CHAPTER-I

INTRODUCTION

1
 INTRODUCTION
The function of the financial market is to facilitate the transfer of funds from
surplus sectors (lenders) to deficit sectors (borrower). Normally, households have
invisible funds or savings, which they lend to borrower in the corporate and public
sectors whose requirement of funds for exceeds their savings. A financial market
consists of investors or buyers of securities, borrower or seller of securities,
intermediaries and regulatory bodies. Financial market does not refer to a physical
location. Format trading rules, relationships and communication networks for
originating and trading financial securities link the participants in the market.
Organized money market:
Indian financial system consists of money market and capital market. The
money market has 2 components is Organized and Unorganized. The organized
market is dominated by commercial banks. The other major participants are the
Reserve Bank of India Life Insurance Corporation, General Insurance Corporation,
units trust of India , securities trading corporation of India And discount and finance
house of India , other primary dealers, commercial banks and mutual funds. The core
of money market is the inter bank call money market where by short term money
borrowing/lending is affected to manage temporary liquidity mismatches. The
Reserve Bank of India occupies a strategic position of managing liquidity through
open market operation of Government securities, access to its accommodation, cost
(interest rate), availability of credit and other monetary management tools. Normally,
monetary assets of short term nature generally less than One year are dealt in this
market.
Unorganized money market :
Market through a large network of banking institutions that have extended
their reach given to the rural areas. There is still an active unorganized market. It
consists of indigenous bankers and money lenders. In the unorganized market, there is
no clear demarcation between short term and long term finance and even between the
purposes of finance; the unorganized sector continues to provide finance for trade as
well as personal consumption. The in ability of the poor to make the credit worthiness
requirements of the banking sectors make them take recourse to the institutions that
still remain outside the regulatory frame work of banking. But this market is
shrinking.

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 OBJECTIVE OF THE STUDY:
1. To know the derivative market trend in India
2. To know the capital market importance in Indian economy
3. To know the online trading system in stock exchanges
4. To know the initial public offers trends in India
5. To know the growth of the capital market from last few years
6. To know the available alternative in capital market for funds raising.
7. To analysis the role of SEBI in Indian capital market
8. To know and analysis about mutual funds available in market

NEED FOR THE STUDY:

The present study to review the online trading procedure a case study of

ONLINE TRADING at UNICON STOCK BROKING LTD., as the exchange has

changed it’s trading from it and there is need to assess the performance of the capital

market.

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 RESEARCH METHODOLOGY

Primary data :
Collected from listed company s in NSE India, BSE India

Secondary data :
1. Data collected from library of the company
2. Data collected from journals, reports of the BSE from last few years
3. Data collected stock brokers
4. The data so collected was then aligned in a interpretable format.
5. The data was interpreted as graphs.
6. The findings and suggestions were incorporated

SCOPE OF THE STUDY:

The scope of my study was

1) To know the procedure of online trading/screen based training.

2) To know the trading procedure at “UNICON”.

3) The study is primarily aimed at knowing the procedural formalities a company

should fulfill to get itself in the stock exchange .

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LIMITATION OF THE STUDY

 The study is restricted to Equity Linked schemes analyzed .

 The Period of one and half months taken for analysis is a limitation.
 Comparative study is restricted to Four companies of Infosys, Tech Mahindra,
Dr.Reddys, WIPRO.
 The period of research of 45 days is one limitation.
 The Study is based largely on secondary data and the limitation existing therein
would creep into the findings.

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 CHAPTER-II
REVIEW OF LITERATURE

6
 REVIEW OF LITERATURE

An overview:

The function of the financial market is to facilitate the transfer of

funds from surplus sectors (lenders) to deficit sectors (borrower). Normally,
households have invisible funds or savings, which they lend to borrower in the
corporate and public sectors whose requirement of funds for exceeds their savings. A
financial market consists of investors or buyers of securities, borrower or seller of
securities, intermediaries and regulatory bodies. Financial market does not refer to a
physical location. Format trading rules, relationships and communication networks for
originating and trading financial securities link the participants in the market.

Organized money market:

Indian financial system consists of money market and capital

market. The money market has 2 components is Organized and Unorganized. The
organized market is dominated by commercial banks. The other major participants are
the Reserve Bank of India Life Insurance Corporation, General Insurance
Corporation, units trust of India , securities trading corporation of India And discount
and finance house of India , other primary dealers, commercial banks and mutual
funds. The core of money market is the inter bank call money market where by short
term money borrowing/lending is affected to manage temporary liquidity mismatches.
The Reserve Bank of India occupies a strategic position of managing liquidity through
open market operation of Government securities, access to its accommodation, cost
(interest rate), availability of credit and other monetary management tools. Normally,
monetary assets of short term nature generally less than One year are dealt in this
market.

Unorganized money market :

Market through a large network of banking institutions that have extended

their reach given to the rural areas. There is still an active unorganized market. It
consists of indigenous bankers and money lenders. In the unorganized market, there is
no clear demarcation between short term and long term finance and even between the
purposes of finance; the unorganized sector continues to provide finance for trade as

7
well as personal consumption. The in ability of the poor to make the credit worthiness
requirements of the banking sectors make them take recourse to the institutions that
still remain outside the regulatory frame work of banking. But this market is
shrinking.

CAPITAL MARKET STRUCTURE

Capital markets can be classified in to two types

 Primary market

 Secondary market

The primary market deals with issue of new instruments by the corporate sectors such
as equity shares, preference shares and debt instruments. Central and state
governments, various public sector industrial units, statutory and other authorities
such as state electricity boards and port trusts also issue bonds/debt instruments. The
primary market in which issue of securities make through a prosperous is retail
market and there is no physical location. Offer for subscription to securities is made
investing community.

The secondary market or the stock exchange is a market for trading and settlement of
securities that have already been issued. The investors holding securities will sell
securities through registered brokers/sub brokers of the stock exchange. Investors who
are desirous of buying securities purchase securities through registered brokers/sub
brokers of the stock exchange. It may have a physical location like a stock exchange
or a trading floor. Since 1995 trading in securities is screen based and internet based
trading has also made an appearance in India. The secondary market consists of 24
stock exchanges including the national stock exchange, over the counter exchange of
India (otci) and inters connected stick exchanges of India limited. The secondary
market provides a trading place for the securities already issued, to be bought and
sold. It also provides liquidity to initial buyers in the primary market to re-offer
securities to any interested buyer at any price, if mutually accepted. An active
secondary market actually promotes in the growth of the primary market and capital
formation because investors in the primary market are assured of a continuous market
and they can liquidate their investments.

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Capital market participants

There are several major players in the primary market. These

include the merchant bankers, mutual funds, financial institutions, foreign institutional
investors (FII) and individual investors. In the secondary market, there are the stock
brokers (who are the members of stock exchanges), the mutual funds, financial
institutions, foreign institutional investors (FII), and individual investors. Registers
and transfer agents, custodians and depositories are capital market intermediaries that
provide important infrastructure services for both primary and secondary market.

Market regulation It is important to ensure smooth working of capital

market, as it the arena where the players in the economic growth of the country.
Various laws have been passed from time to time to meet this objective. The financial
market in India was highly segment until the initiation of reforms in 1992-93 on
account of variety of regulation and inistered prices including barriers to an entry. The
reform process was initiated with the establishment of securities exchange board if
India (SEBI).

Instruments: The changes in the regulatory framework of the capital market and
fiscal policies have also resulted in newer kinds of financial instruments (Securities)
being introduced in the market. Also, a lot of financial innovation by companies who
are now permitted to undertake treasury operation, has resulted in newer kinds of
instruments all of which can be traded being introduced. The various nesses in all
these instruments depend on the tenure, the nature of security, the interest, the
collateral security offered and the trading feature, etc.

Debentures: These are issued by companies and regulated under the SEBI
guidelines of June 16th, 1992. These are issued under a prosperous, which has to be
approved by SEBI in the case of equity issue. The rights of investors as debentures
holders are governed by the companies’ act, which prohibits the issue of debentures
with voting rights. There are a large variety of debentures that are available. This
includes:

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Participating debentures
Convertible debenture with options
Third party convertible debentures
Debt/equity swaps
Zero coupon convertible notes
Secured premium notes
Zero interest fully convertible debentures
Fully convertible debentures with interest
Partly convertible debentures
Bonds:
Indian DFIs, like IDBI, ICICI, and IFCI, have been raising capital for their
operations by issuing of bonds. These too are available in a large variety. These
include:
Income bonds
Tax-free bonds
Deep discount bonds
Retirement bonds, etc.
In addition to the interest rates and maturity profiles of these instruments, the
issue institutions have been including a put/call option on especially the very long-
dated bonds like deep discount bonds. Since the tenures of some of these instruments
spanned some 20 or 25 years during which the interest rate regimes may undergo a
complete change, the issue has kept the flexibility to retire the costly debt. This they
do by exercising their option to redeem the securities at pre-determined periods like at
the end of five seven years. This has been witnessed in number of instruments
recently much to the changing of investors who were looking for secure hassle-free
long-dated instruments.
Preference shares:
As the name suggests, owners of preferential shares enjoy a
preferential treatment with regard to corporate actions like dividend. They also have a
higher right of repayment in case of winding up of a company. Preference shares have
different features and are accordingly available as:

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Cumulative and non –cumulative
Participating and redeemable fully convertible to preference shares
Cumulative and redeemable fully convertible to equity
Preference shares with warranty
Preference shares
Equity shares:
As the name indicates, these represent the proportionate ownership of
the company. This right is expressed in the form of participation in the profits of the
company. There has been some innovation in the way these instruments are issued.
Some hybrid securities like equity shares with detachable warrants are also available.
Government securities:
The central government or state government issue securities
periodically for the purpose of raising loans from public. There are 2 types’
government securities – dated securities and treasury bills. Dated securities have a
maturity period of more than 1 year. Treasury bills have a maturity period of less than
or up to 1 year. The public debt office (PDO) of the Reserve Bank of India performs
all the functions with regard to the issue management, settlement of trade, distribution
of interest and redemption. Although only corporate and institutional investors
subscribe to government securities, individual investors are also permitted to
subscribe to these securities.
An investors in government securities has the option to have securities
has the option to have securities issued either in physical form or in book-entry form
(commonly known as subsidiary general ledger form). These are 2 types of SGL
facilities, viz, SGL-1 and SGL-2. in the SGL-1 accounts and only entities , which
fulfill all the eligibility criteria, are performed to open SGL-1 accounts . the RBI has
permitted banks , registered primary dealers and certain other entities like
NSCLL,SHCIL and DEPOSITORY to provide SGL facilities to subscribers. A
subscriber to government securities who opts for SGL securities may open a SGL
account with RBI or any other approved entity. Investment made by such approved
entity on its own account is held SGL-1 account and investment held on account of
other clients is held in SGL-2 accounts.
INTRODUCTION:
The securities firms are the broker firms who deal in corporate and
government securities, public sectors undertakings bonds etc. in the stock exchanges
and in new issues in the capital market etc. in India brokers in the stock and capital

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markets have been mostly individuals and family concerns. It is only recently that a
corporate member has been permitted. They can deal in the new issues (primary
market, existing securities and secondary market) the government securities, public
sector bonds and money markets etc. stock exchanges deals with only secondary
market. The capital market refers to the market for raising financial resources by the
business enterprises, firms, government, semi government bodies, public sector
undertakings and other organizations.
The methods of raising these resources are :
 From the banks and financial institutions.
 From the public (in the form of public issue).
 From foreign sources (N.R.I‘s foreign institutional investors).
New issue market players:

 Promoters
 Directors
 Employees
 Financial institution
 Banks
 Mutual funds
 Associate
 Public

Intermediates in the secondary market operations:

 Jobbers
 Dealers
 Arbitragers
 Investment advisors
 Portfolio managers
 Sub brokers
 Brokers (members)

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 Evolution and present scenario of the
Indian stock market:
Securities market:
Securities markets are markets of financial assets or instruments and these
are represented as I.O.U’s (I Owe You) in Financial form. Business organization,
corporate units and the government, central or state issue these. Public sectors finance
their investment and current expenditure. These are thus sources of funds to the
issuers.
Securities are the claims on money and are like promissory note or I.O.U
securities of fund for companies, govt etc. the external sources of funds of the
companies are as follows.

A. long term funds

1. Ownership capital equity and preference capital.
2. Debt capital – debentures and long term borrowers in the form of deposits
from public or credit limits or advances from banks and financial institutions.

B. short term funds

1. Borrowings from banks.
2. Trade creditors and suppliers credits.

The securities market can again be classified into :

 primary market:
A primary market is a market where securities are issued to the public for the
first time. New issues are dealt with this market. The new issues market has 3
functions to perform. Organization, underwriting and distribution. There are 3 ways
by which company may raise capital in primary market.

1. public issue
2. rights issue
3. private placements

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 Intermediaries in the primary market are merchant bankers, collecting brokers,
registrations and transfer agents, broker underwriters, advertising agencies, printers,
sub-brokers and solicitors and mailing agents.

 Secondary market :
Secondary market is a market where securities, which have already issued in
the primary market, are traded. This market consists of all stock exchanges recognized
by the government of India and is regulated under the securities contract (regulation)
act 1956. The Bombay Stock Exchange is the principal stock exchange in India,
which set the some of the other stock markets.

Intermediaries in secondary market are brokers, jobbers, dealers, arbitrators,

investments, portfolio managers and sub-brokers.
Evaluation of Indian stock market:
The origin of the stock market in India goes back to the later part of the 19
century. The earliest dealing was transactions for loan securities of the east India
Company, The dominant institution of those days.
Corporate shares came to the picture by 1930’s and assumed significance with the
enactment of the companies act by 1950. The introduction of limited liability market
the beginning of the era of modern joint stock enterprises.
The American civil war followed this in 1960-65. It also resulted in complete
ostracism of the broker community. The tremendous social pressure on the brokers
led to their forming an informal association, which later gave birth to the “the native
share and stock brokers association” which is now known as Bombay Stock Exchange
The cotton textile industry that contributed a lot in the establishment of the Bombay
Stock Exchange was also the prime factor in the development of Ahmedabad as a
center for dealing in stocks and shares. As new cotton textile mills floated and
volumes of business grew, “the Ahmedabad share and stock brokers association” was
formed in 1994. This later came to be known as the Ahmedabad Stock Exchange.
The next stock exchange was established in Calcutta in 1913. The industries
that contributed to its birth and subsequent development were jute, coal and mining.
Like the Bombay Stock Exchange, it was born out of a crisis when the boom of 1904-
13 broke and a need was felt for an organized body for mutual protection of brokers

14
and safety of the trade with World War I. All imports into ceased and the Indian
manufacturers Were faced with a boom. The three stock exchanges flourished during
the period of prosperity.
How ever the boom also led to the formation of many rival stock
exchanges. The World War II also resulted in a boom and mushroom growth of stock
exchanges. Hoe ever may of them perished during the slump that followed. Most of
the other stock exchanges languished till 1956 when government came out with
comprehensive legislation called the “securities contract (regulation) Act “to regulate
the functions of stock exchanges. The established stock exchanges in Mumbai,
Ahmedabad, Calcutta, Delhi, and Hyderabad were recognized subsequently.

At present the Indian stock markets consists of 23 regional stock exchanges

and two national stock exchanges known as NSE and OTCEI (over the counter
exchange of India.

Stock Exchanges stand for

S- security provider for investor

T- tax benefits, planning and exemptions
O- optimum return on investment
C- cautions approach
K- knowledge of market
E- eligibility of accruals
X- xchnage of securities transactions
C- cyclopedias of listed companies
H- high speed
A- authentic information
N- new entrepreneurs
G- guidance to investors and companies
E- equity cult.

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THE SECURITIES EXCHANGE REGULATION ACT 1956
A bill introduced in the Parliament 1954 by the gromwell committee and
recommended on the lines of functioning of stock exchanges.
SECURITIES AND EXCHANGES BOARD OF INDIA (SEBI)
Securities and exchanges board of India (SEBI) was set up in 1988 and given
the statutory status in January 1992 for healthy regulation of the capital markets. The
controller of capital issue (CCI) was abolished and companies have to approach
market directly subject to SEBI
Guidelines relating to disclosure and other measures of investor protection.
FUNCTIONS OF SEBI:
 To regulate the business in the stock exchanges.
 To register and regulate intermediaries associated with securities market as
well as working of mutual funds.
 Promote and regulate self-regulating organization.
 Prohibit fraudulent and fair trade practices relating to securities transactions.

THE MECHANISM
The broker of stock exchanges gets the membership at the exchanges after
fulfilling a set of conditions. The broker is connected online with stock exchange. On
the system he constantly gets real quotes in the market, their position. The demand
and supply rates, number of buyers and sellers at various rates.
The customer drops in the office the broker or gives him a call regarding the
sale or purchase f the particular number of shares. The broker takes his order and
inputs that in his online system. if a proper match Regarding that price available in
that market that is both the buy and sale tates match, then it implies that the deal in
stuck. If this suitable match is not found, order gets stacked in the system till a
suitable counter order emerges and the transaction is closed at that point of time.
The trading system on the National Stock Exchange provided enormous
flexibility to the trading member. The member can easily exercise the various options
available to them on trading floor and when entering the order can place limit on
either the numbers or the higher order and accordingly the orders would be matched at
the best price available. The member would also have the facility of canceling all
outstanding order in one stroke if deemed necessary or he may chose for the entire

16
order to be carried out as one deal or in smaller lots. The orders in the system would
provide complete transparency. The identity of the trading members entering orders in
the system will be protected and will have direct participation by a large player also
without the fear of their orders influencing the state of the market.
ONLINE TRADING HAS LEAD TO ADDITIONAL FEATURES
SUCH AS :
 Limit/stop orders: order that can go unfilled, but there is an extra charge for
this facility since one need to hold a price.
 Market orders: orders can fill as unexpected prices, but this type is much
more risky.
 Cash account: where funds have to be placed against stocks, to increase
purchasing power.

MERITS OF ONLINE TRADING:

Some of the merits of the online trading system can be outlined as follows
Easy and efficient access:
Online trading has made it possible for anyone to have easy and efficient
access to more reports and charts than it was previously possible if one went to any
broker’s office. Thus we get information online itself to teach oneself.
Benefit to smaller organization:
Online trading has made room for smaller organization to complete with
multinational organizations since is no longer an issue. Being online does not identify
the size of any particular organization, therefore this additional power to the
underdogs.
Grater control :
Online trading gives control to individuals and they can exercise it over
accounts thus comprehend what is going on when they trade? it is like going back to
school and reeducating on how to trade online.
Geographical location:
Online trading has allowed companies to locate themselves where they want,
as physical location is not an issue any more. Companies can establish themselves
according to the gain losses, for instance, where tax (sales and value added tax) is best

17
for them permitted. Thus, through this system, the trade transaction has shown a
tremendous increase both in value and volume.
Lower cost :
Individual benefit by saving a lot more when trading online, as the cost per
transactions is less.
Greater investment choice :
Online trading has made it possible for one to find investment option that were
not available on a regular basis, like off beat net stocks, unique trends and the facility
of trading in global market.
Variety :
Individuals can invest in a variety of products, Unlike when people bought
bonds, mutual funds and stocks , stock and index options, mutual funds, individual,
government and even insurance.
DISADVANTAGES:
Network crash :
When the network crashes or breaks down there could be serious
problems and delays due to large influx of traffic and rapid online trading criteria. For
example on the 27th of October 1997 there was a network crash for a day, which
caused trading activities come to a stand still and brokers could not conduct their
business.
Less support :
Individuals are restricted to first–hand financial guidance which means they
are left alone to trade on their own and take quick decision.
Tax assessment :
Tax assessment of sales tax and the value added tax becomes an issue,
especially in case of international transactions.
Lack of knowledge:
Online dealers should have sufficient knowledge of the other end dealer
companies and other vital information.

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 TRENDS IN INDIAN CAPITAL MARKET

Some of the trends or major changes in the Indian capital markets are
heading towards are as follows:
1. SCREEN BASED TRADING :
The trading on stock exchanges in India used to take place through open
outcry without use of information technology for immediate matching or recording of
the trades. This was the time consuming and inefficient. This imposed limits on
trading volumes and efficiency, liquidity and transparency, NSE introduced a nation
wide online fully automated screen based trading system (SBIT) where a member can
punch into the computer quantities of securities and the price at which he likes to
transact and the transaction is executed as soon as if finds .
A matching sale or buy order from a counter party. SBTS electronically matches
orders on a strict price/time priority and hence cuts down on time, cost and risk of
errors as well as fraud resulting in improved operational efficiency. In the very first
year of its operation, NSE became the leading stock exchanges in the forcing them to
adopt SBTS to suit to the changing environment.
2. DEMATERIALIZATION:
Settlement system on Indian stock exchange gave to raise to settlement risk
due to the time that elapsed traders are settled. Physical movement of papers settled
trades the process of physically moving the securities from the seller to the ultimate
buyer through the seller broker and buyer’s broker took with the risk of delay some
where along the chain. The system of transfer of ownership was grossly inefficient as
every transfer involved physical movement of paper securities to the issuer of
registration with the change of ownership being evidence by an endorsement on the
security certificate.
Dematerializing the securities in the depository modes the major development.
This has taken place in capital market providing for maintained of ownership Records
in a book entry form. In order to streamline both the stages of settlement process. The
act envisages transfer of ownership of securities electronically by book entry without
making the securities move from person to person. Currently 99% of market
capitalized and 99.9% of trades are settled by delivery.

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3.SETTLEMENT GUARANTEE:
A Variety of measures were taken to address the risk in the market. Clearing
corporations emerged to assure counter party risk. Trade and settlement guarantee
funds were set up to guarantee provide full innovation and work as central counter
party. The exchanges/clearing corporations monitor the positions of the broker on real
time basis.
4. TRADING CYCLE:
The trading cycle varied from 16 days for specified securities to 30 days for
others and settlement took another fortnight. Often this cycle was not adhered to. This
was euphemistically often described as T+ any thing. Many things could happen
between entering into a trade and its performance providing incentives. For either of
the parties to go back on its settlement. The all scripts move the rolling settlement
from December 2001.T+3 from April 2002 and T+2 from 2003.
5. DERIVATIVES:
To assist market participants to manage risk better through hedging,
speculations and arbitrage, securities contract regulation act was amended further in
December 1999.
To govern RBI and SEBI to refine initiated various measures the market
design of primary market further improved the market sentiments. Some of them are
as follows.

6. BOOK BUILDING PROCESS:

Book building is a process of offering securities in which bids at various
prices from investors through syndicate members and based on bids, demand for the
security is assessed and its price discovered. In case of normal public issue, investors
know the prices in advance and the demand is known at the close of the issue.

7. Online initial public offerings:

A company proposing to issue capital to public through online system of the
stock exchange is required to enter into an agreement with the stock exchanges, which
have the requisite rights, duties, responsibilities and obligation of the company and
also any provision for a dispute resolution mechanism between the company and the
stock exchanges,

20
 “If industry growth is any thing to go by, India will eventually see a fully
fledged market for fund administration from custodian banks, as an alternative to the
current traditional fund bank office”.

DERIVATIVES
INTRODUCTION:
It is a contract whose value depends on or derived from the value of an
underlying asset such as a share, forex, commodity or an index. In its broadest sense
derivatives attempts to hedge against the variability of any economic variable. Thus
exposure of perceived risk to a firm arising from the variation in interest rates,
exchanges rates, commodity prices and equity prices can be hedged through an
appropriate derivatives structure. Such as derivatives structures covers a wide variety
of financial contracts viz. futures, forwards, options, swaps and different variations
thereof. These contracts can be custom designed for individual requirements.
The history of derivatives can be traced to the Middle Ages when farmers and
traders in again and other agricultural products used certain specific types of futures
and forwards to hedge, their risks. Essentially they farmer wants to ensure that he
receives a reasonable price for the grain or his produce, which he could not be of use
as it reduces the price.
The vice versa happens in the case of the grain merchant, as the fall in
production will push up the price resulting in profits. Therefore it would be useful for

21
both to come to an understanding and fix a price for the future. This was how the
futures market 1st developed in agricultural commodities such as cotton, coffee,
sugar, petrol etc. the Chicago board of trade commenced trading in derivatives in the
year 1995.
PARTICIPANTS:
The three players in the derivatives market are as follows :
SPECULSTORS:
The person willing to take advantage of the price movements and thrives on
certainties is the speculator. The speculator may lose large amounts of money if his
forecast goes wrong but stands to again large enormously if he is proved correct. The
risk taking associated with speculation is an integral part of a derivative market.

ARBITRAGER:
The third category of participants is the arbitrageur that looks at risk less profit
by simultaneously buying and selling the same or similar financial products in
different markets. Markets are seldom perfect and this makes it possible to take
advantage of the price variations.
The government of India permits futures trading in many commodities and
with the entry of futures trading in the stock markets, index based derivative trading
has finally arrived in India.
STOCK INDEX FEATURES:
A future contract is an exchanges traded agreement between two parties to buy
or sell an asset at a specified time in future at the agreed price. In the case of stock
index futures contract the underlying asset is the specified stock index. To facilitate
liquidity in the futures contracts, the exchanges specifies certain standard features of
the contracts. The standard contracts once brought can be sold at any time to square
off the position till the date of expiry of the contract. Similarly, once a future contract
may be offset prior to maturity by entering into an equal and opposite transaction.
Nearly 99% of the futures transactions are offset this way.

22
FUTURES: The price at which the futures contract trades in the futures market.
Spot price: The price at which the asset trades in spot market.
Contract cycle: The period over which a contract trades. The index futures
contracts in the NSE and BSE have one, two three-month expiry cycles, which expire
on the last Thursday, a new contract having a three month expiry would be introduced
for trading.
Expiry date: It is the date specified in the futures contract. This is last day on
which the contract will be treated. It will cease to exit the end of the day.
Contract size: The amount of asset that has to be delivered under one contract. The
contract sized of the stock index futures of NSE Nifty is 200 and contract size of the
stock index futures on BSE sensex is 50.

Basis :
Basic is usually defined as the spot price minus future price. There will be a
different basic for each delivery month for the same asset at any point in time. On 19 th
June 2001 Nifty closed at 1596.65. August 2001 Nifty futures closed at 1598.90.
Therefore the basic for the August NIFTY FUTURES IS -2.25 INDEX Points. In a
normal market, basic will be negative that reflects the fact that the underlying asset is
to be carried at a cost for delivery in the future.
Cost of carry:
The relationship between futures price and spot prices can be summarized in
terms of what is known as the cost carry. This measures the storage cost plus the
interest that is paid to finance dividend will be the income earned on the asset ex:
stocks, dividend will be the income earned on the asset and storage cost would be
negligible.
Introductions to options:
Options give the holder or the buyer of the option the right to do something. if
the options is a call option, the buyer or holder has the right to buy the number of
shares mentioned in the contract at the agreed strike price. If the option is a put
option, the buyer of the option has the expiry of the buyer. In contract, in a futures
contract the two parties to the contract have committed themselves to doing
something at a future date. To have this privilege
Of doing something at a future date, to have profitable, the buyer of the option has to
pay a premium to the seller of options.

23
Options terminology:
Index options: An option having the index has the underlying asset. Like
index futures contracts, index options contract is also cash settled.
Stock option: Stock options are options individual stocks. A contract gives the
holder the right to buy or sell shares at a specified price.
American option: These are options that can be exercised any time up to the
expiration date. This name is only a classification and does not imply that they are
available only in America.
European option: these options can be exercised on the expiration date. These
options are easier to analyze than American options and properties of American
options are frequently deducted from those of its European counterpart.
Call option: A call option gives the holder the right but not obligation buys asset
by a certain date for a certain price.
Put option: A put option gives the holder the right but not the obligation to sell an
asset by certain date for certain price.
Buyer of option: The buyer option, either call or put pays the premium and buys
and right now the obligation to exercise his option on the seller/writer.
Writer of an option: The writer of call /put option is the one who receives the
option premium and is there by obliged to sell/buy the asset if the buyer exercises on
him. Option writer is the seller of the option contract.
Strike price: The price specified in the option contract at which buying or selling
will take place is known as the strike price or the exercise price.
Option price: Option price is the premium, in which the option buyer pays to the
option. Seller or writer; black and whole formula is widely used for determining the
fair value of share.
Expiration date : It is the date on which the European option is exercised. It is
also called as exercise date, strike date or maturity date.

24
 INITIAL PUBLIC OFFERING ( IPO )

INTRODUCTION:
A corporation may raise capital in the primary market by way of an initial
public offer, rights issue of private placement. An initial public offers (IPO) is the
selling securities to the public in the primary market. it is the largest source of funds
with long or indefinite maturity for the company.
Getting a piece of a hot IPO is very difficult, if impossible .To understand
why, we need to know how an IPO is done , a process known as underwriting.
When a company wants to go public, the first thing done Is to hire an
investment bank. A company could theoretically sell its shares on its own, but
realistically, an Investment bank is required it’s just the way Wall Street works.
Underwriting is the process of raising money by either debt or equity ( in this case we
are referring companies and investment public).
Once all sides agree to a deal , the investment bank puts together a registration
statement to be filed with the SEC. this document contains Information about the
offering as well as company info such as financial statements , management
background, any legal problems, where the money is to be used and insider holdings.
The SEC then requires a “cooling off period” in which they investigate and make sure
all material information has been disclosed. once the SEC approves the offering , a
date ( the effective date) is set when the stock will be offered to the public.
During the cooling off period the underwriter puts together what is known as
red herring. This is an initial prospectus containing all the information about the
company except for the offer price and the effective date, which are not known at that
time. With the red herring in hand, the underwriter and company attempt to hype and
build up interest for the issue. They go on road show also known as the “dog and pony
show “- where the big institution investors are courted.

25
 RECENT CHANGES
1. REVISION OF ENTRY FOR INITIAL PUBLIC OFFERS:-
a) For unlisted company, requirement of actual payment of dividend changed
b) to ability to pay dividends in terms of section 205 of the companies act
1956.
c) Pre-issue net worth (paid up capital and free reserves minus intangible
assets and revaluation reserves) of not less than 1 crore in three out of the
proceeding 5 years with a minimum net worth to be a met during the
immediately preceding 2 years made compulsory.
d) For infrastructure companies minimum participation of appraising agency
reduced to 5%.

2. MERCHANT BANKERS: -
Merchant bankers permitted to carry activities of primary dealers; SEBI has
permitted merchant bankers who are registered with RBI and NFBC for primary and
satellite dealership of government securities.

3. Par values of shares:-

W.e.f.20th march 1999, companies are allowed to issue shares in any
denomination and not necessarily in Rs.1/- or in decimal of Rs.1/-, either the company
was only permitted to issue the shares in the fixed denomination of Rs.15/- or150/-
may also change the standard denomination into any denomination not below
Rs.1/-,stock exchanges have been advised to reflect the denomination value of the
shares as fixed by the company along with the market quotation.

4. Existing companies:-
Existing companies can also avail this facility by splitting/ consolidating the
existing shares. The current entry norms applicable for issues will be applicable to all
issues.

5. Introduction of employee stock option/ employee stock purchase plan.

6. Vanishing companies:- SEBI has started taking action against the
companies who came out with their public offers during the period from 1992-1995
and are not existence today. Such companies have been identified and SEBI has
started initiating action against its promoters/directors.

26
 BOOK BUILDING

SEBI guidelines defines BOOK BUILDING as “a process undertaken by

which a demand for the securities proposed to be issued by a body corporate is
elicited and built up and the price for such securities is assessed for the determination
of the quantum of such securities to be issued by means of a notice, circular,
advertisement, document or information memoranda or offer document”.
Book building is basically a processed used in initial public offer (IPO) for
efficient price discovery. It is a mechanism where, during the period for which the
IPO is open, bids are collected from investors at various, which are above or equals to
the floor price. The offer is determined after the bid closing date.
As per SEBI guidelines, an issue company can issue securities to the public
through prospectus in the following manner.
150% of the net offer to the public through book building process.
75% of the net offer to the public through book building process and 255 at the
price determined through book building. The fixed price portion is conducted like a
normal public issue after the book built portion, during which the issue price is
determined.
The concept of book building is relatively new in India. However it is common
practice is most developed countries.

DIFFIRENCE BETWEEN BOOK BUILDING AND PUBLIC ISSUE:

In book building securities are offered at prices above or equal to the floor
prices, where as securities are offered at a fixed price in case of a public issue. In case
of book building, the demand can be known everyday as the book is built. But in case
of the public issue the demand is known at the close of the issue.
An issuer company can issue capital, through book building in following two
ways.

75% book building process :

The option of 75% book building is available to all body corporate that are
otherwise eligible to make an issue of capital to the public. The securities issued
through the book building process are indicated as “placement portion category”. In

27
this option underwriting is mandatory to the extent of the net offer to the public. The
issue price for the placement portion and offer to the public is required to the same.
In the 150% of the net offer to the public, entire issue is made through book
building process. The number of bidding centered, in case 75% book building process
should not less than the number of mandatory collection specifies by SEBI. In case of
150% book building process, the book building centers should be at all places where
the recognized stock exchanges are situated. Book building refers to the collection of
bids from investors, which is base on the price-band, with the offer price being
finalizes after the bid/offer closing date.

Book building process:

The principal parties involved in the book building process are:
1. The company.
2. Book running read managers (BRLM)
3. The syndicate members who are intermediaries registered with SEBI
or registered as bookers with the stock exchange and eligible to act as underwriters.
The BRML appoint syndicate members.
The process of book building, under SEBI guidelines,
Relatively new and the investors are advised to make their own judgment about
investment through this process prior to making a bid in the offer.

28
DEMETERIALIZATION
Dematerialization is a process by which physical share of investors are
converted to an equivalent number of securities in electronic from and are credited in
the investor’s account with his depository participant. Dematerialized trading is now
compulsory for all investors. Beginning of first week of January 1999, investors can
trade in specific scripts in the dematerialized form and share certificates will not be
changed for these scripts.
A depository is an organization where securities of shareholders are held in the
electronic form at the request of the shareholders through depository participants
(DP’s). The system is comparable to that in a bank. If investor wants services offered
by a depository, he would have to open an account through a DP- similar to opening
an account with any other branches of the bank in order to avail of its services.
THE PROCESS OF DEMATERIALIZATION:
In order to dematerialize his certificate an investor will have to first open an
account with a depository participant (DP) and then request for the dematerialization
of his certificates by filling up dematerialization request form (DRF), which will be
available with any DP . The name and number should be mentioned. This to ensure
that the security mentioned in the demat request form is same as the one the client
intended to dematerialize.
Steps:
 An investor has to submit the request form along with the share certificates, which
is to be dematerialized to depository participant.
 The depository participants gives the demat order to NSDL through the system.
 The depository participant submits the share certificate, DRF and DRM to
issuer/RTA.
 The issuer/RTA sends confirmation/rejection statement after checking the
validity.
 NSDL in turn sends the status intimation to the DP.
 The issuer/RTA sends the objection memo to DP.
 DP gives the statement of holding to the client.
The whole procedure takes about 19 days from the date of request. Electronic
holding can be converted back into certificates in a similar fashion as that for
dematerialization.

29
ADVANTAGES OF DEMATERIALIZATION:
Transacting depository way has several advantages over traditional way of
physical share certificates.
 There is reduction in risk associated with bad delivery that has lead to
reduction in clearing member age to the extent of .05% by many clearing
member age firms. This in turn reduces all cost and wastage of time involved
in follow up and recitation of bad deliveries.
 The investor can also receive his bonuses and rights into depository account as
a direct credit eliminating cost.
 The investor can also avoid the expenses of applying for duplicate certificates
in case of loss/mutilations of certificates.

Trading of dematerialized securities:

Trading of dematerialization securities is current available at National Stock
Exchange (NSE) the Bombay Stock Exchange (BSE) and Calcutta Stock Exchange
(CSE).
At NSE the dematerialization securities are traded in two separate called “AE
segment “ which are in addition to the segment for trading in securities in the physical
form called “EQ segment “.
In case of AE segment, dematerialized securities are traded in market lot
where as in “Be segment” these can be treated in multiple of one share. At BSE and

30
CSE dematerialized is a trade in separate segment called dematting segment and
physical securities are traded in unified segment.

ONLINE TRADING

INTRODUCTION TO ONLINE TRADING :

Online trading has become very popular in the last couple of years because of
the convenience of ease and use. Numerous companies have gone has existed for as
long as we can talk about it. We are referring to trade financial dealings. In current
trading is buying and selling of financial services, including securities through the
World Wide Web.
Online trading has basically replaced a phone call with the internet. Instead of
interesting with brokers over phone, the consumer is clicking the mouse. Online
trading has given customers real-time access to account information, stock quotes,
elaborate research and interesting trading.

IN INDIAN CONTEXT:
The rank amongst the top ten countries in terms of the market capitalization of
its stock market. India is gradually opening its stock market to foreign investors. At
present there are 24 stock exchange recognized under securities contract act 1956. the
beginning was made on 27 January 2000 when the chairman of securities and
exchange board of India (SEBI) Authorized stock exchanges to provide interest based
trading services to investors and also announced that foreign companies and
individuals could now trade on Indian stock exchange.
OBJECTIVES OF PRESENT ONLINE TRADING :
 Reduces and eliminate operational inherent in manual systems.
 Increased trading capacity in stock exchange.
 Improve market transparency, eliminate unmatched trade and delayed
reporting.
 Provide for online monitoring, control and surveillance of the market.
 Promote fairness and speedy matching.
 Smooth market operations using technology while retaining the flexibility of
conventional trading practices.
 Set up various limits rules and controls centrally.

31
 Consolidate the trades, data on electronic media interface with the brokers
back office system.
 Provide public information on scrip prices indices for all users of the system.
 Provide analytical data for use of stock exchange.

ONLINE TRADING PROCEDURE IN B S.E :

The NSE online securities trading system was built around the most
sophisticated state of the art computers, communication systems and the proven
VECTOR SOFTWARE from CMC and will be one of the powerful SBT system in
the country, operation in was environment, connected through 9.6 KBPS 2 wire
leased from the offices of the members to the office of the stock exchange in the
present building where the central system CHALLENGE DESK SIDE SERVER
made silicon graphics (SGI model no . D95602-s2) is Compaq desk top 2000/desktop
5190 computers connected through MOTOROLA (28.8 KBPS) will carryout trades
from computer terminal located in their own offices. NSE is only exchange in the
country to provide infrastructure to its members for trading through WAN.
NSE has initiated a phased implementation of automated trading
system. Investor face major problems like side jobbing margins, lack of transparency,
and non-execution of the orders or their execution at a price which fails to make into
the rate list, long settlement periods etc. therefore Trading in all non-specified shares
totally on the computer was contemplated.
Each member of the exchange will be provided with computerized
trading stations where instead of shouting out orders would be “keying” them in the
system envisages that a particular broker would buy or sell. The computer would
match the buy orders of one broker with the best order of another.
Maintenance of unique identification code number to the authorized members:
Each member is given a unique code for carrying out his
trading online. This code acts as an effective control to avoid collusion between the
brokers who intends to create the artificial demand situation for any particular scrip as
the code of the, other trading member is not visible on the member’s terminal.
Online trading or risk containing methods :
 Trading of exposure limits
 Circuit filters
 Margins

32
Trading of exposure limit :- NSE collects a minimum capital of Rs 200000/-
from each member known as the security deposit. The exposure limit that is granted
by the NSE is Rs 2000000/- which includes trading in both purchases and selling of
scripts. The NSE is empowered to reduce the limit to less than 15 times in order to
control the risk.
Circuit filters: - Circuit filters are related to the price movements in the stock market.
Price movements in the market are controlled by exercising the ceiling limits as
under.
Daily price movement (8%)
Weekly price movement (46%)
Margins: - Margins are charges that are normally payable in respect of every
contract outstanding at the end of the day. Three type’s margins are under:
 Daily margins
 Adhoc margins
 Carry forward margins
Daily margins are generally at the rate of 5% to 15% of the contact value
which can be hiked levels depending upon the volatility of the market. The higher
rated being made applicable to bulls in a raising market and to bears in falling market.
Adhoc margins imposed on buyers in case of rise in price and suspension
of trading by one or more stock exchanges in respect of scrip subject to under price
and manipulations.
Carry forward margins checks malpractice in the securities market
namely provision for implosion on penal margins on net delivered portion at the end
of each settlement. If such penal margins is not paid then his access to the trading in
the next working day will be withheld.
THE TRADING ENVIRONMENT AT NSE :
The brokers carry out a large of the business operation outside the NSE. The NSE has
successfully implemented a clearing house for settlement of securities transaction on
association with Canara bank , which is one of the best clearing houses in the country.
Trading information is displayed in number of monitors located with the trading hall.
The NSE had also made available live trading information to investors through cable
TV during trading hours currently only 300 scripts are being traded on the NSE.
Trading is restricted to 5 hours from Monday to Friday when business is translated.

33
 The NSE online securities trading system was built around the most
sophisticated state of art computers, communication system and the proven VECTOR
software from CMC and of the most powerful SBT window based entity.
The back-up communication facility at NSE:
Reliable communication service to provide connectivity between the brokers
and NSE is essential to carry out screen based trading. The network should have the
minimal chances of breakdown Otherwise the purpose of the application itself is
defeated, as the entire trading system would come to standstill.
In order to overcome this situation, NSE has devised a partial solution for
coping with network failure. In order to provide better connectivity to brokers. NSE
provides 40 back-up terminals located within its premises so that brokers could carry
out trading within its premises so that brokers could carry out trading with the least
inconvenience. Through number of such back-up terminals is not sufficient taking
into account the number of brokers for this reason back-up connectivity is essential
for smooth communication, services should automatically take over network
operations. This process should be to end-users and provide connectivity transparent
without affecting their trading activities. Reliable networking can be possible when a
change over mechanism is apart of the architecture if the network is successfully
implemented.
SETTLEMENT PROCEDURE AT NSE:
The NSE has weekly settlement period. This has been followed from past
several years. The settlement period is form Monday to Friday for the transitions
carried out in the earlier week.
The exchange issues daily volume report of the day’s transaction in the
evening to all the members. If any discrepancies arise, then that should repeat to the
exchange before 19:30 pm on the next working day. Daily volume report indicates the
information of selling price, circuit breaker and day’s top ten scripts (turn over wise,
transaction wise).
The exchange will provide all the transaction data of the members in a
particular settlement and issue an adjustment report to the members by the end of the
weekly settlement period on Friday along with delivery channels.

34
STOCK MARKET TRADING ON INTERNET:
The major events that will take in the Indian capital market are introduction of
index based futures trading on internet. Trading on interest means that the investor
will actually buy and sell the stick online through the net. A committee was set-up by
SEBI to develop regulatory parameters for use of internet trading .SEBI approved the
report of the committee. SEBI decided that internet trading could take place in India
within the existing legal framework through use of order routing system, which will
route order from client to brokers, for the trade execution on registered stock
exchanges. The board also took not of the recommended between clients and brokers,
which will forced by the respective stock exchanges.

WHAT IS A 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. Government securities etc.
According to securities contract (regulation) Act 1956 “Stock Exchange is an
Association “organization or body of assisting regulating and controlling business in
buying selling and dealing securities.
The Stock Exchange means any body or individuals whether in corporate or
not, constitute for the purpose of assisting regulation or controlling the business of
buying, selling or dealing in securities. It is an association of member broker for the
purpose of self- regulation and protecting the interest of the members.
It can operate only if the Govt. recognizes the securities contract Act 1956. The
central government ministry of finance granted the recognition under section 3 of the
Act.
STOCK EXCHANGE IN INDIA
No Stock Exchange can operate with the Government. The securities contract
(regulation) act is the basis for the operations of permission recognition. Stock
Exchanges are given monopoly in certain areas under section 19 of the above act to
ensure that control and regulation are facilitated. Recognition can be granted to a
stock exchange provided certain conditions are satisfied and the necessary
information is supplied to the government. Recognition can also be withdrawn if
necessary where there are no stock exchanges. The government can license some of
the brokers (licensed dealers) to perform the functions of the stock exchange. In its
absence.

35
 India has 24 Stock Exchanges `duly recognized’ by the Government. These
are listed below in the order of the year of their Establishment.
23 STOCK EXCHANGES
STOCK EXCHANGES YEARS:
1. BOMBAY STOCK EXCHNAGE 1957
2. AHMEDABAD SHARE AND STOCK BROKERS
ASSOCIATION 1957
3. KOLKATTA STOCK EXCHNAGES ASSOCIATION LTD 1957
4. DELHI STOCK EXCHANGES ASSOCIATION LTD 1957
5. CHENNAI STOCK EXCHNAGES ASSOCIATION LTD 1957
6. INDORE STOCK BROKERS ASSOCIATION LTD 1958
7. BANGALORE STOCK EXCHANGES 1963
8. HYDERABAD STOCK EXCHANGES 1943
9. COCHIN STOCK EXCHANGES 1978
15. PUNE STOCK EXCHANGES 1982
16. U.P STOCK EXCHANGES 1982
19. LUDHIANA STOCK EXCHANGES ASSOCIATION LTD 1983
19. JAIPUR STOCK EXCHANGES ASSOCIATION LTD 1983-84
16. GAWHATI STOCK EXCHANGES LTD 1984
19. MANGALORE STOCK EXCHANGES LTD 1985
19. MANGHAD STOCK EXCHANGES LTD 1986
19. BHUVANESHWAR STOCK EXCHANGE ASSOCIATION LT 1989
19. OVER THE STOCK EXCHANGES OF INDIA BOMBAY 1989
19. SAURASHTRA KUTCH STOCK EXCHANGES LTD 1990
20. VADODRA STOCK EXCHANGES LTD 1991
21. COIMBATORE STOCK EXCHANGES LTD 1991
22. MEERUT STOCK EXCHANGES LTD 1991
23. NATIONAL STOCK EXCHANGES LTD 1991

36
 CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE

37
 INDUSTRY PROFILE
Following diagram gives the structure of Indian financial system:

FINANCIAL MARKET
Financial markets are helpful to provide liquidity in the system and for smooth
functioning of the system. These markets are the centers that provide facilities for buying and
selling of financial claims and services. The financial markets match the demands of
investment with the supply of capital from various sources.

38
 According to functional basis financial markets are classified into two types.
They are:
 Money markets (short-term)
 Capital markets (long-term)
According to institutional basis again classified in to two types. They are
 Organized financial market
 Non-organized financial market.

The organized market comprises of official market represented by recognized institutions,

bank and government (SEBI) registered/controlled activities and intermediaries. The
unorganized market is composed of indigenous bankers, moneylenders, individual
professional and non-professionals.
MONEY MARKET:
Money market is a place where we can raise short-term capital.
Again the money market is classified in to
 Inter bank call money market
 Bill market and
 Bank loan market Etc.
 E.g.; treasury bills, commercial papers, CD's etc.
CAPITAL MARKET:
Capital market is a place where we can raise long-term capital.
Again the capital market is classified in to two types and they are
 Primary market and
 Secondary market.
E.g.: Shares, Debentures, and Loans etc.
PRIMARY MARKET:

Primary market is generally referred to the market of new issues or market for mobilization of
resources by the companies and government undertakings, for new projects as also for
expansion, modernization, addition, diversification and up gradation. Primary market is also
referred to as New Issue Market. Primary market operations include new issues of shares by
new and existing companies, further and right issues to existing shareholders, public offers,
and issue of debt instruments such as debentures, bonds, etc.
The primary market is regulated by the Securities and Exchange Board of India (SEBI a
government regulated authority).
Function:

39
The main services of the primary market are origination, underwriting, and distribution.
Origination deals with the origin of the new issue. Underwriting contract make the shares
predictable and remove the element of uncertainty in the subscription. Distribution refers to
the sale of securities to the investors.
The following are the market intermediaries associated with the market:
1. Merchant banker/book building lead manager
2. Registrar and transfer agent
3. Underwriter/broker to the issue
4. Adviser to the issue
5. Banker to the issue
6. Depository
7. Depository participant
Investors’ protection in the primary market:
To ensure healthy growth of primary market, the investing public should be protected. The
term investor protection has a wider meaning in the primary market. The principal ingredients
of investors’ protection are:
 Provision of all the relevant information
 Provision of accurate information and
 Transparent allotment procedures without any bias.

SECONDARY MARKET:
The primary market deals with the new issues of securities. Outstanding securities are traded
in the secondary market, which is commonly known as stock market or stock exchange. “The
secondary market is a market where scrip’s are traded”. It is a market place which
provides liquidity to the scrip’s issued in the primary market. Thus, the growth of secondary
market depends on the primary market. More the number of companies entering the primary
market, the greater are the volume of trade at the secondary market. Trading activities in the
secondary market are done through the recognized stock exchanges which are 23 in number
including Over The Counter Exchange of India (OTCE), National Stock Exchange of India
and Interconnected Stock Exchange of India.
Secondary market operations involve buying and selling of securities on the stock exchange
through its members. The companies hitting the primary market are mandatory to list their
shares on one or more stock exchanges in India. Listing of scrip’s provides liquidity and
offers an opportunity to the investors to buy or sell the scrip’s.

40
 COMPANY PROFILE

Unicon Investment Solutions

Unicon has been founded with the aim of providing world class investing experience
to hitherto underserved investor community. The technology today has made it possible to
reach out to the last person in the financial market and give him the same level of service
which was available to only the selected few.

We give personalized premium service with reasonable commissions on the NSE,

BSE & Derivative market through our Equity broking arm Unicon Securities Pvt Ltd. and
Commodities on NCDEX and MCX through our Commodity broking arm Unicon
Commodities Pvt. Ltd. With our sophisticated technology you can trade through your
computer and if you want human touch you can also deal through our Relationship Managers
out of our more than 150 branches spread across the nation.

We also give personalized services on Insurance (Life & General) & Investments
(Mutual Funds & IPO's) needs, through our Insurance & Investment distribution arm Unicon
Insurance Advisors Pvt. Ltd. Our tailor-made customized solutions are perfect match to
different financial objectives. Our distribution network is backed by in-house back office
support to serve our customers promptly.

MISSION:
To create long term value by empowering individual investors through superior
financial services supported by culture based on highest level of teamwork, efficiency and
integrity.

VISION:
To provide the most useful and ethical Investment Solutions - guided by values
driven approach to growth, client service and employee development.

MANAGEMENT TEAM :

Mr.Gajendra Nagpal (founder and CEO)

Mr. Ram Gupta (Co-founder and president)

Mr .Y P Narang (chairman for fixed assets group)

41
Mr.sandeep Arora (Chief Operation Manager)

Mr.Vijay chopra(National Head)

OUR PRODUCTS AND SERVICES :

customers have the advantage of trading in all the market segments together in the
same window, as we understand the need of transactions to be executed with high speed and
reduced time. At the same time, they have the advantage of having all Advisory Services for
Life Insurance, General Insurance, Mutual Funds and IPO’s also.

Unicon is a customer focused financial services organization providing a range of

investment solutions to our customers. We work with clients to meet their overall investment
objectives and achieve their financial goals. Our clients have the opportunity to get
personalized services depending on their investment profiles. Our personalized approach
enables clients to achieve their Total Investment Objectives.

PRODUCTS :
1. Equity
2. Commodity
3. Depository
4. Distribution
5. NRI Services
6. Back Office
7. Fixed Income

42
EQUITY :
1.UniconPlus
Browser based trading terminal that can be accessed by a unique ID and password.
This facility is available to all our online customers the moment they get registered with us.

FEATURES :
Trading at NSE & BSE:
1. Add multiple scrips on the market watch.
2. Greater exposure for trading on the available margin.
3. Common window for display of market watch and order execution.
4. Real time updating of exposure and portfolio while trading.
5. Offline order placement facility.
6. Proxy link to enable trading behind firewalls.

2.UNICON SWIFT :
Application based terminal for active traders. It provides better speed, greater analytical
features & priority access to Relationship Managers.
FEATURES:
Trading at NSE & BSE:
1. Add any number of scrips in the Market Watch.
2. Tick by tick live updation of Intraday chart.
3. Greater exposure for trading on the margin available
4. Common window for market watch and order execution.
5. Key board driven short cuts for punching orders quickly.
6. Facility to customize any number of portfolios & watch lists.
7. Stop-loss feature.
COMMODITY:
Unicon offers a unique feature of a single screen trading platform in MCX and
NCDEX.Unicon offers both Offline & Online trading platforms. You can Walk in or place
your orders through telephone at any of our branch locations Online Commodity Internet
trading Platform through UniFlex. Live Market Watch for commodity market (NCDEX,
MCX) in one screen. Add any number of scrips in the Market Watch. Tick by tick live
updation of Intraday chart.

43
 1. Greater exposure for trading on the margin available Common window for market
watch and order execution.
2. Key board driven short cuts for punching orders quickly.
3. Real time updation of exposure and portfolio.
4. Facility to customize any number of portfolios & watchlists.
5. Market depth, i.e. Best 5 bids and offers, updated live for all scripts.
6. Facility to cancel all pending orders with a single click.
7. Instant trade confirmations.
DISTRIBUTION
Unicon is fast emerging as a leader in the Insurance and Mutual Funds distribution space.
Unicon has over 150 branches and a huge number of “Business Development Executives”
who help to source and service the customers throughout the country. Unicon is fast
becoming the preferred “Vendor Independent” distribution houses because of providing
efficient service like free pick-up of collection of cheques/DD’s, Keeping track of the
premiums etc to its customers.

Unicon offers the following distribution products:-

IPOS
Mutual funds
Insurance
Properties

44
 CHAPTER IV
DATA ANALYSIS
AND
INTERPRETATION

45
SHARE PRICES OF DR.REDDY’S FOR THE MONTH OF
Jan/ Feb-2023:
Dr.Reddys
Date OPEN HIGH LOW close VOLUME
3-Jan-23 4,907.00 4,930.30 4,847.70 4,853.15 292601
4-Jan-23 4,861.00 4,892.90 4,825.00 4,835.45 253438
5-Jan-23 4,880.00 4,904.60 4,757.05 4,790.40 536802
6-Jan-23 4,790.40 4,836.05 4,728.30 4,739.45 381643
7-Jan-23 4,769.45 4,769.45 4,690.00 4,708.40 267123
10-Jan-23 4,728.40 4,728.40 4,655.15 4,699.05 315019
11-Jan-23 4,710.00 4,739.90 4,660.55 4,669.25 309432
12-Jan-23 4,680.00 4,703.30 4,634.00 4,693.40 237769
13-Jan-23 4,700.00 4,759.60 4,684.60 4,725.95 454051
14-Jan-23 4,720.20 4,723.00 4,660.55 4,689.20 318860
17-Jan-23 4,665.50 4,699.95 4,605.50 4,672.40 538649
18-Jan-23 4,670.00 4,724.45 4,621.00 4,693.55 424528
19-Jan-23 4,695.00 4,734.40 4,654.95 4,684.95 307887
20-Jan-23 4,712.00 4,712.00 4,570.00 4,591.55 317739
21-Jan-23 4,561.25 4,570.00 4,435.00 4,496.15 557548
24-Jan-23 4,486.10 4,489.80 4,311.00 4,364.35 556498
25-Jan-23 4,364.35 4,418.95 4,301.00 4,402.85 340902
27-Jan-23 4,340.00 4,365.15 4,232.00 4,256.35 705506
28-Jan-23 4,248.80 4,380.00 4,175.45 4,218.60 1302984
31-Jan-23 4,249.95 4,368.60 4,240.05 4,302.80 618555
1-Feb-23 4,320.00 4,326.40 4,258.00 4,309.45 371663
2-Feb-23 4,325.00 4,429.75 4,315.10 4,415.35 305001
3-Feb-23 4,418.00 4,436.95 4,360.00 4,374.65 221537
4-Feb-23 4,404.55 4,406.50 4,337.00 4,351.95 246993

46
 Interpretation :
It was noticed that the price of the Dr.Reddys stock is quoted 4907 On 3rd March it
decreased to a rate of 4710 and in the next week it increased to 4720.20. Again in the last
week of January it is decreased to 4175 and touched 4436.95 on 3 rd february this shows good
sign to the investor as its started price increasing in this month and market conditions of the
Dr.reddys is good.

47
 SHARE PRICES OF INFOSYS DURING THE MONTH
Jan/ Feb-2023:
infosys
Date OPEN HIGH LOW close VOLUME
3-Jan-23 1,887.75 1,914.05 1,887.75 1,898.45 3329616
4-Jan-23 1,898.45 1,906.65 1,878.00 1,899.15 3921999
5-Jan-23 1,900.00 1,902.90 1,840.00 1,844.65 6995719
6-Jan-23 1,828.00 1,828.00 1,800.00 1,817.80 6449205
7-Jan-23 1,815.45 1,836.00 1,806.80 1,814.30 4834389
10-Jan-23 1,815.00 1,869.90 1,813.00 1,850.75 7857560
11-Jan-23 1,855.00 1,870.00 1,850.15 1,855.60 5142287
12-Jan-23 1,868.90 1,889.00 1,860.00 1,877.45 5362535
13-Jan-23 1,905.00 1,912.50 1,866.35 1,896.80 14277630
14-Jan-23 1,882.00 1,933.00 1,881.00 1,929.35 7688506
17-Jan-23 1,938.55 1,953.90 1,930.50 1,939.50 5262464
18-Jan-23 1,922.10 1,945.00 1,911.45 1,920.75 3690315
19-Jan-23 1,916.00 1,916.00 1,862.85 1,867.05 5747770
20-Jan-23 1,844.00 1,848.00 1,815.50 1,823.70 5533463
21-Jan-23 1,795.00 1,808.00 1,776.00 1,785.70 8252758
24-Jan-23 1,765.00 1,768.65 1,728.00 1,736.80 7116712
25-Jan-23 1,726.60 1,740.00 1,700.50 1,722.15 9137653
27-Jan-23 1,702.00 1,709.70 1,665.00 1,678.60 11231734
28-Jan-23 1,681.00 1,727.55 1,679.50 1,686.20 10998502
31-Jan-23 1,718.00 1,749.50 1,715.35 1,736.20 8788872
1-Feb-23 1,766.10 1,780.00 1,734.70 1,772.05 5119935
2-Feb-23 1,789.00 1,792.80 1,772.00 1,787.10 4253717
3-Feb-23 1,779.00 1,779.00 1,734.00 1,738.55 3832922
4-Feb-23 1,732.00 1,753.95 1,710.15 1,741.10 4700077

48
 INTERPRETATION :
It was noticed that the price of the INFOSYS stock is quoted 1887 On 3 rd January it
Increased to a rate of 1905 and in the next week it decreased to 1681. Again in the last week
it increased to 1789 this shows good sign to the investor as its price decreasing but its right
time to enter new investor in this stock.

49
 SHARE PRICES OF WIPRO DURING THE MONTH
Jan/ Feb-2023:
wipro
Date OPEN HIGH LOW close VOLUME
3-Jan-23 718 726.8 716 718.7 4640405
4-Jan-23 722.75 723.1 711.55 721.5 5114400
5-Jan-23 720 720.85 703 713.5 7355632
6-Jan-23 705.8 712.25 699.95 705.75 6441610
7-Jan-23 708 721.5 707.6 711.5 6560163
10-Jan-23 709 709 690 693.5 13768910
11-Jan-23 695 698.45 689 694.15 7743729
12-Jan-23 700 701.75 683.2 691.35 11730341
13-Jan-23 663.2 666 648 649.75 30752967
14-Jan-23 649.25 649.25 636.5 639.8 13257274
17-Jan-23 639.5 651.65 633.05 646.65 10228938
18-Jan-23 648.9 650 631.15 633.3 7164990
19-Jan-23 631 631.65 619 621.15 8691383
20-Jan-23 620.65 622.4 610.5 615.2 8413562
21-Jan-23 610 611 600.8 605.05 9823347
24-Jan-23 605.5 605.5 568.45 572.75 13075358
25-Jan-23 562.5 572 550.7 562.7 17356185
27-Jan-23 555 556.9 537.2 544.75 15675872
28-Jan-23 550.1 564.95 546.65 552.15 14949890
31-Jan-23 569 574.4 562.55 572.6 13126087
1-Feb-23 579.9 582.4 566.45 576.65 10460101
2-Feb-23 582 590 575 588 8184413
3-Feb-23 584.7 588.8 576.15 578.25 7041390
4-Feb-23 577 577.8 568.05 571.75 6816779

DATA ANALYSIS :

50
 Interpretation :
It was noticed that the price of the WIPRO is quoted 718. On 19 th january it decreased
to a rate of 631 and in the next week it decreased to 605. Again in the last week also it
decreased to 577 this shows bad sign to the investor as its price decreasing throughout the
month and market conditions of the Wipro in not good.

51
 NO OF INITIAL PUBLIC OFFER(IPO’S) FROM LAST FIVE YEARS
FY YEAR NO OF COMPANYS AMOUNT GATHERD
(IN CR)
2018-19 14 96700
2019-20 35 157820
2020-21 17 165760
2021-22 13 185000
2022-23 63 589000

Interpretation :
It was noticed that the Many company are getting funds from public offerings. Due to
it is very is easy to get money from public for reputed companys like Reliance,Tata,ICIC Etc.
If company have reputation in market that type of company easily getting funds from public.
After privatization Public also aware of stock market Transaction this is also one reason for
growth in IPO Funds. In this covid19 situation almost all employees are working from home,
and Indian government is also encouraging new companies for ipo’s.

52
 FII INVESTMENTS FROM LAST FIVE YEARS

FY YEAR INVESTMENT IN (RS CRORES)

2018-19 56000
2019-20 79500
2020-21 190000
2021-22 78000
2022-23 150000

53
 BSE TREND FROM LAST FIVE YEARS
FY YEAR HIGEST LOWEST
2018-19 33342 28334.25
2019-20 38389 32968
2020-21 41613 36701
2021-22 46973 27590
2022-23 61305 46285

54
 CHAPTER-V
FINDINGS
SUGGESTIONS
CONCLUSION

55
FINDINGS
It was noticed that the price of the Dr.Reddys stock is quoted 4907 On 3rd March it
decreased to a rate of 4710 and in the next week it increased to 4720.20. Again in the last
week of January it is decreased to 4175 and touched 4436.95 on 3 rd february this shows good
sign to the investor as its started price increasing in this month and market conditions of the
Dr.reddys is good.

It was noticed that the price of the INFOSYS stock is quoted 1887 On 3 rd January it
Increased to a rate of 1905 and in the next week it decreased to 1681. Again in the last week
it increased to 1789 this shows good sign to the investor as its price decreasing but its right
time to enter new investor in this stock.
It was noticed that the price of the INFOSYS stock is quoted 1887 On 3 rd January it
Increased to a rate of 1905 and in the next week it decreased to 1681. Again in the last week
it increased to 1789 this shows good sign to the investor as its price decreasing but its right
time to enter new investor in this stock.

I noticed that the Many companies are getting funds from public offerings. It is very
is easy to get money from public for reputed companies like Reliance,Tata,ICIC Etc. The
company have reputation in market that kind of company easily getting funds from public.
After privatization Public also aware of stock market. Transaction this is also one reason for
growth in IPO Funds. In this covid19 situation almost all employees are working from home,
and Indian government is also encouraging new companies for ipo’s.

In the trading week most of the players closed up their contracts to make profit. As
the price was low, the open interest was low and the number of characters traded decline to
19195.

56
SUGGESTIONS
After a comprehensive study of the stock market the suggestions made are as
follows.
The online trading system is easy to operate but very to maintain and difficult
to learn. The delivery and issue of shares consumes lot of time and hence it has to be
reduced to bring about quickness.
The tradable financial products should be made easy to transact or trade in
order to attract domestic and foreign investors. Stock market should not be a vague
concept for a common man and should arouse his interest and involvement with
certain of protection to the investor.
I suggest the exchange authorities take steps to educate investors about their
right and duties, try to increase investor confidence. I suggest the exchange authorities
to be vigilant to curb wide fluctuations of prices on the exchange in the prices, not
attracting the genuine investors to the greater extent towards the market. Try to
explain them how the fraud will take place so that they will be alert and they can take
necessary steps to avoid the frauds.
Genuine investors are not at all interested in the speculative gain as their
investment is based on the future profits, therefore the authorities of the exchange
should be more vigilant in imposing heavy margin to curb the speculative of
securities.
Necessary steps should be taken by the exchanges to deal with the situation
arising due to break down in online trading.

And my final suggestion is invest first before you trade.

57
CONCLUSION
The comprehensive study on online trading at Unicon Investments Solutions
Private Limited has been an enlightening Experience stressing on the positive aspects
on security trading. Dematerialization and settlement of shares, derivatives market
and online trading has done in whole lot of good to the issuer, investor, companies
and country.
The depository system has reduced the time lag in delivery and settlement of
securities the cause of providing more liquidity to the security holder, the need for
setting up of a depository, paper les trading through online trading system and rolling
settlement became inevitable and unavoidable for the smooth and efficient
functioning of the capital market. This system has provided its worthiness by
increasing in the speed of transactions with in T+3 days which was earlier T+5days
and further improve to be done within T+1 day in near future is in itself a sign of the
emerging trends in the stock market.
The changes, which have taken place, recently have an impetus for the
economy to take off. Investor protection is one of the major objectives of the stock
market. A lot more can be done on the foundation lay so far. There are several factors
which act as obstacles in the growth of derivatives market, the absence of clear
guidelines on tax regulation and high cost of transaction etc and other reforms in
India.

58
 BIBLIOGRAPHY

59
 BIBILIOGRAPHY

REFERENCE BOOKS
 Financial management : Philip Kotlar
 Research and Methodology : C.K. Kothari
 Direct Taxes : Dr. Vinod K. Singhania
&
: Dr. Kapil Singhania
NEWS PAPERS:
 Times of India
 Business Standard

JOURNALS
 JOURNAL ON INVESTMENT STRATEGY
 DALAL INVESTMENT JOURNAL
 AFFILIA
 AMERICAN JOURNAL

BOOKS
1. The Mindful Investor, by Maria Gonzalez and Graham Bayron.
2. Understanding Indian Investors, by Jawahar Lal.
3. Security Analysis and Portfolio Management by Punithavathi Pandian.
4. Investment Analysis and Portfolio Management, by Prasanna Chandra.

WEB SITES
www.tax4India.com
www.economictimes.Indiatimes.com
www.business-standard.com
www.Indiamoney.com
www.moneymanagementideas.com
www.savingwala.com

60