CHAPTER- 1

INTRODUCTION

1.1 OVERVIEW OF INDUSTRY AS A WHOLE

1

NSE launched internet trading in early February 2000. It is the first

stock exchange in the country to provide a web-based access to
investors to trade directly on the exchange. The process : Log on to the
brokers site of your choice where you get real time quotes, place a buy
or sell order on the spot, and direct the site to debit the requisite
amount. In some time you get confirmation and after the trade
settlement your bank and depository account will reflect the changes
which you can view anywhere, anytime. Online trading has become
seamless. All that you need is a PC, a modem, subscription to an
Internet Service Provider (ISP), a saving and a depository account
with any bank providing online trading facility. Along with stocks one
can trade in mutual funds and investment instruments. The advantage
with online trading that you can operate in both BSE and NSE
depending on the broking firm.
NSE introduced for the first time in India a fully automated screen
based trading. It uses a modern fully computerized trading system
designed to offer investor across the length and breadth of country a
safe and easy way to invest. The NSE trading system called National
Exchange for Automated Trading (NEAT) is a fully automated
screen-based trading system which adopts the principle of an order
driven market.

With over 20 million shareholders, India has the third largest investor
base in the world after the USA and Japan. Over 9000 companies are
listed on stock exchanges, which are serviced by approximately 7500
stockbrokers. The Indian capital market is significant in terms of the
degree of development, volume of trading and its tremendous growth
potential.

STOCK EXCHANGE
A stock exchange, share market or bourse is a corporation or mutual
organization which provides facilities for stock brokers and traders, to
trade company stocks and other securities. Stock exchanges also
provide facilities for the issue and redemption of securities, as well a,
other financial instrument 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 an bonds. To be able to trade a security on a
certain stock exchange, it has to be listed there.

National Stock Exchange

The national stock exchange of India limited (NSE) is a Mumbai-based

stock exchange. It is the largest stock exchange in India and the third
largest in the world in terms of volume of transaction. NSE is mutuallyowned by a set of leading financial institutions, banks, insurance
companies and other financial intermediaries in India but its ownership
and management operate as separate entities. In March 2006, the NSE
had a total market capitalization of 4,380,774 crores INR making it the
3

second-largest stock market in south Asia in terms of marketcapitalization.

Bombay Stock Exchange

The Bombay stock exchange (or BSE) is there oldest stock exchange in
Asia. It is located at Dalal street, Mumbai, India.
The Bombay stock exchange was established in 1875. there are around
4800 Indian companies listed with the stock exchange, and has a
significant trading volume. As of may 2007, the equity market
capitalization of the companies listed on the BSE was about Rs.40.7
trillion (US$999billion).
This topic includes the practical experience company products that are
followed by studying the consumer preference or interest towards
share market. This is a market; which is uncertain sometimes it gives
4

huge profit and also vice-versa; it depends upon the investment

customer made. This is a better option to have better returns on the
investments then investing in banks, mutual fund or bond et. But risk is
high in this case.
This

products

offers

customer

two

type

of

investment

option

INTRADAY and DELIVERY both has The topic is to study the

consumer preferences towards investment in stock market.
Demat account is a pool of various scripts and securities, whereas
online trading is a tool of purchasing/selling of scripts online. These
scripts are then transferred to depository account after three days.
There own benefits and limitations but a better way to have more
returns on investment. Intraday means investing in a share market for
a day i.e. purchasing and selling of sharekhan in one day. Delivery is
purchasing share and selling those share next day. The charges that
company charge in terms of brokerage is different in both the cases.
Gone are the days when you left orders with your broker, received
conformations on the price and quality of the shares at the end of the
day and the payment made upfront or received after delays. Your
securities settlement took days to reflect in your account. Internet has
changed the way you do trading. The entire process is speedy with
limited to zero paper work. NSE launched internet trading in early
February 2000. it is the first stock exchange in the country to provide a
web-based access to investors to trade directly on the exchange. The
process : Log on to the brokers site of your choice where you get real
time quotes, place a buy or sell order on the spot, and direct the site to
debit the requisite amount. In some time you get confirmation and
after the trade settlement your bank and depository account will
reflect the changes which you can view anywhere, anytime. Online
trading has become seamless. All that you need is a PC, a modem,
subscription to an Internet Service Provider (ISP), a saving and a
5

depository account with any bank providing online trading facility.

Along with stocks one can trade in mutual funds and investment
instruments. The advantage with online trading that you can operate in
both BSE and NSE depending on the broking firm.

1.2 Company profile

Share khan is the retail broking arm of Mumbai-based SSKI

Group, which has over eight decades of experience in the stock
broking business. SSKI owns 65% in Share Khan Balance ownership is
HSBC, first Carlyle and Intel Pacific.
It has been into broking since 80 years. And has focused on
providing equity solutions to every segment. It boasts of largest ground
network of 588 share shops across 213 cities in India.
Sharekhan offers its customers a wide range of equity related services
including trade execution on BSE, NSE, Derivatives, depository
services, online trading, investment advice etc.
Through its online trading portal www.sharekhan.com, it provides
multi-channel access to the stock markets to its customers. The
6

website was launched on Feb 8, 2000. The 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 site has a registered base of over one lakh customers.
The number of trading members currently stands at over 3 Lacs. While
online trading currently accounts for just over 2 per cent of the daily
trading in stocks in India, Sharekhan alone accounts for 32 per cent
of the volumes traded online.
Share khans ground network includes over 588 centers in 148
cities in India, of which 32 are fully-owned branches.
The company has used some of the best-known names in the IT
industry,

like

Sun

Microsystems,

Oracle,

Microsoft,

Cambridge

Technologies, Nexgenix, Vignette, Verisign Financial Technologies India

Ltd, Spider Software Pvt Ltd. to build its trading engine and content.
The Morakhiya family holds a majority stake in the company. HSBC,
Intel & Carlyle are the other investors.
With a legacy of more than 80 years in the stock markets, the SSKI
group ventured into institutional broking and corporate finance 18
years ago. Presently SSKI is one of the leading players in institutional
broking and corporate finance activities. SSKI holds a sizeable portion
of the market in each of these segments. SSKIs institutional broking
arm accounts for 7% of the market for Foreign Institutional portfolio
investment and 5% of all Domestic Institutional portfolio investment in
the country. The Corporate Finance section has a list of very prestigious
clients and has many firsts to its credit, in terms of the size of deal,
sector tapped etc.

SSKI

With a legacy of more than 80 years in the stock market, the SSKI
group ventured into institutional broking and corporate finance 18
years ago. Presently SSKI is one of the leading players in institutional
broking and corporate finance activities. SSKI holds a sizeable portion
of the market in each of these segments. SSKIs institutional broking
arm accounts for 7% of the market for foreign institutional portfolio
investment and 5% of all domestic institutional portfolio investment in
the country. It has 60 institutional clients spread over India, fa east, UK
and us. Sharekhan is the retail broking arm of SSKI, an organization
with more than eight decades of trust and credibility in the stock
market.

SSKI GROUP COMPANIES

SSKI investor services Ltd (sharekhan)

S.S. kantilal ishwarlal securities

SSKI corporate finance

Idream productions

TECHNOLOGY USED BY COMPANY

Sharekhan has always believed in investing in technology to build its
business. The company has used some of the best-known names
in the IT industry, like sun Microsystems, oracle, Microsoft,
nexgenix, spider software pvt. Ltd. to build its trading engine and
content.

SHAREKHAN BUSINESS
1. Brokering house
2. white feathering house production

VISION
To be the best retail brokering brand in the retail business of stock
market.

MISSION
To educate and empower the individual investor to make better
investment decisions through quality advice and superior service

Key Statistics about Sharekhan

Top Locations
Bombay Area, India (123)
Delhi Area, India (21)
Sharekhan Headquarters Address
A-206 Phoenix House 2nd Floor Senapati Bapat Marg Lower Parel
Mumbai, Maharashtra 400 013
India
Phone: 91 22 2498 2000
Fax: 91 22 2498 2626

Headquarters
Industry
Type
Status
Company Size
Website
Table: 1.1

Common Job Titles

Bombay Area, India

Financial Services
Privately Held
Operating
1001-5000 employees
http://www.sharekhan.com

Manager
Relations Manager
Vice President
Analyst
10

15%
10%
9%
5%

Top Schools

Median Age
Gender

Branch Manager
Univ. of Mumbai
Univ. of Pune
Delhi Univ.
Inst. of Tech. and
Management
South Gujarat Univ.
28 years
Male
Female

4%
15%
6%
6%
5%
4%

80%
20%

Table: 1.2

Companies related to Share khan

Parent Company

SSKI

Career path for Sharekhan employees

Before:
A. Anand Rathi...
After:

Religare
Motilal Oswal...

ShareKhan.com is an online trading facility founded in 1999-2000 with

a focus on equities, derivatives and commodities brokerage execution
on the National Stock Exchange of India Ltd. (NSE), Bombay Stock
Exchange Ltd. (BSE), National Commodity and Derivatives Exchange
India (NCDEX) and Multi Commodity Exchange of India Ltd. (MCX).
Sharekhan Limited offers online security broking and portfolio services
to institutions and large corporate houses as well as individual
11

investors. Sharekhan Limited was formerly known as SSKI Investor

Services Private Limited. The company is based in Mumbai, India.

1.3 Problems of Share Khan

Share khan has been strongly committed not only to environmental
conservation programs but also expresses the increasingly inseparable
balance between the economic concerns and the environmental and
social issues faced by a business. A business must not grow at the
expense of mankind and mans future but rather must serve mankind.

Share Khan has failed to evolve into a widespread internet

broking firm because of its un-focused promotional strategies
(advertisements in electronic media, newspapers, etc) across the
length and breadth of India. Although it is a well known broking
house in some states like Maharashtra, Gujarat, etc. it still lacks
considerable awareness in the northern parts of India where its
competitors have been building their reputation very rapidly.

The other of Share Khan is that they give more attention to HNIs
(high net worth individuals) as compared to retail investors.

Most of the processing and clarifications (account opening,

payments, etc) are routed to the head office in Mumbai due to
lack of decision making powers of local branches which delays
the speedy execution of decision

1.4 Competitors Information

5paisa.com
12

Company Background
Indiainfoline was founded in 1995 and was positioned as a research
firm. In 2000 e-broking was started under the brand name of 5
paisa.com. Apart from offering online trading in stock market the
company offers mutual funds online. It also acts as a distributor of
various financial services i.e. GOI securities, Company Fixed Deposits,
Insurance. Limited ground network, present in 20 Cities.

Online Account Types

Investor Terminal: Investors / Students
Trader Terminal: Day Traders / HNIs

PRICING FOR RETAIL CLIENTS

Investor Terminal
Account Opening: Rs 500
Demat 1st Yr: Rs 250
Initial Margin: Rs 2500(Compulsory)
Min Margin Retainable: Rs 1000
13

Brokerage:
Trading 0.10% each side + ST
Delivery 0.50% each side + ST

PRICING FOR HNI CLIENTS

Trader Terminal
Account Opening: Rs 500
Demat 1st Yr: Rs 250
Initial Margin: Rs 5000(Compulsory)
Min Margin Retainable: Rs 100
Brokerage:
Trading 0.10% each side + ST
Delivery 0.50% each side + ST
(Negotiable to 0.05% each side & 0.25%)

Account Access Charges

Monthly Rs 800, adjustable against Brokerage
Yearly Rs 8000, adjustable against brokerage

Deal Clinchers v/s 5 Paisa

Downtime
Recent past 5 paisa Trader Terminal (T.T) is experiencing high
frequency

downtime between 3 3:30 p.m due to server load (as

their T.T is feature heavy compared to Speed trade charting)

14

Manual Accounting
The 5 paisa accounting system is manual, Online fund transfer through
bank is not

credited instantly. Limit is provided EOD for shares sold

from DP, or call similarly limit released for shares sold under BTST is
manual Delay in receiving pay-out of clear funds from trading to Bank
Account

Min Account Balance

Concept of Min Rs 1,000 to be maintained in form of cash / securities

to keep account active. This can be withdrawn only on closure of
account.

Kotakstreet

Company Background
Kotakstreet is the retail arm of kotak securities. Kotak Securities limited
is a joint venture between Kotak Mahindra Bank and Goldman Sach.

15

Online Account Types

Twin Advantage / Green Channel: 2 DPs, Limit against shares
Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction
High Trader: 6 Times Exposure Cash & Derivatives, Auto sq off 2:55

PRICING OF KOTAK
Account Opening: Rs 500
Demat: Rs 22.5 p.m
Initial Margin: Rs 5000(Compulsory)
Min Margin Retainable: Rs 1000
Brokerage Slab wise: Higher the volume, lower the brokerage. Even
older customers (on 0.25% & 0.40%) have been moved to the slab
wise structure.

Deal Clinchers v/s Kotakstreet

Rigid Account Opening Terms
No Flexibility of A/c opening charges (Rs 500) + Compulsory margin Rs
5000/- Account opening free with Rs 10,000 Margin OR competitor
Contract Note.

No Customization of commercial Terms

No Flexibility in Leverage Dependent on Type of Account ( 4 to 6
times only) No flexibility in Brokerage, driven by slab structure

Many Other Charges

16

Rs 22.5 p.m towards DP AMC charges

DP incoming charges extra, 0.02%
Rs 1,000 as retainable Margin to keep account active
Rs 25 per call after 20 calls for the month

INDIABULLS

Company Background
India Bulls is a retail financial services company present in 70 locations
covering 62 cities. It offers a full range of financial services and
products ranging from Equities to Insurance. 450 + Relationship
Managers who act as personal financial advisors

Online Account Type

Signature Account: Plain Vanilla Account with focus on Equity
Analysis. The equity analysis is a paid service even for A/c holders

Power India bulls: Account with sophisticated trading tools, low

commissions and priority access to R.M
17

Pricing of IB Accounts
Signature Account
Account Opening: Rs 250
Demat: Rs 200 if POA is signed, No AMC for this DP
Initial Margin: NIL
Brokerage: Negotiable

Power India Bulls

Account Opening: Rs 750
Demat: Rs 200 if POA is signed, No AMC for this DP
Initial Margin: NIL
Brokerage: Negotiable

Deal Clinchers v/s India Bulls

POA for Clients DMAT
All shares held by client trading with IB are moved to IB Pool Account
and the same is shown as a reflection in client DP account. Charges are
levied to move shares from IB pool Account to client DP account

Paid Research Services

Access to a research even for an IB trading account holder is charged a
min of Rs 500 a month

Margin funding hoax

18

The interest on funding starts on leveraged delivery trades from T+1

day itself @21% p.a, on a daily basis

The role of Relationship Manager

Each RM is looked upon as a revenue generator and he gets a % on
business generated from client. This can lead to over leveraged
(Interest) & high frequency (Brokerage) trading, which may not be in
the best interest of the client.

ICICIDirect

Company Background
ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is an
affiliate of ICICI Bank Limited and the Website is owned by ICICI Bank
Limited

Account Types
ICICI Direct e-invest Account: Plain Vanilla Account with
focus on 3 in 1 advantage. Differentiated in services within the account

1. Cash on spot
2. Margin Plus

19

Premium trading interface of ICICIDirect Link is given to DBC partners

and HNIs

Account Opening: Rs 750

Schemes: For short periods Rs 750 is refundable against brokerage
generated in a qtr. These schemes are introduced 3-4 times a year.
Demat: NIL, 1st year charges included in Account Opening Plus a
facility to open additional 4 DPs without 1st yr AMC
Initial Margin: Nil

Brokerage: All brokerage is inclusive of stamp duty and exclusive of

other taxes.

Slab wise brokerage ranges from 0.75% to 0.25%

depending on volume.
Deal Clinchers v/s ICICIDirect

Poor online Interface

Slow website interface with no real-time quotes creates dissatisfaction
among high frequency traders
Margin trading restriction
The margin trading system is available up to 2:45 p.m, with
outstanding

net

positions

under

margin

segment

automatically

squared off at any time between 2:45 3:30 p.m. Thus no control of
square off price.
20

Morning Trades Issue

Being one of the websites with largest no of after hour orders which are
pushed 1st thing in the morning, creates a choking of orders to the
exchange, causes delay of confirmations for new order placed during
the early morning trades.
Restriction of BTST
The sale of shares purchased is restricted to T+1 day and is not
permitted on T+2 Day.
No leverage for Delivery trades
Delivery is restricted to the total money allocated into the trading
account.
No flexibility on leverage on Intra-day trades
The leverage of 4 times is available for intra- day trades.
Restriction of Bank Account
The choice of bank is restricted to ICICI Bank.
Higher Brokerage rates with slabs
The delivery brokerage is pegged at 0.75% and trading at 0.10% each
side, this makes is very unviable for customers dealing in large
volumes. Although progressively the delivery and trading brokerage
reduce as volumes go up.
21

1.5 S.W.O.T. Analysis of Share Khan

A swot analysis focuses on there internal and external environments.
Examining strengths and weaknesses in the internal environment and
opportunities and threats in the external environment

STRENGTHS
Services
As a product share khan is a extremely innovative product with very
less cost services like online trading facility institutional and domestic
broking. Customized research with almost 80% efficiency etc. share
khan an edge over its research provides other support services that
make retail investors more confident and assured with their trading.
SMS alerts (allowing traders and investors to make the most of the
available opportunities). Softer intangible features like amagers, equity
driving preference. Through efficient trading processes investors can
place their orders directly on the internet do all the information seeking
and basically own the investing process.

Distribution network
Sharekhan with almost 250 branches spread across 123 cities beefed
up by comprehensive online research advice and transaction services.
In near future expect to make 200000-retail customers being serviced
through centralized call centre/ web solution. 60 branches semi
branches servicing affluent aggressive through highly skilled financial
advisors. 250 independent advisory roles through fundamental &
technical research and new initiatives are being made in portfolio
management services & commodities trading.

Marketing
22

Sharekhan is a product of SSKI a veteran equities solutions company

with over decades of experience in the Indian stock markets.
Sharekhan does not claim expertise in too many things. Shraekhans
expertise lies in stocks and that what it talks about with authority. So
when he saves that investing in stocks should not be confused with
trading in stocks or a portfolio-based strategy is better than betting on
a single horse. It is something that is spoken with years of focused and
experience in the stock markets.

Products
Companys product line is quite flexible in the sense that there is a
product for every kind of investors. Also all the products cover all the
products offered by the other competitors like low cost user-friendly
online trading services etc.

WEAKNESS
Localized presence due to insufficient investments for country
wide expansion.

Lack of awareness among customers because of non-aggressive

promotional strategies (print media, newspapers, etc).

Lesser emphasis on customer retention.

Focuses more on HNIs than retail investors which results in
meager

market-share as compared to close competitors .

OPPORTUNITIES
The external environment analysis may reveal certain opportunities for
profit and growth.
23

 Ever-increasing market
After the NSE brought the screen based trading system stock markets
are now more secured which has attracted lot of retail investors and
the demand is increasing day by day. This has resulted in improved
liquidity and heavy volumes on transaction. Share khan is one of the
early entrants here. As to how much it will roar swift it can swoop on
the market, the future alone can answer such queries. Sharekhan has
been a mega player and is known for being a mover of stocks. It is also
known for putting big deals through and enjoys good networking with
the FIIs. It has been dynamic enough to move with the times and
capture the opportunities that the market throws up from time to time.

Improving technology
In county like India technology is always improving which gives the
company a chance to keep on improving their product with time
whereas for the small players like local brokers it will be difficult to
keep the same pace as the changing technology. Also with SEBI lying
down some strict guidelines small brokers are finding it harder to retain
customers with no research department and small capital. The
traditional business players may not have systems technology,
customer services etc capable of directly servicing so many retail
customers.

Education level
The education level in the country is improving year as far as
technology goes. With that the understanding of the stock market is
also increasing and a lot of retail investors are steeping in the markets
24

which are being shown by increasing volumes, transactions and

indices.

THREATS

Aggressive promotional strategies by close competitors may

hamper Share Khans acceptance by new clients.

Lack of sufficient branch-offices for speedy delivery of services.

Other players are providing margin funds to investors on easy
terms where as there is no such facility in share khan.
More and more players are venturing into this domain which can
further reduce the earnings of Share Khan.

1.6 PESTLE Analysis of Share Khan

PESTLE analysis stands for "Political, Economic, Social,

and Technological analysis" and describes a framework of macroenvironmental factors used in the environmental scanning component
of strategic management. Some analysts added Legal and rearranged

25

the mnemonic to SLEPT;[1] inserting Environmental factors expanded

it to PESTEL or PESTLE

COMPOSITION
Political factors are basically to what degree
the government intervenes in the economy. Specifically, political
factors include areas such as tax policy, labour
law, environmental law, trade restrictions, tariffs, and political
stability. Political factors may also include goods and services
which the government wants to provide or be provided (merit
goods) and those that the government does not want to be
provided (demerit goods or merit bads). Furthermore,
governments have great influence on the health, education,
andinfrastructure of a nation

Economic factors include economic growth, interest

rates, exchange rates and the inflation rate. These factors have
major impacts on how businesses operate and make decisions. For
example, interest rates affect a firm's cost of capital and therefore
to what extent a business grows and expands. Exchange rates
affect the costs of exporting goods and the supply and price of
imported goods in an economy

Social factors include the cultural aspects and include health

consciousness, population growth rate, age distribution, career
attitudes and emphasis on safety. Trends in social factors affect the
demand for a company's products and how that company operates.
For example, an aging population may imply a smaller and lesswilling workforce (thus increasing the cost of labor). Furthermore,
companies may change various management strategies to adapt to
these social trends (such as recruiting older workers).
26

Technological factors include technological aspects such

as R&D activity, automation, technology incentives and the rate
oftechnological change. They can determine barriers to entry,
minimum efficient production level and
influence outsourcing decisions. Furthermore, technological shifts
can affect costs, quality, and lead to innovation.

Environmental factors include ecological and environmental

aspects such as weather, climate, and climate change, which may
especially affect industries such as tourism, farming, and insurance.
Furthermore, growing awareness of the potential impacts of climate
change is affecting how companies operate and the products they
offer, both creating new markets and diminishing or destroying
existing ones.

Legal factors include discrimination law, consumer law, antitrust

law, employment law, and health and safety law. These factors can
affect how a company operates, its costs, and the demand for its
products.

27

CHAPTER 2
OBJECTIVE AND METHODOLOGY

2.1 SIGNIFICANCE
This project will accomplish to understand the problem faced by the
new client with respect to online share trading and find ways to solve
their queries at microscopic level. The study also aims to highlight the
possible hurdles that a prospective client faces who are interested to
investing in securities but is unaware of the system of online share
trading. Its also aims at finding out the brand image of the organization
amongst

the

general

investors
28

and

give

information

to

the

management about the new developments in the market adopted by

the competitors and the areas where the company needs to improve.
This is a limited study which takes into consideration the various
operations performed by the company. This data can be exported to
take in the trends across the industry. The significance for the industry
lies in studying these trends that emerge from the study. It is a rapidly
changing and evolving sector.

At sharekhan our goal is not only to sell a bike, but also to help you
every step of the way in making our world a better place to live in.
besides its will to provide a high quality service to all of its customer.
Sharekhan takes a stand as a socially responsible enterprise respectful
of its environment and respectful of the important issues.

Sharekhan has been strongly committed not only to environmental

conservation
inseparable

programmes
balance

but

between

also
the

expresses
economic

the

increasingly

concerns

and

the

environmental and social issues faced by a business. A business must

not grow at the expense of mankind and mans future but rather must
serve mankind.

The best is yet to come. SHAREKHAN is powering its way through a

market that is still to unleash its true potential, as barely two percent
of the population had been penetrated so far.

2.2 MANAGERIAL USEFULNESS OF THE STUDY

29

The stock market is one such institution whose very existence has
been challenged by the growth in information technology. It has turned
very idea of a stock market on its head.
Technology has impact the working of stock markets in every sense.
However, useful starting point for this study would be the study of
dematerialization, or demat as it is popularly known as. This is simply
because demat has change the way stocks are held and traded and
therefore has effect on every other function of the market.
Dematerialization in simple terms means the conversion of shares from
physical to electronic form.
Demat, enabled by the use of technology is probably is single most
important factor which has repercussions on every aspect of the stock
markets.
Demat in India started with the creation of NSDL (National stock
depository limited) in 1996. UTI was one of the first institutions to use
demat when it decided to dematerialize 50% of its holdings in 1997.
SEBI gave a boost to demat, with compulsory trading on shares in
demat form in specified scrips by institutional investors from Jan 15,
1998.
Table: Number of scrips under compulsory demats and value of
demat shares
Timeline

No. of scrips

Year

Value of demat
shares

Mar 1999

31

2000

1,14,255 Cr

Mar 2000

462

2001

4,00,000 Cr

Oct 2000

1413

2002

4,35,000 Cr

Table:2.1
30

Consequently, an increasing percentage of the share trading is done in

demat form:
The exhibit below shows the percentage of demat shares in the total
value traded at NSE over a period of 6 years.

Table: percentage of trade in demat form

Timeline

Percentage of trade in demat form

Apr 1998

2.5%

Dec 1999

79.3%

Since 2003

99%

Table2.2

Dematerialization has benefited the market and the market players in

more than one way.

Demat is instrumental in:

Abolition of market lots

Introduction of rolling settlements

Enhancing liquidity

Brining stamp duty to zero

Reducing chances of bad delivery

Increased lending by banks and other FIs

SEBI extended demat to IPOs during capital reforms in capital markets

in 2002. The premise being elimination of problems due to loss of
allotment letters, share certificates etc., encouraging shareholders to

31

out of for demat credit allotments, trading compulsorily in demat form

within an option of holding shares in physical form for retail investors.
BSE, the first exchange to be set up in India, started as a floor-based
exchange. However, NSE, setup as an alternative to BSE, was an
electronic

(computerized)

exchange.

With

advancements

in

technology, both these exchanges moved to SBTS (Screen Based

Trading System) in `997.
While NSE introduced NEAT (NSEs Online Trading System) in May
1997,

BSE

introduced

BOLT

(BSEs

Online

Trading

System)

in

September 1997 in Mumbai.

The outcome has phenomenal with respect to the number of trades
taking place on these two exchanges.
Further, trading in stocks has reached retail investors home via the
Internet in 2003-2004, SEBI proposed Internet based trading under
ORS (Order Routing System)
Trading via Internet was an instant hit, with 18 members being granted
licenses in 2004-2005 and trades touching 767 Cr. During the first six
months itself.
Although security concerns still exist regarding the safety of data
transfer over the Internet, companies like VERISIGN and RSA, who
specialize in security algorithms and data encryption ensure high
degree of authenticity and trust in trades.
Information Flow
Any trading system disseminates data to market constituents, in other
words, information is freely available. This has two disadvantages

It makes easier for off-exchange transactions to occur because of

availability of information.

32

It makes off-exchange transactions attractive due to absence of

trading costs.

On the other hand rapid flow of information has also meant increased
volatility in the markets. In financial terms, volatility is:
The degree to which the price of a security, commodity, or market rises
or falls within a short-term period. An obvious reason for market
volatility

is

technology.

This

includes

more

timely

information

dissemination, improved technology to make trades and more kinds of

financial instruments. The faster information is disseminated, the
quicker markets can react to both negative and positive news.
Improved trading technology makes it easier to make it easier to take
advantage of arbitrage opportunities, and the resulting price alignment
arbitrage causes. Finally, more kinds of financial instruments allow
investors more opportunity to move their money to more kinds of
investments positions when conditions change.

2.3 OBJECTIVE OF THE STUDY

Customer Acquisition through sales of Trading / Demat Accounts in
order to get a deep insight as to how the Organization actually
performs these functions.
Understanding the Commodity and Derivative market and the way
work is performed in these segments.
Investigate the difficulties faced by the existing clients of Share
Khan with respect to its internet trading services
The primary objective of this study is to gain an insight into the
basics of internet trading with respect to Indian capital market.
33

To ascertain the problems those are hindering the acceptance of

internet trading among the prospective investors.
To conduct Market Research in various parts of the city in order to
get statistical data for commenting on the future of online share
trading in India.

2.4 SCOPE OF THE STUDY

With growing acceptance and popularity of internet trading the
study aims at providing a deeper insight into this new field of
security trading in India.
Assess the penetration of internet trading with respect to the
growth of broadband connectivity provided by various Inter
Service Providers (ISPs). to help Share Khan in developing a
better customer acquisition retention strategy in relation to retail
as well as institutional investors.

2.5 METHODOLOGY
The leads for customer acquisition primarily came from the
questionnaires filled up by prospective customers. Apart from
these customers were also pitched through personal references
and contacts. Moreover the organization takes every possible
effort in order to spread mass awareness. As a result of this
publicity campaign, influenced prospective customers approach
34

the organization. There are various ways to make people aware

about the organization as such Marketing Research, Canopy,
Personal References, Pop-up windows having collaboration with
various portals e.g. Rediffmail.com etc. Person with adequate
interest leaves his contact information. Later on these leads are
contacted personally for further development.

The organization has efficient sales stuff that excels in this job.
Part time trainees are also appointed for the same. This work
force been perfectly supervised by the Managers. Thus all these
factors sum up into a result oriented work force. These leads
were the contacted through tele calling and after developing a
relationship, they were pitched in at the addresses provided by
them. After giving them a presentation about the product and its
advantages over its competitors, they were promised of a Demo
by company sales force in case a sale had resulted. Also
references were collected from such people and the same
methodology was repeated. For each and every customer
personal quarries have been entertained after the sale is done.
Methodology is a way to systematically solve to research
problem. it may be understood as a science of studying how
research is done scientifically. In it we study the various steps
that are generally adopted by a researcher in studying his
research problem along with logic behind him. Why research
study has been undertaken, how research problem has been
defined, in what way and why the hypothesis has been
formulated, what data collected and what particular method has
been adopted, why particular technique of analyzing data has
been used and a host of similar other questions are usually

35

answered when we talk of research methodology concerning a

research problem or study.
Research is a process of refining human experience for being
embodied in the stock of knowledge. In course of this refining
operation a researcher has to follow various specific steps. First,
any development in the scientific knowledge is founded on the
basis of previous knowledge in that area of study. Further, a
researchers quest is to adopt a suitable methodology to pursue
his current research endeavor. This enables him to get reliable
results, which are helpful to form some concrete conclusions.
Present research aims to investigate the level of customer
satisfaction amongst different product types of Sharekhan.
Both type i.e. Primary as well as Secondary data are used in this
report.
Questionnaire and Observation as primary data while Research
reports, pamphlets, and sites of Sharekhan group are used for
secondary data.
Present research is descriptive in nature.
Convenient sampling technique is used in this report.

36

CHAPTER 3
CONCEPTUAL DISCUSSION
(THEORITICAL BACKDROP & LITERATURE
REVIEW)

37

3.1 GENERAL INTRODUCTION

The stock trading history in India is obscured in the mists of time.
Historical records, as and where they exist, rarely speak about
business and speculative activity except in passing. However, the
origin of stock broking in the country may go back to a time, when
shares, debentures and bonds representing titles to property were first
issued on the condition of transfer from one person to another and the
earliest record of dealings in securities in India is the East India
Company's loan securities, way back in the 18th century.
The first stock exchange in India, Bombay Stock Exchange was
established in 1875 as 'The Native Share and Stockbrokers Association'
and has evolved over the years into its present status as the premier
stock exchange in the country. It may be noted that BSE is the oldest
stock exchange in Asia, even older than the Tokyo Stock Exchange,
which was founded in 1878. The country's second stock exchange was
established in Ahmedabad in 1894, followed by the Calcutta Stock
Exchange (CSE). CSE can also trace its origin back to 19th century.
From a get together under a 'neem tree' way back in the 1830s, the
CSE was formally established in May 1908.
38

India's other major stock exchange National Stock Exchange (NSE),

promoted by leading financial institutions, was established in April
1993. Over the years, several stock exchanges have been established
in the major cities of India. There are now 23 recognized stock
exchanges
Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmedabad,
Bangalore, Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur,
Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara,
Indore and Meerut. Today, most of the global stock exchanges have
become highly efficient, computerized organizations.
Computerized networks also made it possible to connect to each other
and have fostered the growth of an open, global securities market.
Though Stock Broking was practiced in Calcutta as early as 1836, the
members of the broking profession had neither any code of conduct for
their guidance, nor any permanent place for congregation. The centre
of their activity was near a neem tree, where at present, stands the
offices of the Chartered Bank (now known as Standard Chartered) on
Netaji Subhas Road, Calcutta. In 1905, Chartered Bank began to
construct their own building, which led brokers to shift the arena of
their operation, to the neighborhood of the recent Allahabad Bank.
The brokers had no shelter and business was carried on in the open
place. The inconvenience of such trading, prompted brokers to
organize themselves and in May 1908, an association was formed
under the name and style of the Calcutta Stock Exchange
Association at 2, China Bazaar Street.
At the time of incorporation in 1908, the Stock Exchange had 150
members. Today the total membership has risen to more than 900,
which contains several corporate and institutional members. The
39

number of companies listed on the Exchange is more than 4800. The

Annual turnover of the Exchange in 2004-05 was to the tune of around
Rs, 12, 00,000 crores. The Calcutta Stock Exchange has been granted
permanent recognition by the Central Government with effect from
April 14, 1980 under the relevant provisions of the Securities Contracts
(Regulation) Act, 1956, with a view to render useful service to
investors.
In December 1993, SEBI directed the stock exchanges to discontinue
the traditional system of carry forward of transactions (badla).
Subsequently, it proposed an alternative system in March 1994, but no
agreement could be reached on implementing this system. In February
1995, SEBI set up the G. S. Patel Committee (GSPC) to review the
system of carry forward transactions. The GSPC submitted its report in
March 1995. SEBI adopted the system recommended by the GSPC with
some modifications in its decisions of July 27, 1995 and October 5,
1995.

DEMAT A\C
Demat a\c is just like a saving a\c. in saving a\c we save our money
and in demat we deal in share market. Demat is dematerialization and
trading in the demat mode. It is safer and faster alternative to the
physical existence of securities.
Demat as a parallel solution offers from delays, thefts, forgeries,
settlement risk and the paper work. This system works through
depository participants (Dps) who offers demat services and the
securities are held in the electronic form for there investor directly by
the depository.

40

WHAT IS DEPOSITORY
In India, there are two depositories

National securities depository ltd.(NSDL)

Central depository services India ltd.(CDSL)

NSDL

Although India had a vibrant capital market, which is more then a

century old, the paper based settlement of trades caused problems like
bad delivery and delayed transfer of till recently, the enactment of
depositories act in august 1996 paved the way for establishment of
NSDL, the first depository in India. The depository promoted by
institutions of national stature responsible for economic development
of the country has since established a national infrastructure of
international standard that handles most of the trading and settlement
in dematerialized form in Indian capital market. Using innovative and
flexible technology system, NSDL works to support the investors and
brokers in the capital market of the country. NSDL aims at ensuring the
safety

and

soundness

of

Indian

market

places

by

developing

settlement solutions that increasing efficiency minimize risk and

reduce costs.
At NSDL, we play a quiet but central role in developing products and
services that will continue to nurture the growing needs of the financial
services industry.

41

In the depository system, securities are held in depository accounts,

which is more or less similar to holding funds in bank accounts.
Transfer of ownership of securities is done through simple account
transfers. This method does away with all the risk and hassles normally
associated with paperwork. Consequently, the cost of transacting in a
depository

environment

is

considerably

lower

as

compared

to

transacting in certificates.

CDSL

Central depository services India ltd.(CDSL) is the other depository,

promoted by the stock exchange, Mumbai in association with bank of
India, bank of Baroda, and state bank of India and HDFC bank.
With the depositories in place, there is a need to ensure that an
effective online trading mechanism is available for the retail investors
to transact in the paperless form. Effectively all leading stock exchange
including BSE and NSE have moved towards online trading. Further the
national stock exchange established a view to provide an efficient and
transparent securities market to the investors.
The depositories are required to have adequate controls, system and
procedure to prevent conduct by DPs which is detrimental to the
interest of investors or the securities market. It charged NSDL of not
taking appropriate penal against DPs observed by them during
inspections. NSDLs action has never gone beyond imposition of
monetary penalties.
42

DEMATERIALIZATION
The dematerialization system is an alternative to the physical
existence of securities. In this system securities are converted into
electronic form and deposited in a depository account in the investors
name.

In order to dematerialize certificates, an investor will have to first open

an account with a DP and then request for the dematerialization
43

request form(DRF), which is available with the DP, and submitting the
same along with the physical certificates. The investor has to ensure
that before the certificates are handed over to the DP for demat, they
are defaced by marking surrendered for dematerialization on the
face of the certificates

3.2 TYPES OF PRODUCTS

Products offered by Sharekhan
1- Equity and Derivatives
2- Research
3- Mutual Fund Advisory
4- Portfolio Management Services.

1. EQUITY and DERIVATIVES

44

Figure3.1
With a Sharekhan online trading account, you can buy and sell
shares instantly. The investors can choose from 2 online trading
accounts that suit their trading habits and preferences the
classic account for most investors and speed trade for active day
traders. The Classic Account also comes with Dial-n-trade
completely free, which is an exclusive service for trading shares
by using telephone. This account enables people to buy and sell
shares through sherkhans website. They get features like:
a) Streaming quotes (using the applet based system)
b) Multiple watch lists
c) Integrated Banking, demat and digital contracts
d) Instant credit and transfer
e) Real-time portfolio tracking with price alerts
and, of course, the assurance of secure transactions.
The Dial-n-Trade service enables one to place orders for buying
and selling shares through telephone by dialing any one of our
two numbers (1-800-22-7050 or 30307600), enter your TPIN
number (which is provided at the time of opening your account)
45

and on authentication you'll be directed to a telebroker who

will buy and sell shares for you.

2. RESEARCH
To cater to the different needs of each investor sherkhan provides
a comprehensive set of research reports, so that you can make
the right investment decisions regardless of your investing
preferences.
A. SHAREKHAN SHOPS
It has 510 share shops across 170 cities in India. There it provides a
host of trading related services - customer service staff will also help
you with any accounts related queries you may have.

A Sharekhan outlet offers the following services:

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

Free access to investment advice from Share khans Research team

Sharekhan Value Line (a monthly publication with reviews of

recommendations, stocks to watch out for etc)

Daily research reports and market review (High Noon & Eagle Eye)

Pre-market Report (Morning Cuppa)

Daily trading calls based on Technical Analysis

Cool trading products (Daring Derivatives and Market Strategy)

Personalized Advice

Live Market Information

Depository Services: Demat & Remat Transactions

Derivatives Trading (Futures and Options)

Commodities Trading
46

IPOs & Mutual Funds Distribution

Internet-based Online Trading: Speed Trade

B. DEMAT
Dematerialization and trading in the demat
mode is the safer and faster alternative to
the physical existence of securities. Demat
as a parallel solution offers freedom from
delays, thefts, forgeries, settlement risks
and

paper

work.

This

system

works

through depository participants (DPs) who offer demat services and

the securities are held in the electronic form for the investor directly
by

the

Depository.

Sharekhan Depository Services offers dematerialization services to

individual and corporate investors.

3.

MUTUAL FUNDS

Share khans clients will now also be able to invest in Mutual funds
through them. They have already started this service for a few mutual
funds, and in the near future will be expanding our scope to include a
whole lot more. Applying for a mutual fund through us is open to
everybody, regardless of whether you are a Sharekhan customer.
To invest in a fund, all you have to do is download the application form,
print it out, fill it in and send it over to them.
47

3. PMS
This is a product which allows the customer to be completely hands off
as all the equity decisions of the customer are taken y the
professionals appointed by the firm.
The product is classified into three categories-:
ProTech
ProPrime
ProArbiterage

ProTech
Product Offerings

Nifty Thrifty:
Nifty futures are bought and sold and the exposure does not
exceed
portfolio.

the
The

value

of

the

advantage

is

that Nifty allows making profits

even in falling markets

Beta Portfolio :

Here 80% of the portfolio is traded in

delivery (cash
market) and the rest 20% in the
Future and Option segment (e.g.
Buying calls /put etc.)This results in
a higher and safer return as risk is undertaken only on the 29% of the
portfolio
48

ProPrime
Product Offerings

The Aggressive Scheme:

Ideal for investors looking at higher returns and are ready to
take higher risks.

The portfolio consists of the following stocks:

Expected growth in profitability

Relatively low valuations

Mid to smallcap companies

The Balanced Scheme:

Ideal for investors looking at steady returns with low risk
appetite consists of a blend of consistent a blue chip stocks
ensuring a balanced growth.
ProArbiterage

It spots risk free opportunities which offer higher return than other risk
free instruments available in the market. On spotting the opportunity
the stock is bought and the future is sold so as to lock in the spread. In
this way the scheme moves from one opportunity to another.

ACCOUNT OPENING
Their demat and trading a/c opening charges (combined) are Rs 950/and it as mandatory to open both the accounts there i.e. you cannot
open just demat or trading a/c with them. Annual Maintenance Charges
are not charged for first 2 years and thereafter levied @ Rs. 250 p.a.

49

BROKERAGE slabs are as follows:Investment

Amount
5000-10,000
10,000-50,000
50,000-1,00,000
Above 1,00,000

Brokerage(in %)
Intraday
Delivery
0.10
0.05
0.03
0.01

0.50
0.25
0.30
0.10

EXPOSURE
It is the facility which allows you to trade for more with less amount in
your account. For sharkhan it is:
Intraday: 4 times
Delivery: 4 times
Interest is charged @ 16% p.a. compounded daily.

SOFTWARE
Sherkhan allows its clients to trade in the share market in 2 ways:

Through its online portals:

1. Fast trade terminal-It is provided to all the clients
irrespective of his portfolio or investment. No additional
amount is charged for it.
50

2. Speed trade terminal- Speedtrade is a powerful trading

and research platform that has live streaming quotes,
trading calls, advanced charting, market news and a single
trading screen for BSE & NSE. It is not provide to all the
clients. Only those clients are eligible for it that can
generate a quarterly brokerage of Rs.1500. Otherwise,
they are bound to pay the penalty of the remainder.
Comparatively it has got more and advanced features, e.g.:
one can see more number of scripts at a time on the
screen.

Dial-n-trade (calling the dealers on phone and getting the trade

done through them)

R.M. FACILITY
Relation managers are the people who provide their clients with the
regular tips for trading in equity market and thereby assist them in
getting the maximum returns.
In sherkhan, relationship managers are not provided to all the clients.
This facility is only made available to those clients whos portfolio is
above Rs. 2, 00,000/-.

TECHNICAL REPORTS

51

Their clients receive 4 mails per day informing them about the most
probable share market movements for that day.
Their Technical Trading calls based on the Brave heart Strategy has
consistently given a strike rate of 87% on calls with a 1-2 months of
price target and 95% for calls based on 3-6 months target.

INTERACTION WITH CLIENTS

The clients are provided with two numbers through which they can
interact with the company, one is a local number (call rates applicable)
and another is a MTNL/BSNL number (no charges). If the clients want to
avail the sms facility they have to pay Rs. 100 extra per month for it.

AWARDS AND RECOGNITION

Sharekhan has been voted as Indias most preferred broking house by
CNBC, a testimony of customers confidence in it.
Its research team by the name of cool gurus has been quoted by
Economic Times for getting the highest returns.

BANK TIE-UPS
Sharekhan has tie-ups with 10 banks. Few of them are:

ICICI

HDFC

UTI

OBC

AXIS

YES

52

3.3 SHAREKHAN SERVICES

Dial-n-trade

Along with enabling access for your trade online, the classic and
Speedtrade account also gives you our dial-n-trade services. With
this service, all you have to do is dial our dedicated phone lines 1800-22-7500 and 39707500.

DNT-Toll free features

Dedicated toll free number for order placements.

Automatic fund transfer with phone banking (only with

Citibank).

Simple and secure IVR based system fro authentication.

No wait time. On entry of phone id and TPIN, the call is

transferred.

Trusted, professional advice of Tal-brokers, who offer r

undiluted sharekhan research inputs.

IPN ON-Line
Can apply the entire following IPO online for free.
53

Research tips: Company provide 4-6 e-mails to there

customers per day.

Pre Market: pre-market report covering views, events and

more.

Daring derivatives: covers futures and option commentary

and trading calls.

High Noon: is aimed at traders, this technical daily newsletter

carries punters calls and smart chart. It is released at noon to be
acted upon during the course of the day.

Post-Market report: updates you day happening.

Eagle Eye: is aimed at traders, this technical daily newsletter
carries punters calls, hit list and smart chart. Its released at the
end of the day to be acted on following day.

Investor eye: is aimed at investors, this fundamental daily

newsletter carries most important news report, research update
on our stock idea and other fundamental reports.

Stock ideas: aimed at investors and it presents our best stock

picks in todays market.

54

CHAPTER 4
DATA ANALYSIS

55

Analysis
On the basis of the primary data collected through questionnaires &
personal interviews conducted with companies employees and clients
analysis was done and following are the question wise results:
Types of Investors

Figure: 4.1

56

Small investors prefer to invest in the stock market through Religare

Securities Ltd., India Bulls Financial Services Ltd. & ICICI Direct.com.
Reliance Money is being preferred more by medium investors.
Sharekhan is suitable for big investors.
Medium of Trade

Figure: 4.2

57

It has been observed that traders inclination towards online trading is

increasing. Investors who opt for online trading are more in Religare
and Indiabulls as their software terminal is very effective. Offline
traders are more in Sharekhan and ICICI Direct.com as their terminal is
very expensive as well as inaccurate. RelianceMoney offers only
internet based trading.

Technical Reports

Figure: 4.3
58

Religare send market tips through E-mails to the clients. Moreover

Relationship Manager also keeps on giving market tips to their
respective clients. Indiabulls provide market tips through e-mails and
sometimes through sms. Both these companies are irregular in sending
technical reports to their clients. On the other hand, Sharekhan and
ICICI Direct.com are very regular in sending technical reports to their
clients. Share khan send 4 reports through mails which include
premarket report before 9:55, post market report, afternoon report and
evening report. ICICI Direct.com sends their market tips through emails only.
91% of the respondents says that Sharekhan is number one in the
market.
The common reasons behind this arte as follows:
Good returns
Advisory
Customized services
Only 9% of the respondents find that Sharekhan is not number one in
the market.
But the reasons of this thing was not even clear to the respondents as
they fill they need more customized services and more returns out of
their investment.
So at last here I would like to recommend that if Sharekhan gives more
emphasis on customized services then more and more customers get
satisfied.

59

CHAPTER 5- FINDINGS AND

RECOMMENDATIONS

60

Figure: 5.1
Interpretation: This shows that although the mutual funds market is
on the rise yet, the most favored investment continues to be in the
Share Market. So, with a more transparent system, investment in the
Stock Market can definitely be increased.

Awareness of online share trading

Yes -- 91%
No-- 9%

Figure: 5.2
Interpretation: With the increase in cyber education, the awareness
towards online share trading has increased by leaps and bounds. This
awareness is expected to increase further with the increase in Internet
education.

Overall Satisfaction
61

Customers are satisfied with the services which are being provided to
Religare. Indiabulls, ICICI Direct.com and Reliance money have satisfied
their clients to some extent only. Customers are not satisfied with
Share khans performance.Sharekhan provide effective service only to
the big investors. Small investors are not given due importance and
attention.

Activeness of Grievance cell

Religare clients find grievance cell of the company active to some
extents only. Indiabulls is highly ineffective in redressing customer
grievances. Share khans grievance cell is not effective and customers
receive very indifferent responses. ICICI Direct.com and Reliance
money are particular in redressing their customers grievances.

After having an experience of two months in sales of demat account I

would like to suggest the following things:

Company has an advantage of reach tips for which sharekhan is

known for, the customer who are new they need relationship
managers who will tell them about investment so it should be
provided to all the customer on demand this will lead to
customer satisfaction and will hip to have more references from
the satisfied customer.

The company also have the advantage of brokerage charges it

need some revision so that the customer who are locking for the
less brokerage can open there account in our company taking
into consideration the different proposal. It can reduce for a HNI
client.
62

The company has shown the growth trend and it has reached at
no.2 it can move to no.1 because it has an advantage of its
services. As sharekhan is already tie-up with 10 banks for online
fund transfer that reduces the paper work for customer and ease
in trading.

The company should revise the advertising strategy to increase

its brand awareness. I suggest making advertisement on
television so that maximum market can be targeted.

Company should focus on customer satisfaction at every levels

of the account procedure.
Brokerage can be reduced with the attractive proposal with
HNI.
Relationship manager should be given on the customer
demand.
Company should use the tool of advertising for marketing
the brand and the product.
Reduction in brokerage would attract the customer of
indiabulls, 5paisa and other competitors having less
brokerage then us. It would increase the market share or
client acquisition.
The account opening time should be reduced to maximum
5days because customer losses the opportunity of
investments.
The company shows the positive trend in growth but it can
be increased more if it focuses on building the brand equity

63

64

Conclusion
Talking about Sharekhan it is one of the most well known players in
this segment and boasts is of high clientele because of its good and
regular research tips, tie-ups with almost all major banks (10 banks to
be precise) as well as competent Relationship Managers. But the only
stain on its name because of the fact that it doesnt care much for its
small customers who are not even provided an R.M. Also their terminal
charges are also quiet high as compared to that of its competitors.

While there are many factors that need to be understood, one simple
fact is worthy of note. The average age of the Indian Internet user as
cited by a recent IDC survey is 27 years. The average age of the head
(and financial decision taker) of the Indian equity-investor household,
as revealed by the SEBI-NCAER study of Indian investors in 2000 is 45
years. The older, experienced equity investor is not online today and
the fact that older, mature investors are not tech-positive and hence
unlikely to move to online trading is a major barrier to the growth of ebroking in India.
Here, the numbers of banks with a strong online presence are very few
- again, dominated by new private banks and foreign banks. Both have
lesser reach owing to a smaller network in the country. The relative
inability of large public-sector banks to offer-facilities for Internet
banking is a barrier in this regard. Besides, Internet penetration in India
is still very low and concerns about security also tend to predominate.
In markets like the US, online brokerages are advertised very heavily.
Online trading in India has so far not seen similar levels of aggressive
advertising, with the exception of ICICI Direct and India bulls. Besides,
only scripts that have been compulsorily dematerialized can be traded
on the net here.
65

ANNEXURES
QUESTIONNAIRE
Name: .....
Phone: .....

Occupation:

(1) Do you invest in stock market?

Yes

No

(2) You are a client of which is a brokerage house.

(3) What is your Experience in the market?
Less than a year
1-4 year

More than 4 years

(4) What is your Trading Preference?

Speculation
Investment

Both

(5) What is your Average investment period?

Less than 3 months.
3 to 9 months.
9 months to 2 year.
More than 2 year.
(6) Factors influencing the investment decisions?
Advice from Broker
Current news
Reviews in Financial Magazines
Advice from Friends
Self Evaluation
Others___________
(7) How much Risk are you willing to take?
High
Low
Moderate

66

(8) How much Appreciation do you expect from your

Investments?
up to 15%
15%-25%
25%-35%
more than 35%
(9) How much loss are you willing to take?
Less Than 5%
5-10%

more than 10%

(10) Any suggestions:

........

67

BIBLIOGRAPHY
Books and Newspapers:

The Economic Times, Business Standard, Business line

Securities Market (Basic) Module :--NCFM

Economic Times.

Training Kit Provided by the Sharekhan.

Indian financial system by M.Y KHAN

NSDL Depository operations module :--NCFM

URLs:

www.indiainfoline.com

www.economics times.com

http://www.investopedia.com/articles/

www. nse-india.com

www.bseindia.com

www.moneycontrol.com

www.sharekhan .com

68