XVII Annual International Seminar Proceedings; January, 2016

“AN ANALYTICAL STUDY OF DEMAT ACCOUNT-WITH

REFERENCE TO SHARE KHAN”

Dr. Moloy Ghoshal Maninder Bedi

ASSOCIATE PROFESSOR Student, BBA
DSPSR DSPSR

INTRODUCTION

In India, shares and securities are held electronically in a dematerialized (or "Demat")
account, instead of the investor taking physical possession of certificates. A Dematerialized
account is opened by the investor while registering with an investment broker (or sub-
broker). The Dematerialized account number is quoted for all transactions to enable
electronic settlements of trades to take place. Every shareholder will have a Dematerialized
account for the purpose of transacting shares. In india, shares and securities are held
electronically in a dematerialized (or "Demat") account, instead of the investor taking
physical possession of certificates. A Dematerialized account is opened by the investor while
registering with an investment broker (or sub-broker). The Dematerialized account number is
quoted for all transactions to enable electronic settlements of trades to take place. Every
shareholder will have a Dematerialized account for the purpose of transacting shares.

Access to the Dematerialized account requires an internet password and a transaction

password. Transfers or purchases of securities can then be initiated. Purchases and sales of
securities on the Dematerialized account are automatically made once transactions are
confirmed and completed.

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 XVII Annual International Seminar Proceedings; January, 2016

Share khan Demat Accounts

Overview of DematAccount :

D e m a t a c c o u n t a l l o w s yo u t o b u y, s e l l a n d t r a n s a c t s h a r e s w i t h o u t t h e
e n d l e s s paperwork and delays. It is also safe, secure and convenient.

In India, ademat account, the abbreviation for dematerialized account, is a typeof banking
account which dematerializes paper-based physical stock shares. T h e dematerialized
account is used to avoid holding physical shares: the shares are bought and sold
through astock broker.

T h i s a c c o u n t i s p o p u l a r i n India. T h e Securities and Exchange Board of

India(SEBI) mandates a demat account for share trading above 500 shares. As of
April2 0 0 6 , i t b e c a m e m a n d a t o r yt h a t a n yp e r s o n h o l d i n g a
f o r d e m a t a c c o u n t s h o u l d possess a Permanent Account Number(PAN), and the deadline
for submission of PAN details to the depository lapsed on January 2007.

Is a demat account a must?

Now a, day, practically alltrades have to be settled and

d e m a t e r i a l i z e d f o r m . Although the market regulator, the Securities and Exchange
Board of India (SEBI),has allowed trades of up to 500 shares to be settled in physical form,

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 XVII Annual International Seminar Proceedings; January, 2016

nobody wants physical shares any more. So a demat account is a must for trading and
investing.

Why demat?

The demat account reduces brokerage charges, makes pledging/hypothecation

of s h a r e s e a s i e r , e n a b l e s q u i c k o w n e r s h i p o f s e c u r i t i e s o n s e t t l e m e n t
r e s u l t i n g i n i n c r e a s e d l i q u i d i t y, a v o i d s c o n f u s i o n i n t h e o w n e r s h i p t i t l e
of securities and provide easy receipt of public issue allotment.

It also helps you avoid bad deliveries caused by signature mismatch, postal delays a n d l o s s
of certificates in transit. Further, it eliminates risks associated with
forgery, counterfeiting and loss due to fire, theft or mutilation. Demat
accountholders can also avoid stamp duty (as against 0.5 per cent payable on
physicalshares), avoid filling up of transfer deeds, and obtain quick receipt of such
benefitsas stock splits and bonuses.

What is dematerialization?

Dematerialization is the process by which physical certificates of an investor areconverted to

an equivalent number of securities in electronic form and creditedinto the investor’s account

With his/her dp.

Why DEMAT a/c likes a BANK a/c?

Just as you have to open an a/c with a bank if you want to save your money, make c h e q u e
p a ym e n t s e t c , yo u n e e d t o o p e n a d e m a t a / c i f yo u w a n t t o b u y o r s e l l
stocks. So it just like a bank a/c where actual money replaced by shares . Example: let’s say
your portfolio has 100 of SATYAM, 200 of IBM and 120 of TCS shares. All these will
show in you’re a/c. so you don’t have to possess any physical certificate that you
own these shares. They all are held electronically in you’re a/c.

Steps involved in opening a demat account :

First an investor has to approach a DP and fill up an account opening form. The
account opening form must be supported by copies of any one of the approved

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 XVII Annual International Seminar Proceedings; January, 2016

documents to serve as proof of identit y (POI) and proof of address

(POA) as specified by SEBI. Besid es, production of PAN card in
original at the time of opening of account has been made m andatory
effective from April 01, 2006.

All applicants should carry original documents for verification by an authorized

official of the depository participant, under his signature.

Further, the investor has to sign an agreement with DP in a depository prescribed standard
format, which details rights and duties of investor and DP. DP should provide the
investor with a copy of the agreement and schedule of charges for their future reference.

The DP will open the account in the system and give an account number, which is also called
BO ID (Beneficiary Owner Identification number).

The DP may revise the charges by giving 30daysnotice in advance. SEBI has
rationalized the cost structure for dematerialization by removing account opening c h a r g e s ,
transaction charges for credit of securities, and custody charges vide
circular dated January 28, 2005.

Further, SEBI has vide circular dated November 09, 2005 advised that with effect f r o m
January 09, 2006, no charges shall be levied by a depository on DP
a n d consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all
the securities lying in his account to another branch of the same DP or to another DP
o f t h e s a m e d e p o s i t o r y o r a n o t h e r d e p o s i t o r y, p r o v i d e d t h e B O A c c o u n t
/s at transferee DP and at transferor DP are one and the same, i.e.
i d e n t i c a l i n a l l respects.

In case the BO Account at transferor DP is a joint account, the BO Account at

transferee DP should also be a joint account in the same sequence of ownership.

Rights:

 You can open more than one depository account in the same name
w i t h single DP/ multiple DPs.
 No minimum balance is required to be maintained in a depository account.

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 XVII Annual International Seminar Proceedings; January, 2016

 You can give a onetime standing instruction to your DP to receive all the
credits coming to your depository account automatically.

DEMAT Benefits?

 A safe and convenient way to hold securities.

 Immediate transfer of securities.
 No stamp duty on transfer of securities (0.5 % on physical shares).
 Eliminationof risks associated with physical certificates
s u c h a s b a d delivery, fake securities , delays , theft etc.
 Reduction in paper work.
 Reduction in transaction cost.
 No odd lot problem , even one share can be sold.
 Nomination facility.
 Holding investment in equity and debt instruments in a single account etc.

Advantages of demat

The bonus/right shares allotted to the investor will be immediately credited into his
account.There is no risk due to loss on account of fire, theft or mutilation. Transaction costs
are usually lower than that in the physical segment. A demat account also helps avoid
problems typically associated with physical share certificates. For example: delivery failures
caused by signature mismatch, postal delays and loss of certificate during transit. Further, it
eliminates the risks associated with Forgery and due to damaged stock certificates. Demat
account holders also avoid stamp duty (as against 0.5 per cent payable on physical shares)
and filling up of transfer deeds. The biggest advantage of having demat account is that you
don't have to pay for stamp since these are electronically stored which reduces the transaction
cost.. .

Disadvantages of Demat

 Trading in securities may become uncontrolled in case of dematerialized securities.

 Agreements are entered at various levels in the process of dematerialization. These
may cause worries to the investor desirous of simplicity.

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 XVII Annual International Seminar Proceedings; January, 2016

 After liquidating the holdings, many Indian investors don't close their dp account.
They are unaware that DPs charge even on dormant accounts.

Documents Required For De-mat Account

To open a De-mat account you have to provide documents which fulfill the requirements of
KYC (Know Your Customer) norms. You have to sign a contract with Stock broker.
Generally the documents are:

 PAN (Compulsory)
 Bank statement (last 3 months)
 Address Proof
 Income Tax Return
 Two colour photos
 Bank crossed Cheque (If required)
 KYC details

OBJECTIVE OF STUDY

The primary objective is:

 Checking the awareness level of online share trading.

 To collect the real time information about preference level of customers
using de-mat account and their inclination towards various other brokerage firms e.g.
India bulls, Angel broking, India info line, Religare, Alan - kit,Unicon.
 Analysing the preferred broking house.
 Checking the satisfaction level of the customers towards preferred brokinghouse.

RESEARCH METHODOLOGY:

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 XVII Annual International Seminar Proceedings; January, 2016

INTRODUCTION

Research Methodology refers to search of knowledge .one can also define research
methodology as a scientific and systematic search for required information on a specific
topic. The word research methodology comes from the word “advance learner ‘s dictionary
meaning of research as a careful investigation or inquiry especially through research for new
facts in my branch of knowledge for example some author have define research methodology
as systematized effort to gain new knowledge.

Methodology of the project starts with –

 In the first phase we are trained and they teach us different things about market.
 After that they conduct a mock viva, in this they ask about the real life problem faced
by the customers.
 They provide leads and after that we make calls.
 Then after that we have to provide details of product and convincethem.
 Then we have to visit them and get the formed filled from them.
 Maintaining dairy of clients and contacting them at regular basis.
 Get the knowledge of technical as well as fundamental methods.
 Observe the patterns of the scripts.

METHODS OF DATA COLLECTION

In the project work Primary data secondary data (both) sources of data has been used:

1. Primary data collection:

In dealing with real life problem it is often found that data at hand are inadequate,and hence,
it becomes necessary to collect data that is appropriate. There areseveral ways of collecting
the appropriate data which differ considerably in context of money costs, time and other
resources at the disposal of the researcher.Primary data can be collected through survey.
2.Secondary sources of data:
In the secondary sources of data is used. (Internet, magazine, books, journals) In research,
Secondary data is data collected and possibly processed by people other than the researcher in
question. Common sources of secondary data for social science include censuses, large

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 XVII Annual International Seminar Proceedings; January, 2016

surveys, and organizational records. In sociology primary data is data you have collected
yourself and secondary data is data you have gathered from primary sources to create new
research. In terms of historical research, these two terms have different meanings. A primary
source is a book or set of archival records. A secondary source is a summary of a book or set
of records.

LIMITATION

 Lack of awareness of capital market

 Since the area is not known before it takes lot of time in convincing
people tostart investing in shares primarily in IPO’s.
 Some people are comfortable with traditionalsystem:
 As people are doing trading from their respective brokers,they
a r e q u i t e comfortable to trade via physical form of paper.
 Lack of Techno Savvy people and poor internet penetration:
 Since most of the people are quite experienced and also they are not
technosavvy. Also Internet penetration is poor in India.

DATA ANALYSIS AND INTERPRETATION

Q1. Have you heard about demat account?

Heard about demat account Percentage of respondent

Yes 70%
No 30%

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 XVII Annual International Seminar Proceedings; January, 2016

result of percentage of people about demat account

1st Qtr
2nd Qtr

YES-70%
NO-30%

Q2. In which of these Financial Instruments do you invest into?

Financial Instrument Percentage of respondent

Mutual Fund 75%

Bond 16%

Online trading 7%

Derivative 2%

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 XVII Annual International Seminar Proceedings; January, 2016

1st Qtr
2nd Qtr
3rd Qtr
4th Qtr

Result of Preference of Investment

 Mutual fund-75%
 Bond-16%
 Online Trading-7%
 Deivativre-2%

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.

Q3. Are you aware of online Share trading?

Aware of online share trading Percentage of respondent

Yes 72%

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 XVII Annual International Seminar Proceedings; January, 2016

No 28%

1st Qtr
2nd Qtr

 YES-72%
 NO-28%

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.

Q4. Heard about Sharekhan ltd.?

Awareness of Sharekhan ltd. percentage of respondent

YES 70%
NO 30%

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 XVII Annual International Seminar Proceedings; January, 2016

Awareness of sharekhan ltd.

1st Qtr
2nd Qtr

70% YES
30% NO

Interpretation:

This pie-chart shows that this brand image should be further leveraged by thecompany to
increase its market share over its competitors.

Q5. Do you know about the facilities provided by Sharekhan ltd.?

Awareness of sharekhan ltd. services Percentage of respondent

YES 36%
NO 64%

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 XVII Annual International Seminar Proceedings; January, 2016

Result of awareness of sharekhan ltd.

services

1st Qtr
2nd Qtr

YES – 64%
NO – 34%

Interpretation:

Although there is sufficiently high brand equity among the target audience yet, it is to be
noted that the customers are not aware of the facilities provided by the company meaning
thereby, that, the company should concentrate more towards promotional tools and increase
its focus on product awareness rather than brand awareness.

Q.6Which company provide a less BROKARAGE rate?

Company Name Percentage of Respondent

Sharekhan ltd. 22
HDFC 11
ICICI 17

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 XVII Annual International Seminar Proceedings; January, 2016

25

20

15

10

0
Sharekhan ltd. HDFC ICICI

INTERPRTETATION:

44% have respondent of Sharekhan ltd., 22% have respondent of HDFC, 34% have
respondent of ICICI.

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FINDINGS

1. Preference of Investment:
Consumers want to invest 75% in Mutual funds, 16% in Bonds, 7% inonline trading and 2%
in Derivatives.

2. Awareness on Online Share Trading:

72% consumers are aware of online share trading and 28% consumersarenot aware of online
share trading.

3. Awareness of Sharekhan ltd.:

70% consumers are know about Sharekhan ltd. and 30% consumers arenot know about
Sharekhan ltd.

4.Awareness about facilities provided by Sharekhan ltd.:

36% consumers are aware about the facilities provided by Sharekhan
ltd.and 64% consumers are not know about the facilities provided bySharekhan ltd.

5.Provide a less BROKARAGE rate:

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 XVII Annual International Seminar Proceedings; January, 2016

44% have respondent of Sharekhan ltd., 22% have respondent of HDFC,34% have
respondent of ICICI.

6. Awareness of demat account:

70% of people have heard about demat account and 30% of people are not aware of de-mat
account.

CONCLUSION AND RECOMENDATIONS

On the basis of the study it is found that Sharekhan Ltd is better services
provider than the other stockbrokers because of their timely research and personalizedadvice
on what stocks to buy and sell. Sharekhan Ltd. provide the facility of Tradetiger as well as
relationship manager facility for encouragement and protect theinterest of the investors. It
also provides the information through the internet andmobile alerts that what IPO’s are
coming in the market and it also provides itsresearch on the future prospect of the IPO.

Study also concludes that people are not much aware of commodity market andwhile it’s
going to be biggest market in India.

The company should also organize seminars and similar activities to enhance
theknowledge of prospective and existing customers, so that they feel morecomfortable while
investing in the stock market.
References
Websites:

 https://www.scribd.com/doc/31134020/Share-Khan
 www.slideshare.net/gandhichintan/project-report-of-share-khan
 www.sharekhan.com/stock-market/company.../company-snapshot.htm
 www.sharekhan.com/AboutUs/AboutUs.htm
 www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId.
 www.sharekhan.com/businesspartner/howtopartner.aspx
 www.sharekhan.com/Brochures/74/PMSProductHome.htm
 www.sharekhan.com/stock-market/company.../company-snapshot.htm
 ww.sharekhan.com/Trade Tiger
 www.sharekhan.com/sfsl/finance.htm

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 XVII Annual International Seminar Proceedings; January, 2016

BOOKS:
 Marketing research bydavid j. luck ,Ronald s. rubin :7 edition
 Market research by gcbery: 4 edition
 Marketing research by harper w. boyd, jr, ralph westfall, Stanley f. stasch: 7 edition

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