Raj Mod Res.

A Research Report On
AN OVERVIEW OF INDIAN STOCK MARKET (In special reference to)
Indiabulls
Submitted in Partial fulfillment for the award of the degree MASTER OF BUSINESS ADMINISTRATION. (Gautam Budha Technical University, Lunknow) (2009-2011)
Submitted To:-
Submitted By:-
Dr. K. N. Singh Dept. of Mgmt.(MBA) C-MAT, Greater Noida
Rajendra Kumar MBA 4th semester Roll No-0914970039
CENTRE FOR MANAGEMENT TECHNOLOGY (C-MAT)

Greater Noida (U.P)
RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 1
Table of Contents
Particulars Page No. 1. Acknowledgement ............................................................ 4 2. List of Table of Illustration............................................... 5 3. Summary .......................................................................... 6 4. Objectives ......................................................................... 7 5. Introduction (i)Outlook on Indian Stock market .................................. 8-13 (ii) Overview of Indiabulls ............................................... 14-21 (iii) Overview of Indiabulls Securities ............................. 22-26 (iv) Financial Analysis ...................................................... 27-37 (v) Understanding Capital market ................................... 38-40 (vi) Competitors ............................................................... 41-45 (vii) SWOT Analysis .......................................................... 46-50 6. Research Methodology ................................................... 51-58 7. Review of Literature......................................................... 59 8. Empirical Analysis ............................................................ 60-69 9. Findings ............................................................................ 70-71 10. Conclusions ...................................................................... 72 11. Limitations ....................................................................... 73
12. Recommendation ............................................................. 74
RAJENDRA KUMAR (MBA-4th SEM), C-MAT
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Particulars
Page No.
13.Appendix .......................................................................... 75-77 14.Bibliography ...................................................................... 78
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ACKNOWLEDGMENT
This research report reflects the help and advice of many people. I express my profound thanks to my Faculty Mr. Vipul Agarwal (Finance) and Mr. Kirti Nidhi Sinha ( Marketing) for their support and guidance during the research. I am also indebted to Mr.K.N.Singh (Department of Management),C-MAT, Greater Noida, for providing me such opportunity.
Once again I like to convey my acknowledgment to all people directly and indirectly associated with this research work. I thank one and all.
DATE: PLACE:
Rajendra Kumar
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List of Tables Of Illustration

Name of the Tables Brokerage Income of Indiabulls Securities Segment wise Sales of IndiaBulls Securities for year 2008 Segment wise Sales of IndiaBulls Securities for year 2009 Financial Ratio Analysis of Indiabulls Securities Ltd Market share of Indiabulls on NSE trading Volumes Intraday Brokerage charges of the Competitors of Indiabulls Securities Ltd Delivery Brokerage charges of the Competitors of Indiabulls Securities Ltd showing Poll results Number of Branches of Competitors compared with Indiabulls securities Number of Customers of competitors compared with Indiabulls 65 68 69 64 Page no 29 30 31 32 36 63
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Summary
Indian securities markets have undergone many changes during the last decade. Exponential growth in trading volumes is pushing existing trading systems and processes to capacity and increasing settlement risk. With Indian market moving to a T+3 rolling settlement cycles in line with global markets, SEBI is continuing its efforts to increase the efficiency and transparency in Indian markets. Indeed it has been SEBI endeavor to make the Indian markets, one of the most competitive and efficient markets of the world. Income, Savings mobilization and promotion of investment are functions of the stock and capital markets which are a part of the organized financial system in India. This Research titled An Overview of Indian stock market is an attempt to understand the stock market and role played by Indian retail Brokerage Firms in stock market. The objective of brokerage firms is to help the investor to minimize the risk involved in investment and maximize the return. Some of the main characteristics of the brokerage industry include growth in e-broking; growing derivatives market, decline in brokerage fees etc. An endeavor was also made to understand the role played by Indiabulls Securities compared to its competitors in Indian retail brokerage market. The role played by Indian retail brokerage industry is of immense significance, taking into account the health of the capital markets and the intensity of competition among the brokerage companies.
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OBJECTIVES
(1) The objective of this research is to understand the stock market and role played by Indian Retail Brokerage firm in Stock Market. (2) To understand the role played by the Indiabulls Securities compared to its competitors in Indian Retail Brokerage Market. (3) To understand the importance of the brokerage firms that are very helpful for the investor to minimise risk involved in investment and maximise return.
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OUTLOOK ON INDIAN STOCK MARKET

1.1 Introduction
Indian Stock Markets is one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States to Europe was stopped; thus, the 'Share Mania' in India began. The number of brokers increased to about 200 to 250. At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association, which is alternatively known as The Stock Exchange". In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. The Indian stock market has been assigned an important place in financing the Indian corporate sector. The principal functions of the stock markets are
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enabling mobilizing resources for investment directly from the investors providing liquidity for the investors and monitoring Disciplining company management.
The two major stock exchanges in India are National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
1.2 National Stock Exchange

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. The National Stock Exchange (NSE) is India's leading stock exchange covering various cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 9
state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualization of stock exchange governance, screen based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, market of debt and derivative instruments and intensive use of information technology. Trading at NSE can be classified under two broad categories: Wholesale debt market Capital market
Wholesale debt market operations are similar to money market operations institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc. Capital market: A market where debt or equity securities are traded. There are two kinds of players in NSE: Trading members Participants
Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility. Trading at NSE takes place through a fully automated screen-based trading mechanism which adopts the principle of an order-driven market. Trading members can stay at their offices and execute the trading, since they are linked through a communication network. The prices at which the buyer and seller are RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 10
willing to transact will appear on the screen. When the prices match the transaction will be completed and a confirmation slip will be printed at the office of the trading member. NSE has several advantages over the traditional trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation. Investors can trade at the same price from anywhere in the country since inter-market operations are streamlined coupled with the countrywide access to the securities.
Delays in communication, late payments and the malpractices prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the stock market operations, with the support of total computerized network.
NSE Nifty S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. NSE came to be owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL have a consulting and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services. CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The S&P prefix belongs to the US-based Standard & Poor's Financial Information Services. RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 11
1.3 Bombay Stock Exchange

The Bombay Stock Exchange is one of the oldest stock exchanges in Asia. It was established as "The Native Share & Stock Brokers Association" in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956. The Exchange's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized and its index, SENSEX, is tracked worldwide. SENSEX The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float methodology. Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 12
provides the time series data over a fairly long period of time. Small wonder, the SENSEX has over the years become one of the most prominent brands in the country. The SENSEX captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through SENSEX. The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised of 100 stocks listed at five major stock exchanges. The Exchange launched dollar-linked version of BSE-100 index i.e. Dollex-100 on May 22, 2006. In order to fulfill the need of the market participants for still broader, segmentspecific and sector-specific indices, the Exchange has continuously been increasing the range of its indices. The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500 Index and 5 sectoral indices in 1999. In 2001, BSE launched the BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECK Index. The Exchange shifted all its indices to a freefloat methodology (except BSE PSU index) in a phased manner. The values of all BSE indices are updated every 15 seconds during the market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE-Indices are reviewed periodically by the "Index Committee" of the Exchange.
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OVERVIEW OF INDIABULLS
1.1 Introduction
Indiabulls is Indias leading Financial and Real Estate Company with a wide presence throughout India. Indiabulls Financial Services Limited was established in the year 2000 by three promoters all of whom are engineers from Indian Institute of Technology, New Delhi, and has attracted over Rs 700 million of investments from venture capital firms, private equity funds and institutional investors. History Indiabulls Financial Services Limited was incorporated on January 10, 2000 as Orbis Infotech Private Limited at New Delhi. The name of the Company was changed to Indiabulls Financial Services Private Limited on March 16, 2001 due to change in the main objects of our Company from Infotech business to Investment & Financial Services business. It became a Public Limited Company on February 27, 2004 and the name of the Company was changed to Indiabulls Financial Services Limited. Indiabulls has over 640 branches all over India. The customers of Indiabulls are more than 4,50,000 which covers from a wide range of financial services and products from securities, derivatives trading, depositary services, research & advisory services, consumer secured & unsecured credit, loan against shares and mortgage & housing finance. The company employs around 4000 Relationship managers who help the clients to satisfy their RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 14
customized financial goals. Indiabulls entered the Real Estate business in the year 2005 with its group of companies. Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock Exchange and Luxembourg Stock Exchange. The market capitalization of Indiabulls is around USD 2500 million (29th December 2006). Indiabulls and its group companies have attracted USD 500 million of equity capital in Foreign Direct Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon Capital. Diversified Business Group of Indiabulls
Securities & Derivatives Broking
Secured Financing
Mortgage & Housing Finance
Financial Products Distribution
Consumer Financing
Fig 1.1: Diversified Business Groups of Indiabulls
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1.3 IndiaBulls Subsidiaries

Indiabulls securities limited: business comprises of Securities & Derivatives broking. Indiabulls Credit services limited: business comprises of personal loans, secured and unsecured loans, and housing and auto loans. Financial products distribution: distribution of mutual funds and insurance products. Indiabulls commodities Pvt ltd: deals with commodity brokerage business Indiabulls Realities limited: is into development of Real estate and mining. Indiabulls housing loans: is into mortgage of properties and housing loan business.
1.4 Organizational Structure of Indiabulls

The organizational structure of Indiabulls is Functional, which consist of several departments. Functioning Online: serving clients primarily through an Internet based relationship targeted towards clients who value anytime, anywhere access and can be serviced at low incremental costs. Functioning Offline: serving clients primarily through an office based relationship targeted towards clients who value physical interaction. Online & offline business consist of following departments Administration Operations & Service quality Page 16
Technology Finance Corporate affairs Human resources Marketing Corporate communications Legal
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Department based organizational Structure

Director-Online Director-Offline
Administration
Operations & Service
Technolog y
Finance
Corporate Affairs
Human Resources
Corporate Communi cation
Legal
Customer Service
Recruitment
Marketing
Training
Sr. Vice President
Regional Manager
Branch Manager
Relationship Manager
Figure 1.2 Department based organizational Structure of Indiabulls

Regional Hierarchy of Indiabulls Senior Vice President
Regional Manager
Branch Manager Senior Sales Manager
Support System
Sales Function
Back Office Executive
Local Compliance Officer
RM/SRM
ARM
Dealer
Figure 1.3 Regional hierarchies of Indiabulls
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Key Positions
Chairman
CFO & President
Securities
Consumer Finance
Real Estate
Executive Director
Chief Executive Officer
Executive Director
Figure 1.4 Key Positions
1.5 Products and Services of Indiabulls

Indiabulls offer the following products and services in the financial markets: Stocks Options and Futures Depository Services Commodities Insurance Products Mutual Funds Bonds and Debt Products
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Services
Commercial Vehicle Loans: In April 2006 Indiabulls started Commercial Vehicle Finance under the flagship of Indiabulls Credit Services Ltd. in order to provide refinance to its commercial vehicle clients. Their fundamentals, competent management and expertise in financing the transporters are pretty sound. The companys unique market position enables it to excel in client contentment, quick service and growthled profitability.
.Mortgage Loans: Indiabulls Housing Finance Ltd. which is a flagship of Indiabulls has started lending of Mortgage Loans to prospective customers. This company enables the home-seekers to access finance to buy their homes. They provide different types of loans like plot loans, Loan against Residential, Commercial and Rental Property, thereby enabling the borrower to leverage the property owned to fund any genuine needs be it Business Expansion, Child's Education, Child's Marriage or for Holiday Abroad.
Consumer Finance: Indiabulls is a retail focused organization that fulfills the credit needs of a large percentage of population in India. The key aspect of Indiabulls business model is to provide an extremely unique customer experience.
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OVERVIEW OF INDIABULLS SECURITIES LTD

1.1 Introduction
Indiabulls Securities Ltd is engaged in the business of Internet based trading and is registered with SEBI as a stockbroker, trading and clearing member of NSE, member of BSE and as a depositary participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). ISL is also a member of the National Securities Clearing Corporation Limited. History Indiabulls Securities Limited (ISL) was incorporated as GPF Securities Private Limited on June 9, 1995. The name of the company was changed to Orbis Securities Private Limited on December 15, 1995 to change the profile of the company and subsequently due to the conversion of the company into a public limited company; the name was further changed to Orbis Securities Limited on January 5, 2004. The name of the company was again changed to Indiabulls Securities Limited on February 16, 2004 so as to capitalize on the brand image of the term Indiabulls in the company name. ISL is a corporate member of capital market & derivative segment of The National Stock Exchange of India Ltd.
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Trading With Indiabulls

This section will introduce us about the process and instruments used to help a customer or a client to trade with Indiabulls securities. This process is almost similar to any other trading firm but there will be some difference in the cost of brokerage commission. Trading: It is a process by which a customer is given facility to buy and sell share this buying and selling can only be done through some broker and this is where Indiabulls help its customer. A customer willing to trade with any brokerage house need to have a demat account, trading account and saving account with a brokerage firm. Any one having following document can open all the above mentioned account and can start trading. Document Required 3 photographs ( signed across) Photo Identification Proof - any of the following - Voter ID/Driving License/Passport. Address Proof any of the following - Voter ID/Driving License/ Passport/ Bank statement or pass book sealed and attestation by bank official/ BSNL landline bill. A crossed Cheque favoring India bulls Securities Ltd. of the required amount. The amount for Demat as well as trading will be Rs. 900/-(free Demat +900 Trading Account) the minimum amount being Rs. 900 a cheque can be given for a larger amount. Copy of PAN Card is mandatory. Registration Kit CDSL Demat Kit Page 23
Bank and address proof declaration. (Master undertaking) PAN name discrepancy form
These documents may not be consumer friendly but it is to avoid illegal transaction and to prevent black money this ensures that money invested is accounted.
1.2 Business Model & Operations of Indiabulls Securities Ltd

The three distinct internal business segments are: Online business Offline business Other Sales
Online business: serving clients primarily through an Internet based relationship targeted towards clients who value anytime, anywhere access and can be serviced at low incremental costs. The Online sales force sells all products and services and follows the relationship manager model. Offline business: serving clients primarily through an office based relationship targeted towards clients who value physical interaction and are typically larger accounts. The Offline Sales force sells all products and services and follows the relationship manager model. The Institutional business serving clients such as mutual funds and pension funds is considered part of the offline business due to largely similar client servicing and channel needs as required for high net worth clients. Indiabulls Securities Limited has established relationships with some large institutional players in India and is qualified broker for Equities, F&O and Debt markets for 145 such institutional clients.
Other Sales: includes insurance, research services and other offerings RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 24
1.3 Basic Requirement for doing Trading

Trading requires Opening a Demat account. Demat refers to a dematerialized account. You need to open a Demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. We need to approach the Depository Participants (DP, they are like bank branches), to open Demat account. A depository is a place where the stocks of investors are held in electronic form. The depository has agents who are called depository participants (DPs). Think of it like a bank. The head office where all the technology rests and details of all accounts held is like the depository. And the DPs are the branches that cater to individuals. There are only two depositories in India The National Securities Depository Ltd (NSDL) and the Central Depository Services Ltd (CDSL).
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1.4 Trading Products of Indiabulls Securities Indiabulls Securities Trading Products
Fig
Cash Account
Intraday Account
Margin Trading
showing 1.1 Trading Products of Indiabulls securities
Indiabulls Securities provide three products for trading. They are Cash account Intraday account Margin trading (Mantra)
Cash account provides the client to buy 4 times of cash balance in his trading account. Intraday product provides the client to buy 8 times of his cash balance in the trading account. Mantra account called as margin trading, is a special account to buy on leverage for a longer duration
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FINANCIAL ANALYSIS OF INDIABULLS SECURITIES

1.1 Income: Indiabulls Securities Ltd income unit has the following components Income from Online business : The contribution of revenue from Online business have grown from Rs. 31.85 million in FY 2002 to Rs. 242.26 million in FY 2004 and from 24.05% of total business in FY 2002 to 34.85% of business in FY 2004. The rapid growth of the online business is driven by growth in total clients, increasing product flexibility and quality, enhanced online-only features such as portfolio analysis and updates, streaming tickers, enhanced product offering of Power Indiabulls. Brokerage Equities F&O
Income from Offline Business: The offline business unit has one of the widest branch networks in India with a pan India presence with large market share. The revenues have grown from Rs. 96.02 million in FY 2002 to Rs. 447.25 million in FY 2004 and have changed from 72.52% of total business in FY 2001 to 64.34% of business in FY 2004. The rapid growth of the Offline business is driven by growth in total clients, increased geographical presence. Brokerage Equities F&O Wholesale Debt Markets
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Brokerage Income
Brokerage Income comprises revenues earned from Equities, F&O and Wholesale debt markets on all stock exchanges. The income from brokerage services is driven primarily by the number of active clients. The rapid growth in total clients is driven primarily by increased geographical presence. Equities constitute the largest portion of brokerage business. F&O brokerage is becoming an increasingly important component of its revenues as Futures & Options trading gains more acceptance. Wholesale Debt market is focused on institutional clients.
Income from transaction and service charges and interest income

Related income comprises revenues earned from market related activities such as transaction charges, service charges and interest levied on customer transactions. These charges are dependent on trading volume, number of transactions completed and any ledger debit amount in the client account.
Income from other Sales including Insurance, Mutual Fund Sales and Other Products
Other income comprises revenues earned from sale of third party products such as Insurance, Mutual Funds and new services such as Research Services. Revenues are a function of volume of mutual funds sold, the type of fund sold (active managed equity, passive fixed income etc.) and the commissions paid on the funds sold.
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Brokerage Income of Indiabulls Securities
Brokerage Income of Indiabulls Securities (in Crore)
Brokerage Income of Indibulls Securities of 3 Years( in Crore)
300
261.11
250
Brokerage Income
200 150
99.65
100 50 0 2008
Years Mar-08 Mar-09 Mar-10
47.2
2009
2010
Bar Chart 1.1 Brokerage Income of Indiabulls Securities (in Crore)
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Segment wise Sales of Indiabulls securities for March 2008(in Crore)
Segmentwise Sales of Indiabulls Securities For March 2008(in Crore)

2, 2% 1.93, 2% 0.84, 1% 9.88, 9%
Brokerage Income Income From Depository Service Income From other Financial Activity Interest Transaction Charges
99.65, 86%
Pie Chart 1.2 Segment wise Sales of IndiaBulls Securities for year 2008
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Segment wise Sales of Indiabulls securities for March 2009(in Crore)
Segmentwise sales of Indiabulls Securities For March 2009(in Crore)

21.16, 7% 9.08, 3% 23.06, 7%
3.57, 1%
261.11, 82%
Brokerage Income Transaction Charges
Income From Depository Service
Income From other Financial ActivityInterest
Pie Chart 1.3 Segment wise Sales of IndiaBulls Securities for year 2009
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1.2 Financial Ratio Analysis of Indiabulls Securities Ltd

Profitability ratios: Indiabulls Securities Ltd. Per cent (Non-Annualized) Margins ratios (%) As % of operating income PBDT PBT PAT PBDT (NNRT) PBT (NNRT) PAT (NNRT) Corporate tax as per cent of PBT Returns ratios (%) As % of total assets PBDT PBT PAT PAT (NNRT) Operating cash flow As % of net worth PBDT PBT PAT PAT (NNRT) Operating cash flow As % of capital employed PBDT PBT PAT RAJENDRA KUMAR (MBA-4th SEM), C-MAT Mar 2008 Mar 2009 12 months 12 months Mar 2010 12 months
43.05 41.45 25.92 43.01 41.41 25.88 35.83
44.75 42.87 27.25 44.52 42.63 27.02 33.69
58.76 56.7 37.49 58.72 56.66 37.45 32.47
18.95 18.15 11.54 11.44 77.78
31.35 30.25 20 19.98 65.19
53.48 51.23 32.57 32.29 219.53
128.77 124.25 82.16 82.07 267.75
47.39 45.39 28.86
58.11 56.06 37.07 Page 32
PAT (NNRT) Operating cash flow Appropriation of profits (as % of PAT) Dividends Equity dividends Preference dividends Retained profits Dividends / net worth Equity dividends / equity capital Equity dividends / equity cap. & sh. prem.
28.61 194.53
37.03 120.82
3.89 0.44 3.44 96.11
19.66 2.27 17.39 80.34 6.4 3.98 3.98
0.52 0.07 0.45 99.48 0.43 0.45 0.45
Liquidity ratios: Indiabulls Securities Ltd. Times (Non-Annualized) Short term liquidity Cash / current liabilities & provisions Quick ratio Medium to long term liquidity Current ratio Solvency ratio Debt equity ratio Interest incidence (%) Interest cover PBIT / interest PBIT (NNRT) / interest Operating cash flow / interest Mar 2008 Mar 2009 Mar 2010 12 months
12 months 12 months
0.67 1.6
0.86 0.86
1.7 1.89
1.776 1.567 1.237 11.42
1.141 1.561 0.848 19.13
2.137 1.269 2.056 11.67
3.63 3.63 -2.99
4.01 4 11.97
5.2 5.2 8.91 Page 33
(Rs. Crore) Current assets Current liabilities Working capital Net worth Reserves & surplus Asset utilization ratios Indiabulls Securities Ltd. Times (Non-Annualized)
231.47 130.34 101.13 83.34 20.24
261.19 228.86 32.33 108.43 45.33
914.49 427.87 486.62 181.77 163.94
Mar 2008 12 months
Mar 2009 12 months
Mar 2010 12 months
Efficiency ratios Operating cash flow / total assets 0 Operating cash flow / gross fixed 0 assets Operating cash flow / capital 0 employed Operating income / total assets Operating income / GFA / leased assets Operating income / capital employed PBDT (NNRT) / total assets PBDT (NNRT) / gross fixed assets PBDT (NNRT) / capital employed PBT / total assets PBT / gross fixed assets PBT / capital employed PAT / total assets PAT / gross fixed assets PAT / capital employed
0.78 17.46 1.95
0.65 14.15 1.21
0.42 9.51 1.06 0.19 4.23 0.47 0.18 4.05 0.45 0.11 2.57 0.29
0.53 11.58 0.99 0.31 6.8 0.58 0.3 6.56 0.56 0.2 4.34 0.37
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1.3 Interpretation:
Profitability Ratios: Profitability is the net result of a number of policies and decisions. The ratios examined thus far provide useful clues to the effectiveness of firms operations.
Liquidity Ratios: liquidity ratios deal with firms ability to pay off its debts. It includes Current ratio: The current ratio is calculated by dividing current assets by current liabilities. The current ratio of Indiabulls securities is 1.776, 1.441, & 2.137 for year 2008, 2009 & 2010 respectively. Current ratio = Current assets /Current Liabilities
Quick ratio (acid test ratio): The quick ratio is calculated by deducting inventories from current assets and then dividing the remainder by current liabilities. The quick ratio is a measure of the firms ability to pay-off the short-term liabilities. A large part of the firms current assets are tied up in slow paying debts. The industry average for Acid test ratio is 2.1, but for Indiabulls securities quick ratio is 1.6, 0.86 & 1.89 for year 2008, 2009 & 2010 respectively, which is less than Industry average. The quick ratio should be high which indicates the companys ability to pay-off short term obligations.
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Debt equity Ratio: Debt equity ratio is the related contribution of creditors and owners of the business in its financing. Debt equity Ratio=Debt / Equity
1.4 Financial performance Year on Year
FY20
Increasing Market Share of Indiabulls on NSE Trading Volumes (1)
35 % 30 % 25 % 20 % 15 % 10 % 5 % 0 % 1.1 % FY2006 FY2007 Share in Online Trading 1.9 % 2.2 % FY2008 3.4 % 17.5 % 22.3 % 21.9 %
30.7 %
18.8 %
5.5 %
FY2009 Share in Total Trading
(1) FY2010
(1) Source: NSE data from NSE website (Equity Segment)
Graph 1.3 Market share of Indiabulls on NSE trading Volumes

Market Shares of Top Brokers on NSE (2)
40% 35% 30% 25% 20% 15% 10% 5% 0% Top 5 Top 10 FY09 7% 14% 12% 24% 20%
35%
Top 25 FY10
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UNDERSTANDING CAPITAL MARKET 1.1 Research Framework
An Outlook on Indian Stock Market
Capital Market
Derivative Segment
Intraday
Delivery
Futures
Options
Figure 1.1 Research Framework The Indian capital markets have witnessed a transformation over the last decade. India now finds its place amongst some of the most sophisticated and largest markets of the world. With over 20 million shareholders, India has the third largest investor base in the world after the USA and Japan. The Indian capital market is significant in terms of the degree of development, volume of trading and its tremendous growth potential.
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Over the past few years, the capital markets have also witnessed substantial reforms in regulation and supervision. Reforms, particularly the establishment and empowerment of SEBI, market-determined prices and allocation of resources, screen-based nation-wide trading, dematerialization and electronic transfer of securities, rolling settlement and derivatives trading have greatly improved both the regulatory framework and efficiency of trading and settlement.
1.2 Cash Market The Spot Market or Cash Market is a commodities or securities market in which goods are sold for cash and delivered immediately. Contracts bought and sold on these markets are immediately effective. Spot markets can operate wherever the infrastructure exists to conduct the transaction. The Spot market for most securities exists primarily on the internet. The trading in this cash market can be further divided into Intraday and Delivery. 1.3 Key Terms Intraday refers to buying or selling stocks today with an obligation to sell or buy the stock on the same day. It means completing the trading cycle in the same day. Here the stocks do not come to the Demat account. Delivery refers to buying stocks today with a plan of selling it in future. In India there is a concept of T+2 settlements. Which means a stock bought on trade day is credited to your Demat account (or delivered) into your Demat account after 2 days. Square off- making the position nil. Say selling off the stocks. (or buying back in case of short selling) RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 39
Short selling- selling without having the possession of the stocks (possible in intraday trade). Selling the stocks initially and buying them back later. It is a concept used in the falling markets. Demat Account- the account where in the shares are delivered. Every Demat account is linked to a trading account and a savings bank account. Demat account are provided by CDSL (central depository services limited) and NSDL (national securities depository limited). Indiabulls is a depository participant which links the depository to the beneficial owner of the account (client).
Trading pool/margin account- the place where the stock is received after the trade, it is the brokers account called the broker pool account. T+2= Transaction + 2 days
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THE COMPETITORS
1.1 Major Competitors of Indiabulls Securities Ltd Indiabulls Securities faces significant competition from companies seeking to attract client financial assets, including traditional and online brokerage firms, mutual fund companies and institutional players having wide presence and a strong brand name. They are; ICICI Securities Ltd. Kotak Securities Ltd. India Infoline SSKI Ltd. Motilal Oswal Securities Karvy Geojit Securities HDFC Securities
1.2 India Infoline Ltd

India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries, straddles the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites, www.indiainfoline.com and www.5paisa.com .
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India Infoline Securities Pvt Ltd India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of Equities broking and Portfolio Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. A choice of technologically advanced trading that is with the help of 5paisa.com. 5 paisa also represents the availability of world class service to investors at the lowest possible rate - 5 paisa for every trade of Rs100, i.e., a brokerage rate of 0.05%.
1.3 Sharekhan Securities

Sharekhan was created when SSKI Investor Services Pvt. Ltd., a company in the securities and equities segment decided to harness the power of the Internet and offer services to its customers through an online stock trading portal. Sharekhan brings and provides a user-friendly online trading facility. They also have an extensive all-India ground network of franchisees across the country. The company offers its services through a combination of online and offline channels. The online model comprises a portal, chat facilities, and 'speed trade' terminals. And the offline model uses a combination of an IVR infrastructure and a team of customer agents to receive orders over the telephone.
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1.4 Motilal Oswal

Motilal Oswal Securities Ltd. was founded in 1986 as a small sub-broking unit, with just two people running the show. Motilal Oswal Securities Limited has established itself as the Best Local Brokerage House in India (Asia Money Brokers Poll 2005). Their Institutional Equities Division combines the efforts of the Research and Sales & Trading departments to best serve clients' needs. Consistent delivery of high quality advice on individual stocks, sector trends and investment strategy has established them as a reliable research unit amongst leading Indian as well as international investors. Their sales & trading team, comprising top equity professionals, translates the research findings into actionable advice for clients, based on their specific needs. Sophisticated computerized tools are used to understand client investment profile and objectives, which ensures proactive and timely service.
1.5 Karvy
The birth of Karvy was on a modest scale in the year 1982. It began with the vision and enterprise of a small group of practicing Chartered Accountants based in Hyderabad, who founded Karvy. They started with consulting and financial accounting automation, and then carved inroads into the field of Registry and Share Transfers. Karvy has built a reputation as an integrated financial services provider, offering a wide spectrum of services for over 20 years. In 1982, a group of Hyderabad-based practicing Chartered Accountants started Karvy Consultants Limited with a capital of Rs.150, 000 offering auditing and taxation services initially. Later, it forayed into the Registrar and Share Transfer activities and subsequently into financial services. RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 43
Karvy made inroads into a host of capital-market services, - corporate and retail which proved to be a sound business synergy. In January 1998, Karvy became the first Depository Participant in Andhra Pradesh.
1.6 Kotak Securities

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. Kotak Securities was set up in 1994. Kotak Securities is a corporate member of both The Bombay Stock Exchange and the National Stock Exchange of India Limited. Its operations include stock broking and distribution of various financial products - including private and secondary placement of debt and equity and mutual funds. Currently, Kotak Securities is one of the largest broking houses in India with wide geographical reach. The company has four main areas of business: Institutional Equities, Retail (equities and other financial products), Portfolio Management and Depository Services.
Kotak Securities Ltd is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 44
providing dual benefit services wherein the investors can use the brokerage services of the company for executing the transactions and the depository services for settling them. Kotak Securities has 195 branches servicing more than 2, 20,000 customers and coverage of 231 Cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments.
1.6 ICICI SECURITIES

ICICI Securities, A subsidiary of ICICI Bank, was set up in February 1993 to provide investment-banking services to investors in India. As on date ICICI Bank holds 99.9% of the share capital of ICICI Securities. ICICI Securities Limited is Indias leading full service investment bank with a dominant position in all segments of its operations Corporate Finance Fixed Income and Equities.
Features of ICICI securities ICICI provides multiple channels in banking like, which is unique feature. Internet Banking Mobile Banking ATM banking Phone Banking
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SWOT ANALYSIS OF INDIABULLS SECURITIES
1.1 STRENGTHS
Integrated technology platform: - Since the launch of their website, www.indiabulls.com their online trading platform, they have invested in building a technology platform. They have also developed software called power Indiabulls. Their trader terminal is an application which allows customers to trade on both the BSE and the NSE, has features like live intra-day tick by tick charts, historical charts, price alerts and other features. The features allow them to seamlessly integrate across delivery channels, online or offline through branches or telephone. Pan India distribution network: - They have 640 branches across India. These branches help in customer acquisition as well as customer service. Their distribution network is well spread to capture the target audience and cater to the needs of their potential customers.
Relationship manager facility: - This is one of the unique services that Indiabulls offers its customers. Every customer is provided with a relationship manager, where in the customers can contact these managers at anytime of the day to get information on the market or get their queries clarified.
Growth rate: - The Company is growing at a very rapid rate, from 25 branches in the year 2003 it has grown to 650 branches in the beginning of 2006. Not only has it seen a fast growth rate in the number of branches
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but also it has grown in the number of clients and the employee strength. They have a customer base of more than 450,000 and over 4500 relationship managers. Indiabulls has been rated as the Fastest Growing Large Cap Company in India in a report by Business Today magazine in April, 2006.
Strong sales and marketing teams that deliver market leading product innovation: - their relationship manager channel offers a single point contact to all their retail customers. These managers offer personalized services to their customers and help to build strong and continuing relationships with them. The marketing associates help the company in client acquisition at minimal cost and they also help the company and its subsidiaries in increasing their penetration into smaller towns and cities.
Strong banking relations and credit ratings: - Indiabulls has banking relation with some of the major banking institutions in the country such as HDFC Bank, ICICI Bank, Standard Chartered Bank, etc, for easy mobilization of funds of the customers.
1.2 WEAKNESSES
Lack of a banking arm: - Indiabulls does not have a banking arm of its own which otherwise would have helped the company to a large extent. Whereas a few of its competitors like HDFC securities, ICICI securities, Kotak securities, etc have their own banking arms which make the transactions easier and simpler.
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Loss of relationship managers leads to loss of clients: - Their business is dependent on the team of relationship managers who directly manage client relationships. Any events that harm these relationships including the loss of their relationship managers may lead to the loss of client.
1.3 OPPORTUNITIES
Changing demographics with higher disposable income: - India is one of the fastest growing economies in the world. It has a large and rapidly growing middle class of 300 million people with increasing levels of discretionary income available for consumption and investment purposes. The options they have for investments are fixed deposits, post office deposits etc,. This gives them a limited interest rate on their investment; where as the stock market provides a good scope for making good returns. The evolution in Indias demographic setup with a median age of 24 years and higher consumption expenditure is expected to have a virtuous cycle effect by improving the economic growth and per capita income which would result in higher savings and investments. Rapid penetration of internet and computers: -Technology is vastly used in stock market trading. Now, with the use of the computers and internet the stock market trading has become fast. The traders can place orders through the internet and execute them. This saves the time of the investors, who earlier had to make calls to their brokers in order to trade. These people are willing to use advanced communication tools, such as computers and telephones, and want to take charge of their personal
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investment decisions. The use of technology is influencing more people to invest in the stock market. Market size and Characteristics: -India is a large and growing economy with rapidly expanding financial services sector. The sector has witnessed a transformation over the last decade as a result of the economic liberalization which started in 1991. India is the worlds 12th largest economy in dollar terms and the 4th largest in PPP terms. The researched growth rate of real GDP is greater than 9% per annum with higher growth in many sectors such as financial services. Indian financial sector presents a huge retail finance opportunity. As a result of falling interest rates, bank deposits, other traditional investment opportunities are losing their attraction. Thus, Indian investors are getting attracted towards alternate investments such as the equity markets and are looking for newer financial products.
1.4 THREATS
Economic slowdown: - Terrorist attacks and other acts of violence or war, including those involving India or other countries could adversely affect national economy or world economy as a whole. Such act may also result in a loss of business confidence. Travel restrictions as a result of such incidents may have adverse affect on the ability to operate effectively. This will result in an economic slowdown (example: the 9/11 attack on the World Trade Centre, New York). Political instability in the country: - The government of India has pursued the policy of economic liberalization, including relaxing restriction on the private sector. With the change in government, there is no RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 49
assurance that these liberalization polices will continue in the future. Any political instability could delay the economic reforms and could have adverse effect on the market. Volatile movement in market indices: - The Indian stock market is very volatile in nature and is capable of shedding or gaining several points in a single day. Unless and until the market stabilizes the investors will be very hesitant to invest in the market. Stock market falls will have a cascading effect on the investors and economy of the country. Competition: - Indiabulls faces significant competition from companies seeking to attract clients financial assets, including traditional and online brokerage firms, mutual fund companies, etc, which are having a wide presence and strong brand name. As the company enters new markets their bound to face additional competition from those who have longer operating history have grater retail and brand presence than Indiabulls. If the company is unable to manage its business it might impede their competitive position and their profitability.
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RESEARCH METHODOLOGY
Research in common paralance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. Research is an art of investigation. The Advance Learners Dictionary of Current English lays down the meaning of research as a careful investigation or inquiry especially through search for new facts in any branch of knowledge . Some people consider research as a movement, a movement from known to unknown .it is actually a voyage of discovery Research methodology mean what's method apply to do any type of research and. how can you collect the data from the field'. Before conducting any type of research and analysis and inference based on it, the first and the foremost thing is to collected the date and after the proceeding in a systematic manner to finally reach at result. There are the various steps to be followed such as: (a) What should be the sample size? (b) From where it can be taken? (c) Compilation of data (d) Presentation of data (e) Analysis and presentation of data (f) Making inference
1. UNDERSTANDING THE ORGANIZATION:
An in depth study of the Organization's working was done. The motive was to know the working of the Organization and why INDIA BULLS is considered as
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number one. Current status of the competitors is considered as to analyse their competitive situation.
2. DEVELOP A SURVEY QUESTIONNAIRE:
A questionnaire was developed to understand the comfort and investment level of customer in any Security and stock Market and his preference with the Organization. To know the areas where INDIA BULLS lack so that the Organization can improve upon its weak areas and be able to extract best business.
3. CONDUCT SURVEY:
After finalizing the sample, who may be old or new, meetings were scheduled and survey conducted. We contacted the Customers, fixed appointment with them and collected data. Data obtained was then analyzed.
4. ANALYSIS AND INTERPRETATION OF INFORMATION
The collected data should be properly analysed ,so that some fruitful information can be yield out of it. The data must then be interpreted in a manner that the analysis may be easily presented before anyone and easy to understand.
ADOPTED RESEARCH:-
1. Descriptive and Analytical Research:Descriptive research include survey and fact finding enquiries of different kinds. RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 52
In analytical research, the research has to use facts or information already available, and analyze these to make a critical evaluation of the material.
The type of research adopted to perform the research work is Descriptive Research as the information is collected through survey by questionnaire, without giving regards to any theory and concepts. The need of primary information required for the research topic can be done through Descriptive Research. The facts and information was surveyed and various fact finding enquiries of different kinds. The description of current state of affairs in the current situation of the stock market may be analysed.
The comparison of INDIA BULLS and other stock market companies depends on the customers investment criteria and not in the hands of the company itself. The performance of share market do not depends on the companies wish to earn profit, but the investors wish to invest in share market and to earn profits.
The secondary information required to support the research topic findings is being collected through Analytical Research, in which the researcher has to use facts and information already available, and analyse these to make a critical evaluation of the material. In analytical research, the research has to use facts or information already available, and analyze these to make a critical evaluation of the material.
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The data collected to conduct this type of research has been prepared from Magazines, newspaper annual and weekly issues, books on stock exchanges.
METHOD AND PRINCIPLE USED:

INFORMATION REQUIRED IN DETAIL
PRIMARY INFORMATION: To know why INDIA BULLS is standing at a reputative position among stock exchanges and its competitive advantage. The competitor companies were also analysed to find out their current status and how close competition exists.
SECONDARY INFORMATION: To present the specialities of INDIA BULLS which are shown through secondary data analysis.
METHOD OF DATA COLLECTION

The task of data collection begins after research problem has been defined and research design /plan checked out. While deciding about the method of data collection to be used for the study, the researcher should keep in mind the two types of data viz. primary and secondary. . Primary Data
They are those which are collected a fresh and for the first time, and thus happened to be in original in character. Data is collected by:RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 54
-Survey -Observation method -Interview Methodpersonal interview, telephonic interview.
Secondary Data
Are those which has already been collected by someone else and which have already been past through the statical process. Data is collected by:-Publications of central state and local govt. -Publication of foreign. -Journal -Books, magazines and newspaper -Reports and publication of business house -Reports and publication of scholars and universities. -Public records
RESEARCH INSTRUMENT USED IN DETAIL:
PRIMARY Questionnaires: A formal list of the questions answered by the people who are thought to have the desired information and later analyzing the responses is the questionnaire method. It can be used to get some data relative to most problems. We have used structured questionnaires as a formal list of questions produces more reliable results.
For collecting the data we used questionnaire method. The questionnaire was design mainly of objective nature and partially of descriptive nature to get suggestion regarding housing finance compares. We visited various government RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 55
department and business organization and also to individuals for required information according to our Performance knowing the views of the people and get their suggestions.
Personal Interviews: Personal interview is the most versatile and flexible kind of technique. Direct face-to-face conversation helps in getting accurate data. Personal interview were done with the people in order to get the required information.
SECONDARY Websites. Brochures and Company Magazines.
RESEARCH DESIGN
The formidable problem that follows the task of defining the research is preparation of the design of the research research, popularly known as research design. Decisions regarding what, where, when, how much by what means considering an inquiry or research study constitute a research design .
Types:-
Research Design in case of exploratory research study . Research Design in case of descriptive and diagnostic research study. Research Design in case of hypothesis-testing research study.
RESEARCH STUDIES CONSIDERED :RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 56
EXPLORATORY RESEARCH
Exploratory research is based on secondary data and survey of knowledgeable persons., This research is usually designed to obtain the investigations of the investors prospective of comparing the stock exchanges for his investment decision.Wide-ranging and versatile approaches are employed. Exploratory research is appropriate for situations where Management is searching for solutions and seeks new insights regarding the situation or desires a more precise formulation of the problem. We have made use of exploratory research in our research because it served our purpose to the maximum information. A new knowledge is being discovered ,although it exists in the environment.
DESCRIPTIVE RESEARCH
Descriptive research studies are those studies which are concerned with describing the characteristics if a particular individual ,or of a group. this type of study is concerned with specific predicition , with narration of facts and characteristics considering individual and groups. The decision regarding what to measure and find adequate method of measuring along with the clear cut definition of population. As data collected, they should be examined for completeness, comprehensibility, consistency and reliability. This type of research design is adopted since it takes into account all the steps involved in a survey concerning a phenomenon to be studied. This type of study makes enough provision for protection against bias and must maximize reliability.
SAMPLE DESIGN RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 57
The selected respondents constitute what is technically called a sample and the selection process is called sampling technique. the survey so conducted is known as sample survey.
Researcher must prepare a sample design for his study i.e., he must plan how a sample should be selected and of what size such a sample would be.
1. Types of universe: - The sample design is clearly define the set of objects, technically called the universe. The total population of India is universe for INDIA BULLS. The population of the whole country may be considered as the sampling population.
2. Sampling unit: - Sapling unit may be a geographically one such as state, district, village, etc. The sampling unit is decided by dividing into central, eastern, western, northern and southern zones
3. Source list: - It is also known as sampling frame from with sample is to be drawn. It is decided by considering the people who know about SHARE MARKET.
4 Size of sample: - This refers to the number of items to be selected from the universe to constitute a sample size. The sample size chosen by me is 50 persons, 5 persons in every zone.
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REVIEW OF LITERATURE
The primary information for comparison of INDIABULLS and other stock market companies depends on the customers investment criteria and not in the hands of the company itself. The performance of share market do not depends on the companies wish to earn profit but the investor wishes to invest in the share market and earn profits. The comparison of INDIA BULLS and other stock market companies depends on the customers investment criteria and not in the hands of the company itself. The performance of share market do not depends on the companies wish to earn profit, but the investors wish to invest in share market and to earn profits.
The secondary information required to support the research topic findings is being collected through Analytical Research, in which the researcher has to use facts and information already available, and analyse these to make a critical evaluation of the material. In analytical research, the research has to use facts or information already available, and analyze these to make a critical evaluation of the material.
The data collected to conduct this type of research has been prepared from Magazines,newspaper annual and weekly issues, books on stock exchanges.
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EMPERICAL ANALYSIS
EMPERICAL ANALYSIS FOR INDIABULLS SECURITIES
1.1 Indian Retail Brokerage Market The Indian retail brokerage industry consists of companies that primarily act as agents for the buying and selling of securities (e.g. stocks, shares, and similar financial instruments) on a commission or transaction fee basis. It has two main interdependent segments: Primary market and the Secondary market. Indian Retail Brokerage Market
Interdependent Segments
Primary Market
Secondary Market
Figure 1.1 Interdependent Segments of Brokerage Market
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Objective: The main objective is to Analyze retail brokerage industry taking into account the health of the capital markets, Derivative Market and the intensity of competition among the brokerage companies. Doing Competitive Analysis for Indiabulls
1.2 Major growth drivers for brokerage revenue and trading volume are: Continuous fall in brokerage fees Adoption of technology screen-based trading, electronic matching, and paperless securities. Centralized operations, effective risk management, and control on large interconnected operations spanning multiple locations, which is enabled by telecom connectivity and low costs Increasing access to capital and the ability to provide margin finance 1.3 Parameter Assessment for Doing Competitive analysis A differentiating aspect is a comparative assessment of the top retail brokerages on various value indicators, comprising of Product Pricing Service proposition. Competitive analysis
Product
Price
Service
Value Proposition
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1.4 Customers need to analyze the Brokerage Firms Based on these 5 Parameters. Brokerage & Miscellaneous charges Quote Software Execution Platform Demat Account, and finally Back office Support.
Brokerage & Miscellaneous charges: This accounts for all the charges that you incur for your trading/investing. A few examples would be: Demat Account maintenance, Brokerage, Annual account Fee, Telephone based trading charges, trading software usage charges, etc. Quote Software: This is used mainly for technical study and for live quotes. Many people dont evaluate quote software. Some Investors dont pay attention to the quality of data (how accurate it is). Or how fast and often it refreshes. Does it allow us to back test our strategy? Does it allow customizing technical signals/parameters?? Does it allow us to see historic data? For, what period is intra day data available? They might need all this information. They should be clear on what they need and ensure quote software provides it all. Execution Platform: Its nothing but a platform that allows us to execute our trade fast. It should automate trade management and execution, and should automatically give protection against human errors. Demat Account: Demat account should only be opened with a well known and established brokerage firm in the market.
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Back office Support: People while trading face lots of problem because of lack of good back office support. Relationship Managers trading without their clients knowledge, funds not being transferred, trades not being executed, slow execution etc are a few examples. 1.5 Brokerage Charges Intraday Brokerage charges of the Competitors of Indiabulls Securities Ltd
Intraday Brokerage Charges

0.3 0.25 0.25 0.2
Charges
0.15 0.1 0.1 0.05 0.05 0 Indiabulls Kotak India-infoline ICICI direct Securities Karvy Motilal oswal Sharekhan 0.05 0.1 0.1 0.1
Financial Brokerage Firms
Indiabulls
Kotak Securities
India-infoline
ICICI direct
Karvy
Motilal oswal
Sharekhan
Graph 1.2 Intraday Brokerage Charges
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Delivery Brokerage charges of the Competitors of Indiabulls Securities Ltd
Delievery Brokerage Charges

0.8 0.7 0.6 0.5
Charges
0.75
0.5 0.45
0.5
0.5
0.5
0.5 0.4 0.3 0.2 0.1 0 Indiabulls
Kotak Securities
Indiainfoline
ICICI Direct
Karvy
Motilal oswal Sharekhan
Financial Brokerage Firms

Indiabulls Kotak Securities India-infoline ICICI Direct Karvy Motilal oswal Sharekhan
Graph 1.3 Delivery Brokerage Charges 1.6 Analyzing the Blogs from Web Site Traderji.com (online community for Indian Investors & Traders) We were interpreting the blogs written by customers, their experiences and their review on brokerage firms. In this web site they have conducted opinion poll on broker preferences of customers & reasons for choosing the particular brokerage firm. In this poll opinion, customers have shared their viewpoint about pros & cons of different brokerage firms.
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Experiences of Customers
Poll Options Which online broker u prefer and why - chose one 5paise ShareKhan Motilal Oswal ICICI Direct HDFC India Bulls Kotak Any other (mention name) View Poll Results
Vote Now
Poll Results of Blogs: Total Number of Voters =456
Which Online Broker You Prefer? Poll Results of Blog(Voters 457)
Any other Mention, (58), 13%
India-Infoline(5paisa), (68), 15%
Kotak, (34), 7%
Sharekhan, (83), 18%
Indiabulls, (75), 16% ICICI direct, (109), 24% HDFC, (14), 3%
Motilal Oswal, (16), 4%
India-Infoline(5paisa) HDFC
Sharekhan Indiabulls
Motilal Oswal Kotak
ICICI direct Any other Mention
Pie chart 1.4 showing Poll results RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 65
1.6 Competitive Strength of Indiabulls Securities Indiabulls securities Ltd have a distinct set of competitive advantages that make it uniquely capable of winning in the marketplace against its competitors Diverse Branch Network Bouquet of financial products and services Advanced technology innovation Strong sales and marketing teams with continuous reinvestment and training Strong cross-selling opportunities. Strong and experienced promoters Leading product innovation and marketing strategies Well capitalized player, with strong banking relationships and credit ratings Ability to combine people and technology in unique ways Strong market presence and increased market share leading to a virtuous cycle of growth and Profitability. team that delivers market leading product
Core pillars of Business strategy Increase the number of Client Relationships. Offer Diversified Financial Products & Services. Multiple Channels Enhance Customer Experience and Opportunities. Low cost and highly scalable business.
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Merits of Indiabulls Securities Indiabulls securities provide 8 times margin for Intra-day and 4 times margin for delivery. Indiabulls is suitable for both Day trading & Long term investment IndiaBulls has software called Power IndiaBulls. It is a Java based application, with real-time streaming quotes. It is fast in terms of speed and execution Research reports are free of cost to trading members.
De-Merits of Indiabulls Securities You have to open a bank account with the banks mentioned in Indiabulls site for Credit/ Debit Facility as they dont have their own bank. And In ICICI direct , you have a direct debit/credit facility with the bank Most customers feel that it is difficult to understand the ledger reports of Indiabulls securities, so proper customer guidance should be given. Lack of Banking arm Rural market is yet to be tapped. More importance should be given to promotions & advertisements.
Value Proposition of Indiabulls Securities ISL provide a very good Trading tools like Power Indiabulls & Indiabulls market trader. Power Indiabulls: A desktop Trading application offering clients sophisticated trading tools accessible at lightning fast speed. Indiabulls Market Trader: Browser based trading application built for retail investor. RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 67
Indiabulls Equity Analysis: Premium research on 400 plus companies. Indiabulls Professional Network: Offers real-time prices, detailed data and news, intelligent analytics and electronic trading capabilities. Relationship manager: Indiabulls securities robust technology is integrated with knowledgeable and customer-focused relationship managers who are available 24X6 to assist the clients.
1.8 Number of Branches of Competitors compared with Indiabulls securities

Branches of Competitors of Indiabulls as per the Year 2008-09 Number of Branches 800 750 700 600 500 400 300 200 100 0 Kotak Indiabulls ICICI Sharekhan Competitors IndiaInfoline Motilaloswal Karvy 306 250 500 400 257 667
Kotak
Indiabulls
ICICI
Sharekhan
India-Infoline
Motilal-oswal
Karvy
Fig: Number of Branches of Competitors compared with Indiabulls securities
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Number of Customers of competitors compared with Indiabulls
Number of Customers Using Online Trading Terminal as per Year 2008 Number of Customers using Online Trading 800,000 700,000 600,000 500,000 Terminal 400,000 300,000 200,000 100,000 0 India-Infoline ICICI securities Kotak Securities Indiabulls Securities Sharekhan Securities 75,000 140,000 60,000 90,000 675,000
Brokerage Firms
Fig: Number of Customers of competitors compared with Indiabulls
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FINDINGS
Aggressive Promotions: Indiabulls Securities compared to its competitors concentrates less on advertising and promotions, especially through electronic media. Its competitors like Sharekhan, ICICI and Kotak are advertising aggressively through media. Hence Indiabulls should concentrate more on advertising through print and electronic media. Tapping Rural Market: The Indian rural investors market are relatively untapped, with only small and private firms meeting the current demand. Indiabulls Securities can gain the First Mover Advantage over its competitors, especially in areas were commercial crops are grown and the standard of living is high. These people do not have much option to invest other than banks and post offices. Reduce the initial account opening charges: The charge for opening a trading and demat account in Indiabulls securities is high compared to its competitors. This influences the potential investors to open their account with another company which provides the same at lower prices. Thus it acts as a mental barrier for potential customers, who tend to overlook all other benefits offered by Indiabulls. Hence Indiabulls should consider reducing their account opening charges. Bring in more product differentiation: Product differentiation here means that Indiabulls securities should bring in more customized services and more value proposition for large investors. It can reduce the brokerage charges for large investors which will encourage them to invest more in the company.
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Invest more on R&D: Indiabulls should concentrate on its research and development since most of its competitors are investing on R&D. This will help the company to read the market better and will also be in a better position to understand the needs of the customers. This can be extremely beneficial for Indiabulls in the long run.
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CONCLUSION
Indiabulls faces significant competition from companies seeking to attract clients financial assets including traditional and online brokerage firms, mutual fund companies and institutional players, having wide presence and a strong brand name. As Indiabulls enter newer markets, they are likely to face additional competition from those who may be better capitalized, have longer operating history, have greater retail and brand presence, and better management than Indiabulls. As new players like Reliance Money enters the market the competition will only get more intense. If they are unable to manage their business it might impede their competitive position and profitability. Hence they should continue to compete vigorously to capture more market share and should add more management personnel to manage their growth in an optimal way. Post economic liberalization in 1991 the Indian financial services industry has experienced significant growth. Exposure to global practices has made the Indian customer more demanding. As a result of falling interest rates, bank deposits, other traditional investment opportunities are losing their attraction. Thus, Indian investors are getting attracted towards alternate investments such as the Retail Security Market and are looking for newer financial products. As the Indian Retail Security Market is still in a nascent stage and as a lot of potential for growth, its a very good opportunity for companies like Indiabulls to increase their market presence. They will have to concentrate more on the Research and Development and come up with strategies which are beneficial for the company. Thus for the purpose of Applied Research Researchs in the company, they can do more research on the market and identify the major factors which will drive the market in the future. RAJENDRA KUMAR (MBA-4th SEM), C-MAT Page 72
LIMITATION
(i). Indiabulls Securities compared to its competitors concentrates less on advertising and promotions, especially through electronic media. (ii). The charge for opening a trading and demat account in Indiabulls securities is high compared to its competitors. Thus it acts as a mental barrier for potential customers. (iii). Indiabulls securities doesnt provides differentiated product due to high valule of brokerage charges . (iv). Indiabulls dont focus on Research and development and the result of which The customer doesnt benefited from it. (v). In Indiabulls site, for Credit/ Debit Facility as they dont have their own bank and but in ICICI direct ,they have a direct debit/credit facility with the bank. (vi). Most customers feel that it is difficult to understand the ledger reports of Indiabulls securities, so proper customer guidance should be given. (vii).Lack of Banking arm (viii). Rural market is yet to be tapped.
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RECOMMENDATION
(i). Competitors like Sharekhan, ICICI and Kotak are advertising aggressively through media. Hence Indiabulls should concentrate more on advertising through print and electronic media. (ii). Indiabulls Securities can gain the First Mover Advantage over its competitors, especially in areas were commercial crops are grown and the standard of living is high. These people do not have much option to invest other than banks and post offices. (iii). Indiabulls charge high price for opening a trading and demat account in comparison of other company.Hence Indiabulls should consider reducing their account opening charges. (iv). Product differentiation here means that Indiabulls securities should bring in more customized services and more value proposition for large investors. It can reduce the brokerage charges for large investors which will encourage them to invest more in the company. (v). Indiabulls should concentrate on its research and development since most of its competitors are investing on R&D. This will help the company to read the market better and will also be in a better position to understand the needs of the customers. This can be extremely beneficial for Indiabulls in the long run.
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APPENDIX
QUESTIONNAIRE
Format of Questionnaire For Doing Promotions
The format of Questionnaire given to people is as follows:
Name of Person:
Contact Number:
E-mail Id
Are you interested in Share Market?
Yes
No
Do you invest in Share market? Are you aware of Indiabulls? Do you have a Demat Account?
Yes Yes Yes
No No No
Presently in which security are you trading?
Signature
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Profit & loss Summary
Mar 2008
Mar 2009
Mar 2010
Rs. Crore (Non-Annualized) Income Leasing & hire services Security transactions Dividend income Interest income Others Other income Non-recurring income Expenditure Loss on security transactions Other operating expenses Personnel cost Other expenses Finance charges Lease rent Less: expenses capitalized Non-recurring expenses -
12 months
12 months
12 months
69.48 0 0.18 0 15.36 53.94 0 0.03
114.59 0 0 0.29 1.93 112.36 0 0.26
316.96 0 0 0 21.16 296.81 0 0.13
0 3.58 10.62 11.33 13.96 2.19 0 0
0.28 6.92 20.88 13.61 21.48 3.89 0 0
0.04 13.84 50.24 21.24 46.6 3.08 0 0
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Profits / losses PBDT Depreciation PBT Tax provision PAT Appropriation of profit Dividends Retained earnings
29.91 1.11 28.8 10.69 18.01
51.28 2.16 49.12 16.89 31.23
186.85 6.56 180.28 61.06 119.22
0.6 16.31
6.14 25.09
0.62 118.6
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BIBLIOGRAPHY
Bombay Stock Exchange" Bseindia<http://www.bseindia.com>. " Indiabulls Securities Indiabulls.Com. <http://www.Indiabulls.com>. "National Stock Exchange nseindia. <http://www.nseindia.com>. "Share khan Securities Sharekhan.Com. <http://www.sharekhan.com>. India Infoline Securities India-Infoline.Com. 6 Mar. 2006 <http://trade.indiainfoline.com>. " India Infoline Securities 5paisa.Com. 26 Mar. 2006 <http://www.5paisa.com>. " Kotak Securities kotak securities.Com. 26 Mar. 2006 <http://www.kotaksecurities.com>. "ICICI Securities ICICI securities.Com..25 Mar. 2006 <http://www.ICICIsecurities.com>. " Karvy Karvy.Com. 25 Mar. 2006 <http://www.karvy.com>. Online Investors & Traders 2 Apr. 2006 <http://www.traderji.com>. " Motilal Oswal Securities . 25 Mar. 2006 <http://www.motilaloswal.com>.
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A Research Report On

AN OVERVIEW OF INDIAN STOCK MARKET (In special reference to)

Dr. K. N. Singh Dept. of Mgmt.(MBA) C-MAT, Greater Noida

Rajendra Kumar MBA 4th semester Roll No-0914970039

CENTRE FOR MANAGEMENT TECHNOLOGY (C-MAT)

12. Recommendation ............................................................. 74

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

13.Appendix .......................................................................... 75-77 14.Bibliography ...................................................................... 78

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

List of Tables Of Illustration

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

OUTLOOK ON INDIAN STOCK MARKET

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

1.2 National Stock Exchange

1.3 Bombay Stock Exchange

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

Securities & Derivatives Broking

Mortgage & Housing Finance

Financial Products Distribution

Fig 1.1: Diversified Business Groups of Indiabulls

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

1.3 IndiaBulls Subsidiaries

1.4 Organizational Structure of Indiabulls

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

Department based organizational Structure

Operations & Service

Corporate Communi cation

Sr. Vice President

Figure 1.2 Department based organizational Structure of Indiabulls

Regional Hierarchy of Indiabulls Senior Vice President

Branch Manager Senior Sales Manager

Back Office Executive

Local Compliance Officer

Figure 1.3 Regional hierarchies of Indiabulls

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

CFO & President

Chief Executive Officer

Figure 1.4 Key Positions

1.5 Products and Services of Indiabulls

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

OVERVIEW OF INDIABULLS SECURITIES LTD

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

Trading With Indiabulls

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

1.2 Business Model & Operations of Indiabulls Securities Ltd

1.3 Basic Requirement for doing Trading

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

1.4 Trading Products of Indiabulls Securities Indiabulls Securities Trading Products

showing 1.1 Trading Products of Indiabulls securities

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

FINANCIAL ANALYSIS OF INDIABULLS SECURITIES

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

Income from transaction and service charges and interest income

RAJENDRA KUMAR (MBA-4th SEM), C-MAT

Brokerage Income of Indiabulls Securities

Brokerage Income of Indiabulls Securities (in Crore)

Brokerage Income of Indibulls Securities of 3 Years( in Crore)

Bar Chart 1.1 Brokerage Income of Indiabulls Securities (in Crore)