A

SUMMER TRAINING PROJECT REPORT

ON

A study on behavioral finance in Investment Decisions of

Investors in Delhi NCR

Submitted for the partial fulfillment of the requirement for the award

Of
Post Graduate Diploma in Management
                 
Batch 2021-23
SUBMITTED BY
SANDEEP YADAV
Enrollment NO: GNIOT/GIMS/21/23

Faculty Guide:                               Industry Guide:

Dr. Shalini Sharma                                          Sumit Sharma

Assistant Professor                                                          Sr.Territory Manager

Department- PGDM Company Name: Sharekhan Ltd

                                                        
 DECLARATION

 
I hereby declare that this Summer Internship Project Report titled A Study on Behavioral Finance in
Investment Decisions of Investors in Delhi NCR submitted by me to GNIOT Institute of
Management Studies (GIMS), Greater Noida is a bonafide work undertaken during the period from
10/5/2022 to 10/7/2022, by me and has not been submitted to any both diploma/certificate institution
for the award of any degree diploma/certificate or published any time before.

(Signature of the Student)                                                                                   Date: 

Name: SANDEEP YADAV

 Enroll. No.: 00921DM071

2
 BONAFIDE CERTIFICATE

 
  
This is to certify that as per the best of my belief the project entitled “A Study on Behavioral
Finance in Investment Decisions of Investors in Delhi NCR” is the bonafide research work carried
out by Sandeep Yadav, Enroll. No. GNIOT/GIMS/21/231, student of Post Graduate Diploma in
Management (PGDM), GNIOT Institute of Management Studies (GIMS), Greater Noida, in partial
fulfillment of the requirements for the Summer Internship Project Report for the award of Post
Graduate Diploma in Management (PGDM).

 He / She has worked under my guidance.

I wish him/her success in all his/her future career endeavors.

                                                                                                                                         

Signature with Date

Faculty Mentor’s Name: Shalini Sharma  

Designation: Assistant Professor 

          

3
 ACKNOWLEDGEMENT
 
I offer my sincere thanks and humble regards to GNIOT Institute of Management Studies (GIMS),
Greater Noida for imparting me a valuable professional internship during the Post Graduate Diploma
in Management (PGDM) program.

 I pay my gratitude and sincere regards to Dr. Shalini Sharma my project guide for giving me the
cream of their knowledge. I am thankful to them as they have been a constant source of advice,
motivation, and inspiration. I am also thankful to them for giving me suggestions and encouragement
throughout the project work.

 I also thank my industry mentor for their constant support and guidance through the period of my SIP
without which this work would not have been possible.

I take the opportunity to express my gratitude and thanks to our computer Lab staff and library staff
for providing me an opportunity to utilize their resources for the completion of the project.

 I am also thankful to my family and friends for constantly motivating me to complete the project and
providing me with an environment, which enhanced my knowledge.

Date:   / / 2022

Name: SANDEEP YADAV

Enroll. No.: 00921DM071

Course: PGDM (IV-Trimester)

 (Signature of the Student)

4
 Table of Content
1
INTRODUCTION TO THE TOPIC 6-10

2
EXECUTIVE SUMMARY 11

3
ABOUT SHAREKHAN COMPANY 12-30

4
INTRODUCTION TO INDUSTRY 31-43

5
LITERATURE REVIEW 44-46

6
RESEARCH METHODOLOGY 47

7
DATA ANALYSIS 48-63

8
FINDINGS & CONCLUSIONS 64-65

9
BIBLIOGRAPHY 66

10
REFERENCES 67

11
ANNEXURE 67-72

5
 CHAPTER 1

A study on behavioral finance

in Investment Decision of
Investors in Delhi NCR

6
INTRODUCTION TO THE TOPIC

The field of finance is basically about decision making as to investment decisions, working capital
decisions, dividend decisions, and fund allocation decisions whereas the field of economics is about
decision making as to what to produce, how to produce, and or whom to produce. In the same way, the
emerging field of behavioral finance also deals with the complex activity of decision-making. Though
the fields of economics and finance have contributed many theories over the years, they could not
explain why people sometimes take irrational decisions decision.

There are studies in the field of finance that gives us theories with clarification and proof about how
the market operates and how the investors take their investment decisions. They explain the dynamics
of investment and the rules to apply for investment decisions the rules seem to be simple but investors
feel difficulty in applying those rules. Due to inefficiency in applying rules, investors said too much,
buying or selling at the time, allowing emotions to overrule logic and misjudge probabilities.

The finance field was unwilling to accept the view of psychologists who proposed the behavioral
finance model. Indeed, the early proponents of behavioral finance were regarded as heretics. As the
evidence of the influence of psychology and emotions on decisions became more convincing,
behavioral finance has received greater acceptance. Although there is dissimilarity about when, how,
and why psychology influences investment decisions, the award of the 2002 Nobel Prize in economics
to psychology Daniel Kahneman and experimental economist Vernon Smith is seen as a vindication of
the field of behavioral finance.

TRADITIONAL FINANCE AND BEHAVIOURAL FINANCE

The key difference between “Traditional Finance” and “Behavioral Finance” are as follows
What is Traditional Finance?
The goal of traditional finance is to profit from the debt instruments it trades. Bonds and Treasury bills
are the two primary types of debt securities. Investors get Treasury notes, which normally have a fixed
rate of interest for a specific time period. Another sort of government-issued debt instrument bonds,
which typically have fixed interest rates for a set length of time. The government guarantees to pay
back the bondholders with interest in exchange for the issuance of these securities. According to the
fundamentals of the company it represents, a traditional financial analyst will often decide whether to
purchase or sell a debt instrument. To assess whether the bond is a wise investment, the investor will
consider the basics.
 Assumes that information is processed accurately and roughly by individuals.
 Assumes that all decisions are viewed by people through the transparent and unbiased lens of risk
and return.
 Presumes that people make decisions based on their own reasons, logic, and judgement.
 Makes the case that markets are efficient, meaning that each security's price is a fair assessment of
its fundamental value.

7
What is Behavioural Finance?
Being a relatively new field of study, behavioral finance has recently risen to prominence as one of the
most studied aspects of economics. It focuses on how people choose their investments. People don't
always make logical decisions. Additionally, they pay much more attention to the material they select
than is rational. This might give rise to the misconception that individuals behave rationally and push
asset values much higher than they can realistically be sustained.
 It recognizes that people employ imperfect rules of thumb to process.
 It recognizes that emotions and heard instincts play an important role in influencing decisions.
 It suggests that the perceptions of risk and return are influenced by how the decision problem is
framed.
 Argues that there is a lack between market price and fundamental value is often caused by
behavioral biases and errors, frame dependence effects, emotions, and social influences.
Sewell has defined Behavioural finance as “the study of the influence of psychology on the
behavior of financial practitioners and the subsequent effect on markets”.
Linter has defined Behavioural finance as the “study of how human interprets and act on
information to make informed investment decisions”.

Psychology Sociology

Behavioural Finance

Finance

8
APPLICATION OF BEHAVIOURAL FINANCE
Finance professionals can better comprehend and avoid numerous known psychological traps that are
present in human cognition and emotions thanks to behavioral finance, which gives them a new set of
lenses. Individual and institutional investors, portfolio managers, analysts, advisors, and even
policymakers are included in this. It also covers business boards and managers. Heuristics and biases
are psychological factors that cause behavioral traps to exist and happen across all choice axes. These
events and variables can affect markets for extended periods and are systematic.
 Investors
 Corporations
 Markets Regulators
 Educations

Behavioral Biases that Influence Investment Decisions

Denial: Most of the time investors don't want to believe that the stock they need hold for ages has
become underperforming or that they have to sell it off. they're in a very constant state of denial
although the said asset brings the return of the portfolio down, investors are reluctant to give it.
Information processing errors: Often spoken because of the heuristic simplification, the information-
processing error is one of the biases of investor psychology. These people use the only approach to
resolve a controversy instead of counting on logical reasoning. Heuristic simplification may be
detrimental to investing decisions this can be done by omitting crucial information to scale back
complexity and by processing only part information. Such an approach can result in flawed decisions
which may be dangerous to the exchange.
Emotions: Most of the behavioral anomalies stem from the intense emotions of the investors. This
happens when investors don't make decisions with an objective mind and only tend to reply to their
biases. Misconceptions, misinterpretations, risk-aversion, and past experiences all combine to dam the
logical bent of the mind and expose the investment decisions to possibilities of risk and losses.
Loss Aversion The risk-taking ability of every investor is different. Some are conservative in their
approach while others believe in taking calculated risks. However, among the conservative investors
are few who fear losses like anything. they'll bear in mind of the potential gains from an asset class but
are intimidated by the prospects of incurring even a short-term loss. In short, their excitement for gains
is far but their aversion to losses. Needless to mention, these investors miss out on quite a few fruitful
investments
Social influence/herd mentality: Herding is kind of an infamous phenomenon within the stock
markets and is the result of massive sell-offs and rallies. These investors don't put deep research
behind their decisions and only follow the sentiment of the group whether positive or negative.
Whether it absolutely was the tech bubble within the early 90s, the subprime crisis in 2008, the
Eurozone crisis in 2010, or the recent banking sector scams in India, the market has seen huge sell-
offs. Most of them weren’t even warranted.

9
Anchoring: Many times, investors hold on to a specific belief and refuse to part ways with it. They
“anchor” their beliefs thereto notions and have difficulty accepting any new piece of data associated
with the topic. This is often true in cases wherein a true estate or company is involved in an
exceedingly legal battle or a bank has been involved in a scam. This negative information is received
with greater intensity, such a lot that no other piece of positive information can neutralize its effect.

Anchoring The tendency of investors to make stock-related forecasts Tversky and

by being too influenced by certain values and pegging the Kahneman (1974),
estimates to an arbitrary, initial, or prior value/quantity Hirshleifer (2001)
that might be meaningless

Loss The tendency of investors to experience regret on Kahneman and

aversion incurring losses which cause them to avoid future loss Tversky (1979)
and regret. Usually, individuals are more loss averse in
bull markets

Mental The tendency of investors to make a mental account of Barberis and Huang
accounting investments that affects stock selection and asset prices (2001), Thaler
(1999)

Herding The tendency of investors to infer information and make S. Kumar and
choices based on the actions of others, be influenced by Goyal (2016),
and act in accordance with their judgment Shantha (2019)

10
 Executive Summary

This Project presents a report on A Study on Behavioral Finance in Investment Decisions of Investors
in Delhi NCR. The behaviour of investors is not always rational, so investment managers do not
forget how the psychological factor of a person plays a substantial role in the behavior of
the financial market.

Psychological biases such as emotions, fear over-confidence, greed, and risk aversion influence
investors’ behavior that, in turn, influences stock markets. The study found out that investors are
not rational and there is always the effect of the above biases in more or less proportion to the
decision-making process of investors in the investments.

Behavioral financing is an evolving field that studies how psychological factors affect decision-
Making under uncertain conditions. Behavioral finance is one of the important topics for us to know
about the mindsets of the people about how they think of various things when they invest in various
investment avenues. Through this research, we came to know about the mentality of the people while
they invest in various investment avenues. I.e. what do they think while investing. This paper seeks to
find out the major influence of certain behavioral finance concepts such as overconfidence, perception,
Representative, anchoring cognitive Dissonance, Regret Aversion, narrow framing, and mental
accounting on the decision-making process of individual investors in the stock market

This study informs how behavior affects the investment decision of the investors in the Stock market
there are many types of biases that affect the decisions of the investors.

Such as the focus is on behavioral biases namely: overconfidence, anchoring, familiarity, conformation
bias, mental accounting, narrow framing, the shadow of past, emotional bias, and information or heard
instinct.

Some of the factors that affect decision-making are Tax Advantage, Suggestions from a Friend,
Financial Knowledge, Investment Amount, Information from the Internet, Professional Investment
Management, Newspaper, Past Experience, TV Channels, Lack of Confidence, Suggestion by
Relatives, and Peer Groups/Colleagues.

11
 CHAPTER 2

INTRODUCTION TO STOCK MARKET

A stock exchange, or share market, is a corporation or mutual organization which provides "trading"
facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also
provide facilities for the issue and redemption of securities as well as other financial instruments and
capital events including the payment of income and dividends. The securities traded on a stock
exchange include shares issued by companies, unit trusts, and other
pooled investment products and bonds. To be able to trade a security on a certain stock
exchange, it has to be listed there. Usually, there is a central location at least for recordkeeping, but
trade is less and less linked to such a physical place, as modern markets are electronic networks, which
gives them advantages of speed and cost of transactions. Trade on an exchange is by members only.
The initial offering of stocks and bonds to investors is by definition done in the primary market and
subsequent trading is done in the secondary market. A stock exchange is often the most important
component of a stock market. Supply and demand in stock markets are driven by various factors
which, as in all free markets, affect the price of stocks (see stock valuation). There is usually no
compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the
exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that bonds

12
are traded. Increasingly, stock exchanges are part of a global market for securities. A stock exchange is
simply a market that is designed for the sale and purchase of securities of corporations and
municipalities. A stock exchange sells and buys stocks, shares, and other such securities. In addition,
the stock exchange sometimes buys and sells certificates representing commodities of trade.

History of Stock Exchanges

The first organized stock exchange in India was started in 1875 in Bombay.

Indian Stock Market is one of the oldest Stock Market in Asia. East India Company used to transact
Loan Securities by the end of the 18th Century. In the 1830s, trading on corporate stocks and shares in
Bank and Cotton presses took place in Bombay.

In 1874, with the rapidly developing share trading business, brokers used to gather at a street (now
well known as "Dalal Street") for the purpose of transacting business.

In 1875 The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock
Exchange") was established in Bombay.

In 1894 the Ahmedabad Stock Exchange was started to facilitate dealings in the shares of textile mills
there.

The Calcutta stock exchange was started in 1908 to provide a market for shares of plantations and jute
mills.

The Role of Stock Exchanges:

Stock exchanges have multiple roles in the economy, this may include the following:

Raising capital for businesses:

The Stock Exchange provides companies with the facility to raise capital for pass-through selling
shares to the investing public.

Mobilizing savings for investment:

When people draw their savings and invest in shares, it leads to a more rational allocation of resources
because funds, which could have been consuming or kept in idle deposits with banks, are mobilized
and redirected to promote business activity with benefits for several economic sectors such as
agriculture, commerce, and industry, resulting in stronger economic growth and higher productivity
levels and firms.
13
Facilitating company growth:
Companies view acquisitions as an opportunity to expand product lines, increase distribution channels,
hedge against volatility, increase its market share, or acquire other necessary business assets. A
takeover bid or a merger agreement through the stock market is one of the simplest and most common
ways for a company to grow by acquisition or fusion.

Redistribution of wealth:

Stocks exchanges do not exist to redistribute wealth. However, both casual and professional stock
investors, through dividends and stock price increases that may result in capital gains, will share in the
wealth of profitable businesses.

Corporate governance:

By having a wide and varied scope of owners, companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders and the
more stringent rules for public corporations imposed by public stock exchanges and the government.
Consequently, it is alleged that public companies (companies that are owned by shareholders who are
members of the general public and trade shares on public exchanges) tend to have better management
records than privately-held companies (those companies where shares are not publicly traded, often
owned by the company founders and/or their families and heirs, or otherwise by a small group of
investors).

Creating investment opportunities for small investors:

As opposed to other businesses that require huge capital outlay, investing in shares is open to both the
large and small stock investors because a person buys the number of shares they can afford. Therefore
the Stock Exchange provides the opportunity for small investors to own shares of the same companies
as large investors.

14
Government capital-raising for development projects:
Governments at various levels may decide to borrow money in order to finance infrastructure projects
such as sewage and water treatment works or housing estates by selling another category of securities
known as bonds. These bonds can be raised through the Stock Exchange whereby members of the
public buy them, thus loaning money to the government. The issuance of such bonds can obviate the
need to directly tax the citizens in order to finance development, although by securing such bonds with
the full faith and credit of the government instead of with collateral, the result is that the government
must tax the citizens or otherwise raise additional funds to make any regular coupon payments and
refund the principal when the bonds mature.

Barometer to the Economy

At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices
tend to rise or remain stable when companies and the economy in general show signs of stability and
growth. An economic recession, depression, or financial crisis could eventually lead to a stock market
crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator
of the general trend in the economy.

Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed
companies, they help trade and raise funds from the market. Over the hundred and twenty years during
which the stock exchanges have existed in this country and through their medium, the central and state
government have raised crores of rupees by floating public loans. Municipal corporations, trust, and
local bodies have obtained from the public their financial requirements, and industry, trade, and
commerce- the backbone of the country’s economy-have secured capital of crores or rupees through
the issue of stocks, shares, and debentures for financing the day-to-day activities, organizing new
ventures and completing projects of expansion, diversification, and modernization. By obtaining the
listing and trading facilities, public investment is increased and companies were able to raise more
funds. The quoted companies with wide public interest have enjoyed some benefits and asset valuation
has become easier for tax and other purposes.

15
  FEATURES OF NSE

Features of NSE are as follows

 Nationwide coverage i.e., investors from all over the country.

 Ring less i.e., it has no ring or trading floor.
 Screen-based trading i.e., trading in this stock exchange is done electrically
 Transparency i.e., the use of the computer screen for trading makes the dealings in
Securities transparent.
 Professionalization in trading brings professionalism in its functions.

Bombay Stock Exchange (BSE)

It is the oldest and first stock exchange of India established in the year 1875. First, it was started
under banyan tree opposite to town hall of Bombay with over 22 stock brokers. There are
23stock exchanges in India.

Bombay stock exchange is the largest, with over 6000 stocks listed. The BSE accounts for two-
third of the total trading volume in the country.

Established in 1875, the exchange is also the oldest in Asia. Among the twenty-two stock
exchanges recognized by the government of India under the securities
contracts(Regulation)Act,1956, it was the first one to be recognized and it is the only one that
had the privilege of getting permanent recognition.

17
 Vision And Mission Of BSE

• Vision

Our vision is to be the most sought-after learning provider in the world in areas of financial and
leadership learning, by pioneering the generation and dissemination of knowledge of the
enhancement of skills and capabilities of professionals and aspiring professionals.

• Mission

As a center of learning, our mission is to promote an open learning environment that brings
people together, cultures, and ideas from around the world, changing lives and helping transform
organizations through innovative learning programs.

Through our learning programs, we develop responsible thoughtful leaders and entrepreneurs
who create value of their organizations and their communities.

THE REGULATORS

1. Securities & Exchange Board of India (SEBI)

The Securities and Exchange Board of India (SEBI) was formed after the Indian parliament
passed the securities and exchange board of India Act, 1992 in response to the financial Services
Assessment Program. SEBI was actually established in the year 1988 and given statutory power
in 1992. With the growth in the dealings of the stock markets, lots of malpractices also started in
stock markets such as price rigging, ‘unofficial premium on a new issues delays in delivery of
shares, and violation of rules and regulations of the stock exchange and listing requirements.

18
Due to these malpractices, the customers started losing confidence and faith in the stock
exchange. So the government of India decided to set up an agency or regulatory body known as
the Securities Exchange Board of India (SEBI).

 Function Of SEBI

• Regulating the business in the stock exchange and any other securities markets.
• Promoting and regulating self-regulatory organization.
• Registering and regulating the work of collective investment schemes, including Mutual
funds.
• Prohibiting fraudulent unfair trade practices relating to the securities market.
• Promoting education, and training of intermediaries of the securities market.

 Purpose and Role Of SEBI

• Issuers. For issuers, it provides a marketplace in which they can raise finance fairly and
easily
• Investors: For investors, I provide protection and supply of accurate and correct
information.
• Intermediaries: For intermediaries, it provides a competitive professional market.

2. Reserve Bank of India (RBI)

`

The Reserve Bank of India (RBI) is governed by the Reserve Bank of India Act, 1934. The RBI
is responsible for implementing monetary and credit policies, issuing currency notes, being a
banker to the government, the regulator of the banking system, manager of foreign exchange,
and regulator of payment & settlement systems while continuously working towards the
development of Indian financial markets.
The RBI regulates financial markets and systems through different legislations. It regulates the
foreign exchange markets through the Foreign Exchange Management Act, 1999

19
3. National Stock Exchange (NSE)

.
In the role of a securities market participant, NSE is required to set out and implement rules and
regulations to govern the securities market. These rules and regulations extend to member
registration, securities listing, transaction monitoring, compliance by members to SEBI / RBI
regulations, investment, or protection etc. NSE has a set of Rules and Regulations specifically
applicable to each of its trading segments. NSE as an entity regulated by SEBI undergoes regular
inspections by them to ensure compliance.

ONLINE TRADING
Online trading involves investment activity that takes place over the Internet and it does the not
require physical inclusion of the broker. An investor has to register with an online trading portal
like ICICIdirect.com,motilaloswal.com and Sharekhan.com many companies like them and the
investor gets into an agreement with the firm to trade in different securities according to the
terms and conditions are given in the agreement. As the servers of the online trading portal are
connected all the time to the stock exchanges and designated banks the order processing is done
in real-time and investors can also have updates on the trading. They can also check the status of
their orders either through e-mail or through an interface that cannot be accessed by a third party.
Some options are usually given to users such as linking their bank accounts, Demat accounts,
and brokerage accounts into a single interface. A single window is also there for all exchanges
and a single screen is there for the complete order routing mechanism. The hardware used
comprises Web and application servers, switches, routers, firewalls and security devices, and
specialized appliances. There are two broad models in play in the online brokerage space.
• Bank-backed firms
• Entrepreneur-floated firms

Bank-backed brokerages such as ICICI direct and HDFC Securities have expanded on based one
brand name and the trust of investors in them. The integrated 3-in-1 accounts offered by these
bank-backed brokerages help their parent bank by giving it accounts along with float income.
In the second case i.e. Entrepreneur-backed companies like Sharekhan, Indiabulls, Religare, and
Motilal Oswal have expanded by offering customers a mix of online and offline accounts, higher

20
margin finance amounts, and lower brokerage rates. Though the bank based has performed better
but the latter has not lagged too far behind.
The reason why online trading has developed over conventional offline brokerage firms is that
this conventional method struggled with unfavorable economies. Staff cost is just one example of
it. As the markets open for 330 minutes a day one dealer can at best execute 500 trades in a day
while an online company like ICICI direct executes 150,000-200,000 trades a day on the
National Stock Exchange alone accounting for 3-4% of NSE trades of 5 million a day. It would
require a large number of dealers to service this demand. Besides the salary costs, it would also
demand huge expenses in real estate and support systems.
The offline model has got a downfall in the form of lower bandwidth and IT costs and the cost of
bandwidth has fallen to one-eighth of what it was in the year 2000 giving online broking an
advantage, especially in the case of lower-volume retail investors.
Today 30% of volumes on the NSE come from this and it may go up to 50% in three-four years
providing explosive growth for online booking in India.
To be a successful trading portal it will definitely a bouquet of services provided by it to an end-
user. Most of the portals charge a small registration fee and brokerage based on various
conditions but it's important for the organization to keep focused on customer-centric services
and delivery models to actually e most attention.

The Emergence of E-Broking in India

The Indian trader is being fancied by the democratized world of online trading or also known as
broking. The regular and attractive advertisements in the print media and electronic media have
added to this fancy world.

But as we compare to the Western countries, in India online trading has not still grasped the
market, but has done a very important amount of progress in the past years and the future of
online trading is bright. That is why many new companies are coming into this form of business
structure and the existing companies are changing to this new format besides offline and other
traditional forms of business. With only a mere share of 10% online trading and a combined
gross turnover of around Rs. 9000-10,000 crores handled by the BSE and NSE together there is
much greater scope for online trading. At present some of the dominant players in the online
trading market of share market are –

 Sharekhan.com
 Angel Trade
 Icicidirect.com
 Reliance Money

21
  Unicon
 Religare
 5paisa.com
 Karvy
 Indiabulls
 IL and FS
 Kotak Securities
 Motilal Oswal
 Geojit Securities

Earlier the share market was not safe enough to invest but some of the changes in the past ten
years in the Indian share market have created an interest in trading in the shares the people.
Broadly we can classify three important factors which have contributed to the development of
online trading in India-
Firstly the major step was taken by the National Stock Exchange (NSE) in the year 1994 which
allowed electronic trading and seeing to this various other stock exchanges in India followed
soon. This helped in making accurate and transparent transactions saving a lot of time than the
traditional method of trading. The investors were also saved by the clutches of the fraud brokers
at times when the clients were not aware of the true prices of the shares.
Secondly, in the year 1996, the dematerialization of the shares came (also known as DEMAT)
which avoided the online presence of shares in an electronic form avoiding them from theft,
pilferage, or from other losses like counterfeiting and frauds regarding share transfer.
The third reason was the rapid growth of computer education and learning of the internet by the
people. With the evolving of evolution, online trading became a hit he investors became
confident in investing just with a click of a mouse.

With the happening of such events, the ratio of trading has improved a lot. As it takes less time
for people to praise this technology for trading purposes. Some people who traded rarely now
even trade 2-3 times every day as it provides an edge of researching about companies on the
internet. The number of small investors is increasing on a daily basis that trades on the internet.
If a person invests or trades in equities, derivatives, commodities, etc through the used Internet it
is known as online trading enabling the investor to connect electronically to buy or sell stocks,
derivatives, etc with other investors. This can be done with the help of online service providers
like Sharekhan.com, ICICI Direct.com, etc. A person can access a stockbroker's website through
a PC connected to the Internet and can place his orders. The benefits are-

 A person can see the latest market movement through streaming quotes.
 Reduces time lag due to self-execution and instant confirmation.
 Empowers traders to have complete control over their trading decisions.
 A person can access his accounts and related information on the Website.

22
  Provides greater convenience of trade as a person can trade from home or other
convenient location.
 It is cheap in terms of the cost associated and offers a reduction in overheads
 A trader can view the historical charts on his computer.

The Internet revolution has changed the way to communicate and the way to do business in
today’s society bringing us closer and closer to vital sources of information. It provides us with
the means to directly interact with service-oriented computer systems tailored to our specific
needs; therefore, we can serve ourselves better by making our own decisions.
This new access be online trading customers to low-cost transactions and cutting-edge, real-time
market information that formerly belonged only to brokers have opened up extraordinary new
investment opportunities as well as a crucial need for state-of-the-art information.
Today investors use the Internet Client-Server technology to buy and sell securities at an instant
at any point in time. People investing online have reached the proportions.
Online trading allows an investor to buy and sell shares on the exchange through Internet the to
help in the direct control of his investments.
Advantages of Online Trading

Advantages of Online Trading

1. Provides the Freedom of Information

The Internet provides a new sense of controlling our financial future as the amount of investment
information available online is truly outstanding. An investor can- • Know the price of any stock
he desires at any point time on the internet.

An investor can review the price history of any stock in chart format online

An investor can follow in-depth the events happening in the market

Helps an investor to conduct extensive financial research of any company he desires

He may also consult with other investors online present around the world

Some online stock broking companies provide real-time stock quotes, daily round-ups of the
stock market, expert commentary, and a deep community of fellow investors.

2. Provides Control of Investor’s Money

When an investor wants to buy or sell stock he no longer needs to call his broker on the phone
thus helping in the execution of the order instantly on the internet.

3. Provides access to the market

Through the sophisticated information streams, dedicated trading platforms, and sophisticated
tools the investor can access the markets which provide more agility in buying and selling stocks.

23
4. Ensures the best price for investors

Some companies like Invest smart (IL and FS) specialize in the techniques which offer the best
price offer the buy and sell orders of the investors and traders providing a high level of
transparency by displaying information relating to the specific stocks and company profiles
which helps in getting the best quote for the orders.

5. Online trading offers greater transparency

Online trading offers investors greater transparency by providing an audit trail. The process
involves a complete integrated electronic chain starting from order placement, to clearing and
settlement and finally ending with credit into the depository account of the investor. All these
stages are inspected which brings transparency into the system.

6. Provides hassle-free trading

Online trading provides an integration of the bank account, trading account, and Demat accounts,
which leads to easy and paperless trading for the client.

7. Online trading allows instant trade execution

Online transactions help in the quick execution of the entire trading transaction right from
logging to the trader’s site to the settlement of the bank account in a very short period of time.

8. It provides a level playing field

Trading online gives even the smallest retail investor access to information that was earlier
available only to the big traders. It has provided a level playing field for all investors in the
securities market.
9. Online trading reduces the settlement risk

This method of trading reduces the settlement risk for the investor as when a short sell order is
played the orders are squared off at the specified cut-off time and are not allowed to be carried
forward.

10. Provides live financial news and analysis

The online sites also provide live terminals which provide streaming news to give an investor the
latest financial information as it occurs.

11. Online help desk

Some companies provide online help desk an investor cancan contact the Tele Trading
Executives from the Tele Trading team during and after market hours and can clarify questions.

12. Instant order trade confirmations

24
 Through online trading, every trade is confirmed immediately and the investor receives an on-
screen confirmation following every trade with full details for the investors’ records which
avoids costly errors that would have been discovered when it is too late.

13. Keeps Information Secure

As per the guideline provided by SEBI every effort has to be made to keep the investor’s account
and personal information secure by use of encryption technology and updated security
technology to advanced fraud prevention measures.

Disadvantages of Online Trading

1. In the online terminal, the investor can’t get customized expert advice, whereas offline the
broker gives suggestions according to the investor’s strategy (i.e. short-term or long-term)

2. Brokerage is high compared to offline.

3. Privacy is less due to hacking scandals

4. Transactional errors due to technical problems.

25
WHAT IS A DEMAT ACCOUNT?

In India Instead of the investor taking physical hold of certificates, shares and securities are held
electronically in a dematerialized (or Demat) account in India. The investor opens a Demat
account while enrolling with an investing broker (or sub-broker). All transactions must include
the Dematerialized account number in order for trades to be settled electronically. To do
business, each shareholder will have a dematerialized account.

Both a transaction password and an internet password are required to access the dematerialized
account. Then, transfers or acquisitions of securities may start. As soon as transactions are
validated and finished, the Dematerialized account automatically makes purchases and sales of
securities.

The benefits of Demat are as follows:

 Easy and convenient way to hold securities

 Immediate transfer of securities
 No stamp duty on transfer of securities
 Safer than paper shares (earlier risks associated with physical certificates such as bad
delivery, fake securities, delays, thefts, etc. are mostly eliminated)
 Reduced paperwork for transfer of securities
 Reduced transaction cost
 No "odd lot" problem: even one share can be sold
 Change in address recorded with a Depository participant (DP) gets registered with all
companies in which investor holds securities eliminating the need to correspond with each of
them separately.
 Transmission of securities is done by DP, eliminating the need for notifying companies.
 Automatic credit into Demat accounts for shares arising out of bonus/split,
consolidation/merger, etc.
 A single Demat account can hold investments in both equity and debt instruments.
 Traders can work from anywhere (e.g. even from home).

26
 What Is Depository?

In the language of the stock market, a depository is a location where securities can be deposited
or stored. In this situation, a depository could be a bank, group, or institution. These
organizations aid traders and investors in keeping their funds safe and secure. In addition to
keeping assets on behalf of investors, depositories also offer a wider range of services, such as
help with trading securities.
An essential market player that provides security and liquidity is a depository. In addition, they
provide loan services using the cash they have on hand. The term "depository participants" is
likely familiar to any trader or investor who has engaged in stock market activity.

What are depository participants?

1. NSDL or National Securities Depository Limited 

2. CDSL or Central Depository Securities Limited 

What is NSDL?
The oldest and biggest depository in India is NSDL. It started operating in Mumbai in 1996. This
depository was the first to offer trading services in an electronic format.
According to SEBI data, NSDL has more than 36,123 depository participant service locations
spread across 2,000 cities, with an estimated 2.4 crore active investors.
The following electronic financial securities are entrusted to NSDL for safekeeping:

 Stocks
 Bonds
 Debentures
 Commercial papers
 Mutual Funds

NSDL offers a wide range of services, like:

 Dematerialisation services
 Rematerialisation services
 Transfers between depositories
 Off-market transfers
 Lending of securities

27
What is CDSL?
After NSDL, CDSL is the second-largest depository in the nation and began operations in
Mumbai in 1999.
It offers all services, including holding financial securities electronically and facilitating trading
and order settlement, just like NSDL. Similar to NSDL, all types of stocks and securities are kept
at this central depository.
More than 5.2 crore active client accounts are present, with around 21,434 depository participant
service centers, according to SEBI data

SCREENSHOTS OF HOW ONLINE TRADING IS DONE

1. We go to trade now after logging in our clients’ go to exchange that from where we want to
purchase the shares.

2. Then we go to buy/sell option to buy or sell the shares

28
3. Then we go to validity that is GFD, IOC or MyGTD. Which means for intraday or delivery.

4. We then write the name of share in the scrip. For ex. Axis Bank

29
5. We after filling the required amount of shares we place the order and a box appears for
confirmation.

30
COMPANY PROFILE

ABOUT SHAREKHAN COMPANY

Sharekhan is one of the best retail brokerage houses in India with a strong online trading
platform. The company offers equity-based products (research, equities, derivatives, depository,
margin funding, etc.). It has one of the largest networks in the country with 704 share shops in
280 cities and India’s premier online trading portal www.sharekhan.com. With their research
expertise, customer commitment, and superior technology, they provide investors with end-to-
end solutions in investments. They provide trade execution services through multiple channels -
an Internet platform, telephone, and retail outlets.
Sharekhan was established by the Morakhia family in 1999-2000 and the Morakhia family
continues to remain the largest shareholder. It is the retail broking arm of the Mumbai-based
SSKI [SHANTILAL SHEWANTILAL KANTILAL ISWARNATH LIMITED] Group. SSKI
which is established in 1930 and is the parent company of Sharekhan Ltd. With a legacy of more
than 80 years in the stock markets, the SSKI group ventured into institutional broking and
corporate finance over a decade ago. Presently SSKI is one of the leading players in institutional
broking and corporate finance activities. Sharekhan offers its customers a wide range of equity-
related services including trade execution on BSE, NSE, and Derivatives. Depository services,
online trading, Investment advice, Commodities, etc.

Sharekhan Ltd. is a brokerage firm which is established on 8th February 2000 and now it is
having all the rights of SSKI. The company was awarded the 2005 Most Preferred Stock Broking
Brand by Award Consumer Vote. It is the first brokerage Company to go online. The
The company’s online trading and investment site - www.Sharekhan.com - was also launched on
Feb 8, 2000. This site gives access to superior content and transaction facility to retail customers
across the country. Known for its jargon-free, investor-friendly language, and high-quality
research, the content-rich and research-oriented portal has stood out among its contemporaries
because of its steadfast dedication to offering customers best-of-breed technology and superior
market information.
Share khan has one of the best states of art web portals providing fundamental and statistical
information across equity, mutual funds, and IPOs. One can surf across 5,500 companies for in-

31
depth information, details about more than 1,500 mutual fund schemes, and IPO data. One can
also access other market-related details such as board meetings, result announcements, FII
transactions, buying/selling by mutual funds, and much more.
Sharekhan's management team is one of the strongest in the sector and has positioned Sharekhan
to take advantage of the growing consumer demand for financial services products in India
through investments in research, a pan-Indian branch network, and an outstanding technology
platform. Further, Sharekhan's lineage and relationship with SSKI Group provide it a unique
position to understand and leverage the growth of the financial services sector.

32
 PROFILE OF THE COMPANY:

Name of the company: SHAREKHAN LTD.

Year of Establishment: 1925

Headquarters: SHAREKHAN SSKI

A-206 Phoenix House

Phoenix mills compound
Lower Parel

Mumbai – Maharashtra, India-400013

Nature of Business: Service Provider

Services: Depository Services, Online Services, and Technical Research.

Number of Employees: Over 3500

Website: www.SHAREKHAN.com

Slogan: Your Guide to The Financial Jungle.

Mission:
To achieve and sustain market leadership
To provide world-class quality services.
To Educate and empower the individual investor to make better investment
Decision through quality advice and superior service.

Vision:
To be the best brokering brand in their tail business of stock marketing.
To lead the market.
To acquire the highest market share.

33
PRODUCT & SERVICES

A Sharekhan outlet offers the following services:

 Online BSE and NSE executions (through BOLT & NEAT terminals)

 Free access to investment advice from Sharekhan’s Research team.

 Sharekhan Value Line (a monthly publication with reviews of recommendations, stocks to

watch out for, etc)
 Daily research reports and market revere view Noon & Eagle Eye)

34
 Pre-market Report (Morning Cups)

 Daily trading calls based on Technical Analysis

 Cool trading products (Daring Derivatives and Market Strategy)

 Personalized Advice

 Live Market Information

 Depository Services

 Derivatives Trading (Futures and Options)

 IPOs & Mutual Funds Distribution

 Internet-based Online Trading: Speed Trade

Types of Products

 Classic Account
 Fast Trade Account
 Trade Tiger

1. Classic Account
The features of a classic account are-

 It is used for beginners i.e. Fresher

 Here the transactions can be done in BSE, NSE, and F&O

35
There can be a market watch.
 Here we can make four templates i.e. folders.
 You can add 20 scrip’s to each template.
 Here you can add a minimum of 20 scrips and a maximum of 100 scrips.
 Top gainers, Top losers, Top traded equities, and Top traded funds are the special links
available in this.
 It gives maximum access.
 You can keep the lump sum amount in the account.
 There is a link which is- what’s in, what’s out
 A system required is Windows XP, 2000, IE 6.0

2. Fast Trade Account

The features of fast trade account are-
 We can make five templates.

 You can monitor 125 companies.

 Systems required here are Windows XP, 2000, IE 6.0, and Java

36
 You can also buy Mutual funds and IPO online.
 You can also monitor circuits.
 You can see the market depth i.e. the logic of demand and supply. It will help to decide
whether to buy or not.
 It can also add a trigger as it works as a reminder.
 This online trading platform is an applet-based application that provides live streaming
quotes from BSE and NSE.
 Get live market prices and market statistics like best bid price, quantity, best offer price,
quantity, etc. for chosen stocks.

37
3. Trade Tiger

Trade Tiger is an application that brings you the power of a broker’s terminal, right from your
desktop.
 Trade on multiple exchanges {NSE, BSE, MCX, NCDEX} from a single screen.
 Customize market watches by scripts or sectors and view them on a single screen.
 Get access to technical tools and trade like a pro.
 This account allows you to trade through the website and is suitable for retail investors.
 The online trading website also comes with a Dial-n-Trade service that enables to buy and
sell shares by calling the dedicated toll-free number 1-800-22-7050

Tie-ups with Banks

Sharekhan has tied up with ten banks to facilitate the transfer of money from saving account to
Demat account and vice–versa .and by only these banks one can transfer the money by e-
banking.

38
 AXIS Bank

 Bank of India

 Citi Bank

 HDFC

 ICICI Bank

 IDBI Bank

 IndusInd Bank

 Oriental Bank of Commerce {OBC}

 Union Bank of India

 Yes Bank

COMPETITORS
 Geojit Financial Services

 HDFC Securities

 Motilal Oswal

 Religare

 Kotak Securities

 ICICI Direct

 Anand Rathi

39
The Main Aim of SHAREKHAN is:-
To provide Online and Offline Trading Services to clients: - Trading is done online with the
SHAREKHAN website and offline through Dial n Trade Service which is provided by
SHAREKHAN to every customer.

Investment: -SHAREKHAN is also providing a platform for investment. An investment is a

monetary asset purchased with the idea that the asset will provide income in the future or
appreciate it and be sold at a higher price.

Portfolio Management Service: - SHAREKHAN is also having Portfolio Management

Services for Exclusive clients. It offers various details like:-

 Single window for Multiple investments

 Fast, Simple, and hassle-free maintenance
 Portfolio booster with News and views

Mutual Fund: - If anyone invests in a Mutual fund, SHAREKHAN is also providing the service
of a Mutual Fund. We take a monthly SIP (Systematic Investment Plan).

Derivative: - If we want to trade in Derivative Market, SHAREKHAN is also providing the

service of the Derivative Market. In Derivative Market we trade in Future Derivative Market and
Option Derivative Market.

SWOT ANALYSIS OF SHAREKHAN LTD

Strengths

 Services

As a product, SHAREKHAN is an extremely innovative product with a very less cost. Services
like an online trading facility, institutional and domestic brokering customizing research reports
with almost 80% efficiency, etc. give SHAREKHAN an edge over its competitors.

 Products

The company’s product line is quite flexible in the sense that there is a product for every kind of
investor. Also, all the products cover all the loopholes of all the products offered by the other
competitors like low-cost, user-friendly online trading services, etc. their competitors like low
cost, user-friendly online trading services, etc.

40
 Marketing

Sharekhan is a product of SSKI, a veteran equities solution company with over decades of
experience in the Indian stock markets.
Sharekhan does not claim expertise in too many things. Sharekhan’s expertise lies in stocks and
that’s what talks about with authority.

Weakness
 Competition From Banks

Most thanks due to good branding have the faith of the customer of their banking database. So
they enjoy the liberty of a huge database and customers find it more reliable to trade their rather
with an unknown broker. Also, Bangkok like ICICI and HDFC bank has the advantage of linking
the trading account of their customer to their saving accounts.
 Branding

Though the company has efficient products large part of the investment interested population
does not know the company. The most basic expectation for a trader or investor when one begins
trading is that one must get timely delivery of shares and proceeds from the m sale of shares.

Opportunities

 Upgrade Technology

In a country like India technology is always improving which gives the company a chance to
keep on improving their products with time whereas for the small players like local brokers it
will be difficult to keep the same pace as the changing technology. The traditional business
model largely depends on the large network.

 Expansion Of Market

After the NSE bought the screen-based trading system stock markets are now more secure which
has attracted d lot of retail investors and the demand is increasing day by day. It has been
dynamic enough to move with time and capture the opportunity that the market throws up from
time to time.

 Education Of Stock Market

41
The education level; in the country is improving year after year as far as technology goes. With
that, the understanding of the stock market is also increasing and a lot of retail investors are
stepping into the market which is shown by increasing volumes, transactions, and indices.

Threats
 Technology-Based Business

Online trading is based on technology which is quite complex typically the technology solution
has to start from the internet front end. So the technology is a kind of threat because unless it is
working properly it is good but the internet is not that safe. Though there are a lot of cyber laws
being made but not yet executed.

 New Entrant

A lot of competition is trying to enter the market in this bullish run to taste the flavor of the
cherry. This is creating a lot of competition for large players like sharekhan and it is creating
little confusion in the minds of customers about services provided by the broker.

42
 ACHIEVEMENTS OF SHAREKHAN

Awards & Recognition

 NSE Market Achievers Awards 2018.
 NSDL Star Performer Awards 2018.
 Second Top Performer in New Accounts Opened.
 Leader in Go Green Initiative.
 BSE Top Volume Performer.
 Best Commodity Retail Broking House award 2018.
 Best Commodity Retail Broking House award 2019.

43
 Literature Review
Subir Gokarn (1996) in his examination paper "Indian Capital Market Changes,
1992-96 An Evaluation" utilized a calculated structure that draws on the hypothesis of
guidelines from one viewpoint and the new political economy on the other to make an
evaluation of the far-reaching changes that have been started in the Indian financial
exchange throughout the course of recent years. In light of the system, the different
changes are arranged into classifications mirroring their administrative viability and
additionally their effect on wellsprings of market disappointment. The specialist shows
up at a for the most part certain evaluation of the changes, yet brings up three areas of
concern: the absence of a proper term arrangement for the controllers; the steadiness of
non-serious circumstances on the lookout; and the unreasonable passage of new scripts
into the market, Albeit lately, a few stages have been taken to resolve this issue too.
Selvam M (2008) in his research paper "Proficiency of Indian Capital Market to
respond sufficiently to the declaration of quarterly profit: A concentrate in Capital
products Industry" has expressed that a proficient and coordinated capital market, is a
significant foundation that works with capital development. The effectiveness with which
the capital development is completed relies upon the proficiency of the capital business
sectors and monetary foundations. A capital market is supposed to be productive as for a
data thing on the off chance that the costs of protections completely seize the profits
ramifications of that thing. The current review has observationally analyzed the
enlightening effectiveness of the Indian capital market as to quarterly profit delivered by
the car area organizations in the semi-solid type of EMH. The study found that the Indian
Capital market is close to effective in the semi-solid type of EMH, which can be utilized
by financial backers to make strange returns.
Jumba Shelly (2010) in her report "A task on Capital Market" has ascertained that the
execution of the organization's or corporate profit is one of the variables which
meaningfully affect the capital market in a country. Powerless corporate profit shows that
the interest for labor and products in the economy is less because of slow development in
the per capita pay of individuals. Due to slow development popularity, there is slow
development in work which means slow development sought after sooner rather than
later. In this manner, frail corporate profit shows normal or not super great possibilities
for the economy overall in the close term. In such a situation the financial backers (both
homegrown as well as unfamiliar) would change to put resources into the capital market
and subsequently there is the bear market-like circumstance. Its contrary instance would
be powerful corporate profit and its positive effect on the capital market. The specialist
has additionally added that the macroeconomic numbers likewise impact the capital
market. It incorporates List of Modern Creation (IIP) which is delivered consistently,
yearly Expansion number demonstrated by Discount Value Record (WPI) which is
delivered consistently, Commodity - Import numbers which are pronounced consistently,
Center Ventures development rate (It incorporates Six Center framework enterprises -
Coal, Unrefined petroleum, refining, power, concrete and completed steel) which comes

44
out each month and so on. These large-scale - monetary pointers show the condition of
the economy and the bearing in which the economy is going and thusly influence the
capital market in India.
Prior investigations have been completed to decide the example of Institutional financial
backers Venture however Studies managing Speculation example of individual financial
backers are not very many. Past Examinations predominantly focus on Contrasts in
individual money management design based on Orientation. Contrasts based on Age in
Speculation design is new road for research. Prior examinations infer that ladies
contribute their resource portfolios more moderately than their male partners. Ladies'
venture has generally been lower than people's because of multiple factors, including
Social and different segment concerns. Anyway the distinctions keep on being huge even
subsequent to controlling for individual Qualities (Schmidt and Sevak, 2006).In pursuing
any Venture Choice Hazard avoidance and Monetary Proficiency is a central point.
Albeit different writing accessible on risk characterize it variedly yet in like manner the
word risk alludes to circumstances in which a choice is made whose results rely upon the
results of future occasions having known probabilities(Lopes,1987)
Warren et al. (1990) and Rajarajan (2000) foresee individual speculation decisions (e.g.,
stocks, bonds, land) in view of way of life and segment credits. These financial backers
consider prizes to be dependent upon their own way of behaving (Rajarajan, 2002).
Gupta (1991) contends that planning a portfolio for a client is substantially more than
only getting protections for venture. The portfolio supervisor necessities to grasp the
mind of his client while planning his portfolio. Risk open minded financial backers act
like they have some control over risk. This proposes that risk resilience fills in as an
intermediary for an 'deception of control' and hence presumptuousness [Madhusoodanan
(1997); Odean (1998); Hairstylist and Odean (2001); Benartzi and Thaler (2001); Gervais
and Odean (2001); and Daniel and Huberman (2003)].
Phillip (1995) broke down the progressions in monetary navigation and financial backer
way of behaving in the wake of partaking in financial backer training programs. In India,
SEBI arranges a mindfulness program for little investor peaks, which has begun giving
advantages, as far as worth financial planning and informed money management from
retail financial backers. Madhusudhan and Jambodekar (1996) reasoned that financial
backers expect better administrations from the Organization to which they contribute.
The greater part of investors contributes to the security of head, liquidity and capital
increase. As indicated by an overview led by SEBI (1998) speculation objective of the
financial backer, risk craving, pay, or assets accessible for venture impacts the
speculation conduct in protections damage across various levels. Sewell (2005) reasoned
that Social money is the investigation of the impact of brain behavioral the way of
behaving of monetary experts and the ensuing impact on business sectors.
Tavakoli (2011) reviewed the various variables influencing the choice of financial
backers. He broke down the 13 variables to decide if the financial backers consider these
elements and choices are impacted by these variables.

45
He observed that a portion of these elements are more impacting including monetary
statement, talking with anyone, recycled data assets, monetary proportions, notoriety of
the firm, productivity variable. Most significant sub variable of benefit is the profit.
The behavioural theory that demonstrates how human behaviour affects investment
decisions develops as a contrary method rather than an additional assumption. This
section of the literature review aims to provide a concise overview of pertinent research
findings on behavioural finance and how it affects investment decision-making. Age, sex,
money, and education all have an impact on investors' preferences, according to
Lewellen's (1977) research.
According to Ippo Lito and Bogle's analysis from 1992, investors base their choice of the
fund on the previous performance of the funds, and capital flows into successful funds
more quickly than they do from unsuccessful ones. Shefrin (2001) determined that
behavioural finance is the examination of the influence of psychology on financial
judgment.

46
Research Methodology
The study is exploratory and descriptive in nature. The methodology of the study is discussed as
follows:

RESEARCH OBJECTIVES

The objective of the study

The study was conducted taking into consideration the following objectives:

 To detect the factors that have an impact on the investor’s decision.

 To analyze the behavior and psychology of the investor.
 To analyze the savings and investment decisions.

Sources of data collection

The study uses primary as well as secondary sources of information. For collecting data from the
sample respondents and the questionnaire was used. Questionnaires were distributed to 70 people
out of which response was received from 52 respondents. Internet, Books, Newspaper, Articles,
magazines, and blogs are some of the sources of secondary data collection that we have used for
our research. The data collected was analyzed using different analytical tools like SPSS
Percentages, frequencies, charts, and the Likert -scale. Data has been presented in pie charts or bar
charts. In this Project Descriptive Research design method is used.

SCOPE OF STUDY
Scope of study is limited to Delhi NCR city of India
Scope includes investors of all above 18 age groups.

RESEARCH DESIGN
The type of research design that we are using here is descriptive design because is used to
describe characteristics of a population or phenomenon being studied.

SAMPLING PLAN

Population People of Delhi NCR

Sampling frame People who invest
Sampling size 52 people

47
 DATA ANALYSIS
DO YOU THINK THAT YOU HAVE SUFFICIENT KNOWLEDGE ABOUT IT? *
EDUCATION

Qualification * Do you think that you have sufficient knowledge

about share Market ? Crosstabulation
Count
Do you think that you have
sufficient knowledge about
share Market ?
No Yes Total
Qualification PG 6 31 37
Graduate 2 11 13
Others 1 1 2
Total 9 43 52

48
 This bar chart shows that 59.62% of PG students and 21.15% of UG Student that they
have sufficient knowledge about Stock Market

The level of education and the overconfidence bias was compared here to check whether
there is any relationship between education level and they are confidence toward the
stock Market knowledge.

2. WHEN IT COMES TO DECISIONS RELATED TO INVESTMENTS, YOU

RELY MORE ON YOUR INTUTIONS AND GUT FEELINGS* GENDER

Count
when it comes to decisions related to investments, you rely more on
your institutions and gut feeling's
Strongly Strongly
disagree Disagree Neutral Agree Agree Total
What Male 4 6 14 15 3 42
is you Female
Gender 3 1 5 1 0 10
?
Total 7 7 19 16 3 52

49
Out of total respondents, 19.2% of females and 80.8% of males rely on their intuition and
gut feeling while making investment decisions.

The comparison was made with gender and emotional bias. So it can be said that males
rely more on their intution and gut feeling while making an investment decision Female
gender is less prone to emotional bias as compared to males.

3. SUPPOSE YOU HAVE BOUGHT THE SHARES OF ABC LTD, THEN WILL
YOU GIVE MORE IMPORTANCE TO THE POSITIVE NEWS RELATED
WITH ABC LTD. * AGE

what is you Gender?

Male Female Total
Suppose you have Strongly disagree 3 2 5
the shares of XYZ Disagree 4 0 4
Ltd, then will you Neutral 11 3 14
give more
Agree 17 4 21
importance to the
Strongly Agree 7 1 8
positive
Total 42 10 52

50
Out of total respondents, of people of the age 18-30, 9.6% strongly disagree,7.7% are
disagree, 26.9% are neutral, 40.4% are agree, 15.4% are strongly agree more importance
to the positive news related to their investments.

4.IF YOUR INVESTMENT IS SHOWING LOSS,WILL YOU HOLD IT FOR

RECOVERING THE LOSS?

Will you hold on your investment if it is showing a loss in hope of

recovering the loss?

Cumulative
Frequency Percent Valid Percent Percent
Strongly disagree 9 17.3 17.3 17.3
Disagree 4 7.7 7.7 25.0
Neutral 14 26.9 26.9 51.9
Agree 20 38.5 38.5 90.4
Strongly Agree 5 9.6 9.6 100.0
Total 52 100.0 100.0

51
Out of the total responses, 38.46% agree, and 26.92% strongly Agree to have the hope of
recovering the loss and trying to reach the break-even point

5. Do other investors’ decisions of buying and selling make an impact on your

investment decision?

Cumulative
Frequency Percent Valid Percent Percent
Strongly disagree 5 9.6 9.6 9.6
Disagree 4 7.7 7.7 17.3
Neutral 21 40.4 40.4 57.7
Agree 18 34.6 34.6 92.3
Strongly Agree 4 7.7 7.7 100.0
Total 52 100.0 100.0

52
Out of the total responses, 40% were neutral and 34.6% Agree that Heard
instincts/Confirmation bias other investor’s decisions of buying and selling make an
impact on your investment decision.

6. Do you prefer to keep holding into investments, even if there past performance
is not very encouraging?

Valid Cumulative
Frequency Percent Percent Percent
Strongly
4 7.7 7.7 7.7
disagree
Disagree 13 25.0 25.0 32.7
Neutral 19 36.5 36.5 69.2
Agree 11 21.2 21.2 90.4
Strongly Agree 5 9.6 9.6 100.0
Total 52 100.0 100.0

Out of the total respondents, 36.54% responded neutrally prefer to keep holding into
investments, even if their past performance is not very encouraging  whereby an
individual's decisions are influenced by a particular reference point this is Anchoring.

53
 Assured Return [What is the main purpose for Investment decision?]

Frequency Percent
Strongly agree 16 31%
Agree 20 38%
Neutral 12 23%
Strongly Disagree 4 8%
Total 52 100%

8%
31% Strongly agree
23%
Agree
Neutral
Strongly Disagree

38%

38% of the total population consider that is the main purpose for Investment decision is
assured return.

54
 Tax benefits [What is the main purpose for Investment decision?]

  Frequency Percent
Strongly agree 8 15.4
Agree 18 34.6
Neutral 19 36.5
Disagree 5 9.6
Strongly
2 3.8
Disagree
Total 52 100.0

4% 15%
10%
Strongly agree
Agree
Neutral
Disagree
37% 35% Strongly Disagree

36% of the total population consider tax benefits as an neutral investment decision whereas 35%
of the total population Agree that tax benefits is the purpose of investment decision.

55
What is the main purpose for Investment decision? Child Education / Child
marriage

Frequenc Valid Cumulativ

y Percent Percent e Percent
Strongly
8 15.4 15.4 15.4
agree
Agree 15 28.8 28.8 44.2
Neutral 22 42.3 42.3 86.5
Disagree 4 7.7 7.7 94.2
Strongly
3 5.8 5.8 100.0
Disagree
Total 52 100.0 100.0

6% 15%
8%
Strongly agree
Agree
Neutral
29% Disagree
42% Strongly Disagree

56
42.3% of the total population consider Child education as a Neutral investment decision
whereas 28.8% of the total population consider as Agree with child Education / Child
marriage main purpose for investment decisions.

Investment amount - factors that have implications on Investment Decision.

Valid Cumulative
Frequency Percent Percent Percent
Strongly
17 32.7 32.7 32.7
agree
Agree 17 32.7 32.7 65.4
Neutral 15 28.8 28.8 94.2
Disagree 1 1.9 1.9 96.2
Strongly
2 3.8 3.8 100.0
Disagree
Total 52 100.0 100.0

4%
2%
33% Strongly agree
29% Agree
Neutral
Disagree
Strongly Disagree

33%

57
32.7% of the total population considers investment amount as a Strongly Agree and 33%
Agree that Investment amount - factors that have implications on Investment Decision.

Past experience factors which have effect on Investment Decision

Valid Cumulative
Frequency Percent Percent Percent
Strongly
12 23.1 23.1 23.1
agree
Agree 20 38.5 38.5 61.5
Neutral 19 36.5 36.5 98.1
Strongly
1 1.9 1.9 100.0
Disagree
Total 52 100.0 100.0

2%
23%
Strongly agree
37% Agree
Neutral
Strongly Disagree
38%

58
38.5% of the total population considers as a Agree 37% are neutral and 23% are strongly
Agree that Past experience has implications on Investment Decision.

Lack of Confidence factors which have effect on Investment Decision?

Frequency Percent Valid Percent Cumulative Percent

Strongly agree 8 15.4 15.4 15.4
Agree 22 42.3 42.3 57.7
Neutral 17 32.7 32.7 90.4
Disagree 5 9.6 9.6 100.0
Total 52 100.0 100.0

59
Information through Internet factors which have effect on Investment
Decision?

Valid Cumulative
Frequency Percent Percent Percent
Strongly agree 7 13.5 13.5 13.5
Agree 24 46.2 46.2 59.6
Neutral 19 36.5 36.5 96.2
Disagree 1 1.9 1.9 98.1
Strongly
1 1.9 1.9 100.0
Disagree
Total 52 100.0 100.0
42.3% of the total population considers as Agree and 32.69% are neutral that Lack of
Confidence has implications on Investment Decision.

60
46.2% of the total population considers as Agree and 36.54% neutral that Information
through Internet factors has implications on Investment Decision.

TV Channels factors which have effect on Investment Decision?

1 1.9 1.9 1.9

Strongly agree 9 17.3 17.3 19.2
Agree 22 42.3 42.3 61.5
Neutral 17 32.7 32.7 94.2
Disagree 1 1.9 1.9 96.2
Strongly
2 3.8 3.8 100.0
Disagree
Total 52 100.0 100.0

61
42.3% of the total population considers as Agree that TV Channels factors has
implications on Investment Decision and 32.69% are neutral TV Channels factors has
implications on Investment Decision.

Firm’s image has influence on the investment decision

Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly agree 14 26.9 26.9 26.9
Agree 18 34.6 34.6 61.5
Neutral 18 34.6 34.6 96.2
Strongly Disagree 2 3.8 3.8 100.0
Total 52 100.0 100.0

62
34.6% of the total population considers as Agree that a Firm’s image has an influence on
the investment decision and 34.62% are neutral and 26.92% are considers that Firm’s
image has influence on the investment decision

Newspapers factors which have effect on Investment Decision?

Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly agree 11 21.2 21.2 21.2
Agree 23 44.2 44.2 65.4
Neutral 15 28.8 28.8 94.2
Strongly Disagree 3 5.8 5.8 100.0
Total 52 100.0 100.0

63
44.2% of the total population considers as Agree, 28.85% neutral and 21.15% are strongly
that Newspapers factors impact the investment decision.

64
 Suggestion by Relatives factors which have effect on
Investment Decision?
Valid Cumulative
Frequency Percent Percent Percent
Valid Strongly agree 7 13.5 13.5 13.5
Agree 20 38.5 38.5 51.9
Neutral 16 30.8 30.8 82.7
Disagree 7 13.5 13.5 96.2
Strongly
2 3.8 3.8 100.0
Disagree
Total 52 100.0 100.0

38.46% of the total population considers Suggestion by Relatives as important investment

decision whereas 30.77% of the total population considers Suggestion by Relatives as less
important & neutral investment decision.

65
 What is the main purpose for Investment decision?
Suggestion by Friends

Valid Cumulative
Frequency Percent Percent Percent
Valid Strongly agree 5 9.6 9.6 9.6
Agree 14 26.9 26.9 36.5
Neutral 19 36.5 36.5 73.1
Disagree 10 19.2 19.2 92.3
Strongly
4 7.7 7.7 100.0
Disagree
Total 52 100.0 100.0

36.54% of the total population considers Suggestion by Friends as a neutral investment decision
whereas 26.92% of the total population considers Suggestion by Friends as agree investment decision

66
 FINDINGS

It shows that the post-graduate people are the people with the highest level of overconfidence
bias and it can be said that people who are educated have more overconfidence bias to predict
the market compared to people who are less educated.

The comparison was made with gender and emotional bias. So it can be said that males rely
more on their intuition and gut feeling while making an investment decision.

According to the age profit of investors, maximum people give more importance to the
positive news related to their investments.

Larger number of people feel that they Heard instincts/Confirmation bias other investor’s
decisions of buying and selling make an impact on your investment decision it show that they
are self-doubt toward the investment decision.

Most of the respondents do not strong opinions or do not have the confidence to keep holding
into investments, even if their past performance is not very encouraging they are Anchoring
investors many times, investors hold on to a specific belief and refuse to part ways with it.

The respondents were asked about the purpose of the Investment decision which they
consider highly important. The respondents replied that they focus on assured returns, tax
benefits, capital gain, secured future, child education, and daughter marriage.
According to the response received the factors which have an impact on decision-making
includes Tax Advantage, Suggestion from a friend, Financial knowledge, Investment amount,
Information through the Internet, Professional Investment Management, Newspaper, Past
experience, TV Channels, Lack of Confidence This are the factors that affect the investment
decision of the investors while they are an investment in the stock market.

67
 CONCLUSIONS

The objective of this study was to check the relevance of the behavioral finance theories
and if the average individual investor participating in the investments market of the Delhi
NCR is always rational or not.

The focus was is on the behavioral biases namely: overconfidence, anchoring, familiarity,
conformation bias, mental accounting, narrow framing, the shadow of past, emotional
bias, and information or heard instinct.

Effects of the above biases on the decision-making process of the investors of the Delhi
NCR were studied and analyzed. Data collection was done through a questionnaire and
70 responses were obtained from individual investors.

Behavioral finance is considered to be an important element in any investment decision

in the Indian capital market. Through this study, the analysis of investor saving and
investment decision-making in the Indian capital market is highlighted with 52
respondents’ opinions gathered. The various parameter for which the behavior of
investors for investing in the Indian capital market. The level of education and the
overconfidence bias was compared here to check whether there is any relationship
between education level and overconfidence. It shows that the postgraduate people are
the people with the bypass level of overconfidence bias. Our study has shown that
behaviour plays a significant role in making intelligent investment decisions, therefore
choosing an investment option involves an investor's full behavioral pattern, which
includes life goals, spending habits, expenses, income, and other factors. Perception of
investments, changes in lifestyle, time frame, nature of investments, and mindset Natural
habits, financial analysis, risk tolerance, liquidity, projected return, the connection of the
investment with the goals, and comprehension of the investment target in line with the
goals are all important. In order to analyze the many investment options available in the
Indian capital market and make an informed conclusion regarding the best investment
option, one must follow their psychology. Although the way people behave when
investing in the capital market differs from how people generally behave, there are some
shared characteristics, such as goal clarity, product understanding, risk analysis,
investment comparison, linkage with individual goals and requirements, and time period
of investment, which are some of the common characteristics that are generally accepted
as key criteria to judge.

68
 BIBLIOGRAPHY

1. www.sharekhan.com
2. www.moneycontrol.com
3. www.sebi.gov.in
4. www.nseindia.com
5. www.wikipedia.com
6. www.investopedia.com
7. www.theteentrillionaire.com
8. www.kaplanfinancial.com
9. www.wallstreetmojo.com
10. https://www.investopedia.com/terms/i/investment.asp

69
 REFERENCES

1. Athur, A. D. (2013). Effect Of Behavioural Biases On Investment Decisions Of

Individual Investors In Kenya
2. Upadhayay D. A Study on Behavioral Finance in Investment Decisions of Investors in
Ahmedabad. IJNRD-International Journal of Novel Research and Development (IJNRD).
2019 Jul 22;4(7):103-14.
3. https://www.researchgate.net/publication/315662083_Indian_Capital_Market_A_Review
4. chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://pubs.aeaweb.org/doi/
pdfplus/10.1257/jep.12.4.9
5. Dash, Manoj Kumar. "Factors influencing investment decision of generations in India:
An econometric study." Int. J. Buss. Mgt. Eco. Res 1.1 (2010): 15-26.
6. Dash, M.K., 2010. Factors influencing investment decision of generations in India: An
econometric study. Int. J. Buss. Mgt. Eco. Res, 1(1), pp.15-26.
7. H. K. Baker and J. A. Haslem, (1974). The impact of investor socioeconomic
characteristics on risk and return preferences, Journal of Business Research, vol. 2, pp.
469-476.
8. Ippolito R A (1992). Consumer Reaction to Measure of Poor Quality: evidence from the
mutual fund industry, Journal of Law and Economics,Vol. 35, pp. 45-70.
9. Kadariya, Sudarshan, (July 8, 2012).Factors Affecting Investor Decision Making: A Case
of Nepalese Capital Market,Journal of Research in Economics and International
Finance (JREIF),Vol. 1(1), pp. 16-30, Available at SSRN:
https://ssrn.com/abstract=2849888

70
 ANNEXURE

Name of the Respondent*

Annual Income
 0 - 200000
 200000-300000
 300000-400000
 above 400000

Gender*
 Male
 Female
 Prefer not to say

Age profile of the investors*

 21-30
 31-40
 41-50
 Above 50

Marital Status*
 Single
 Married

Qualification*
 PG
 Graduate
 Others

Do you think that you have sufficient knowledge about share Market ?  *
 NO
 YES

71
when it comes to decisions related to investments, you rely more on your institutions and gut
felling's
*
 Strongly Disagree
 Disagree
 Neutral
 Agree
 Strongly Agree

Do other investor’s decisions of buying and selling make impact on your investment decision
*
 Strongly Disagree
 Disagree
 Neutral
 Agree
 Strongly Agree

Suppose you have the shares of XYZ Ltd, then will you give more importance to the positive
news related with XYZ Ltd.
*
 Strongly Disagree
 Disagree
 Neutral
 Agree
 Strongly Agree

Will you hold on your investment if it is showing a loss in hope of recovering the loss?
 Strongly Disagree
 Disagree
 Neutral
 Agree
 Strongly Agree

Suppose you have invested Rs 1 lac in equity, Rs 1

lac in bond and if there is news in bond market then
will it affect your buying and selling decision in
equity?
*

72
 Strongly Disagree
 Disagree
 Neutral
 Agree
 Strongly Agree

Do you prefer to keep holding into investments, even if there past performance is not very
encouraging?
*
 Strongly Disagree
 Disagree
 Neutral
 Agree
 Strongly Agree

What is the main purpose of Investment decision? High Return*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

What is the main purpose of Investment decision? Tax benefits*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

What is the main purpose of Investment decision?  Child Education / Child marriage *

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

What is the main purpose of Investment decision?   Suggestion by Friends

 Strongly agree
 Agree
 Neutral

73
 Disagree
 Strongly Disagree

What is the main purpose of Investment decision?  Secured Future*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

Investment amount - factors which have implications on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

Past experience factors which have effect on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

Lack of Confidence factors which have effect on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

Information through Internet factors which have effect on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
 Firm’s image has influence on the investment decision
*
 Strongly agree

74
 Agree
 Neutral
 Disagree
 Strongly Disagree

Suggestion by Relatives factors which have effect on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

TV Channels factors which have effect on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

Newspapers factors which have effect on Investment Decision?*

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

75