Pawan project on icic securities

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Pawan project on icic securities

  1. 1. SUMMER TRAINING PROJECT REPORT ON “COMPARATIVE ANALYSIS BETWEEN ICICI SECURITIES LTD AND MAJOR PLAYERS IN SECURITIES MARKET” Submitted To Kumaun University, Nainital FOR PARTIAL FULLFILMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) DEPARTMENT OF MANAGEMENT STUDIES, Kumaun University, Nainital Uttarakhand Submitted by: PAWAN PUNETHA 2013 1|Page
  2. 2. STUDENT DECLARATION I am student of MBA 3rd semester of Department of Management Studies; Bhimtal has undergone a research project on “COMPARATIVE ANALYSIS BETWEEN ICICI SECURITIES LTD AND MAJOR PLAYERS IN SECURITIES MARKET " at DEHRADUN This Project has been undertaken as a partial fulfillment of the requirement for the award of degree of MBA, Kumaun University, Nainital. This project was executed during the summer break after the second semester under the guidance of DR AMIT JOSHI (Faculty of Department) at DMS, Bhimtal. Further I declared that this project is my original work and the analysis and the findings are for academic purpose only. This project has not been presented in any seminar or submitted elsewhere for the award of any degree or diploma. Counter signed by :- 2|Page (Student signature)
  3. 3. ACKNOWLEDGEMENT This project aims at understanding the workings of an organization, its external and internal processes, and the product and services it offers to its customers. ICICI Securities Limited has provided an in depth knowledge about how an organization functions, the challenges it faces and its earnest endeavor to overcome them in its objective of becoming the no.1 service provider in its product line. I thank Mr. MAX MENENGER (Country head) for selecting me as a management trainee in his organization. I would especially like to thank Mr. SATISH JOSHI (REGIONAL MANAGER) for his guidance and motivation in helping me to understand the working of the organization and the challenges ahead in the organization and the corporate world as a whole. My regards also extends to Mr. ARVIND GUPTA (TEAM LEADER) for providing an insight in the organization and their help and support and clearing my doubts and problems. PAWAN PUNETHA MBA III SEM 3|Page
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  5. 5. TABLE OF CONTENT CHAPTER-I EXECUTIVE SUMMARY 8 CHAPTER-II 2.1 INTRODUCTION 10 2.2 REVIEW OF LITERATURE 11 2.3 STATEMENT OF PROBLEM 12 2.4 OBJECTIVES 12 2.5 PROBLEM DEFINETION 13 2.6 WHY INVESTOR CHOOSE ICICI SEC LTD 13 2.7 INVESTOR EXPECTATAIONS 15 2.9 INDIAN FINANCIAL SECTOR 17 3.0 ICICI SECUR: THE COMPANY 20 3.1 COMPANY STRUCTURE 26 3.2 COMPETITORS OF ICICI 27 3.3COMPETITIVE ADVANTAGE 28 CHAPTER-III RESEARCH DESIGN AND METHODOLOG 3.4 RESEARCH DESIGN 32 3.5 SOURCES OF DATA COLLECTION 33 3.6 LIMITATIONS OF STUDY 34 5|Page
  6. 6. CHAPTER-IV DATA REPRESENTATION, ANALYSIS & INTERPRETATION 3.7 DEMATERIALISATION 37 3.8 COMPARISON TABLE OF BROKERAGE CHARGES IN INDIA 42 3.9 SWOT ANALYSIS 49 CHAPTER-V CONCLUSION AND RECOMMENDATION 52 CHAPTER-VI BIBLIOGRAPHY CHAPTER-VII ANNEXTURE 6|Page 55
  7. 7. CHAPTER - I EXECUTIVE SUMMARY 7|Page
  8. 8. 8|Page
  9. 9. EXECUTIVE SUMMARY The project focuses on the dematerialization and stock trading services provided by ICICI SECURITIES and its features which gives ICICI Securities no 1 position in financial market. The project also includes the services industry in which ICICI Securities LTD plays an important role. The organization structure, history of the company, ownership patterns, divisions and different departments in the organization are also mentioned. The primary objective of study is to understand the customer needs and their expectations from the ICICI securities and their products. The project provides an overall view on the financial standing of the company, products offered and services provided the competitors in the industry and the competitive edge of ICICI Securities LTD over others to have a distinctive position in the industry. Lastly the project involves an analysis and comparative study of the product of ICICI Securities LTD with other major players in securities market and Conclusion and Recommendations to provide a horizon of improvement and growth. 9|Page
  10. 10. CHAPTER – II INTRODUCTION 10 | P a g e
  11. 11. INTRODUCTION The stock broking industry is a service-oriented industry where brokers act as agents for investors when a security is bought or sold and are compensated with a commission. Investors would not hesitate to switch to alternative brokerage houses if they do not obtain satisfaction. Providing quality service and hence customer satisfaction should thus be recognized as a key strategy and a crucial element of long-run success and profitability for stock broking businesses. Little has been done towards understanding the expectations investors hold from their stockbrokers. Since expectations serve as benchmark to gauge the service level of brokers, the delivery of services that exceed customer expectations is one strategy that can give firms a competitive advantage. Therefore, it would seem beneficial for stockbrokerage firms, in a dynamic economic environment like India, to provide service at a good scale of quality. In addition, stockbrokers have much to gain in understanding investors’ expectations of them, as this would help the stockbrokers to serve their customers better and foster long-lasting relationship with their customers. This study therefore aims to provide a platform for understanding what the customer needs and what is being provided to bridge the gap between customer expectation and the actual service rendered. This information would be useful for those who would like to control and improve the performance of their service. The project would focus mainly on ICICI SEC LTD. understanding of the requirements of the customer and its endeavor to provide what the customer expects and hence showing that it is the market leader in the stock broking industry. 11 | P a g e
  12. 12. BACKGROUND AND LITERATURE REVIEW The Securities Brokerage Industry is cyclical and comprised of two distinct types of businesses. Brokerages, also known as financial services companies, strive to meet the investing needs of their clients, and exchanges facilitate securities trading. Net profits correlate to the performance of the broader equity market. In this market with less differentiated products and many players, there exists an oligopoly (saying in book terms), characterized by tough competition, entry and exit barriers and many more. 1. Al Ries and Jack Trout, in his work said “differentiate or die”, too many less differentiated products creates a kind of information overload, and in this clutter of too much information, products which are not properly differentiated or advertised just end up becoming a me too product. To avoid it every marketer needs to position his/ her products in a way that makes a specific image in the minds of consumers. 2. Jack Miller, in his work published on June 03, 2010, talked about how investors make investment decisions. He broke the process of decision making in pulling the buy or sell trigger. According to him investors made the investment decisions in the ways like simple screening, then lateral recommendation, followed by piggy bank investing. 3. According to U.S. Securities and Exchange Commissions‟, one of the articles: investors first evaluate their current financial roadmap, and then they evaluate their comfort zone in taking on risk. Consider an appropriate mix of investments, create and maintain an emergency fund, consider dollar averaging, consider rebalancing portfolio occasionally, and in the process also try to avoid the circumstances that can lead to fraud. 12 | P a g e
  13. 13. STATEMENT OF PROBLEM To provide ICICI SEC LTD. with meaningful recommendation (if any) to initiate a change in their products (Demat and trading etc.) after questioning prospective investors regarding the fulfillment of their expectation. OBJECTIVES OF RESEARCH: To understand and analyze the expectations of customers of ICIC SECLTD In today‟s market scenario and compare the services of ICICI SEC with Other major players in securities market. Like Hdfc sec, Motilal Oswal, angel broking, share khan, India bulls, Kotak securities. Identifying problems being faced by customers Analyzing ICICI sec‟s product in meeting these expectations. Finding deviations if any. 13 | P a g e
  14. 14. PROBLEM DEFINITION Understanding expectation of investors. Analyzing the problems being faced by investors. Understanding ICICI DIRECT products to meet these problems. Mapping a questionnaire to analyze investors’ satisfaction of ICICI DIRECT product. Contemplating the information. Providing meaningful analysis of the problem. Why investors choose ICICI SECURITIES?? It is an ICICI group company. Diverse portfolio and a lot of products under one roof. Has one of the best brokerage plans. Attractive brand. Relationship managers attached to customers. Equity research team (one of the best in the market). Controlled and low cost service structure. Large volume processing structure. 14 | P a g e
  15. 15. Expertise in coordinating multi-location responses. Safety & security of funds & stocks. Transparent dealings. Hassle-free settlements. Timely pay-in & pay-out, no follow ups. Direct deal with members (no intermediaries). Localised & personalised service. Complete suite of products - One stop financial shop for Equity, Derivative, MF, and IPO. No hidden costs/charges. 15 | P a g e
  16. 16. INVESTORS EXPECTATIONS Providing basic knowledge to investors so as to help them in understanding the stock market and making proper decisions in stocks Providing an averagely priced product so as to appeal to the investors and have a penetration effect in the market. Timely input (tips, entry and exist) to be provided to prospective clients so that they can maximize their wealth by making smart decisions. Updated info about client accounts on amounts outstanding, payment, withdrawals, shortages etc. if any. Ancillary services like providing payout facilities, direct transfers, timely payments and receipts, confirmations about order receiptance and delivery of stocks, cheques, dematerialized shares etc. Cordial relation with clients should be maintained so as to promote goodwill and business of the broker. Proper availability of RM’s to attend to clients requests so as to minimize delays in order reacceptance and minimizing customer dissatisfaction. Attractive brokerage charges (with respect to the customer needs). 16 | P a g e
  17. 17. THE INDIAN FINANCIAL SECTOR The Indian financial services industry has experienced significant growth in the last few years. There has been a considerable broadening and deepening of the Indian financial markets due to various financial market reforms undertaken by the Indian regulators, the introduction of innovative financial instruments in the recent years and the management and brokerage have been liberalized to allow private sector involvement, which has contributed to the development and modernization of the financial services sector. CAPITAL MARKET: The capital market is divided into two segments viz: a) Primary Market b) Secondary Market a) PRIMARY MARKET: Most companies are usually started privately by their promoters. However the promoters ‘capital and the borrowed capital from banks or financial institutions might not be sufficient for running the business over the long term. That is when corporate and the government looks at the primary market to raise long term funds by issuing securities such as debt or equity. These securities may be issued at face value, at premium or at discount. Let us understand the meaning of these terms:  Face Value: Face val is the original cost of the security as shown in the ue certificate/instrument. Most equity shares have a face value of Rs. 1, Rs. 5, Rs. 10 or Rs. 100 and do not have much bearing on the actual market price of the stock. When issuing securities, they may be offered at a discount or at a premium.  Premium: When the security is offered at a price higher than the face value it is called a premium  Discount: When the security is offered at a price lower than the face value it is called a discount. 16 b) SECONDARY MARKET: The secondary market provides liquidity to the investors in the primary market. Today we would not invest in any instrument if there was no medium to liquidate our position. The secondary markets provide an efficient platform for trading of those securities initially offered in the primary market. Also those investors who have applied for shares in an IPO may or may not get allotment. If they don‘t then they can always buy the shares 17 | P a g e
  18. 18. (sometimes at a discount or at a premium) in the secondary market. Trading in the secondary market is done through stock exchange. The Stock exchange is a place where the buyers and sellers meet to trade in shares in an organized manner. The stock exchange performs the following functions:  Provide trading platform to investors and provide liquidity  Facilitate Listing of securities  Registers members Stock Brokers, sub brokers  Make and enforce bylaws  Manage risk in securities transactions  Provides Indices There are two leading stock exchanges in India which help us trade are: i. National Stock Exchange: National Stock Exchange incorporated in the year 1992 provides trading in the equity as well as debt market. Maximum volumes take place on NSE and hence enjoy leadership position in the country today ii. Bombay Stock Exchange: BSE on the other hand was set up in the year 1875 and is the oldest stock exchange in Asia. It has evolved in to its present status as the premier stock exchange. RECENT ADVANCEMENTS IN THE INDUSTRY With market sentiment turning positive due to the formation of a stable newly elected government, the ripple effect is likely to felt across all the financial services in India. Financial services and real estate sector rose by 11.5 per cent in the first quarter of 2011-12. 18 | P a g e
  19. 19. Slashing interest rates, lowering factory levies and more than doubling the limit on foreign investment in corporate bonds has led to rapid growth in the financial sector. 2011-2013 saw increased inflow in to equity with investors steadily turning positive on equity with net investment of mutual funds in debt almost getting tripled. India’s market capitalization (m-cap) has touched US$ 1.24 trillion making it the largest among in the world. The Indian stock market has currently responded to the optimism of reforms by the new stable government and its continuity in policies. Falling commodity price will ease input cost of the industries. Government policies to boost the economy. Inflation is at control 9- 10%. As interest rate in developed economy is record low, India could attract investment. Reducing interest rates provide fuel to the recession economy making the financial system more secure. 19 | P a g e
  20. 20. ICICI GROUP ICICI SECURITIES LTD ICICI Securities Ltd is an integrated securities firm offering a wide Range of services including investment banking, institutional broking, Retail broking, private wealth management, and financial Product distribution. ICICI Securities sees its role as 'Creating Informed Access to the Wealth of the Nation' for its diversified set of client that include Corporate, financial institutions, high net-worth individuals And retail investors. Headquartered in Mumbai, ICICI Securities operates out of 66 Cities and towns in India and global offices in Singapore and New York. ICICI Securities Inc., the step-down wholly owned US subsidiary Of the company is a member of the Financial Industry Regulatory Authority (FINRA) / Securities Investors Protection Corporation (SIPC) . ICICI Securities Inc. activities include Dealing in Securities and Corporate Advisory Services in the United States. ICICI Securities Inc. is also registered with the Monetary Authority of Singapore (MAS) and operates a branch office in Singapore. THE SERVICES OFFERED BY ICICI SEC LTD ARE: INVESTMENT PRODUCTS BONDS IPOs MUTAL DUNDS FD NCD,s FINANCIAL PLANNING WEALTH PRODUCTS 20 | P a g e
  21. 21. PMS ASSERTS HOME LOANS LAP LAS REAL ESTATE EQUITY 3-in-1A/C PREPAID A/C ATS PAID EDUCATION 21 | P a g e
  22. 22. 22 | P a g e
  23. 23. ICICI GROUP: THE LEADING FINANCIAL INSTITUTION OF INDIA: OVERVIEW ICICI Group offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized group companies and subsidiaries in the areas of personal banking, investment banking, life and general insurance, venture capital and asset management. With a strong customer focus, the ICICI Group Companies have maintained and enhanced their leadership positions in their respective sectors. 1. ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion (US$ 1,271 million) for the year ended March 31, 2012. The Bank has a network of 2,791 branches and 10,021 ATMs in India, and has a presence in 19 countries, including India. 2. ICICI Prudential Life Insurance is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudentially, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential Life was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 47.91 billion (as of March 31, 2012) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For FY 2012, the company garnered Rs.140.22 billion of total premiums and has underwritten over 13 million policies since inception. The company has assets held over Rs. 707.71 billion as on March 31, 2012. 3.ICICI Lombard General Insurance Company, is a joint venture between ICICI Bank Limited, India's second largest bank with consolidated total assets of over USD 91 billion at March 31, 2012 and Fairfax Financial Holdings Limited, a Canada based USD 30 billion diversified financial services company engaged in general insurance, reinsurance, insurance claims management and investment management. ICICI Lombard GIC Ltd. is the largest private sector general insurance company in India with a Gross Written Premium (GWP) of Rs. 5,358 crore for the year ended March 31, 2012. The company issued over 76 lakh 23 | P a g e
  24. 24. policies and settled over 44 lakh claims and has a claim disposal ratio of 99% (percentage of claims settled against claims reported) as on March 31, 2012. 4. ICICI Securities Ltd is the largest integrated securities firm covering the needs of corporate and retail customers through investment banking, institutional broking, retail broking and financial product distribution businesses. Among the many awards that ICICI Securities has won, the noteworthy awards for 2012 were: Asia money `Best Domestic Equity House for 2012; 'BSE IPF D&B Equity Broking Awards 2012' under two categories:Best Equity Broking House - Cash Segment and Largest E-Broking House; the Chief Learning Officer Award from World HRD Congress for Innovation in Learning category. IDG India's CIO magazine has recognized ICICI Securities as a recipient of CIO 100 award in 2009, 2010, 2011 and 2012. I-Sec won this awards 4 times in a row for which the CIO Hall of Fame award was additionally conferred in 2012. 5. ICICI Securities Primary Dealership Limited (‘I-Sec PD’) is the largest primary dealer in Government Securities. It is an acknowledged leader in the Indian fixed income and money markets, with a strong franchise across the spectrum of interest rate products and services institutional sales and trading, resource mobilization, portfolio management services and research. One of the first entities to be granted primary dealership license by RBI, I-Sec PD has made pioneering contributions since inception to debt market development in India. ISec PD is also credited with pioneering debt market research in India. It is one of the largest portfolio managers in the country and amongst PDs, managing the largest AUM under discretionary portfolio management. I-Sec PD’s leadership position and research expertise have been consistently recognized by domestic and international agencies. In recognition of our performance in the Fixed Income market, we have received the following awards: “Best Domestic Bond House” in India - 2007, 2005, 2004, 2002 by Asia Money “Best Bond House” - 2009, 2007, 2006, 2005, 2004, 2001 by Finance Asia “Best Domestic Bond House” – 2009 by The Asset Magazine’s annual Triple A Country Awards Ranked volume leader - by Greenwich Associates in 2010 Asian Fixed-Income Investors Study. Ranked 5th in ‘Domestic Currency Asian Credit’ with market share of 4.5%, Only Domestic entity to be ranked. “Best Debt House in India” – 2012 by EUROMONEY 24 | P a g e
  25. 25. 6. ICICI Prudential Asset Management is the third largest mutual fund with average asset under management of Rs. 688.16 billion and a market share (mutual fund) of 10.34% as on March 31, 2012. The Company manages a comprehensive range of mutual fund schemes and portfolio management services to meet the varying investment needs of its investor’s through117 branches and 196 CAMS official point of transaction acceptance spread across the country. 7. ICICI Venture is one of the largest and most successful alternative asset managers in India with funds under management of over US$ 2 billion. It has been a pioneer in the Indian alternative asset industry since its establishment in 1988, having managed several funds across various asset classes over multiple economic cycles. ICICI Venture is a wholly owned subsidiary of ICICI BANK. COMPANY STRUCTURE: Our organization is led by individual who are professional and leaders in every sense of the world. Experts in their respective domain, esteem members of its Board of Directors are: ICICI Securities Limited. Ms. Chanda D. Kochhar,Chairperson Mr. Uday Chitale Mr. Narendra Murkumbi Ms. Zarin Daruwala Mr. Anup Bagchi, Managing Director & CEO Mr. Ajay Saraf, Executive Director Mr. Ketan Patel ICICI Securities Holding Inc. Mr. Sandeep Batra, Director 25 | P a g e
  26. 26. Mr. Sriram Iyer, Director Mr. Warren Law ICICI Securities, Inc. Mr. Anup Bagchi, Chairman Mr. Ajay Saraf Mr. Jaideep Goswami Mr. Subir Saha Mr. Robert Ng Mr. MAX MENENGER (SUB broker channel) 26 | P a g e
  27. 27. COMPETITORS OF ICICI SECURITIED LTD ARE: HDFC SECURITIES INDIA BULLS KOTAK SECURITIES SHARE KHAN SECURITIES MOTILAL OSWAL ANGEL BROKING 27 | P a g e
  28. 28. The ICICI SEC LTD Edge: Position is not squared off without margin calls. Cash transfer facility against sale & purchase of shares. Judgmental call tips given even in the processing time. Facility to place after market orders. Efficient and prompt customer service. Efficient research and analytical team. SMS alert and email notification. Short margin calls in the morning. Transfer funds with most banks. We offer discount on brokerage. Attractive margin funding facility. Flat prescribed NSDL charges. ECS of dividend in margin. Excellent market tips. No inactivity fee. IPO investments. 4 times exposure on delivery and intraday. We offer mapping with other demat absolutely free of cost. No minimum balance maintenance on R-ally. Brokerage is negotiable. Company offers demat 3 in 1 online banking A/C EASE, TRANSPARENCY, SPEED 28 | P a g e
  29. 29. 3-in-1 account is a unique Platform: Providing Demat, Trading and Savings account Transparency: Direct dealing with ICICI securities, Weekly contract Notes sent to customers Security: As per client request, orders are placed by SB Trust: No hidden charges for your customers Flexibly & Competitively priced for the end Our power packed trading terminal Advanced software‟s for trading. 29 | P a g e
  30. 30. 30 | P a g e
  31. 31. CHAPTER-III RESEARCH DESIGN AND METHODOLOGY 31 | P a g e
  32. 32. Research Methodology comprises defining and redefining the problem, formulating hypothesis or suggesting solution, collecting, organizing and evaluating the data, making deduction and reaching to conclusions. Research Methodology is a way to solve research in study and solving research problems along with logic behind them. Thus while talking about research methodologies we are not only talking of research methods but also consider the logic behind the methods. During my project, I collected data through various sources of primary & secondary data. RESEARCH DESIGN: A research design is the master plan or model for the conduct of formal investigation and survey. It is a specification of methods and procedures for acquiring the information needs for solving the problem. It decides the source of information and methods for gathering the data. A questionnaire and other forms are tested to use the collection of data. A sampling design is to be selected. Good research design ensures that the information obtained is relevant to the research question and that it was collected by objectives. Since research design is simply the framework of plan for a study, it is used as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research study. My approach to research is descriptive as well as Explorative. The major objective of the descriptive research is to describe something – usually market features or functions. Exploratory research is concerned with the identifying the new insights of investment psychology. Why investor don‟t want to invest in share market. 32 | P a g e
  33. 33. SOURCES OF DATA COLLECTION: In this research, I have used two types of data. Primary Data. Secondary Data. Sources of Primary Data includes:Telephonic Interview Personal Interview during cold calling Company prospectus & literature Questionnaire Sources of Secondary Data includes:Books related to Financial Management Internet Newspaper Company Database References given by Relationship Manager SAMPLINGDESIGN PROBABILITY/ PROBABILITY NON PROBABILITY Sampling Unit Online trading companies Sample Size 6 Online trading companies Sampling Procedure Simple Stratified Sampling 33 | P a g e
  34. 34. Otheron-linesharetradingco‟sare ICICIDIRECT.COM www.icicidirect.com Share khan www.sharekhan.com MOTILAL Oswal www.motilaloswal.com India bulls securities ltd. www.indiabulls.com HDFC Securities www.hdfcsec.com Kodak Securities www.kotaksecurities.com ANGEL BROKING 34 | P a g e www. angelbroking.com
  35. 35. Limitation of the study The information given by the person of company may not be completely correct. Some information may be given wrongly which may not be factual. The complete parameters to compare the online product are not included. Visual look of the Software and different facilities of software are not included. Only13person of company is interviewed. All the parameters may not be Relevant for all the companies. Due to limitation of time and cost constraints a sample size of only 6 Companies of online trading are chosen. This exploratory research is done focusing on the Comparative analysis scenario ofdehradun region only therefore findings and suggestions given on the basis of this research and Cannot be considered for the entire stock market Industry. As we all know, security market is highly volatile.Wemay predicts about it more accurate but due to uncertain driving forces the predictions may not work. The market risks and uncertainties are always there. The data provided by the investor and the agents can’t be assumed as 100% correct. Sampling was judgment based & simple random so chance of occurrence of error is more. 35 | P a g e
  36. 36. CHAPTER - V DATA REPRESENTATION, ANALYSIS & INTERPRETATION 36 | P a g e
  37. 37. DEMATERIALISATION In order to mitigate the risks associated with share trading in paper format, dematerialisation concept was introduced in Indian Financial Market. Dematerialisation or Demat in short is the process through which an investor’s physical share certificate gets converted to electronic format which is maintained in an account with the Depository. India adopted the Demat System successfully and there are plans to facilitate trading of almost all financial assets in Demat format in future. Through this article, we will try to understand the Demat process and its benefits from common investor’s perspective. What is it? Dematerialisation is the process of converting physical shares into electronic format. An investor who wants to dematerialise his shares needs to open a Demat account with Depository Participant. Investor surrenders his physical shares and in turn gets electronic shares in his Demat account. Storage of Dematerialised Shares - Depository Depository is the body which is responsible for storing and maintaining investor's securities in Demat or electronic format. In India there are two depositories i.e. NSDL and CDSL. Who is a Depository Participant? Depository Participant (DP) is the market intermediary through which investors can avail the depository services. Depository Participant 37 | P a g e
  38. 38. provides financial services and includes organizations like banks, brokers, custodians and financial institutions. Advantages of Demat Dealing in Demat format is beneficial for investors, brokers and companies alike. It reduces the risk of holding shares in physical format from investor’s perspective. It’s beneficial for brokers as it reduces the risk of delayed settlement and enhances profit because of increased participation. From share issuing company’s perspective, issuance in Demat format reduces the cost of new issue as papers are not involved. Efficiency and timeliness of the issue is also maintained while companies deal in Demat format. There are a lot of other benefits, but let’s focus on benefits with respect to common investor and the same are listed below. • Demat format reduces the risk of bad deliveries • Time and money is saved as you are not dealing in paper now. You need not go to the notary, broker for taking delivery or submitting the share certificate • Liquidity is very high in case of Demat format as whole process in automated. • All the benefits of corporate action like bonus, stock split, rights etc. are managed through the depository leading to elimination of transit losses • Interest on loan against Demat shares are less as compared to physical shares • Investors save stamp duty while transferring shares in Demat format. • One needs to pay less brokerage in case of Demat shares. Demat Conversion Most of the trading in shares are done in Demat format now a day, but there are few investors who still hold shares in paper format. You cannot deal in paper shares now, so you need to dematerialise them first. In order to dematerialise physical/paper shares, investors need to fill Demat Request Form (DRF), and submit the same along with physical shares. DRF is available with the DP and you simply need to raise a request for Demat conversion with the DP. 38 | P a g e
  39. 39. Their representative will come and get the DRF form signed. So the complete process of dematerialisation involves: 1. Investor surrenders the physical certificates for dematerialisation to the DP along with DRF. 2. DP updates the account of the investor and shares are allocated in investor demat holding. BENEFITS OF DEMAT ACCOUNT Safe and convenient way of holding securities (equity and debt instruments both). Transactions involving physical securities are costlier than those involving dematerialised securities (just like the transactions through a bank teller are costlier than ATM transactions). Therefore, charges applicable to an investor are lesser for each transaction. Securities can be transferred at an instruction immediately. Increased liquidity, as securities can be sold at any time during the trading hours (between 9:15 AM to 3:30 PM on all working days), and payment can be received in a very short period of time. No stamp duty charges. Risks like forgery, thefts, bad delivery, delays in transfer etc, associated with physical certificates, are eliminated. Pledging of securities in a short period of time. Reduced paper work and transaction cost. Odd-lot shares can also be traded (can be even 1 share). Nomination facility available. 39 | P a g e
  40. 40. Any change in address or bank account details can be electronically intimated to all companies in which investor holds any securities, without having to inform each of them separately. Securities are transferred by the DP itself, so no need to correspond with the companies. Shares arising out of bonus, split, consolidation, merger etc. are automatically credited into the Demat account of the investor. Shares allotted in public issues are directly credited into Demat account of the applicants in quick time. BANK ACCOUNT VS DEMAT ACCOUNT S. Basis Of No. Differentiation 1. Form of Bank Account Demat Account Funds Securities Holdings/Depo sits 2. Used for Safekeeping of money Safekeeping of shares 3. Facilitates Transfer of money Transfer of shares (without actually (without actually handling shares) handling money) 4. Where to open A bank of choice A DP of choice (can be a bank) 5. Requirement Not Mandatory Mandatory (effective from April 01, 40 | P a g e
  41. 41. 2006) of PAN Number Interest Interest income is No interest accruals on securities accrual on subject to the held in Demat account holdings 6. applicable rate of interest AQB* maintenance is specified for certain requirement 8. Minimum balance 7. bank accounts Either or No such requirement Available Not available Survivor facility *AQB - Average Quarterly Balance SIMILARITES BETWEEN BANK'S A/c AND DEMAT A/c S. No. BASIS OF PARTICULARS SIMILARITY 1. Security and Both are very safe and convenient means of holding Convenience deposits/securities 41 | P a g e
  42. 42. 2. No legal barrier on the number of bank or Demat Number of accounts accounts that can be opened 5. Funds/securities instruction of the account holder Physical transfer of Physical transfer of money/securities is not money/securities 4. Transfer of deposits (funds or securities) 3. are transferred only at involved Nomination Facility Available COMPARATIVE ANALYSIS 1. ICICI VS HDFC SEC ICICIDIRECT HDFC SECURITIES Trading Account Opening Fees 975 Rs 799 Rs Trading Account AMC Nil Demat Account Opening Fees Nil Demat Account AMC Rs 450 ICICI DIRECT CM Segment - Cash Delivery CM Segment - Cash Intraday 42 | P a g e HDFC SECURITIES 0.55% 0.50% 0.275% 0.10% the
  43. 43. Margin Trading 0.05- 0.03% 0.05% F&O Segment – Futures 0.05- 0.03% 0.05% F&O Segment – Options Rs 95- 65 per lot Rs 100 Minimum Brokerage Charges Rs 25 Rs 25 PROS- ICICI DIRECT Offers 3-in-1 account which makes stock market investment very easy for casual investors. Wide range of investment options available under one portal. Provides a low bandwidth website which works well where internet connection is slow. GTC (good till cancellation) and off-market hours order placement facility is very useful. Pros – Hdfc sec The 3-in-1 account, which includes HDFC Bank Account, HDFC Securities Trading Account and HDFC Securities Demat Account, is the best offering for retail investors in India as it provides easiest way to invest in stock market and other financial instruments. Concs: Icici direct: ICICI Security charges high brokerage in comparison to most of the brokers. Poor performance of website is reported in peak hours of trading. Concs: Hdfc securities: In addition to opening a trading account with HDFC Securities Ltd, you will also be required to open a savings bank account (quarterly minimum balance of Rs. 5000) and a DP (depository participant) account with HDFC Bank. 2. ICICI DIRECT VS INDIA BULLS ICICIDIRECT 43 | P a g e INDIABULLS SECURITIES
  44. 44. Trading Account Opening Fees 975 Rs 950 Rs Trading Account AMC Nil Nil Demat Account Opening Fees Nil Nil Demat Account AMC Rs 450 Rs 450 ICICI DIRECT INDIABULLS SECURITIES CM Segment - Cash Delivery CM Segment - Cash Intraday Margin Trading 0.55% 0.40% 0.275% 0.04% F&O Segment – Futures 0.05- 0.03% 0.04% F&O Segment – Options Rs 95- 65 per lot Minimum Brokerage Charges Rs 25 2.5%orRs 100 per lot whichever is high 4 paisa per share 0.05- 0.03% PROS OF INDIA BULLS: India bulls has good network of branches across India. Brokerage is negotiable and can be reduced up to 50-60%. 10 times exposure for intraday trades. India bulls provides trading platforms which are easy to use, rich in features and to suite different customer needs. Power India bulls Trading Terminal, Online Trading Website and Mobile Power India bulls trading platform are 3 platforms offered by them. India bulls have branches and sub brokers in almost every city in India. This helps customers who feel comfortable dealing with people. India bulls offers 2-in-1 account which includes share trading and demats account. CONS: OF INDIA BULLS Power India bulls Trading Terminal cost Rs 750 one time change. 44 | P a g e
  45. 45. There are no standard rates, fees or brokerage published on website. You should be very careful with hidden changes. No centralized support or sales team. Business is done through branches and sub-brokers. India bulls doesn't provide 3-in-1 account 3. ICICI DIRECT VS KOTAK SECURITIES ICICIDIRECT KOTAK SECURITIES Trading Account Opening Fees 975 Rs Rs 750 Trading Account AMC Nil Demat Account Opening Fees Nil Demat Account AMC Rs 450 Rs 600 ICICI DIRECT KOTAK SECURITIES CM Segment - Cash Delivery CM Segment - Cash Intraday Margin Trading 0.55% 0.49% 0.275% 0.049 F&O Segment – Futures 0.05- 0.03% 0.049% F&O Segment – Options Rs 95- 65 per lot Rs 100 Minimum Brokerage Charges Rs 25 4p for delivery,3p for Intraday & Futures 0.05- 0.03% Pros of Kotak securities: Kotak Security is a full services broker offering wide range of investment options and research reports. Kotak Securities has extended network of 1400+ branches across India. 45 | P a g e
  46. 46. It offers 3-in-1 account, the combination of broker account, bank account and a Demat account. All these accounts are linked together and work seamlessly to make stock market investment very easy especially for beginners in stock market. Kotak offers 5 different trading platforms to fulfill almost all customer requirements. Cons: The brokerage changed by them of higher than the discount brokers. 4. ICICI DIRECT VS SHARE KHAN ICICIDIRECT Share khan Trading Account Opening Fees 975 Rs Rs 750 Trading Account AMC Nil Rs 400 Demat Account Opening Fees Nil Demat Account AMC Rs 450 Rs 400 ICICI DIRECT Share khan CM Segment - Cash Delivery CM Segment - Cash Intraday Margin Trading 0.55% 0.50% 0.275% 0.10% F&O Segment – Futures 0.05- 0.03% 0.10% F&O Segment – Options Rs 95- 65 per lot Rs 100 Minimum Brokerage Charges Rs 25 Pros in share khan: 46 | P a g e 0.05- 0.03% 10 paisa per share
  47. 47. It has a strong network of over 1950 branches across India. The fund transfer from and to the trading account is free. The share transfer from and to the DP account is free when trading from Share khan trading account. The 'Trade Tiger' is the most popular trading terminal in India. Cons: Share khan doesn’t offer 3-in-1 account as it doesn’t offer banking services. Share khan brokerage is high in comparison to the discount brokers. Share khan charges Rs 400 as AMC for trading account in addition to Rs 400 for Demat account. 5. ICICI DIRECT VS MOTILAL OSWAL ICICIDIRECT MOTILAL OSWAL Trading Account Opening Fees 975 Rs Nil Trading Account AMC Nil Nil Demat Account Opening Fees Nil NIL Demat Account AMC Rs 450 Rs 441 ICICI DIRECT MOTILAL OSWAL CM Segment - Cash Delivery CM Segment - Cash Intraday Margin Trading 0.55% 0.50% 0.275% 0.10% F&O Segment – Futures 0.05- 0.03% 47 | P a g e 0.05- 0.03% 0.10%
  48. 48. F&O Segment – Options Rs 95- 65 per lot Minimum Brokerage Charges Rs 25 Rs 100 CONS OF MOTILAL OSWAL: Margin Deposit Rs 10,000+ is required 6. ICICI DIRECT VS ANGEL BROKING ICICIDIRECT ANGEL BROKING Trading Account Opening Fees 975 Rs 0 Trading Account AMC Nil Rs347 Demat Account Opening Fees Nil Rs 0 Demat Account AMC Rs 450 Rs 0 ICICI DIRECT ANGEL BROKING CM Segment - Cash Delivery CM Segment - Cash Intraday Margin Trading 0.55% 0.40 – 0.10% 0.275% 0.04- 0.01% F&O Segment – Futures 0.05- 0.03% 0.04- 0.01% F&O Segment – Options Rs 95- 65 per lot 0.04- 0.01% Minimum Brokerage Charges Rs 25 PROS: NOTHING 48 | P a g e 0.05- 0.03%
  49. 49. CONS: Useless Online Chat Support. They can't answer any of the questions you ask. The standard answer is 'Sir as per our policy we cannot provide you details on chat however can arrange call back for you'. SWOT ANALYSIS SWOT analysis is done by all the companies to be aware about the competitor and new changes in the market. The SWOT analysis leads the company to take strategic decisions. Company always highlight its strength, try to hide own weakness and in the same way try to find out strength and weakness of the competitors. S – Streng th Strength of the ICICI Securities is the main feature of the service. As it gives 3 in 1 account to the customer, the ease to trade at your convenient time is the main strength of the ICICI Direct. Following are some of the strong points of the company. Convenience of time to trade Faster transaction Paperless work 3 in 1 account facility so all work done at one place The bank has strength of the latest technologies and the most modern banking channels as net banking and the schemes such as young saver accounts also. The young and energetic staff of the bank is also one of the strengths. W- Weaknesses Weakness of company is fond out to remove it and then make the product or service better than current status. Each and every product and service 49 | P a g e
  50. 50. has weakness. It is just like two side of the coin, if you have strength then you have weakness. The weakness of the ICICI Direct.com can be said its high charges Compared to other companies. O – Opportunity Opportunity of the company is with the growth of volume of share trading and if company decides to reduce the prices to some extent then a new market segment will come up as a customer of the service. Dehradun, Haridwar being the big industrial city of Uttarakhand region the Bank has enough of opportunities to flourish its business here. ICICI Bank can also grab the opportunity of establishing its market in the nearby towns and villages by keeping their ATM machines and also by sending their marketing executives to these remote places on some specific Days. T – Threat Threat for the company can be considered as following. Growing competition Change in government rules which is negative for stock market Low prices of local brokers Low awareness of computer in public The other threat of the new entrants in the market will take up the share from them. Now a day‟s many of the financing companies are entering the d e h r a d u n Market, which is one of the biggest threats for the Banks as they provide the finance to the customers at very less rates and also at the quickest. 50 | P a g e
  51. 51. CHAPTER-VI CONCLUSION AND RECOMMENDATIONS 51 | P a g e
  52. 52. CONCLUSION Online Trading is successful in other parts of the world, especially in the US. That„s because it has a strong culture of using credit cards (plastic money) and a strong law and order system. If you look beyond the US, even other leading markets like Hong Kong are still in a premature stage for execution of internet trading. As for the future of internet broking in India, It sounds exciting, but when we talk about the net penetration level of telecommunication and computer usages, it is poor in India. Since the concept is new to investors, it is very important that they follow certain guidelines, which will ensure safe trading. Removing the mental block from the minds of the investor with regard to online trading. The Indian stock market faces the challenge of setting up this infrastructure. Another important point is people of India specifically; investors are not too much techno. This has been achieved through active use of cutting- edge t e c h n o l o g y and b e i n g i mp roved by h i g h l y m o t i v a t e d a n d s k i l l e d employees. The success of e-broking would depend on addressing each and every issue faced by the investors in offline trading and delivering the service in a seamless manner backed by world-class customer service. Finally I n d i a needs a robust and world class IT and telecom infrastructure coupled with explosion in Internet penetration. In under served Internet market of India, this is one definite case of ―build and they will come.‖ RESEARCH FINDINGS Limit Exposure in case of margin segment (same day) is higher than all other companies. Account opening charge is also higher than the other 52 | P a g e
  53. 53. companies. Still quotes of BSE trading time are late by 1 to 5 minutes. Some time we cannot execute trade on BSE market. Still transaction speed is not high in compare to other companies. Brokerage charges are also higher than the other companies. Some customers demanding more limits in deliver trading which is lower than other sites. Some customers are interested in account opening but not ready for maintaining minimum Rs. 5000 balance in saving account. Annual Service charge is higher than the other companies. RECOMMENDATIONS For Brokers Brokerage Firms need to ensure that their ability to provide effective customer service keeps pace with their growth, if you are marketing your firm to new customers, you better be able to provide them service when they do business with you. All firms, whether on-line, discount or full service, have an obligation to ensure the best execution of their customers„ orders. Network infrastructure will have to be stabilized. The Internet an computers will have to penetrate further in dayto-day life of investors. When security and accessibility issues are resolved and technology stabilizes successful investor will find the actual time spent trading will be minimal. Nearly all the effort involved will relate to monitoring the standards that have been set. Not so hard, but not so easy 53 | P a g e
  54. 54. FOR COMPANY: Company should decrease brokerage. Right now it is 0.75% on delivery and 0.15% on margin trading. Company should decrease the account opening charges so that more & more customers can be attracted. Annual charges should be decrease because the other companies have very less annual charges. Sometime problem arise on BSE market trading where we cannot execute trade on it. So company should improve infrastructure facility. Awareness should create among the people about this new type of technology with the help of seminar and expert session. The enterprise should try to bring in the notion of „customer orientation‟ i.e. give the customer what they require, only then can it grow and reach the highest level of customer satisfaction. An RM assessment is required after every month so as to assess their performance and ask them about the steps they have taken to retain their original customers and to induce the dormant customers to invest and also to assess if the client is satisfied with the working of their respective RMs. FOR CUSTOMER: Customer should not worry about brokerage part because services are far better and different types of products are therein the company. ICICIDirect.com is part of ICICI Group & this group is trusted by millions of people. 54 | P a g e
  55. 55. CHAPTER-VII BIBLIOGRAPHY 55 | P a g e
  56. 56. BIBLIOGRAPHY BOOKS & JOURNALS:  RESEARCH METHODOLOGY METOHDS & TECHNIQUES Author: - C.R.Kothari  MARKETING RESEARCH Author: - David. J. Luck Ronald S. Rubin WEBSITES:  http://www.religaresecurities.com  http://www.nseindia.com  http://www.bseindia.com  http://www.google.com  http://www.finsights.com  http://www.asklaila.com  http://www.moneycontrol.com  http://www.adityabirlamoney.com  http://www.economictimes.com 56 | P a g e
  57. 57. CHAPTER – VIII ANNEXURE 57 | P a g e
  58. 58. APPENDIX QUESTIONNARE 1. Name: 2. Mob No: email: 3. Company: 4. Income A) Below 2 lakh B) 2lakh to 5 lakh C) 5lakh to 10 lakh D) More than 10 lakh 5. Do you invest in share market? A) Yes B) No [A] If “yes” 1. How much you invest? 2. Which is your broking firm? 3. In which market you invest more frequently? A) Equity market 58 | P a g e B) Commodity market
  59. 59. C) Mutual funds D) Gold E) Other: ........................ 4. Are you satisfied with the service? A) Yes B) No Comment: [B] If “no” 1. Do you have “Demat Account”? A) Yes 2. Any specific reason for not investing in stock market Comment:3. Would you like to invest in share market? 1. Have you heard about “Icici securities ltd”? 59 | P a g e B) No

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