EXECUTIVE SUMMERY

In todays increasingly competitive and complex world it is vital to choose proper way of expansion strategy. The choice of proper way of expansion will flourish the company promptly in business world. The equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. The roots of a stock market in India began in the 1860s. At that time brokers used to gather to seek stock tips and share news on step of a bank building. After being disallowed to use the steps of the bank building the share brokers had to find a place their own which later turn in to DALAL STREET. A group of about 300 brokers formed the stock exchange in Jul 1875, which led to the formation of a trust in 1887 known as the Native Share and Stock Brokers Association. A unique feature of the stock market development in India was that that it was entirely driven by local enterprise, unlike the banks which during the pre-independence period were owned and run by the British. Following the establishment of the first stock exchange in Mumbai, other stock exchanges came into being in major cities in India, namely Ahmedabad (1894), Calcutta (1908), Madras (1937), Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets gained from surge and boom in several industries such as jute (1870s), tea (1880s and 1890s), coal (1904 and 1908) etc, at different points of time. A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilization that evinced huge interest from retail investors. From the year1987 broking houses like Ashika, India Bulls, Motilal Owsal came in to existence in share broking industry. Then the share broking business gets the test of corporate house and becomes more organized. In later days companies like Reliance,Kotak,ICICI etc emerged in the share broking business. My study is emphasizing on the expansion strategy of Nirmal Bang in eastern region as it put its foot step newly in eastern region where leading companies like Kotak securities, Religier,India Bulls, India Infoline, Motilal Owsal etc are already established broking houses and there the main competitor of Nirmal Bang in eastern region. Here my study tries to help Nirmal Bang to choose the proper expansion strategy and to achieve their goal in future in eastern region.

Market Share of top Share broking House in India

30%

15% 19%

India infoline Kotak Securities Ltd Share Khan Indiabulls Motilal Oswal

14%

4%

10%

8%

Religare Others

COMPANY PROFILE

Incorporation Year 1987

Nirmal Bang Group

Incorporated by Mr. Nirmal Bang, it started its equity broking business operations in 1987 as a subbroker. Currently, Group is engaged in various capital market related operations like equity broking, commodity broking, arbitrage trading, investment activities, margin funding, and distribution of the financial products. All the group companies are held 100%, directly or in-directly by the promoters.

Nirmal Bang Securities Private Limited

Nirmal Bang Securities Private Limited is a flag-ship company of Nirmal Bang Group, and started its broking operations under corporate license in 1997. Currently, NBSPL is engaged in equity broking, arbitrage trading, depository operations and distribution of the financial products. NBSPL is held 100% directly or indirectly by the promoters.

Nirmal Bang Group is one of the largest retail broking houses in India, providing the investors state of art services in capital markets in the country. We are a financial services company in India, offering a wide range of financial products and services targeted at retail investors, high net worth individuals and corporate and institutional clients. The Group has memberships of Bombay Stock Exchange Limited, National Stock Exchange of India Limited, Multi Commodity Exchange of India Limited, National Commodity and Derivatives Exchange limited and is also a Depository participant of NSDL and CDS (I) L, the Depositories of the country. Our principal group companies are:

Nirmal Bang Securities Private Limited Member- National Stock Exchange of India Limited Member- Bombay Stock Exchange Limited Participant- National Securities Depository Limited Participant- Central Depository Services (India) Limited

Nirmal Bang Commodities Private Limited Member- Multi Commodity Exchange of India Limited Member- National Commodity & Derivatives Exchange Ltd

Bang Equity Broking Private Limited Member- Bombay Stock Exchange Limited

Nadi Finance & Investment Private Limited RBI registered Non Banking Finance Company

Shresth Financial & Insurance Services Pvt Ltd

We started in 1986 under the leadership of Late Shri Nirmal Bang and have grown steadily and progressively since then. Our clients as well as Business Partners have contributed tremendously to our growth we recognize and applaud this, we value our relationship with them and for their convenience we have all investing avenues under one roof. It is a consistent profit making company from Last 5 years. Its an extremely well capitalized company with high Net worth

SERVICES
EQUITY AND DERIVATIVES Trading platform for equities and equity derivatives on NSE and BSE- the Company has a reach of over 100 branches at 36 locations in the country to cater to retail and high net worth individuals. The branches constitute of self owned hubs and franchise/ remissers/ sub broker through whom the business is sourced.

COMMODITIES Trading platform for commodities on NCDEX and MCX- Commodity trading facility is provided to all the clients at all the centers and location. The company is planning to establish itself as a leading research center for commodities market in the country.

DISTRIBUTION Distribution of retail finance products Mutual Funds and IPOs. The group is empanelled with all the Fund Houses in the country to sell their Mutual Fund and NFOs using the retail network. IPOs selling is undertaking from all the branches of the company.

FINANCIAL ADVISORY SERVICES Investment and trading advisory services to its clients are based on technical, fundamental and market research- The Company has one of the best fundamental research and technical analysis teams in the company. We release reports based on fundamental research of industries, sectors, companies and individual stock to our clients.The technical research team gives the clients recommendations using charting tools like Falcon and Metastock. Comprehensive reports on volume breakouts, delivery reports and F&O open interest positions are given to all the clients.

COMPETITOR MAP OF NIRMAL BANG IN EASTERON REGION

Reliance Mutual Fund

India Infoline

Motilal Oswal

SMC

SBI ULIP

Nirmal Bang Security pvt ltd

MF

Religare

India Bulls

Share Khan

TATA EQUITY FUND

SWOT ANALYSIS OF NIRMAL BANG

Strengths: Company having young management team which consists of very talented and knowledge professionals from different fields. Nirmal Bang is a well capitalized group with net worth of 3500 crores.

Company is unaffected in this global recession which shows companys never say die sprits. It means company is armed with proper resources to fight any adverse situation. Companys research team provides tremendous research calls to their clients with high success record and generates level of satisfaction to clients.

Weakness: Investors are not completely aware of Nirmal Bang, so the brand value of the company not yet created. The market share of the company in commodity and equity market in terms of turnover is not significant.

Opportunities: The growth of capital market is very high. Investors are now ready to invest their money in this market because the return is much higher compare to other place for investment, so they are ready to bear risk factor associated with it. It means volume will increase year by year in this sector. As Nirmal Bang having its presence in 36 location of the country, so company has good opportunities to extents its branches all over the country. Company has not come yet with its own IPO, this is a good chance for the company to be a public limited company which will help company to get money and create brand awareness in this market.

Threats: Company has to face a tough competition from major market leaders, so it will be a difficult task for Nirmal Bang to sustain itself in this cut throat competitions.

Recently financial market is not performing well due to global recession and investors have suffered a huge loss, so investors now investing their money at much safer place instead of this market.

PERFORMANCE OF NIRMAL BANG

Nirmal Bang became fully operational in Eastern India in both the equity and commodities market from October 2008. Since then the company has shown a tremendous growth in the amount of earning in each month. In October 2008 the companys total earning was around Rs.6.4 lakhs. This increased to around Rs.22 lakhs in March 2009, which further increased to around 25 lakhs in April 2009.

EARNINGS IN LAKHS
25 20 15 10 5 0 OCTOBER '08 MARCH '09 APRIL '09 OCTOBER '08 MARCH '09 APRIL '09

There has also been a tremendous increase in the earnings from the commodities market for Nirmal Bang in Eastern India. In October 2008 the earnings from commodities market was around Rs. 40 thousands. This increased to Rs. 2.2 lakhs in February 2009, which further increased to Rs. 4.7 lakhs in April 2009.

EARNINGS IN COMMODITIES MARKET (IN LAKHS)

5 4 3 2 1 0 OCTOBER DECEMBER FEBRUARY APRIL '09 '08 '08 '09 EARNINGS IN COMMODITIES MARKET (IN LAKHS)

The rate of growth of the company itself speaks for the character and determination of the company and all the employees. If the company keeps on growing at this rate then it will soon be able to compete with all the big players in Eastern India. Nirmal Bang is also undertaking a very aggressive expansion policy. Already Nirmal Bang has its Head Office of the Eastern India in Kolkata and two other branches in Durgapur and Siliguri. Also the company has around 50 sub-brokers all over West Bengal. Nirmal Bang is planning to open up another 20 branches and about 200 sub-brokers within the next one year. Thus there will be more 250 contact point for the clients. Also the company will be providing a lot of employment opportunity for the local people.

INDIAN STOCK/EQUITY MARKET

stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. India stock market offers a great opportunity to the investors as right now it is experiencing a boom in many of its shares. The speedy ascension of the Indian stocks has made the Indian Market of Securities very lucrative for those interested in making profits by investing in the Indian Stock Exchange. The healthy banking and monetary services have secured the investment possibilities in the Indian Stock Market to a large extent.

The market for long term securities like bonds, equity stocks and preferred stocks is divided into two categories 1) Primary Market 2) Secondary Market

Primary market:
The primary market deals with the new issues of securities Stocks available for the first time are offered through primary market. The issuer may be a new company or an existing company. These issues may be of new type or the security used in the past. In the new issue market or primary market the issuer can be considered as a manufacturer. The issuing houses, investment bankers and brokers and brokers act as the channel of distribution for the new issues. They take the responsibility of selling the stocks to the public. The main service functions of the primary market are origination, underwriting and distribution. Origination deals with the origin of the new issue. The proposal is analyzed in terms of the nature of the security, the size of the issue, and timing of the issue and floatation method of the issue. Underwriting contract makes the share predictable and removes the element of uncertainty in the subscription. Distribution refers to the sale of securities to the investors. This is carried out with the help of the lead managers and brokers to the issue.

The main agencies who are involved in the primary market are underwriters, bankers, advertising agencies, financial institutions and government/statutory agencies.

Secondary Market:
A market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market. Also called Secondary Market. In the secondary market, the investors can sell and buy securities. Stock market predominantly deals in the equity shares. Well regulated and active stock market promotes capital formation. Growth of the primary market depends on the secondary market. The health of the economy is reflected by the growth of the stock market. The term "secondary market" is also used refer to the

market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market. The secondary market for a variety of assets can vary from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies.

RESEARCH METHODOLOGY
I have done a research in order to judge the acceptability of branch and channel partners to the customers of various economic and social backgrounds. We have more than 50 channel associates and 4 branches in NIRMAL BANG SECURITY PVT LTD
Research Objective :

A survey was done on the traders and non traders. The survey was directed at certain target and the main objectives of the survey are as follows:
To clearly identify the awareness level about Nirmal Bang Financial Group. To clearly identify the awareness level about the advantage and disadvantage of own branch and franchisee. To find out the expectations of the investors regarding the service provided by a broking firms and sub brokers.
To take proper initiative to satisfy investor and sub brokers expectations .

Research Approaches

Primary data are collected through survey method.

Survey ---- survey is the best suitable method for descriptive research. Surveys are mainly done to
know about peoples opinion, beliefs, preferences etc. I have done a survey to know traders and non traders preference between companys own branch against franchisee and for that purpose I interviewed large number of investors and non investors in equity market in Kolkata, Hooghly district.

Research Instrument Questionnaire is used as a research instrument. Questionnaire ---- The questionnaire is the most common instrument to collect primary data. It
consists of a set of questions. There are mainly two types of questionnaires open-end and closedend. In my survey I used closed-end questionnaire.

Sample Plan

After deciding on the research approaches and instruments, I design a sampling plan.

Sampling unit ---- It means - who is to be surveyed?

In my survey I collect data from traders as well as non traders in different part of Kolkata and Hooghly district.

Sample size ---- It means how many people should be surveyed?

In my survey a total sample size of 100 people is covered to collect primary data.

Sample procedure ---- It defines how should the respondents be chosen?

I visited different franchisee, market in different location .

Area coverage ---- Kolkata,Rishra,Chunchura,Srerampur,Konnagar.

Sampling Technique
For any kind of research work, a proper sampling method is required. Sampling means understanding the needs and the demands in different market segments. By the help of proper techniques a sampling can be done. As we choose a sample consisting of people from different occupation e.g. service, business etc. a stratified sampling technique is adopted.

Stratified Sampling also has some following advantages: Easy research process. Increase of Accuracy. Error Free Research. Easy analysis of survey.

LIMITATION OF THE STUDY

1. I have gathered information and data from the secondary source like internet. These data may be true or not. 2. People do not have sufficient knowledge to distinguish between advantages and disadvantages of trading between companies own branch and franchisee. 3. For primary data, I filled questionnaire from 100 people to suggest proper expansion model for Nirmal Bang in Eastern Region. Now based on the opinion of such a small sample size it is very difficult to suggest anything for greater and diversified area. 4. Some times people never read the questionnaire seriously, they just filled it quickly and run away. In such way it is almost impossible to get the real opinion of people.

DATA ANALYSIS AND INTERPRETATION

As per survey location they can be classified in to 3 categories 1. City 2. Rural or interior location 3. Town

1. Awareness about Nirmal Bang .

It is found that 8% of the investors are aware of the company Nirmal Bang and the remaining 92% of the investors are not aware of the company.

PERCENTAGE
100 90 80 70 60 50 40 30 20 10 0 AWARE UNAWARE AWARE UNAWARE

2. Mode of earning of the investors in city.

Among the 100 investors whom were surveyed 31% are office goers, 63% are business persons and the remaining 6% have other mode of earning.

MODE OF EARNING

SERVICE BUSINESS OTHERS

3.Mode of earning of investors in town and rural areaAmong the 100 investors whom were surveyed 41% are office goers, 56% are business persons and the remaining 3% have other mode of earning.

BUSINESS SERVICE OTHERS

3.Preference in cityCustomers residing in cities prefer own branches over channel partners or franchises, the main reason being security. There are various other reasons as follows o Security: - People in cities expect assured service even if it comes at slightly higher price. The services provided at different own branches of a company naturally comes with more assurance of quality and availability, rather than those provided by channel partners. Moreover, since this is an insurance company, lots of money is always at stake. So naturally, customers strive for more security than anything else. They think that chances of any kind of fraud activities are much less if they can contact the company directly, rather than through some third party (in this case channel partners). o High Profile Customer: - High profile customers are major go to for the companies in any business. For these kinds of customers, the security is not the only concern. So, they want better service in every way and also direct attention of the company. So for them, branches are always a better choice. o Effective Relationship Management: - Service is not of sole importance, it is also important HOW you provide the service. So, relationship management is very important aspect of any business and it is truer in our case. Customers should not feel ignored. The companies are well aware of this fact, and they strive for excellence in maintaining good business relation with each and every customer. But, the channel partners may not always be able to do that, simply because of lack of investment and proper man-power too (they obviously are not such BIG business units like companies). So, branches in cities win in this aspect and they are more preferable to the city-customers. o Effective risk management: - Branches owned by companies posses much more effective risk management which is again a major area of concern for customers. So they have easily become the first choice for customers in cities.

PREFERENCE

FRANCHISEE OWN BRANCH DONT KNOW

4.Preference in interior or rural area

In interior side, the acceptability criteria changes and so does acceptance. Customers in rural area prefer channel associates over own branches. The reasons are as follows o Mobility Criteria: - The idea of channel associates came up because of this mobility factor. Companies can not always set up a branch in these rural places. They think that it will not be profitable investment as businesses are expected to be slightly lower in those places. So they channelize there business through channel-associates in those rural areas. Naturally channel partners are more available to the customers in interior side. So availability becomes a big issue here. Well-known employees: - Customers in rural areas can rely more on people they know personally. They prefer well-known people more than a well-trained but unknown officiates. In the case of insurance policies, this factor becomes even more important for them. As the franchises are based locally, they naturally employ local people and this comes as an advantage over branches. Positive customers: - Channel associates only have positive customers who invest in good amount.

PREFERENCE

FRANCHISEE OWN BRANCH DONT KNOW

5.Preference in town- As customers in towns are based in the middle sphere of society both economically and socially, so they prefer both channel associates and company own branches.

PREFERENCE

FRANCHISEE OWN BRANCH DONT KNOW

Data Sources During the survey both primary and secondary data are collected. Primary data are those data which are gathered freshly for a specific purpose or research objective.

Primary Data Sources ---- Structured Questionnaire , INTERNET, BROCHURE Secondary data are collected from the sources which are already exist somewhere.

Secondary Data Sources ---- Books, Internet and Newspaper.

FINDINGS & RECOMENDATION

The major findings that were revealed during the research are as follows :-

FINDINGS
1.The level of awareness among the investors about Nirmal Bang is very low 2.Most of the investors are businessman, the tendency of investing is much high among the businessmen than those involved in service. 3.Most of the investors are invest their money from Kotak securities, Sharekhan, Motilal Oswal and very few of them are known about Nirmal Bang securities pvt.ltd.

4. The most popular source of information about the market among the investors are television and newspaper followed by internet and business magazines. 5. People who trade in franchisee they face one common problem that is lack of proper infrastructure. Many franchisees do not have proper back up for electricity and broad band service. 6. Franchisee owners have lack of knowledge regarding stock / commodity market. Many franchisees have not clear idea about the equity and commodity market. 7. In franchisee traders have to pay high brokerage charge. 8 Traders of small town and rural area give more importance on personal Relation and mobility. 9. Traders who have big portfolio they like to trade from companys own branch. 10. In city traders prefer to trade in companys own branch. 11. Sometimes franchisees do not able to give proper service and guidance. 12. The investors provided valuable suggestions about better service of a broking firm. The most popular suggestions are
Good tips and calls. Less brokerage. Easy money transfer (pay-in and pay-out). Good trading software. Regular research reports. Educating the clients about the market. Good relation with the dealers and the relationship manager.

RECOMMENDATION
Keeping in mind the preference and demand of the people in different locations and studying both channel business model and own branch model and comparing the advantages and disadvantages of the models I would like to provide some suggestions which may help Nirmal Bang to choose proper expansion strategy for the growth of its market share in Eastern Region.

1.Improve the brand awareness of Nirmal Bang by increasing advertisements and promotional activities like performing campaigning programs. This will improve the brand of Nirmal Bang which will help to attract more clients.

2.Customers residing in cities prefer own branches over channel partners or franchises, the main reason being security, effective relationship management, risk management system. Besides these the high profile client prefer companies own rather than franchisee. So in cities company can go for own branch model.

3.Customers in rural area prefer channel associates over own branches due to easy communication with channel associates ,as it is not always possible for them to contact with main office. The customers of rural area emphasize on personal relation. So in rural area company can go for channel business model.

4.In town customers prefer both franchisee and branch. So in town company should make a thorough market study and take its decision. 5.If in city company goes for channel business model then that franchisee should possess good infrastructure and human resource otherwise that franchisee will not able to compete with other companies branches and franchisee. 6.Company should train its franchisees about the equity and commodity market so that they can give better service and knowledge to their customers.

BIBLIOGRAPHY

For the preparation of project and other required concepts following websites are consulted for the information Following books, magazine and newspapers are also consulted:

1) Business World 2) Business Economy 3) The Economic Times 4) Business standard

5) Business line 6) Security analysis and Portfolio management (Punithavathy Pandian)