A Project Report On

A project study on Sherkhan Position in

Market

Submitted by:
ATUL GUPTA

RAJASTHAN TECHNICAL UNIVERSITY, RAJASTHAN

MBA in Finance and Marketing

DECLARATION

I undersigned ATUL GUPTA student of MBA 3rd semester declare that I have done the
project on Sherkhan position in Market. has been personally done by me under the
guidance of Prof. Navdeep jaipur in partial fulfillment of MBA Program- during
academic year-2014-16. All the data represented in this project is true & correct to the
best of my knowledge & belief.
I also declare that this project report is my own preparation and not copied from
anywhere else.

Date
Signature
Atul Gupta

SUMMARY

An Investment is a sacrifice of current money or the other resources for future

benefits.

As the project title itself indicates the A Comparative study on investment

advisory services offered by share khan & other competitors it includes all the aspect of
investment advisory services of share khan. The project contains all the detail information
about the share market and also other facility off its competitor company.

The Project also highlights the share industry profile, that how it came into
existence, what is share.
The project is carried out the competitive study of other share broker & sub broker.

Dividing it in the phases carried out the study , firstly the data was collected
from the net & various sources .next phase was to meet people to open demat & speed
trade a/c .The last phases to find out people who interested to open share khan franchise.

It was recommended to share khan that, they should open branches in another
city, beside they should also target small city people and they invest more for brand
awareness activities.

INTRODUCTION TO SSKI

80 years of taming Bulls & Bears

SSKI group also comprises institutional broking and corporate Finance. While the
institutional broking division caters to the largest domestic and foreign institutional
investors, telecom and media. SSKI holds a sizeable portion of the market in each of
these segments.
As the forerunner of investment research in the Indian market, we provide the best
research coverage amongst broking houses in India. Our research team is rated as one of
the best in the country. Voted four times as the Top Domestic Brokerage House by Asiamoney Survey. SSKI is consistently ranked amongst the top domestic brokerage houses
in India.

SSKI Group Companies

SSKI Investor Services Ltd (Sharekhan)

S.S. Kantilal Ishwarlal Securities

SSKI Corporate Finance

Idream Productions

SHARE KHAN BACKGROUND

Share khan is one of the leading retail brokerage firms in the country. It is the retail
broking arm of the Mumbai-based SSKI Group, which has over eight decades of
experience in the stock broking business. Share khan offers its customers a wide range of
equity related services including trade execution on BSE, NSE, Derivatives, depository
services, online trading, investment advice etc.
Sharekhan offers you trade execution facilities on the BSE and the NSE, for cash as
well as derivatives, depository services and most importantly, investment advice
tempered by 80 years of research and broking experience.

Present Status

Name change of SSKI Investor Services Private Limited to Sharekhan Limited

Consequent to the change in name of SSKI Investor Services Private Limited to Share
khan Limited, the Securities and Exchange Board of India has granted the certificate of
registration to Share khan Limited as a Participant. The DP Id of Share khan Limited is
IN300513.
The firms online trading and investment sitewww.Sharekhan.comwas 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. In Delhi
(N.C.R) Region approx- 2000 online share trading accounts per Month are opened.
The objective has been to let customers make informed decisions and to simplify the
process of investing in stocks.
On April 17, 2002 Share khan launched Speed Trade, a net-based executable application
that emulates the broker terminals along with host of other information relevant to the
Day Traders. This was for the first time that a net-based trading station of this caliber was
offered to the traders. In the last six months Speed Trade has become a de facto standard
for the Day Trading community over the net.
Share khans ground network includes over 704 centers in 234 cities in India, of
which 63 are fully owned branches.
Share khan 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, Cambridge Technologies, Nexgenix, Vignette, Verisign
Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and
content. The Morakhia family holds a majority stake in the company. HSBC, Intel &
Carlyle are the other investors.

Share khan is :

Among the top 3 branded retail service providers

No. 2 player in online business

Largest network of branded broking outlets in the country servicing 100,000

clients

Mission

..to educate and empower the individual investor to make better investment decisions
through

QUALITY ADVICE

IT Means product quality of share khan is very beneficial than another companies.easy
to work that products

INNOVATIVE PRODUCTS

Using that products is very easy way and in working time no many refreshes in that
products.

SUPERIOR SERVICE

Providing good research to their clients and they also provide time-to-time information
about the securities.

Customer education

They provides customer education regarding our products and services and also conduct
seminars

Seminars/ Workshops
-First Step Seminars for new investors
-Portfolio clinics for HNIs
-Seminars for traders on various trading strategies
-Seminars on Equity investment strategies

Objectives of the study

The prime objective of the study was to understand the market

The survey was used to

Understand the type of financial service desired by the customer.

To find out the degree of awareness of Equity.

To study the consumer behavior.

To find out the market potential for online trading of equity shares.

To learn professionalism in market of financial product and services.

To find prospects for the institution.

To conduct the survey to know how many persons invest in equity and how many
do not.

To do the analysis of market share of Share Khan.

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Our ORIGINS

Sharekhan traces its lineage to SSKI, an organization with more than eight decades of
trust & credibility in the stock market.

Sharekhan started of as retail arm of SSKI

Pioneers of online trading in India- Sharekhan.com was launched in 2000 and is now the
second most visited broking site in India
Has one of the largest network of Share shops in the country
Has attracted investment from leading Private equity players of the world

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Growth Path for Management

Trainee In Sharekhan Sales
Team
CEO

Production & tech.director

Operation Head director
Cluster Manager
Regional Sales Manager
Area Sales Manager
Territory Manager
Assistant Manager
Sales Executive
Super Trainee
Management Trainee

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SHAREHOLDERS

HOLDING %

CITI VENTURE CAPITAL AND

OTHER PRIVATE EQUITY FIRMS
IDFC

81
9

EMPLOYEES

10

SHAREHOLDERS & THE MANAGEMENT TEAM

MANAGEMENT TEAM
TARUN SHAH

CEO

JAIDEEP ARORA

DIRECTOR- PRODUCTS & TECH.

SHANKAR VAILAYA

DIRECTOR-OPERATIONS

13

HIERARCHY IN JAIPUR BRANCH.

Cluster Manager

:-

NIDHi

Branch Manager
Territory Manager :Assistant Manager..
Sales Executives,

GEOGRAPHICAL AREA COVERED BY SHARE KHAN

14

15

DIGRAMATICAL FORM

800

704

700

607

Network

600
500

410

400
300
200
100

82

147

176

228

0
2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Online Business is 50%

5,00,000 Customers & Growing

3,100 employees

Most preferred broking website in India

16

Sep-07

Financial Performance of Share khan

Share khan is India's leading retail financial services company. They
have over 704 share shops across 234 cities in India. While their size and strong balance
sheet allow them to provide customers with varied products and services at very
attractive prices, their over 750 Client Relationship Managers are dedicated to serving
customers

unique

needs.

Share khan is lead by a highly regarded management team that has invested crores of
rupees into a world class Infrastructure that provides clients with real-time service & 24/7
access to all information and products. Their flagship Share khan Professional Network
offers real-time prices, detailed data and news, intelligent analytics, and electronic trading
capabilities, right at your fingertips. This powerful technology complemented by their
knowledgeable and customer focused Relationship Managers is creating a world of Smart
Investor.

Share khan offers a full range of financial services and products ranging from Equities to
Derivatives enhance your wealth and hence, achieve your financial goals.

Share khan' Client Relationship Managers are available to the customers to help with
their financial planning and investment needs. To provide the highest possible quality of

17

service, Share khan provides full access to all our products and services through multichannels.

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.

It has 60 institutional clients spread over India, Far East, UK and US. Foreign
Institutional Investors generate about 65% of the organizations revenue, with a daily
turnover of over US$ 2 million. 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. The group has placed over US$ 1 billion in private equity deals. Some of the
clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planet Asia, and
Shoppers Stop.

SSKI CORPORATE STRUCTURE

18

Our Products
19

FIRST STEP
CLASSIC
TRADE TIGER
PLATINUM
CIRCLE

FOR THOSE INVESTING FOR THE FIRST TIME IN

THE STOCK MARKET
FOR THOSE FOR WHO TRANSACT OCCASIONALLY
FOR DAY TRADERS AND FOR THOSE WHO TRADE
ACTIVELY IN THE MARKET
FOR HNIS LOOKING FOR PERSONALIZED AND
EXCLUSIVE INVESTMENT AND PORTFOLIO
MANAGEMENT SERVICES (PMS)

PRODUCTS & SERVICES OFFERD BY SHARE KHAN

Products

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 First Step
Classic / Fast trade
Trade Tiger
Portfolio Management system

Services

Technical research
Fundamental research
Share shops
Portfolio Management
Dial- n- trade
Commodity Trading
Online services
Depository services

PRODUCT DETAILS OF SHARE KHAN

Share khan offers the following products:-

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CLASSIC ACCOUNT

This account allows the client to trade through our website and is suitable for the retail
investor who is risk-averse and hence prefers to invest in stocks or who do not trade too
frequently.

FEATURES:-

Online trading account for investing in Equity and Derivatives

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Both NSE & BSE online and Trading through website Live terminal

Both Cash & F&O

No brokerage commitment required

Integration of On-line trading, Saving Bank and Demat Account.

Instant cash transfer facility against purchase & sale of shares.

Competitive transaction charges.

Instant order and trade confirmation by E-mail.

Streaming Quotes.(Cash & Derivatives)

Personalized market watch.

Single screen interface for Cash and derivatives and more.

Provision to enter price trigger and view the same online in market watch.

SPEEDTRADE
SPEEDTRADE is an internet-based software application that enables anyone to buy
and sell in an instant. It is ideal for active traders and jobbers who transact frequently
during days session to capitalize on intra-day price movement.

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FEATURES:Instant order Execution and Confirmation.

Single screen trading terminal.(NSE AND BSE BOTH)

Real-time streaming quotes, tic-by-tic charts.

Market summary (Cost traded scrip, highest value etc.)

Hot keys similar to brokers terminal.

Alerts and reminders.

Back-up facility to place trades on Direct Phone lines.

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Sharekhan portfolio Management services

Product Offerings
Ideal for investors looking at steady and superior returns with low to medium
risk appetite. This portfolio consists of a blend of quality bluechip and growth
stocks ensuring a balanced portfolio with relat vely medium risk profile. The
portfolio will mostly have large capitalization stocks based on sectors & themes
who have medium to long term growth potential.

Product Approach
Investment are based on 3 tenets:

Consistent, steady and sustainable returns

Margin of Safety
Low Volatility

Product details
Minimum Investment: Rs 10 lakhs
Lock in period: 6 Months
Reporting: Online access to portfolio holdings, quaterly repeorting of portfolio
holdings/transactions

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Charges: 2.5% per

annum AMC charged every quarter, 0.5% brokerage 20% profit sharing after
15% hurdle is crossed-chargeable at the end of the fiscal year.
Profit wi tiples of 25000 after lock in period.thdrawal in mul

Convenient, Secure and Automated Demat services

Dematerialisation 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 dematerialisation services to individual and

corporate investors. We have a team of professionals and the latest technological
expertise dedicated exclusively to our demat department, apart from a national network
of franchisee, making our services quick, convenient and efficient.

CHARGES
TABLE-1
Charge

Classic Account

Speed Trade Account

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Special rate of
Account Opening

Rs. 750/-

Rs. 1000/-

Monthly

Rs. NIL

Rs. 500/=*

Rate of

Intraday-0.10%

Intraday-0.10%

Brokerages

Delivery-0.50%

Delivery-0.50%

Commitment Charge

SOURCE:www.sharekhan.com

Refundable in case the brokerage is more than Rs.500/= p.m. Or quarterly generated
brokerage to be 1500/-. ** Taxes as per govt.
For Speed Trade the Monthly Recurring Fee of Rs.500 per month is very nominal
considering the benefits of the product. This access charges will be debited to all the new
customers signed up after March 15 2008. And at the end of the month if the client has
contributed more than Rs.500 as brokerage the access charge of Rs.500 will be credited
back to the clients account. Please note - this credit of Rs.500 will be refunded only to
customers who have contributed more than Rs.500 as brokerage during the month.

DEPOSITORY CHARGES:

Account Opening Charges

Rs. 750

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Annual Maintenance Charges

Rs. NIL first year

Rs. 300 Per annum from second year
onward

BROKERAGE CHARGED:-

0.10% Plus Taxes for Each leg of Intra-day trade

0.50% Plus Taxes for trades resulting in delivery

EXPOSURE: 4 TO 8 TIMES (ON MARGIN MONEY)

TIE UPS:

Tie up with six banks i.e. HDFC Bank Ltd, Oriental Bank Of Commerce, IDBI Bank Ltd,
Citi Bank, United Bank of India and UTI bank for online money transfer.

DOCUMENTS REQUIRED

As per KYC guide lines there needs to be Photo Identity and Address proof of the
customer. The required documents are mentioned below:-

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Identity Proof

Residence/Address Proof

Passport

Passport(valid)

Pan Card

Voter's ID

Driving License

Driving License(valid)

Voter's ID

Bank Statement(latest)

MAPIN UIN Card

Telephone Bill(latest)

Electricity Bill(latest)

Ration Card

Flat Maintenance Bill(latest)

Insurance Policy(latest)

Leave-License/Purchase Agreement(latest)

2 Photographs
1 Cheque of Rs.500 In Favor of S.S.Kantilal Ishwarlal Securities Pvt. Ltd. ( For
Classic Account ), Or
1 Cheque of Rs.1000/=In Favor of S.S.Kantilal Ishwarlal Securities Pvt. Ltd. (For
Speed Trade Account).

SHAREKHANSERVICES

29

DIAL-N-TRADE
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Along with enabling access for their trade online, the CLASSIC and SPEEDTRADE
ACCOUNT also gives their customers Dial-n trade services. With this service, all the
customers need to do is dial to their dedicated phone lines 1-800-22-7050.

IPO On-line

The customers can apply all the forthcoming IPO online hassle-free.
Number is

30307600 or 1800227050

COMMODITY

The process of economic liberalization in India began in 1991. As part of this process,
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several capital market reforms were carried out by the capital market regulator Securities
and Exchange Board of India. One such measure was to allow trading in equities-based
derivatives on stock exchanges in 2000. This step proved to be a shot in the arm of the
capital market and volumes soared within three years.

The success of the capital market reforms motivated the government and the Forward
Market Commission (the commodities market regulator) to kick off similar reforms in the
commodities market. Thus almost all the commodities were allowed to be traded in the
futures market from April 2003. To make trading in commodity futures more transparent
and successful, multi-commodity exchanges at national level were conceived and were
allowed to start futures trading in commodities on-line.

A lot of water has flown since then. Today commodities exchanges have become an
integral part of Indian financial system. Their volumes have gone through the roof; from
a humble Rs 5000 crores in 2003 today it stands north of Rs 27 lac crores per year. This
rise in volumes has been led by bullion (gold and silver) trading. Simultaneously, MCX
has emerged as the second largest commodity exchange in the world in terms the number
of silver contracts traded. Similarly it is the third largest commex in the world today
considering the number of gold contracts traded.

There is yet another feather in the cap of Indian commexes; while the American
commexes still continue to have open outcry system, Indian ones have begun in style,
with every aspect of trading fully computerised. Thus you have trading engines which

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match buy and sell orders at the nanosecond basis.

Coming to commodities, today Indian investors can trade in a great number of

commodities on these bourses, and the list is getting bigger by the day. No wonder then
that the commodity futures market is being viewed as a significant business segment by
many businessmen, investors, institutions, brokers, banks et al.

FCRA Forward Contracts (Regulation) Act, 1952 defines goods as every kind of
movable property other than actionable claims, money and securities. Futures trading is
organized in such goods or commodities as are permitted by the Central Government. At
present, all goods and products of agricultural (including plantation), mineral and fossil
origin are allowed for futures trading under the auspices of the commodity exchanges
recognized under the FCRA.

Commodity Exchange
A Commodity Exchange is an association, or a company of any other body corporate
organizing futures trading in commodities. In a wider sense, it is taken to include any
organized market place where trade is routed through one mechanism, allowing effective
competition among buyers and among sellers this would include auction-type
exchanges, but not wholesale markets, where trade is localized, but effectively takes
place through many non-related individual transactions between different permutations of
buyers and sellers.
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Commodity derivatives market

Commodity derivatives market trade contracts for which the underlying asset is
commodity. It can be an agricultural commodity like wheat, soybeans, rapeseed, cotton,
etc or precious metals like gold, silver, etc.
Difference between Commodity and Financial derivatives
The basic concept of a derivative contract remains the same whether the underlying
happens to be a commodity or a financial asset. However there are some features, which
are very peculiar to commodity derivative markets. In the case of financial derivatives,
most of these contracts are cash settled. Even in the case of physical settlement, financial
assets are not bulky and do not need special facility for storage. Due to the bulky nature
of the underlying assets, physical settlement in commodity derivatives creates the need
for warehousing. Similarly, the concept of varying quality of asset does not really exist as
far as financial underlings are concerned. However in the case of commodities, the
quality of the asset underlying a contract can vary at times.

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Get everything you need at a Sharekhan outlet!

All you have to do is walk into any of our 640 share shops across 280 cities in India to
get a host of trading related services - our friendly customer service staff will also help
you with any accouts 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 Sharekhan's Research team

Sharekhan ValueLine (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)

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Daily trading calls based on Technical Analysis

Cool trading products (Daring Derivatives and Market Strategy)

Personalised Advice

Live Market Information

Depository Services: Demat & Remat Transactions

Derivatives Trading (Futures and Options)

Commodities Trading

IPOs & Mutual Funds Distribution

Internet-based Online Trading: SpeedTrade

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Online Services
With a Sharekhan online trading account, you can buy and sell shares in an instant!
Anytime you like and from anywhere you like!

You can choose the online trading account that suits your trading habits and preferences the Classic Account for most investors and Speedtrade for active day traders. Your
Classic Account also comes with Dial-n-Trade completely free, which is an exclusive
service for trading shares by using your telephone.

IPO
Initial public offering (IPO), also referred to simply as a "public offering", is when a
company issues common stock or shares to the public for the first time. They are often
issued by smaller, younger companies seeking capital to expand, but can also be done by
large privately-owned companies looking to become publicly traded.
In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it
determine what type of security to issue (common or preferred), best offering price and
time to bring it to market.
IPOs can be a risky investment. For the individual investor, it is tough to predict what the
stock or shares will do on its initial day of trading and in the near future since there is

37

often little historical data with which to analyze the company. Also, most IPOs are of
companies going through a transitory growth period, and they are therefore subject to
additional uncertainty regarding their future value.

DERIVATIVES
Derivatives are the instrument and Derivative contract is a financial instrument whose
payoff structure is derived from the value of the underlying asset.
There are 3 types of Derivative contracts
Forward Contract
Future Contract
Option Contract

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FORWARD CONTRACT:
It is an agreement entered today under which one party agrees to buy and the other agrees
to sell on a specified future date at an agreed price.

FUTURE CONTRACT:
It is a standardized contract between two parties where one party commits to sell and the
other commits to buy, a specified quantity of a specified asset at an agreed price on a
given date in the future.

OPTION CONTRACT:
It is a contract between two parties under which the buyer of the option buys the right
and not the obligation to buy or sell, a standardized quantity of a financial instrument at
or before a pre determined date at a price, which is decided in advance.

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OPTIONS AVAILABLE FOR INVESTMENT

1. FIXED DEPOSITS
Fixed deposits remain the most popular instrument for financial savings in India. They
are the middle path investments with adequate returns and sufficient liquidity. There are
basically three avenues for parking savings in the form of fixed deposits. The most
common are bank deposits. For nationalized banks, the yield is generally low with a
maximum interest of 10 to 10.5% per annum for a period of three years or more. The rate

40

of interest differs from bank to bank and is generally higher for private sector and foreign
banks. This, however, does not mean that the depositor loses all his rights over the money
for the duration of the tenor decided. The deposits can be withdrawn before the period is
over. However, the amount of interest payable to the depositor, in such cases goes down
(usually 1% to 2% less than the original rate). Moreover, as per RBI regulations there will
be no interest paid for any premature withdrawals for the period 15 days to 29 or 15 to 45
days as the case may be.
Post office is a very safe and secure investment avenue. The money is used in the
development of the society as a whole, while it provides steady returns. The biggest
advantage of investing in post office schemes is the tax benefit that they provide. Thus a
lot of savings go through this channel to dual advantage - tax benefits and steady returns.
Other than these, there deposits with NBFCs or Non Banking Financial Corporations and
company deposits are more attractive.

2. NATIONAL SAVING CERTIFICATES (NTSCs)

National Savings Certificates (NSC) is an assured return scheme, armed with powerful
tax rebates under Section 88 of the Income Tax Act, 1961. Interest is payable at 8 per
cent, compounded half-yearly for a duration of 6 years.

41

NSC combines growth in money with reductions in tax liability as per the provisions of
the Income Tax Act, 1961. The scheme offers a coupon of 8 per cent, compounded semiannually. So, Rs 1,000 invested in NSCs become Rs 1,586.87 on maturity after 6 years.

3. LIFE INSURANCES
Life insurance is a contract that pledges payment of an amount to the person assured or
his nominee on the happening of the event insured against. The contract also provides for
the payment of premium periodically to the Corporation by the policyholder. Life
insurance is universally acknowledged to be an institution, which eliminates 'risk',
substituting certainty for uncertainty and comes to the timely aid of the family in the
unfortunate event of death of the breadwinner. By and large, life insurance is
civilizations partial solution to the problems caused by death. Life insurance, in short, is
concerned with two hazards that stand across the life-path of every personDying
prematurely leaving a dependent family and living the old age without much of support.

1. That of dying prematurely leaves a dependent family to fend for itself.

2. That of living till old age without visible le means of support
The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972,
Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related

42

Acts. Life Insurance Corporation India (LIC) is the undisputed leader in this area and
provides.

4. PUBLIC PROVIDENT FUND (PPF)

The Public Provident Fund (PPF) is probably the most popular of all the tax-saving
schemes. PPF is a savings cum tax saving instrument. It also serves as a retirement
planning tool for many of those who do not have any structured pension plan covering
them. Under Section 88 of the Income Tax Act, you can invest up to Rs 70,000 of your
income to claim a rebate of upto 30 per cent depending upon the rate of rebate applicable
in your case. The PPF account may be opened at any branch of the State Bank of India
(SBI) and its subsidiaries, a few branches of the other nationalized banks, and all head
post offices. The minimum deposit is Rs 500.Minimum deposit required in a PPF account
is Rs. 500 in a financial year. Maximum deposit limit is Rs. 70,000 in a financial year.
Maximum number of deposits is twelve in a financial year.
The account matures for closure after 15 years. Account can be continued with or without
subscriptions after maturity for block periods of five years. Premature withdrawal is
permissible every year after completion of 5 years from the end of the year of opening the
account. Loans from the amount at credit in PPF amount can be taken after completion of
one year from the end of the financial year of opening the account and before completion
of the 5th year.
Interest at the rate notified by the Central Government from time to time, is calculated
and credited to the accounts at the end of each financial year. Presently, the rate of
interest is 8% per annum. Income Tax rebate is available "on the deposits made", under

43

Section 88 of Income Tax Act, as amended from time to time. Interest credited every year
is tax-free.

5. REAL ESTATES
Real estate is a legal term (in some jurisdictions) that encompasses land along with
anything permanently affixed to the land, such as buildings. Fixtures include buildings,
fences, and things attached to buildings, such as plumbing, heating, and light fixtures.
Property that is not affixed is regarded as personal property. For example, furniture and
draperies are items of personal property.
Within the real estate sector, foreign investment is now permitted in construction and
project development related to both residential and commercial development in (i)
Housing Townships; (ii) Commercial Office Space; (iii) Hotels and Resorts;

(iv)

Hospitals; (v) Educational Institutions; (vi) Recreational facilities; and (vii) City and
State level Infrastructure.Real Estate investment is one of the easiest ways to make
money.

6. SHARE MARKET

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The capital of the company is divided into the number of equal parts known as shares and
holders of these shares are called shareholders or owners of the company and company
provide part of profit to shareholders out of net profit is known as dividend and at the
time of loss the shareholders have to bear the loss also.

7. DERIVATIVES
Derivatives are the instrument and Derivative contract is a financial instrument whose
payoff structure is derived from the value of the underlying asset.
There are 3 types of Derivative contracts
Forward Contract
Future Contract

45

Option Contract

FORWARD CONTRACT:
It is an agreement entered today under which one party agrees to buy and the other agrees
to sell on a specified future date at an agreed price.
FUTURE CONTRACT:
It is a standardized contract between two parties where one party commits to sell and the
other commits to buy, a specified quantity of a specified asset at an agreed price on a
given date in the future.

OPTION CONTRACT:
It is a contract between two parties under which the buyer of the option buys the right
and not the obligation to buy or sell, a standardized quantity of a financial instrument at
or before a pre determined date at a price, which is decided in advance.

8. COMMODITIES MARKET
Commodity markets are markets where raw or primary products are exchanged. These
raw commodities are traded on regulated exchanges, in which they are bought and sold in
46

standardized Contracts. A commodity has value, which represents a quantity of human

labor. The fact that it has value implies straightaway that people try to economies its use.
A commodity also has a use value, an exchange value and a price.
In the world of business, a commodity is an undifferentiated product whose value arises
from the owner's right to sell rather than the right to use. Example: commodities from the
financial world include oil (sold by the barrel), electricity, wheat, bulk chemicals such as
sulfuric acid, base and other metals, and even pork-bellies and orange juice. More
modern commodities include bandwidth, RAM chips and (experimentally) computer
processor cycles, and negative commodity units like emissions credits.
In the original and simplified sense, commodities were things of value, of uniform
quality, that were produced in large quantities by many different producers; the items
from each different producer are considered equivalent.

9.

INITIAL

PUBLIC

OFFER

(IPO)

47

An initial public offering (IPO) is the first sale of a corporation's common shares to
public investors. The main purpose of an IPO is to raise capital for the corporation. The
first sale of stock by a private company to the public, IPOs are often issued by smaller,
younger companies seeking capital to expand, but can also be done by large privatelyowned companies looking to become publicly traded. On an average IPO to give decent
returns as this helps companies to build up trust and later raise huge amounts from public.

10. MUTUAL FUNDS

A mutual fund is a basket of investment brought from the money of investors and
managed by a set of experts. It raises money from the investors regularly by coming out
with new schemes which carry a particular name depending upon their investment
portfolio. For e.g. DSP FMCG fund will only invest in the shares and debt of the FMCG
companies. The return received by the scheme is highlighted in the form of a higher NAV.

NAV= initial issue price + profit net of expenses

NAV goes up or down based on the performance of the scheme, which in term is related
to the performance of the market.
A fund operated by an investment company that raises money from shareholders
and invests it in stocks, bonds, options, commodities, or money market securities. These
funds offer investors the advantages of diversification and professional management also
known as an open-end investment company, to differentiate it from a closed-end

48

investment company. Mutual funds invest pooled cash of many investors to meet the
fund's stated investment objective. Mutual funds stand ready to sell and redeem their
shares at any time at the fund's current net asset value: total fund assets divided by shares
outstanding.

Regulatory Body of Mutual Funds

Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual
funds. All the mutual funds must get registered with SEBI.

Benefits of investing in Mutual Funds

There are several benefits from investing in a Mutual Fund:
1. Small investments: Mutual funds help you to reap the benefit of returns by a portfolio
spread across a wide spectrum of companies with small investments.

2. Professional Fund Management: Professionals having considerable expertise,

experience and resources manage the pool of money collected by a mutual fund. They
thoroughly analyze the markets and economy to pick good investment opportunities.
3. Spreading Risk: An investor with limited funds might be able to invest in only one or
two stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its
risk by investing a number of sound stocks or bonds. A fund normally invests in
companies across a wide range of industries, so the risk is diversified.
4. Transparency: Mutual Funds regularly provide investors with information on the
value of their investments. Mutual Funds also provide complete portfolio disclosure of

49

the investments made by various schemes and also the proportion invested in each asset
type.
5. Choice: The large amount of Mutual Funds offer the investor a wide variety to choose
from. An investor can pick up a scheme depending upon his risk/ return profile.
6. Regulations: All the mutual funds are registered with SEBI and they function within
the provisions of strict regulation designed to protect the interests of the investor.

Meaning of NAV
NAV or Net Asset Value of the fund is the cumulative market value of the assets of the
fund net of its liabilities. NAV per unit is simply the net value of assets divided by the
number of units outstanding. Buying and selling into funds is done on the basis of NAVrelated prices. The NAV of a mutual fund are required to be published in newspapers. The
NAV of an open-end scheme should be disclosed on a daily basis and the NAV of a close
end scheme should be disclosed at least on a weekly basis.

Entry and Exit Load

A Load is a charge, which the mutual fund may collect on entry and/or exit from a fund.
A load is levied to cover the up-front cost incurred by the mutual fund for selling the
fund. It also covers one time processing costs. Some funds do not charge any entry or exit
load. These funds are referred to as No Load Fund. Funds usually charge an entry load

50

ranging between 1.00% and 2.00%. Exit loads vary between 0.25% and 2.00%. For e.g.
Let us assume an investor invests Rs. 10,000/- and the current NAV is Rs.13/-. If the
entry load levied is 1.00%, the price at which the investor invests is Rs.13.13 per unit.
The investor receives 10000/13.13 = 761.6146 units. (Note that units are allotted to an
investor based on the amount invested and not on the basis of no. of units purchased).
Let us now assume that the same investor decides to redeem his 761.6146 units. Let us
also assume that the NAV is Rs 15/- and the exit load is 0.50%. Therefore the redemption
price per unit works out to Rs. 14.925. The investor therefore receives 761.6146 x 14.925
= Rs.11367.10.

Risks involvement in investing in Mutual Funds

Mutual Funds do not provide assured returns. Their returns are linked to their
performance. They invest in shares, debentures, bonds etc. All these investments involve
an element of risk. The unit value may vary depending upon the performance of the
company and if a company defaults in payment of interest/principal on their
debentures/bonds the performance of the fund may get affected. Besides incase there is a
sudden downturn in an industry or the government comes up with new a regulation which
affects a particular industry or company the fund can again be adversely affected. All
these factors influence the performance of Mutual Funds.
Some of the Risk to which Mutual Funds are exposed to is given below:

51

Market risk
If the overall stock or bond markets fall on account of overall economic factors, the value
of stock or bond holdings in the fund's portfolio can drop, thereby impacting the fund
performance.

Non-market risk
Bad news about an individual company can pull down its stock price, which can
negatively affect fund holdings. This risk can be reduced by having a diversified portfolio
that consists of a wide variety of stocks drawn from different industries.

Interest rate risk

Bond prices and interest rates move in opposite directions. When interest rates rise, bond
prices fall and this decline in underlying securities affects the fund negatively.

Credit risk
Bonds are debt obligations. So when the funds invest in corporate bonds, they run the risk
of the corporate defaulting on their interest and principal payment obligations and when
that risk crystallizes, it leads to a fall in the value of the bond causing the NAV of the
fund to take a beating.
Types of Mutual funds
Mutual funds are classified in the following manner:

52

(a) On the basis of Objective

Equity Funds or Growth Funds
Funds that invest in equity shares are called equity funds. They carry the principal
objective of capital appreciation of the investment over the medium to long-term. They
are best suited for investors who are seeking capital appreciation. There are different
types of equity funds such as Diversified funds, Sector specific funds and Index based
funds.

Diversified funds
These funds invest in companies spread across sectors. These funds are generally meant
for risk-averse investors who want a diversified portfolio across sectors.

Sector funds
These funds invest primarily in equity shares of companies in a particular business sector
or industry. These funds are targeted at investors who are bullish or fancy the prospects of
a particular sector.

Index funds
These funds invest in the same pattern as popular market indices like S&P CNX Nifty or
CNX Midcap 200. The money collected from the investors is invested only in the stocks,

53

which represent the index. For e.g. a Nifty index fund will invest only in the Nifty 50
stocks. The objective of such funds is not to beat the market but to give a return
equivalent to the market returns.

Tax Saving Funds

These funds offer tax benefits to investors under the Income Tax Act. Opportunities
provided under this scheme are in the form of tax rebates under the Income Tax act.
Debt/Income Funds
These funds invest predominantly in high-rated fixed-income-bearing instruments like
bonds, debentures, government securities, commercial paper and other money market
instruments. They are best suited for the medium to long-term investors who are averse to
risk and seek capital preservation. They provide a regular income to the investor.

Liquid Funds/Money Market Funds

These funds invest in highly liquid money market instruments. The period of investment
could be as short as a day. They provide easy liquidity. They have emerged as an
alternative for savings and short term fixed deposit accounts with comparatively higher
returns. These funds are ideal for corporates, institutional investors and business houses
that invest their funds for very short periods.

Gilt Funds

54

These funds invest in Central and State Government securities. Since they are
Government backed bonds they give a secured return and also ensure safety of the
principal amount. They are best suited for the medium to long-term investors who are
averse to risk.

Balanced Funds
These funds invest both in equity shares and fixed-income-bearing instruments (debt) in
some proportion. They provide a steady return and reduce the volatility of the fund while
providing some upside for capital appreciation. They are ideal for medium to long-term
investors who are willing to take moderate risks.

b) On the basis of Flexibility

Open-ended Funds
These funds do not have a fixed date of redemption. Generally they are open for
subscription and redemption throughout the year. Their prices are linked to the daily net
asset value (NAV). From the investors' perspective, they are much more liquid than
closed-ended funds.

Close-ended Funds

55

These funds are open initially for entry during the Initial Public Offering (IPO) and
thereafter closed for entry as well as exit. These funds have a fixed date of redemption.
One of the characteristics of the close-ended schemes is that they are generally traded at a
discount to NAV; but the discount narrows as maturity nears. These funds are open for
subscription only once and can be redeemed only on the fixed date of redemption. The
units of these funds are listed on stock exchanges (with certain exceptions), are tradable
and the subscribers to the fund would be able to exit from the fund at any time through
the secondary market.

Different rights that are available to a Mutual Fund holder in India

As per SEBI Regulations on Mutual Funds, an investor is entitled to:
1. Receive Unit certificates or statements of accounts confirming your title within 6
weeks from the date your request for a unit certificate is received by the Mutual
Fund.
2. Receive information about the investment policies, investment objectives,
financial position and general affairs of the scheme.

56

3. Receive dividend within 42 days of their declaration and receive the redemption
or repurchase proceeds within 10 days from the date of redemption or repurchase.
4. The trustees shall be bound to make such disclosures to the unit holders as are
essential in order to keep them informed about any information, which may have
an adverse bearing on their investments.
5. 75% of the unit holders with the prior approval of SEBI can terminate the AMC
of the fund.
6. 75% of the unit holders can pass a resolution to wind-up the scheme.
7. An investor can send complaints to SEBI, who will take up the matter with the
concerned Mutual Funds and follow up with them till they are resolved.

OBJECTIVES OF THE STUDY

To understand the securities, securities market, function of securities market and
who regulate the securities market.
To know the types and nature of securities available in the security market.

57

 To know the company policy, how one can invest in securities through Share
khan.

Benefit of online product of share khan

Instant credit and money transfer

Trade from any net enabled PC

After hour orders

Online orders on the phone

Timely advice and research reports

Freedom from paperwork

Real-time Portfolio tracking

Sources
The data was from companies and it is first hand information .The company various
contents and the soft copies of the same proved to an important source of the information

58

in carrying out the project .The other necessary information is collected from the various
other sources out side the company i.e. from newspapers, websites, magazines etc.

To sum up the resources

PRIMARY SOURCES
Company Records
Informal talks with the personnel

SECONDARY SOURCES

Websites
Newspaper
Magazines
Textbook

Methodology

Preparing this report is not been a easy task for me .for preparing it I had adopted the
below methodology:

59

(a) Collection of the data:A survey was conducted of the main players in the market dealing in online share trading.
The people working in these companies were interviewed and information was gathered.
Secondly the customers were interviewed randomly about the online share trading and
their preferences.
For this purpose a questionnaire was prepared
The survey was conducted in the market of:

Industrial Zones:
Software industries.

Traders:
Citizens.
Samples under study:
Equity traders were surveyed randomly.

Sample size:
30 PEOPLES

60

(b) Analyzing the collected information:This involved converting raw data into useful information.

(c) Report finding & suggesting recommendation:These phases marked the copulation of the data & analyze part of it. This report with the
finding is a formal written document. The analyzed data and personal experience were
used to propose the recommendations

Limitations
Though I had completed my project on time but I still faced certain problems while doing
the market survey work and collecting information for my project report they are listed
below:
o Searching for the prospective client for opening online account is very time
consuming.
o Some clients have already taken the online account of our competitors and they
are not interested in giving information about it.
o Limited data availability.
o Lack of proper response from the respondents as they dont want to invest in
equity, so they refuse or do not cooperate.

o Online share trading is a very new field for me and I had consumed a lot of time
for understanding about it.

61

o Irregular consumer behavior regarding investing in equity market.

DATA ANALYSIS & INTERPRETATIONS

What is your occupation ?

STUDENT

20

SERVICE MEN

60

BUSSINESS MEN 20

62

 Do you frequently invest in equity market ?

YES

60

NO

40

63

 Which broking firm would you prefer ?

SHAREKHAN

28

ICICI DIRECT

22

HDFC SECURITIES

15

INDIABULL SECURITIES

17

ANAND RATHI

18

64

65

 Looking at the current economic scenario

where would you suggest an investor to
invest?
GOVT.BONDS

35

MUTUAL FUND

15

COMMODITIES

30

EQUITY

20

66

CONCLUSION

Indian economy globalizes and the capital market has been linked to the international
financial market. Foreign individuals and institutional investors are now encouraged to
participate into it. So, there is a need for raising the Indian Capital market in to the
international standards in terms of efficiency and transparency. One such measure is the
passing out of the Depository Act in the year 1996. Dematerialization of securities is one
of the major steps aimed at improving and modernizing the capital market and enhancing
the levels of investors protection measures which aims at eliminating the bad deliveries
and forgery of shares and expediting the transfer of shares.
This study is giving the clear picture about the security market. It gives the meaning of
primary and secondary market. The study is helpful to understand the different type of
securities available in the market. It made clear the meaning of stock exchange where the
companies are listed and issue the security for buying and selling like shares, debenture,
bonds, and government securities etc. how one can invest in these securities. There are
two procedures are available. One is old procedure and second is new procedure.
In old procedure one can purchase securities in physical form. Issue of securities is along
term process on the other hand new procedure or modern procedures one can purchase
securities in demat form through DPs. DPs and stock exchange follow some rules and
regulations, which made by regulatory body known as SEBI (Security and Exchange

67

Board of India). It is a governing body to regulate the working of security market and
function DPs. It also protects the right of the investors.

ANNEXURE II
Questionnaire for research survey of Executives / Mangers / Employees
of Share Brokers & consultants of Equity market or Mutual fund
organizations etc
Name and Address ..
Organization:
Gender

Designation:
:

Marital Status:

Phone No:

Male / Female
Married / Unmarried

1.To which of the following age groups you belong to?

a. 20-25 years
b. 25-35 years
c. 35-50 years
d. 50 and above

2. For how many years have you been in service of the company/ industry?
a. 0 1 year
b. 2 4 years

68

c. more than 4 years

3. To which of the following income groups/slabs you belong to?

a. Rs. 1-4 lakhs
b. Rs. 4-6 lakhs
c. Rs.6-9 lakhs
d. Rs.10 lakhs and above

4. What is your risk taking ability / option, in general, if you are an investor
in making investments, particularly, in Equity market etc?
a. High
b. Medium
c. Low

5. If you yourself are an investor in Equity market & Mutual funds, please
Rank your priorities: (rank 1, 2 and 3 respectively indicate the priority in the
descending order)
a. Protection
b.Saving
c.Investment

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6. Looking at the current economic scenario, where would you suggest an

investor to invest?
a. Mutual funds
b. Government bonds
c. Equity market
d. Others .

7. Which scheme, in this Broker firm , would you generally suggest /

recommend to your clients?
a. Equity
b. Debt
c. Commodities

8.Do you recommend to your customers / clients to consider the profile

of the fund manager before investing?
a. Yes
b. No

70

9. Based on your experience in the industry, what proportion of income

people invest in financial products? ( in percentage)
(a) 0-20
(b) 20-40
(c) 40 & above

10. What do you think which investment will provide more safety ?

a .Debentures
b .Shares
c .Mutual funds
d .Govt .securities

11. Which of the following Broker firm , according to you is the best
performing one at present in terms of returns to the investor?
a. Share Khan Ltd
b. Reliance
c. Anandrathi
71

c. ICICI Direct
d. INDIA Bulls
e. Otheres

72