the receipts of letter on its
letter head intimating to applicant company that the share or
debenture bearing distinctive number from to have been listing
for trading on stock exchange.
The stock exchange also sends the notice of intimation to
all recognized stock exchange in India. The stock exchange
should not take more than three working days for admission of
securities to deal on the exchange once the listing application is
complete in all respect. Once the listing is complete, the
company has to pay the annual listing for in advance.

ADVANTAGES OF LISTING
Listing of securities on the stock exchange is advantage to the
company as well as to the investor as will be seen here under.

To the company
 The companies enjoys concession s under direct tax laws as companies
are known as companies in which public are substantially interested resulting
in lower rate of income taxes of income tax payable by them
 The company gain national and international importance by its shares
volume quoted on stock exchange
 Financial institutions /Banker extend term loan facilities in the form of
rupee and foreign currency loan
 It helps the company to mobilize resources from the shareholders
through ‘right issue’ for programmed of expansion and e modernization
without depending on the financial institutions in line with the government
policies
 It ensures wide distribution of share holding thus avoiding the fear of
easy take over of organization by others

To the investors
 Since the securities are officially traded liquidity of investment by the
investor is well ensure.
 Right entitlement in respect of further issue can be deposed of in the
market.
 Listing securities are well preferred by banker for extending loan
facilities.
 Since securities are quoted there is no secrecy of price realization of
securities sold by investors.
 The rules of stock exchange protect the interest of investor in respect of
their holdings.

DISADVANTAGE OF LISTING
 Once the shares are listed the company subjects themselves to various
regulatory measures of stock exchange and SEBI. They have to disclose vital
information to the Stock Exchange.
 The company has to send notice for annual general meeting to a large
number of shareholders, resulting in expenditure.
WHAT IS DEMATERIALIZATION
Dematerialization in short called as demat is the process by which an investor
can get physical certificates converted into electronic form maintained in an
account with the depository participant .The investor can dematerialize only
those share certificates that are already registered in their name and belong to
the list of securities admitted for dematerialization at the depositories.

DEPOSITORY
The organization responsible to maintain investors securities in the electronic
form is called the depository. In other words, a depository can therefore be
conceived of as a bank for securities. In India there are two such organization
viz. NSDL and CDSL. The depository concept is similar to the banking
system with the exception that the banks handle funds whereas a depository
handles securities of the investors. An investor wishing to utilize the services
offered by a depository has to open an account with the depository through a
depository participant.

Depository participant
The market intermediary through whom the depository services can be
availed by the investor is called the depository participant (DP). As per
SEBI regulations ,DP could be organizations involved in the business of
providing a financial services like banks, brokers, custodians and financial
institutions. This system of using the existing distribution channel (mainly
constituting DPs ) helps the depository to reach a wide cross section of
investors spread across a large, geographical area at the minimum cost. The
admission of the DPs involves detailed evaluation by the depository of their
capability to meet with the strict service standards and a further evaluation
and approval from SEBI. Realizing the potential, all the custodians in India
and a number of banks, financial institutions and major brokers have already
jointed as DPs to provide services in a number of cities.

ADVANTAGES OF DEPOSITORY SERVICES:

Trading in demat segment completely eliminates the risk of bad deliveries.

In case of transfer of electronic shares you save 0.5% in stamp duty. Avoids
the cost of Courier/notarization/the need for further follow up with your
broker shares returned for company objection no loss of certificates in transit
and saves substantial expenses involved in obtaining duplicate certificates,
when the original share certificates become misplaced. Increasing liquidity
of securities due to immediate transfer and registration. Reduction in
brokerage for trading in dematerialized shares, Receive bonuses and rights
into the depository account as a direct, thus eliminating risk of loss in transit.
Lower interest charges for loans taken against demat shares as compared to
the interest for loans against physical shares. RBI has increased the limit of
loans against physical securities. Fill up the account opening form, which is
available with DP. Sign the DP client agreement, which defines the rights
and duties for the DP and the person wishing to open the account, Receive
your client account number (client ID). This client id along with you DP id
gives you an unique identification in the depository system. Fill up a
dematerialization request form, which is available with your DP, submit
your share certificates along with the form, (write “surrendered for demat”
on the face of the certificate before submitting it for demat). Receive credit
for the dematerialized shares into your account within 15 days.
PROCEDURE OF DEMAT ACCOUNT OPENING
Opening a depository account is as simple as opening a bank account.
You can open a depository account with any DP convenient to you by
following these steps :
• Fill up the account opening form , which is available with the DP.
• Sign the DP client agreement, which defines the rights and duties of
the DP and the person wishing to open the account.
• Receive your client account number (client ID).This client ID along
with your DP Id gives you a unique identification in the depository
system.
There is no restriction on the number of depository accounts you can
open. However if your existing physical shares are in names, be sure to
open the account in the same order of names before you submit your
share certificates for demat.

FORMALITIES TO BE FULFILLED WHILE OPENING A DEMAT

ACCOUNT AND TRADING ACCOUNT:

• Application form duly completed and signed by all participants.

• Agreement, duly signed by all participants.
• Two photographs of each applicant.
 • One cheque
• Proof of identity and PAN card
• Bank paas book

BENEFITS OF DEMAT:

Transacting the depository way has several advantages over the

traditional system of transacting using share certificate.
Some of the benefits are:
• Trading in demat segment completely eliminates the risk of bad
deliveries which in turn eliminates all cost and wastage of time
associated with bad delivery has lead to reduction in brokerage to
the extent of 0.5% by quite a few brokerage firms.
• In case of transfer of electronic shares you save 0.5% in stamp
duty.
• You also avoid the cost of courier/notarization/the need for further
follow up with your broker for shares returned for company
objection.
• In case the certificates are lost in transit or when the share
certificates become mutilated or misplaced, to obtain duplicate
certificates, you may have to spend atleast Rs 500 for indemnity
bond, newspaper advertisement etc, which can be completely
eliminated in the demat form.
• You can also receive your bonuses and rights into your depository
account as a direct credit, thus eliminating risk of loss in transit.
 • You can also expect a lower interest charge for loans taken against
demat shares as compared to the interest for loan against physical
shares. This could result in the saving of about 0.25% to 1.25%.
Some banks have already announced this.
• RBI has increased the limit of loans against dematerialized
securities as collateral to Rs 2mn per borrower as against Rs 1mn
per borrower in case of loans against physical securities.

RBI has also reduced the minimum margin to 25% for loans against
dematerialized securities as against 50% for loams against physical
securities.

A COMPARISON OF INVESTMENT IN SECURITIES IN

PHYSICAL AND DEPOSITORY MODES

IN PHYSICAL FORM IN DEMAT FORM

Space required for storage and No space required.
safety.
Exclusive manpower to be This function can be clubbed with
allocated. other functions. No exclusive
manpower is required.
Insurance is required. No insurance required.
Laborious inventory verification Periodic statement of holding is
during internal staff taking and made available by the DP;s easy
statutory audits. verification of audits.
No custody charges if using own Custody charges vary from 3-10
premises, however, custodian’s basis points depending upon DP
charges 20-40 selected.
Basis points.
Risk of theft/forgery/mutilation etc. No risk of theft/forgery/mutilation
etc.
Pledging of shares is cumbersome. Pledging is safe and easy.
Receipt of corporate benefits need Faster and hassle free receipt of
monitoring & risks of loss in transit corporate benefits.
not ruled out.
Inconvenience in portfolio shuffling Convenient portfolio shuffling &

& transaction within the group since adjustment within the group since delivery
is through the single instrument,
buy/sale adjustments need
registration, instantaneous & costs less
movement of paper.
( no stamp duty )

SELLING
IN PHYSICAL FORM IN DEMAT FORM
Higher Brokerage Lower brokerage. NSE brokers
charge half the brokerage on electric
trades compared to physical.
No transaction cost except the cost Transaction charge very from nil to
of personnel handling the sale. 10 basis points. Serving in
brokerage are more than these costs.
Transaction only in market lots. No market lot concepts.
Jumbo lots need to be split into No need of split.
market lots for selling.
Off market transaction are costly Facility for off market transaction,
and risky. especially within the group.
 BUYING

IN PHYSICAL FORM IN DEMAT FORM

Higher brokerage. Lower brokerage.
Stamp duty at the rate of 50 basis No stamp duty.
point.
Postage and handling charges for No postage and handling charges.
lodgments and transfer.
Cost involve in follow up/ Guaranteed good delivery.
rectification.
Opportunity cost for delay in Immediate transfer therefore no
transfer of share. opportunity cost.
No transaction charges. Transaction charges very from 7-10 basis
points.

Brokerage & NSE BSE

c Charges NSE Jobbing BSE Jobbing Delivery Delivery F&O
Buy Sell Buy Sell Buy/Sell Buy/Sell Buy
Brokerage 0.03000 0.03000 0.01000 0.01000 0.08000 0.10000 0.01000
S.Tax 12.36% 0.00371 0.00371 0.00124 0.00124 0.00989 0.01236 0.00124
STT 0.00000 0.02500 0.00000 0.02500 0.12500 0.12500 0.00000
Other Charges* 0.00550 0.00550 0.00570 0.00570 0.01350 0.01370 0.00430
Total 0.03921 0.06421 0.01694 0.04194 0.22839 0.25106 0.01554

NSE-Cash NSE BSE NSE

Jobbing BSE-Cash Delivery Delivery F&O (Rs.
(Rs. Per Jobbing (Rs. (Rs. Per (Rs. Per Per
Other Charges Crore) Per Crore) Crore) Crore) Crore)
Exchange
Transaction Charges 350 350 350 350 210
Stamp Duty 200 200 1000 1000 200
SEBI Fees 0 20 0 20 20
Total 550 570 1350 1370 430
 FUNDING VALUE

1 SHARE CATAGERY
AFTER
HAIRCUT FUNDING Client
B.HAIRCUT value VALUE DIEFFERENCE 75% 25%
100 A 100 0 75 25 100
100 B 85 15 63.75 21.25 87
100 C 75 25 56.25 18.75 75
100 D 60 40 45 15 100
100 E 1 99 0.75 0.25 1

FUNDING FACILITY:-

Three basic types of funding: -

1.T+5

2.RFL

3.MTF

1. T+5:-

Intraday: - Religare provides 8 to 10 times funding

 Delivery: - Religare provides 4 to 6 times funding

This funding is basically provided for Trading + 5Days to every client. On

the 5th day client is required to either clear the credit by giving the cheque
or just by selling off his holdings.

If none of the action is taken then the stock of the client is automatically
cleared so as to clear the debit balance.

2. RFL:-(Religare Finevest Limited)

RFL is a loan against shares, with interest charges of 18%.

There is no time limit for credit in the account, credit is provided till the
client demands. This account demands for a Power of Attorney from the client.

3. MTF (Margin Trading Funding):-

MTF provides two times funding to the account holder. This type of funding is
provided only on 700 scripts. This restriction is laid by NSE and BSE.

If the client works on scripts other than these 700 scripts then a normal credit of
T+5 is provided.
 FINANCIAL ASPECT OF RELIGARE:-

LISTING OF RELIGARE ENTERPRISE:-

Religare enterprise is a Ranbaxy promoters group company and operates through

its subsidiaries. Religare enterprises were listed on 27th November 2007.

Its IPO came on

Religare Enterprises was offering 75.7 lakh shares in the price band of Rs160-185 to
raise Rs121-140 crore. Offer proceeds will be deployed mainly in funding the
lending and retail finance businesses and in expanding the branch network.

Financial Ratios
Religare Enterprises Ltd
Industry: Finance BSE & Code: 532915
Investments NSE Code: RELIGARE
House: Parvinder Singh

Rs. In Cr.

Mar 2005Mar 2004Mar 2003Years

Debt-Equity
0.07 0.35 0.01 0.20 0.40
RatioMar 2007Mar 2006
Long Term Debt-Equity
0.07 0.35 0.01 0.20 0.40
Ratio
Current Ratio 1.35 0.40 0.16 0.03 0.00
Fixed Assets 3076.00 0.00 0.00 0.00 0.00
Inventory 0.00 183.60 2.00 0.00 0.00
Debtors 161.89 0.00 0.00 0.00 0.00
Interest Cover Ratio 8.50 90.40 0.27 2.50 0.00
PBIDTM (%) 88.95 98.47 60.00 100.00 0.00
PBITM (%) 88.95 98.47 60.00 100.00 0.00
PBDTM (%) 78.48 97.39 -160.00 60.00 0.00
CPM (%) 72.82 97.39 -160.00 60.00 0.00
APATM (%) 72.82 97.39 -160.00 60.00 0.00
ROCE (%) 7.51 12.41 7.69 9.43 0.00
RONW (%) 6.55 16.56 -20.78 6.82 -4.65
Source: Financial report of Religare securities ltd.
Shareholding Pattern
Mutual Fund Concept

• A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal.

• The money thus collected is then invested in capital market

instruments such as shares, debentures and other securities.
• The income earned through these investments and the capital
appreciation realized are shared by its unit holders in proportion to
the number of units owned by them.

• Thus a Mutual Fund is the most suitable investment for the

common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost.

Asset Management Company

• An AMC is a legal entity formed by the sponsor to run a mutual
fund.

• It is the AMC that employs fund managers and analysts and other
personnel.
 • It is the AMC that handles all operational matters of a mutual fund
– from launching schemes to managing them to interacting with the
investors.
• The people in the AMC who should matter the most to the investors
are those who take investment decisions

Basis principles
open/closed-ended schemes

• Based on the accessibility they provide investors, mutual fund

schemes can be classified into ‘open ended’ and ‘closed ended’.

• Open-ended schemes, as their name suggests, don’t have a fixed

tenure and are always open for investment.

• One can invest in them any time and also withdraw at any time.
• This ease of entry and exit makes it a popular choice among both
mutual funds and investors.
•
• Closed-end schemes, on the other hand, are of fixed tenure, which
is stated at the time of their birth itself.
•
• Such schemes invite subscriptions only once during their lifetime, at
the time of launch.
• Further you can sell your units in the market.
•
• Most closed ended schemes are listed on the stock exchanges.
•
• But it is unlikely that one will realize a fair price.
•
Units

• The mutual fund issues the investor ‘units’.

• A unit is the currency of a fund.

• What a share is to a company, a unit is to a fund.

•
 • NET ASSEST VALUE (NAV)
•
• The investor is allotted units on the basis of the scientific pricing
mechanism.

• This price, measure per unit, is called the net asset value (NAV) of
the unit.

• Just as a share or a bond is bought at a price, the unit is bought and

sold at NAV.

• A schemes NAV is its net assets.

• Net assets is the market value of the securities it owns minus

whatever it owes.

• The net assets divided by the no. of units gives the NAV.

• A schemes NAV is a dynamic figure.

LOAD

• Although the NAV represents a scheme’s current market value, it is

not the exact price at which the investor enters or exits the scheme.

• Fund houses levy a nominal charge, on most of their schemes to

meet their processing costs and to discourage investors from
leaving.
• This charge is referred to as ‘Load’ and it is the price one pays over
and above the funds NAV when you buy or sell units.

• One pays ‘entry load’ at the time of buying and ‘exit load’ at the
time of selling.

• Loads are always expressed as a percentage of the NAV, which

places fewer units in your hands.
EXPANCES

• Another entry that eats into the investors returns is ‘expenses’.

• This is what the fund charges the investor for managing his money.
• Fund managers have to be paid a fee, as do the other constituents
managing your money.
• All this entails costs which the scheme recovers from the investor
within limits.
• SEBI rules allow equity schemes to charge a maximum of 2.5% of
corpus as expenses every year.
•
•
EQUITY MUTUAL FUND

• Equity mutual funds are also known as stock mutual funds.

• Equity mutual funds invest pooled amounts of money in the stocks

of public companies. Stocks represent part ownership, or equity, in
companies, and the aim of stock ownership is to see the value of the
companies increase over time.

• Stocks are often categorized by their market capitalization (or caps),

and can be classified in three basic sizes: small, medium, and large.

• Balance Mutual Fund

•
• Balanced fund is also known as hybrid fund.

• It is a type of mutual fund that buys a combination of common

stock, preferred stock, bonds, and short-term bonds, to provide both
income and capital appreciation while avoiding excessive risk.

• Balanced funds provide investor with an option of single mutual

fund that combines both growth and income objectives, by investing
in both stocks (for growth) and bonds (for income).
• Such diversified holdings ensure that these funds will manage
downturns in the stock market without too much of a loss.
•
 • But on the flip side, balanced funds will usually increase less than
an all-stock fund during a bull market.
PROJECT:-

From the very start Stock Market has been an area of interest for the mass, the
investors and for the analyst .It has been a source of earning and profit for large
while some have also experienced its sour taste.
Stock Market has shown various colours to the investors all over the world and has
drawn the attention of many people. It has been one of the reasons for inflation. But
this inflation has not been a loner; it is also backed by increased in purchasing
power and disposable income.
The investors in the stock market have increased and so has competition. A rise in
the number of investors has drawn the attention of the brokerage houses and has
lead to rise in competition and so has increased the number of brokerage houses.

A brokerage house is one with help the investors invest their funds and gain profit
and in return charge brokerage and interest for the funds provided by them. A
brokerage house also provides facilities like account opening, transfer of shares,
dematerialization of shares, provides funds for the trading and so on. Different
companies have different policies for providing funds. Few provide 2 Times of your
investment while some up to 10 Time.

Every brokerage house has a survey team that helps the dealers and the team
suggests investment and guides them in investing their funds appropriately and gain
profit. The research team provides suggestions to the dealers and the dealers on the
basis of these investment tips help investment of funds.

All the brokerage houses have tie up with different banks to facilitate deposit and
withdrawal of fund. There exist a large number of brokerage houses and offer
different products and plans.

OBJECTIVE

• To provide details about the various products and plans offered to

customers by the competitors existing in the market
• To evaluate their product and compare with the products of Religare Securities
Ltd.
• To recognize areas of improvement.
• To define the area and reason for Religare having an edge over other

SCOPE:-
• The research consists of study of products of various brokerage houses in the
city of Jaipur.
• A detail analysis of the brokerage houses, their products, their services.
• To conduct a customer survey so as to define the various needs and
requirement of investors with the objective to facilitate them with the facilities and
services they expect.

PROJECT REVIEW:-

The project “RELIGARE AT HIGHLIGHT- is basically a project where a clear

definition of company’s product will be given and all the services that it provides to
the client.
Then a comparison is made between the products and facilities provided by
Religare and other brokerage houses.
Since it is not possible to compare the data of all the houses, therefore, data of 16
major competitors have been taken.

The main objective is to recognize the area of improvement and define the strength
and opportunity for Religare so that the opportunity may be enchased and the
company fights back the competition.

Customer survey also forms a major part of the project. As investor is the point
around which the story of these houses revolves therefore their view and opinion
forms a major part of the study.

Survey will be conducted regarding their view about the stock market, their
experience in the stock market, where they prefer to invest and about their
knowledge regarding products and facilities offered by other houses, reasons for
their preference for a particular company over others, etc.

Customer survey is basically conducted so that a clear definition of customer

preference can be drawn. With the project we aim to help fight competition and be
prepared for the future

PROPOSED METHODOLOGY
The methodology for the project is to collect the details from various brokerage
houses, essentially covering major competitors and rivals and then compare it with
the plans and policies of RELIGARE.

Also the project emphasis the need for client preference and expectation so
customer survey will be conducted on few of present client of Religare and rest of
the data from general public interested in stock market.

Data Source: The study is absolutely based on primary data.

• Information and knowledge given by Branch Head of RELIGARE “Mr. Brajesh

Parihar”
• Information and knowledge provided by “Mr. Nitesh Paliwal” (Relationship
Manager) and other Dealers.
• Information and knowledge provided by Office Executive ”Mrs Varsha Singh”
• Data collected from Relationship Managers of other brokerage houses.
• Data collected from present client and people interested in stock market.
\

PROCEDURE:-
The procedure to be followed is a simple four-step plan, which is as followed: -

STEP 1:-

Firstly, to understand the products of other companies it is essential to understand

the products and policies of Religare. Therefore, first a detail study of various
products being offered by Religare is to carried on.

STEP 2:-

After studying the working of a brokerage house and various products of Religare,
a list of various houses to be visited was prepared and then the data collecting
procedure was started by personally visiting these 16 houses as a customer and
meeting the RM.

STEP 3:-

After collecting and analyzing the data, a questionnaire is to be designed, keeping in

mind various aspect to be covered.
Then a set of customer and investors is to be targeted for the survey followed by the
procedure of the survey.

STEP 4:-

Lastly, all the data is to be reconciled and the result is to be drawn, preparing all the
report and the presentation, it is to be submitted to the company and faculty guide.
ABOUT THE PROJECT:
The crux of the project is to understand various products and services offered by
Religare Securities Ltd and the same of its competitors.

It involves a comparison of the products and services of major competitors, which

are: -

• INDIA INFOLINE
• INDIA BULLS
• ANGEL BROKING
• KOTAK
• ANAND RATHI
• MOTILAL OSWAL
• UNICON
• IL & FS INVESTMENTS
• LKP
• GUINESS
• UTI
• MANGALKESHAV
• HEM
• SYSTEMATICS
• HSCIL
• RELIANCE-MONEY
• SHAREKHAN

After collecting all the data a comparative excel sheet is prepared regarding the
various schemes, services and products of the companies.

Also customer survey is done to provide the services according to the demand.

INTERIM FUNDING:-
• Market survey of different brokerage houses tells that although there
exists a tough competition in the market yet the market in untapped.
 • Investors are basically looking for better and easy facilities and hence
it is simpler to help them switch over to other companies.

• The market and investors are govern by local brokers who are ready
to provide credit on Zero balance but still there are certain pitfalls
relating to the local brokers

LIMITATIONS OF STUDY
The limitations of the study are the following:

1) Data Constraint:
• The project relies on the data provided by other brokerage houses
where they reveal the positive aspect of their plans and policies but
the loopholes remain uncovered.
• The primary data is based on the data provided by the client and the
prospective client where they may avoid providing their exact view.

2) Time Constraint:
• The number of other brokerage houses is very large so it is not
possible to cover all the brokerage houses to evaluate actual
competition. Thus the project is limited to “16” brokerage houses
excluding “RELIGARE”.

3) Place Constraint:
• The data is limited to the brokerage house existing in Jaipur and the
products offered by them in Jaipur, where the product may differ in
different cities.

TARGET/TASKS

• The Target for Summer Internship Program in RELIGARE SECUERITIES

LTD. is convincing people to invest in STOCK MARKET through our
company.

• Convince people to open DEMAT accounts inspire them to trade with our
company.

• Overall Target To open 10 DEMATS accounts within 45 days.

 • Target Achieved I have opened 12 DEMAT accounts for Religare
securities ltd in 45 days.

LIMITATIONS

1. Margin money is necessary in our company for open a Demat

A/c.

2. Market is so much volatile so investors are not interested to invest in the share
market

3. Many people don’t aware from Religare security ltd.

4. It is very difficult to make understand people the concept of Demat Accounts.

5. As I am new to this share market it becomes difficult to solve the queries of

customers.

6. Lack of time.

7. Cost constraint.

8. Sometimes people are not giving accurate information.

9. As I have to do marketing work it becomes difficult to roam in hot weather.

 ANNEXURE - I
QUESTIONNAIRE
Name: E-mail:
Contact no.:

Your Trading account is in which company?

i) Since when are you trading in the share market?

Less than 1 yr 1-3 yrs 4-6 yrs More than 6 yrs

ii) What type of trading do you prefer?

Intraday Delivery Both

iii) What is the brokerage charged?

.03-.30 Paisa .02-.20 Paisa 01-.10 Paisa more than
0.3Paisa

iv) What interests you in Share Market?

………………………………………………………………………………………………

V) How often do you gain from it?

………………………………………………………………………………………………

vi) What are the reasons for operating with the stated company?

……………………………………………………………………………………………....

vii) Are you satisfied with the services?

Yes No

viii) Are you Satisfied with the investment tips?

Yes No

ix) What is the margin allowed and what are the services that you expect?

………………………………………………………………………………………………

x) Is there any difference in the services provided by local broker and a corporate
body? If yes then please specify?

………………………………………………………………………………………………
]
xi) Have you switched from one firm to another? If yes then reasons and which
company have you switched to?

……………………………………………………………………………………………..

xii) What are the different attributes that the client looks forward for a brokerage
house?

……………………………………………………………………………………………..

xiii) What were the areas where the MOST could not meet the client’s expectation
level?
Attributes Ranks
a) Brokerage fees

b) Services

c) Research & advices

d) Complaints handling

e) Products Basket

Remarks: -

…………………………………………………………………………………………….

Thank you
CONCLUSION

After taking feedback from customers I knew that Religare

securities Ltd is popular product in the market and every one
knows the benefits of online share trading. They want to open
Demat account and take advantage of online and offline share
trading.

This OJT has given us real practical experience of the market.

During these three months we have meet to different people. I
have prepared the questionnaire that has helped us to know the
market trends and customer preference related to Demat a/c and
commodity section. I have assessed their queries and grievances.
We have also learnt about how to deal with customers and solve
their queries and how to convince theme by the presenting the
products of the company.

I thing that performance can be improved by the adopting some

strategy of the marketing like and know the customer satisfaction
related to our company products.