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summer intenship project on marketing strategy adopted by sharekhan

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  • 1. Project Report ON LATEST MARKETING STRATEGIES OF SHAREKHAN Kurukshetra University kurukshetar Master of Business Administration Submitted to: Submitted By: Name: SUDHIR NIGAM Ravi Garg Designation: TERITORRY MANAGER Roll No-M1212 Raj Pal Inderprastha Institute of Technology Bastara (Karnal) (Kurukshetra University kurukshetar)
  • 2. TO WHOM IT MAY CONCERN This is to certify the fact that Mr. Ravi Garg of RAJ PAL INDERPRASTHA INSTITUTE OF TECHNOLOGY has undergone his summer Training as a part of the degree of MBA in Sharekhan Ltd. Panipat from 13/06/2013 to 31/07/2013 and submitted his project entitled “Latest marketing strategy of sharekhan”. Mr. Ravi Garg Date……………… Date………… (Internal Guide) 2
  • 3. STUDENT DECLARATION I, Ravi Garg, hereby declare that the piece of dissertation report entitled “Latest Marketing Strategies of Sharekhan” has been prepared under the guidance and Supervision of “Mr. Umang kapoor” Sharekhan limited, Panipat as a part for the requirement of the degree in “Master of Business Administration” under kurukshetra University kurukshetar during the session 2012-14.To the best of my knowledge & belief, this is my own work and has not been submitted anywhere earlier for any other degree. RAVI GARG MBA 3rd Sem 3
  • 4. TABLE OF CONTENT S.No. TOPIC Page No. 1. Preface 4 2. Executive Summary 5 3. Objective & Nature of the Study 6 4. Industry overview 7 5. Development 8 6. Company profile 10 7. Indian scenario 45 8. Strategy of sharekhan 51 9. Research metrology 58 10. Data analysis 64 11. Swot 71 12. Conclusion 77 13. Limitation 78 14. Suggestion 79 15. Bibliography 80 16. Appendix 81 4
  • 5. PREFACE . With the ongoing revolution in M.B.A. where Innovations are taking at the blink of eye; it is impossible to keep the pace with the emerging trends. Excellence is an attitude that whole of human race is born with. It is the environment that makes sure that whether the result of this attitude is visible or otherwise. A Well planned, properly executed and evaluated Industrial Training helps a lot in inculcating a professional attitude. It provides a linkage between the student and industry to develop an awareness of industrial approach to problem solving, based on a broad understanding of processes and mode of operation of organization. During this period, the student gets the real experience for working in the actual Industry Environment. Most of the theoretical knowledge that has been gained during the course of their studies is put to test here. Apart from this the student gets an opportunity to learn the latest technology, which is immensely helpful in building their career . The project entitled “Latest marketing strategy of share khan” has been done in Panipat, Sharekhan RAVI GARG MBA 3rd SEM. 5
  • 6. EXECUTIVE SUMMARY The research work had an object oriented and realistic approach towards the online share trading scenario in India as well as covering the globe by and large, precisely speaking economic giants like Sharekhan. I follow market research procedure to get an extensive idea about the general perception in the mass when online share trading considered, the exact figures are involved in share trading online. To acquire customers in favor of Sharekhan was also an integral part of the job. I covered Karnal for this purpose. A brief profile about the organization was also intimated to each and every respondent in order to increase the popularity of Sharekhan.The next phases were all about to have an international look in this field of online share trading. The team examined thoroughly areas such as the number of players, technology they are offering, their customer base, whether this is appealing to the common people or not, how they market their services etc. The Indian scenario has been evaluated considering the facts like, players in the market, advantages, drawbacks, and connectivity hazards. Still, in due course of time, Indian online share trading will be able to find its hold; there is not doubt about that. 6
  • 7. OBJECTIVES There is always a purpose of every research study. The main objective of the study is given below: - • To study the attitude of people towards sharemarket or online trading. • To study the strategy of sharekhan. • To knowing the effect of marketing strategy on people. • To study the satisfaction of customers 7
  • 8. INDUSTRY OVERVIEW INTRODUCTION Stock exchanges to some extent play an important role as indicators, reflecting to performance of the country’s economic state of health. Stock market is a place where securities are bought and sold. It is exposed to a high degree of volatility; prices fluctuate within minutes and are determined by the demand and supply of stocks at a given time. Stock brokers are the ones who buy and sell securities on behalf of individuals and institutions for some commission. The Securities and Exchange Board of India (SEBI) is the authorized body, which regulates the operations of stock exchanges, banks and other financial institutions. The past performances in the capital markets especially the securities scam by ‘Hasrshad Mehta’ has led to tightening of the operations by SEBI. In addition the international trading and investment exposure has made it imperative to better operational efficiency. With the view to improve, discipline and bring greater transparency in this sector, constant efforts are being made and to a certain extent improvements have been made. 8
  • 9. HISTORY HISTORY OF THE STOCK BROKING INDUSTRY Indian Stock Markets are 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. 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 of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). 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. Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges. 9
  • 10. DEVELOPMENT An important early event in the development of the stock market in India was the formation of the Native Share and Stock Brokers’ Association at Bombay in 1875, the precursor of the present-day Bombay Stock Exchange. This was followed by the formation of associations /exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). IN addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently. In order to check such aberrations and promote a more orderly development of the stock market, the central government introduced a legislation called the Securities Contracts (Regulation) Act, 1956. Under this legislation, it is mandatory on the part of a stock exchanges to seek government recognition. As of January 2002 there were 23 stock exchanges recognized by the central Government. They are located at Ahemdabad, Bangalore, Baroda, Bhubaneshwar, Calcutta, Chenni,(the Madras stock Exchanges ), Cochin, Coimbatore, Delhi, Guwahati, Hyderbad, Indore, Jaipur, Kanpur, Ludhiana, Mangalore, Mumbai(the National Stock Exchange or NSE), Mumbai (The Stock Exchange), papularly called the Bombay Stock Exchange, Mumbai (OTC Exchange of India), Mumbai (The Inter-connected Stock Exchange of India), Patna, Pune, and Rajkot. Of course, the principle bourses are the National Stock Exchange and The Bombay Stock Exchange , accounting for the bulk of the business done on the Indian stock market. While the recognized stock exchanges have been accorded a privileged position, they are subject to governmental supervision and control. The rules of a recognized stock exchanges relating to the managerial powers of the governing body, admission, suspension, expulsion, and re-admission of its members, appointment of authorized representatives and clerks, so 10
  • 11. on and so forth have to be approved by the government. These rules can be amended, varied or rescinded only with the prior approval of the government. 11
  • 12. COMPANY PROFILE It is a Stock Broker: Sharekhan is one of the leading retail broking houses of SSKI GROUP, Which was running successfully since 1922 in the country? It is the retail broking arm of the Mumbai based SSKI GROUP, which has over eight decades of experience in the stock broking business. SHAREKHAN offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advisory, mutual fund advisory etc. The firm’s online trading and investment site www.sharekhan.com was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known or its jargon-free, investor friendly language and high quality research, the site has a registered base of over two lakhs customers. The number of trading members currently stands over 3 lacks. while online trading currently accounts for just over 5 percent of the daily trading in stocks in India, share khan alone accounts for 32 percent of the volumes traded online. About SSKI (Shri Shantilal Kantilal,Ishwarlal pvt. Ltd) group: SSKI groups also comprise institutional broking and corporate finance. While the institutional broking division caters to the largest domestic and foreign institutional investors, telecom and media. SSKI holds a sizeable portion of the market in each of these segments. As the forerunner of investment research in the Indian market, we provide the best research coverage amongst broking houses in India. Our research team is rated as one of the best in 12
  • 13. the country. Voted for times as the Top domestic brokerage house by Asia-money survey SSKI is consistently ranked amongst the top domestic brokerage houses in India. Broking… personalized if you prefer the assurance and reliability of trading through a broker, you can use our network of 250 branches and 1200 business partner outlets in over 123 cities to trade in equities as well as derivatives. We will help you with the investment process, give you advice based on extensive research and provide you with relevant and updated information to help you make informed investment decisions. Our trading services are designed to offer an easy, hassle free trading experience, whether you trade daily or occasionally. You will be entitled to a host of value added services, intended to assist you in your investment process depending of your investing style and frequency. CURRENT POSITION VISION To empower the investor with quality advice and superior service to help him take better investment decisions. We believe that our growth depends on client satisfaction. MISSION To provide the best customer service and product innovation tuned to diverse needs of : • Continuous up-gradation with changing technology, while maintaining human values. • Respond to progressive globalization and achieving international standard. • Efficiency and effectiveness built on ethical practices. CORE VALUE • Customer satisfaction through  Providing quality service effectively and efficiently 13
  • 14.  “Smile, it enhances your face value service quality stressed on periodic customer service Audits. • Maximization of stakeholder value • Success through Teamwork, integrity and People DEMAT ACCOUNT SHAREKHAN ONLINE TRADING PRODUCTS: (a) CLASSIC ACCOUNT: DEMAT A/C free for first year and Rs.400 from 2nd year onwards.(Annual Maintenance charges) Online Trading through website. No volume commitment required. Account Opening Charges: Nil (b) SPEED TRADE: A/C Opening charges: Rs. Nil DEMAT A/C free for first year and Rs.400 from 2nd year onwards.(Annual Maintenance charges).Software downloading.(CASH and DERIVATIVE) Live NSE terminal. Live BSE terminal Access charge is adjustable as per new Speed Trade Pricing Policy. BROKERAGE: - CASH BROKERAGE: - DELIVERY: 0.20%, INTRADAY: 0.02% (Negotiable According To Margin Money) EXPOSURE: - 10 TIMES (ON MARGIN MONEY) 14
  • 15. F&O BROKERAGE : - 0.02% OTHER FEATURES:- No Demat Transaction Charges in case of buying and selling through Sharekhan. For the fund transfer and withdrawal, we have tie-up with ten BANK'S- - HDFC Bank, - CITI Bank, - IDBI Bank, - UTI Bank, - UBI Bank, - Indus Bank. - Oriental Bank of Commerce -ICICI Bank -Yes bank -Bank of India If you are having bank a/c in one of them, you can transfer the funds and withdraw the funds online from your trading a/c at anytime. Along with above following benefits are available: BTST (Buy today Sell Tomorrow) Online IPO's available. Online Mutual Funds available. Dial -n- Trade facility 15
  • 16. DOCUMENTS REQUIRED:- (A) TWO PHOTOGRAPH (B) For Identification Proof - VOTER ID / DRIVING LICENCE / PASSPORT/ PAN CARD (C) For Residence Proof - BANK STATEMENT / VOTER ID / RATION CARD / DRIVING LICENCE/PASSPORT /TELEPHONE BILL STATEMENT / ELECTRICITY BILL STATEMENT (ANY ONE) (D) Cheque of account opening amount ****PAN Card is Mandatory 16
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  • 18. Unlike browser based trading applications that require moving from page to page to execute a single transaction, trade tiger is a net based executable application that provides everything a trader needs on one screen, thereby, reducing the maximum time required to execute a trade by a huge margin. SPEEDTRADE offers a tick-by-tick update on stock price movements with market depth and intra-day chart and lets the client do his own stock/technical analysis. Speed Trade Plus extents the power of online trading from cash markets to futures & options on a single screen, you can trade cash as well as future & option contracts other features include advanced intra-day charting (Bar & Japanese Candlestick Charts) easy order placement and instant trade confirmations in seconds, price alters, research calls, and derivative tool-kit to help you trade like the experts. Power packed features 1. Real time streaming quotes, tic-by-tic chart 2. Market summary (most traded, highest value etc) 3. Ability to customize the terminal screen 4. Hot keys similar to BOLT & NEAT 5. Instant order execution & confirmation 6. Reports for personal account details 7. Pre-defined detailed sector-wise script list 8. Simple order entry process 9. Alerts and remainders 10.Ability to place limit order and subsequently modify /cancel instantly. Sharekhan Research: Receive high performance trading recommendations from Sharekhan yes we boast of strike rates as high as 70-90% in booking recommendations in the money. Our first rule is not to 18
  • 19. lose money and the second to make some. If you didn’t believe making money was a scientific process and there was a method in the madness we have broken the myth and with consistency. Investment ideas: For investment the application of the bottom-up approach of investing with a clear focus on stock picking has resulted in investment ideas that have withstood the storm to deliver returns to patient investors. Effective money management with appropriate risk rewards, the relentless use of stop losses. And our clear – cut focus on the importance of timing the market accurately has contributed to this success. Trading calls: Trading will never be the same again once you are accustomed to the disciplined trading tools that we provide, that help you to achieve your trading objective of high profits and limited risk. Some of the most unique and customized products are developed to meet your specific needs. We believe that making money involves had work and you need to be brace that’s right a brave heart. Research team: All this is made possible by a team of dedicated analysts who have years of working experience in the industries that they track, and a proven track in using their knowledge of the investment science to deliver results. Depository services: Sharekhan offers you the convenience of broker – DP. It will help you meet your pay-in obligations on time thereby reducing the possibility of auctions. They understand your need for flexibility therefore they accept late instructions without any extra charge. They execute 19
  • 20. the instruction immediately on receiving it. You can view your update account statement on internet. Sharekhan depository service offers DMAT services to individual and corporate investors. We have a team of professionals and the latest technological expertise dedicated exclusively to out DMAT department. You can avail of Demat ‘Remant, Repurchase, Pledge, Transmission facilities at our branch and business partner’s outlets.They have designed product like classic, speed trade and speed trade plus. Classic: This account allows you to trade through their website and is suitable for the retail investor. There online trading website also comes with a Dial in trade service that enable you to buy and sell shares by calling there dedicated toll-free number 1800-22-7050.1800-22-7500. Speed trade: Speed trade is a next generation online trading product that brings the power of your broker’s terminal to your PC. It is ideal for active traders who transact frequently during day’s trading session to capitalize on Intraday price movement. Speed trade is an internet based application available on a CD, which provides everything a trader is needs on one screen, thereby, reducing the time required to execute a trade. Trade tiger:: This comes with all the features of speed trade along with an additional power to trade in derivatives. If he ask more details about speed trade and ST plus then proceed with below given key features. 20
  • 21. Key features of Speed trade and Speed trade Plus: 1. Single Screen Trading Terminal for NSE cash, NSE F$O & BSE 2. Real-time Screaming Quotes. 3. Live Tic-by-Tic intra day Charting 4. Instant order / Trade confirmations in the same window 5. Hot keys similar to Brokers Terminal 6. Alerts and reminders 7. Market summary(cost traded scrip, highest value etc) 8. Back-up facility to place trade on direct phone lines Classic / Speed Trade / Speed Trade Plus one time registration fee 750/500 / 1500. 0.50% (plus 8% service tax, 0.005% turnover tax, 0.01% stamp duty) will be charged on each side. Minimum brokerage of 10 paisa on each share will be charged on 3 each side. Minimum brokerage of Rs.16 will be charged per transaction. 0.1% (plus 8% service tax, 0.005% turnover tax, 0.01% stamp duty) will be charged on each side Minimum brokerage of 2 paisa will be charged on each side. For margin trading the exposure is 10 times. 21
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  • 25. System Requirements You'll need access to a computer which has at least the following configuration: A. Pentium, Minimum 1 GB RAM B. Windows 7/XP/VISTA C. Internet Connection D. Internet Explorer E. Java enabled in IE 25
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  • 27. Area of investment through Sharekhan 1. Derivative 2. Commodity 3. Equity 4. IPO’s ( Initially Public Offer) 1. Derivative Market: Financial markets are, by nature, extremely volatile and hence the risk factor is an important concern for financial agents. To reduce this risk, the concept of derivatives comes into the picture. Derivatives are products whose values are derived from one or more basic variables called bases. These bases can be underlying assets (for example forex, equity, etc), bases or reference rates. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. The transaction in this case would be the derivative, while the spot price of wheat would be the underlying asset. Development of exchange – traded derivative: Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen possibility that large swings would inhibit marketing the commodity after a harvest. The need for a derivative market: The derivative market performs a number of economic functions. 1. They help in transferring risk from risk averse people to risk oriented people. 27
  • 28. 2. They help in the discovery of future as well as current prices. 3. They catalyze entrepreneurial activity 4. They increase the volume traded in market because of participation of risk averse people in greater numbers. 5. They increase savings and investment in the long run. The participants in a derivative market: The following three broad categories of participants who trade in the derivatives market: 1. Hedgers 2. Speculators and 3. Arbitrageurs Hedgers: Hedgers face risk associated with the price of an asset. They use futures or options markets to reduce or eliminate this risk. Speculators: Speculators wish to bet on future movements in the price of an asset. Futures and Options contracts can give them an extra leverage; that is, they can increase both the potential gains and potential losses in a speculative venture. Arbitrageurs: Arbitrageurs are in business to take advantage of a discrepancy between prices in two different markets. For example, they see the futures price of an asset getting out of line with the cash price; they will take offsetting positions in the two markets to lock in a profit. Factors driving the growth of financial derivatives: 1. Increased volatility in asset prices in financial markets. 2. Increased integration of national financial markets with the international markets 28
  • 29. 3. Marked improvement in communication facilities and sharp decline in their costs 4. Development of more sophisticated risk management tools, providing economic agents a wider choice of risk management strategies. 5. Innovations in the derivatives markets, which optimally combine the risks and returns over a large number of financial assets leading to higher returns, reduced risk as well as transactions costs as compared to individual financial assets. 2. Commodity: Although commodity derivatives command a humble share of 6% in the derivatives segment across the world, yet these record high volumes in the markets the world over compared to equity derivatives. In an era where risks to investments are on the rise. India needs to switch to commodity derivatives and also to whether derivatives (when these are launched), if it needs to top the list of developed nations. Of course with the other asset classes offering attractive returns. “Why commodities”? is the inevitable question that pops in one’s mind today, more so considering that the BSE sensitive index is scaling new highs by the day well, despite offering relatively lower returns, commodity derivatives provided unique money-making opportunities to a wider section of market participants, starting from planters to exporters, importers detail and to the agrarian Indian population commodities are obviously not new, nor are the advantages of trading in them unknown. 1. No balance sheet, P & 1, statement, EBITDA and regarding between the lines Commodity trading is about the simple economics of supply and demand 2. Supports are known, only resistance matters Minimum support price acts as a statutory support for many commodities. 3. No Dollar – Rupee premiums / Discounts no hedging on the NYMEX Indian commodity derivatives hedge both forex and commodity specific risks at a single cost. 29
  • 30. 4. No breaking of heads over market direction seasonality patterns quiet often provide clue to both short-and long-term players. 5. No scam, no price rigging commodity trading comes with nil insider trading and company specific risk. What’s more, why invite risk by investing in a metal company when you can trade in the metal itself? After all, while the stock price of the company is dependent on several factors including the company’s own fundamentals, the price of the metal is driven by the simple economics of demand and supply. The more demand for the mental , the higher its price and vice versa. Also compared to equities if is much cheaper to trade in commodities, where margin requirements are lower. Commencement of live trading in commodities: Black Pepper, Castor, Seed, Gold, Gold M. Silver M, RBD Palmolien, Castor Oil, Soy Seed, Refined Soy Oil, Groundnut Oil, Crude Palm Oil, Steel Long, Steel Flat, Copper, Nickel, Tin, Guarseed, etc. Soy Bean, Refined Soy Oil, Mustard Seed, Expeller Mustard Oil, RBD Palmolien, Crude, Palm Oil, Medium Staple Cotton, Long staple Cotton, Pepper, Rubber, Jute, Chana, Guar, Seeds, Gold, Kilo Gold, Silver, Mega Silver, etc. 30
  • 31. 3. Equities: Trading accounts With a Sharekhan online trading account you can buy and sell shares in an instant. Any time you want, from anywhere you like. A Sharekhan online trading account comes with a depository participant account where you can keep all your shares, in safe custody with National Securities Depository. You can also like a Sharekhan online trading account to an Internet banking account of your choice, so that you can move cash in and out of this account easily, without the bother of writing Cheque all the time. Sharekhan offers two types of trading accounts to suit your trading habits. Sharekhan account and Sharekhan. Trading services Trading is super fast , extremely safe and high secure at Sharekhan. Apart from providing the most advanced trading platform in the country, Sharekhan also offers facilities like instant cash transfer, after-market order, limit against shares and four times exposure on margin. Trading products: 31
  • 32. For timely and accurate “Buy” and “Self” recommendations try our Super-Duper trading products. Depository services: You can open a Depository Participant (DP) account, either through a Sharekhan branch or through a Sharekhan franchisee. There is no fee for opening a DP account with Sharekhan. However a nominal deposit (refundable) is charged towards services which are adjusted against all future billings. Sharekhan offers dematerialization/ Rematerialisation services to individual and corporate investors. • Dematerialization is the process by which a client can get physical certificates converted into electronic balances maintained in his account with the DP. • Rematerialisation is the process by which a client can get his electronic holdings converted into physical certificates. Sharekhan also offers Pledge facility which enables you to obtain loans against your dematerialized shares. So you get liquidity without having to sell your shares. You can also obtain RBI Relief Bond forms from any of our branches and franchisees present in over 123 cities. Visit our site for more information on RBI Relief Bonds. 32
  • 33. Content features: At Sharekhan online trading in equities is made easy with the help of jargon-free investment advice. If you experience our language presentation style or content, you will find a common thread – the one that helps you make informed investment decisions and simplifies investing in stocks. Track domestic and international stock incidents with “Indices at a Glance” Get real-time stock quotes , live NSE ticker, daily top 5 gainers/losers, volume toppers and more market statistics, all at Sharekhan. Known about the market as it happen through “Live markets”. Keep abreast of the latest news and developments not only in the stock market but also in the world outside with “Live News” brought to you by Reuters. We also have a tie-up with Capital Market News Service for “Archive News”. “Market Commentary” brings you a bird’s eye view of the day’s market. Track the futures market with “Future Commentary”. Tune in to “Punter’s Call” for technical analysis of the market. 33
  • 34. Have exhaustive data on over 5,000 companies at your fingertip with “All Company Info”. Which stock is on Share khan’s recommendations list? Find answer to this billion dollar question in the “Investment Ideas” section. New want investing? Join our “School” for a crash course in investing and more. Equip yourself with “Find Company” – an immensely powerful tool that helps you sift through 6,000 companies to home in on only those that meet your stringent fundamental parameters. Keep abreast of all corporate action like board meetings general body meetings bourses splits etc. with “Market Calendar”. 4. IPO’s: An IPO, or Initial Public Offering, is the sale of shares by a company to the public for the first time colloquially, it is said that a company is ‘going public’. How is then that company like ONGC and GAIL, which are already listed, are going for an “IPO” again? The government is the majority stockholder in these companies and it is offering a percentage of its stock now to the public. So strictly speaking, public sector companies that are already listed are not having their ‘IPO’ but they are going for a ‘public offering’ of their shares it’s technical distinction and one that should not bother individual investors. To apply to an IPO you have to fill an IPO application form. These forms are available in stalls outside the stock exchanges and with vendors in various other areas.You can also get an application form through a share broker or investment consultant, if you have one. Else forms are available at various banks. 34
  • 35. A good idea is to check the Web site of Karvy Consultants (www.karvy.com) who are often registrars or lead managers for issues. The other option is to check the SEBI website (http//www.sebi.gov.in) for the prospectus of a particular IPO. The prospectus lists the lead managers for the IPO and you can get a copy of the application form from their centers. Once you get the form, you have to fill it, remit the amount after calculating the number of shares applied for the bank that is designated in the form as collecting center for that IPO. If you have a demat account, then you can apply for the shares directly through your demat account or thee is an option of physical delivery of share certificates. Some IPO offer only demat (dematerialized) form of shares, while others offer both demat as well as regular (physical) shares. SEBI advices investors to get the allotment in demat forms as the shares in IPO are tradable only in demat segment in the stock exchanges. Dealing of physical shares (allocated in IPO) is not accepted. When shares are bought in an IPO it is termed primary market. The primary market does not involve the stock exchanges. A company that plans an IPO contacts an investment banker who will in turn called on securities to help, sell the new stock issue. This process of selling the new stock issues to prospective investors in the primary market is called underwriting. When an investor buys shares from another investor at an agreed prevailing market price, it is called as buying from the secondary market. 35
  • 36. The secondary market involves the stock exchanges and it is regulated by a regulatory authority in India, the secondary and primary markets are governed by the security and exchange board of India (SEBI). Currently, IPOs are being heavily oversubscribed and there are many retail investors applying for the same IPO. In such a situation, there is a high risk that even after applying for an IPO an Individual investor might not get an allotment of the shares. Buying in the primary market does not assure an investor of allotment of shares.There is also a risk that the price of the share may fall within a few days or weeks of the listing. An individual investor needs to take a call on how he thinks the market will behave over the next few months and decide on his/her strategy accordingly. In a bear run, prices usually fall after the stock lists. Hence, it might make more sense to buy in the secondary market. But in a bull run, like the Sensex is experiencing now, prices of the shares are likely to zoom up and so applying during the IPO is the best way to get the share at its cheapest. If you are in the market for the long term this question should not bother you as you would not be looking at profit booking within a few months. Track record of the promoters: Background and experience of the promoters, the management team and their expertise is one of the main factors that needs to be Considered as they will be ones responsible for the profitability of the company. Studying this point will help investors avoid fly by night promotes and companies. Financials: The Company’s balance sheet is a very important document and investors should look at it carefully. Investors should look at not just the current balance sheet but also that of the last three to four years to get an idea o the company’s growth and focus. 36
  • 37. Prospectus: Read the prospectus for the company carefully. The prospectus called as red- herring prospectus is a document that every company that goes for a public offering has to file with the SEBI. The prospectus has all the details about the company, the risk factors and the company’s financials. You can get the prospectus for companies going public at the SEBI website http://www.sebi.gov.in/index.jsp? Content Disp= Department & dep_id=1. Issue price: Investors need to decide if the issue is worth investing in at that price. One-way of checking the valuation is to look at the price-earnings (P/E) multiple. The P/E multiple is the ratio of the share price to earnings per share (EPS which is listed in the balance sheet). P/E of the issue should be compared with the industry average and the other companies in the sector. Apart from these three important points other factors like amount to be paid on application, the lead manages for the issue, the stock exchanges that issue plans to list on and the current market sentiment are other factors to watch out for. Price band comes into play when IPOs are done through a book-building process. IPOs if they have gone for the book-building route will mention a price bank. For instance, Biocon which has declared a price band of Rs. 270 to Rs. 315 per equity share of face value Rs. or ONGC which has set a price bank of Rs. 680-750. Book-building is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices which are above or equal to the floor price (the minimum price). The final price of the share is determined after the bid closing date, based on certain evaluation criteria. 37
  • 38. Individual investors are encouraged to bid at the floor price. When all the bids are received and the final price is decided, those who have got the allotments will have to pay that price, irrespective of the price they had bid on. So price bank indicates the range which the investment bankers think that the share is likely to be priced in. No. if the offer is oversubscribed by a few times then the chances of getting an allotment is high. However, if it is oversubscribed heavily (by over 15 times) then the chances of getting an allotment progressively decrease SEBI uses a lottery system as well as a proportionate allotment formula. The key is to remember that there is no guarantee that you will any shares at all if you apply for an IPO. If you have applied, you can know the status by calling the registrar, whose name will be listed on the prospectus or the application form, after 30 to 40 days from the closing date of the issue. In a book-building issue, you can know the status by calling the registrar after 20 days from the closing date. If you have got an allotment then the share certificates will be mailed to you. Karvy consultants act as registrars to a large number of issues. If the are the registrars you can check the allotment status on their web site. If you have got an allotment then the share certificates will be mailed to you.You will get a refund 40-45 days from the closing date of the issue. In book-building issue, you will be getting the refund in 30-40 days from the closing date. AWARDS AND ACHIEVEMENT: 8 July 2005, Mumbai: Sharekhan won the award by the vote of consumers around the country, as part of India’s largest consumer study cover 7000 respondents – 21 products and services across 21 major cities. The study, initiated by Awaaz – India’s first dedicated 38
  • 39. consumer channel and member of the worldwide CNBC Network, and AC Nielsen – ORG, Marg, was aimed at understanding the brand preferences of the consumer and to decipher what are the most important loyalty criteria for the consumer in each vertical. In order to select the award recipient, spontaneous responses, rather than promoted responses were garnered, with an intention to glean unbiased preferences. Opinions were garnered from owners of each of the categories, to get experimental responses, which are likely to be more realistic and grounded in nature. Further, preference also indicates future intentions of repeat purchases. The reasons behind the preferences for brands were unveiled by examining the following. • Tangible features of product / service. • Softer, intangible features like imagery, equity driving preference. • Tactical measures such as promotional / pricing schemes. Sharekhan is honored to be voted as the most preferred stock broking brand in India our focus has always been to demystify the stock market and empower the investors to take informed decisions”, said Jaideep Arora, Director, Sharekhan “The Award increases Sharekhan’s responsibility to persistently delight our customers with user-friendly trading experience and we shall continue our focus to evolve business strategies that keep us aligned with our customers need Sharekhan signs on Blue Lotus as communication partner: Mumbai July, 2005 Sharekhan, the retail broking arm of SSKI group, one of the largest stock broking houses in the country, signed on Blue Lotus Communication Consultancy as its communications partner recently. Sharekhan aims to gain a substantial market share through various new initiatives like First step, Platinum Guild & Power Club and communications has been identified as a major marketing initiative by the company. 39
  • 40. First step, an initiative aimed at demystifying the stock markets to the layperson, provides guidance, knowledge and jargon-free research to help the first time investor take their careful first steps in the stock market. With over a million new investors having entered the stock market over the last year, the product was launched to address the market need to provide structured supervision to the stock market novice. On a fast growth spree, Blue Lotus Communications Consultancy has acquired its 6th client over the last month amounting to an addition of Rs.5 crores to the agency’s capitalized turnover. Speaking on the growth of the company, N. Chandramouli, CEO, Blue Lotus Communications Consultancy said, “The acquisition of the Sharekhan account is extremely prestigious for Blue Lotus. The communication of Sharekhan will be unique since it uses a combination of technology and finance to achieve the objectives of the client. Our strengths have in these sectors have proven to be a dovetail fit for Sharekhan. Founded in October 2002, Blue Lotus has an impressive client portfolio with names like Trend Micro, TWS Holding, Bristlecone, Mahindra Special Services Group, Habitat International Spryance and Johnson & Johnson Acuvue. Having gained these accounts through aggressive pitches the Rupees Fifteen Crore agency employs 50 people across its 5 offices. “We have always believed that public relations are an essential marketing tool that helps build brand credibility, trust and recall. PR is an essential ingredient in any communications portfolio and the progressive companies like Sharekhan have recognized this need. We have an aggressive education and awareness campaign linked up for this online stock trading major”, added Chandramouli. 40
  • 41. Sharekhan seen to revive interest in net trading : Trading in stock markets through the internet, which took a dip due to investor apathy because of prolonged bearishness in recent years, is witnessing a revival of interest and is expected record growth in the coming years. The retail investors in the capital market are the most neglected lot with no access to research and Sharekhan, the retail broking arm of SSKI group, one of the oldest members of the BSE, seeks to fill this vacuum felt by retail investors, according to Mr. Tarun Shah, CEO, Sharekhan, Mumbai. Speaking to business line on the sidelines of the opening of the Coimbatore branch of Sharekhan, he said the company had invested about Rs.13 crore in the last two years is creating the requisite infrastructure by way of branches and for internet trading. With presence in about 123 cities across the country now, it will seek to consolidate its presence in the current year and focus on expanding its membership. He said “Sharekhan enjoyed about 20 percent market share in Web business (Internet trading) in stock markets. Three years ago, web trading showed lot of promise but with the market witnessing a downturn, there was not much interest among retail customers”. The company has been adding around 1,000 customers a month and felt that for retail customer; web trading was a very good medium particularly as it provided live information. Mr. Tarun shah, when asked about the number of investors who were hooked on to Web trading, said numbers could be ‘misleading’. While his company has about 10,000 plus 41
  • 42. customers, ICICI securities claimed to have 1.20 lakh customers and there were other players like HDFC too. His estimate was that the number of active web traders would be in the 30,000 – 50,000 regions. He said this number was growing at 5 percent to 10 percent a month and this was a segment that could not be ignored. He said in Sharekhan, web trading constituted about 1 percent to 2 percent of the revenue in 2001-02. But in 2002-03, when the overall revenue trebled, the share of Web trading constituted 22 percent of the revenue. As Sharekhan’s daily trading volume was over Rs.200 crore, the share of web trading at about Rs.40 crore a day was substantial and a larger part of the volume was coming from day traders. Commenting on the growth of internet trading in the stock markets, he said share of web trading in the total turnover of the capital markets was miniscule now just about 1 to 2 percent. But in the next two or three years, he expected this to go up to 10 to 15 percent. There was huge scope for growth in this segment of business, he said. His company knew share broking best and would stick to that, he added Mr. Tarun shah said Sharekhan recently obtained license to offer Portfolio management services (PMS). It was offering a range of products to suit retail investors and PMS when launched, would cater to the requirements of the high worth-individuals. The entry-level investment for PMS membership may be around Rs.5 – Rs.10 lakh, which was need for having a well-diversified portfolio. This could be by way of taking over existing portfolio or fresh investment, he added. 42
  • 43. Sharekhan vs ICICI Direct vs HDFC vs Kotak vs Indiabulls vs 5 Paise 5 paisa 15 25.00% Sharekhan 14 23.33% Motilalsowal 0 0% ICICI Direct 15 25.00% HDFC 2 3.33% India bulls 12 20.00% Kotak 1 1.67% Any other (mention name) 1 1.67% Starcom bags Share khan’s Rs.10 core media duties: Starcom India has won the media business of Sharekhan.com and it’s parent company SS Kantilal Ishwarlal Securities Pvt. Ltd. (SSKI). The size of the business is estimated to be around Rs.10 crore. The development has been confirmed by Utkarsh Singh head of IP business, Starcom. The Business is moving from Insight singh told agencyfaqs! That Starcom got the online media business of Sharekhan.com in may. “The client subsequently wanted to hire a new agency for the conventional media. They had already seen our work on the online media front. So, it was not very difficult to convince them to award us the entire media business,” says Singh. The company is launching a new programme for first-time investors to invest in the equity market. For this, the company will be launching mass media campaigns very soon. Singh mentioned that our of the total media budget, 70 percent would be spent on mass media, while the remaining 30 percent would be through online media. 43
  • 44. SSKI is among the leading brokerage companies in India with over eight decades of experience in the Indian stock markets. Synapze, a Goa based agency, handles the entire communication for the company including the creative business. Online Profit: A Tiger’s Tale: SSKI Investor services pvt. Ltd has been in the equities solutions business for the past eight decades. SSKI created Sharekhan in 1999, when it wanted to utilize the internet for providing financial services through an online trading website. Sharekhan is one of the country’s strongest names in the online trading domain today. The company runs India’s largest chain of ‘share shops’ with around 280 outlets in 123 cities. Sharekhan handles revenues to the tune of Rs.800 crore to Rs. 1, 000 crores on a daily basis. Says Ketan Parekh, CTO, and Sharekhan, “The focal point for any manager should be on business expansion. Technology is just a tool to achieve it, not the focus area. At the end of the day, you are simply running a business”. Parekh’s role has been critical in keeping IT investments under control, and helping in keeping these spends aligned with Share khan’s business goals. He runs a team with 50 people on board, Parekh’s unit ensures that Sharekhan retains its focus on providing reliable, secure, and fast trading services inside the jungle Sharekhan operates through online offline (SSKI) channels. The online structure forms the most integral point for business and transactions. The online component is made up of a conventional portal, a chat facility and a few ‘speed trade’ terminals. What the ‘speed trade’ channels, customers gain a better and more efficient platform for transactions. It has a terminal at the user end, connected to Sharekhan’s systems through a 44
  • 45. TCP/IP link. When a web trade request is made, it travels via HTTP/HTTPS and is not real- time. But with a speed trade transaction, the transfer of information is directly with the trading system and is entirely live. Sharekhan uses 128-bit SSL encryption technology by Revising and can also operate on cable connections, GPRS and dial –up. The offline model is more personalized in the sense that it provides the customer the opportunity to interact with a human voice through the IVR or a team of customer service executives over the telephone. InvestingOnlineissomucheasier: This account enables you to buy and sell shares through our website. You get features like a) Streaming quotes (using the applet based system) 45
  • 46. b)Multiple watch lists c) Integrated Banking, demat and digital contracts d) Instant credit and transfer e) Real-time portfolio tracking with price alerts and, of course, the assurance of secure transactions. Features of Classic Account: That enables you to invest effortlessly  Online trading account for investing in Equities and Derivatives via sharekhan.com  Integration of: Online trading + Bank + Demat account  Instant cash transfer facility against purchase & sale of shares  Make IPO bookings Click on the images for larger Screenshots  You get Instant order and trade confirmations by e-mail  Streaming Quotes  Personalized Market Scan with your own customized stock ticker!  Single screen interface for cash and derivatives  Your very own Portfolio Tracker! 46
  • 47. Are you an Investor? Get our Classic Account! The Classic Account enables you to trade online on the NSE through our website, gives you access to all our research content and also comes with Dial-n-Trade, enabling you to buy shares using your telephone. Are you a Trader? Get Trade Tiger! Trade Tiger is a next-generation online trading product that brings the power of your broker's terminal to your PC... It's the perfect trading platform for active day traders. Trade using your phone! Dial-n-Trade Free with our Classic Account, Dial-n-trade is an exclusive service for trading shares from your landline telephone or cell-phone. Demat Account Sharekhan Demat Account Our demat account services are quick, convenient and secure, coupled with the Classic Account or Speed trade. We provide standalone demat services as well. 47
  • 48. Get the Trade Tiger advantage: • Live Streaming Quotes • Access all Trading Calls • Advanced Charting features • Create your own technical rules for trading • A Single Trading Screen for BSE & NSE FEATURES OF TRADE TIGER:- A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX, Mutual Funds, IPOs Multiple Market Watch available on Single Screen Multiple Charts with Tick by Tick Intraday and End of Day Charting powered with various Studies Graph Studies include Average, Band- Bollinger, Know SureThing, MACD, RSI, etc Apply studies such as Vertical, Horizontal, Trend, Retracement & Free lines User can save his own defined screen as well as graph template, that is, saving the layout for future use User-defined alert settings on an input Stock Price trigger Tools available to guage market such as Tick Query, Ticker, Market Summary Online fund transfer activated with 12 Banks 48
  • 49. INDIAN SCENARIO Background of Exchanges: The stock trading history in India is obscured in the mists of time. Historical records, as and where they exist, rarely speak about business and speculative activity except in passing. However, the origin of stock broking in the country may go back to a time, when shares, denatures and bonds representing titles to property were first issued on the condition of transfer from one person to another and the earliest record of dealings in securities in India is the East India Company’s loan securities, way back in the 18th century. The first stock exchange in India, Bombay stock exchange was established in 1875 as ‘the native share and stockbrokers association’ and has evolved over the year into its present status as the premier stock exchange in the country. It may be noted that BSE is the oldest stock exchange in Asia, even older than the Tokyo stock exchange, which was founded in 1978. The country second stock exchange was established in Ahmedabad in 1894, followed by the Calcutta stock exchange (CSE). CSE can also trace its origin back to 19th century from a get together under a ‘neem tree’ way back in the 1830s; the CSE was formally established in May 1908. India’s other major stock exchange National Stock Exchange (NSE) promoted by leading financial institutions, was established in April 1993. Over the year, several stock exchanges have been established in the major cities of India. There are now 23 recognized stock exchanges – Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmedabad, Bangalore, Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur, Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara, Indore and Meerut. Today most of the global stock exchanges have become highly efficient, computerized organizations. Computerized networks also made it possible to connect to each other and have fostered the growth of an open, global securities market. 49
  • 50. Though Stock Broking was practiced in Calcutta as early as 1836, the members of the broking profession had neither any code of conduct for their guidance, nor any permanent place for congregation. The centre of their activity was near a neem three, where at present, stands the offices of the Chartered Bank (now know as Standard Chartered) on Netaji Subhas Road, Calcutta. In 1905, Chartered Bank began t construct their own building which led brokers to shift the arena of their operation, to the neighborhood of the recent Allahabad Bank. The brokers had no shelter and business was carried on in the open place. The inconvenience of such trading, promoted brokes to organize themselves and in may 1908, an association was formed under the name and style of the Calcutta Stock Exchange Association at 2, China Bazaar Street. At the time of incorporation in 1908, the Stock Exchange had 150 members. Today the total membership has risen to more than 900, which contains several corporate and institutional members. The number of companies listed on the exchange is more than 3,500. The annual turnover of the exchange in 1997-98 was to the tune of Rs.1, 78,779 crores. The Calcutta stock exchange has been granted permanent recognition by the Central Government with effect from April 14, 1980 under the relevant provisions of the securities contracts (Regulation) Act, 1956, with a view to render useful service to investors. In December 1993, SEBI directed the stock exchanges to discontinue the traditional system of carry forward of transactions (badla). Subsequently, it proposed an alternative system in March 1994, but no agreement could be reached on implementing this system. In February 1995, SEBI set up the G. S. Patel Committee (GSPC) to review the system of carry forward transactions. The GSPC submitted its report in March 1995. SEBI adopted the system recommended by the GSPC with some modifications in its decisions of July 27, 1995 and October 5, 1995. 50
  • 51. This Revised Carry Forward System (RCFS) was implemented in the BSE in January 1996, but the other exchanges in which the traditional carry forward system had been prevalent before December 1993 did not come forward to adopt the RCFS. A year after the implementation of RCFS, the President of the BSE wrote to SEBI in January 1997 requesting a relaxation of certain aspects of the RCFS to make to more practical and efficient. In its meeting of March 27,1997, SEBI reviewed the entire sequence of developments relating to the RCFS and specifically noted that while introducing the RCFS in July 1995, SEBI had decided that “the implementation of the revised carry forward system would be reviewed periodically by the Board, the first review being after three months”. BSE Background: The BSE sensitive index (1978, 79-100) has, to a considerable extent, been serving the purpose of quantifying the price movements as also reflecting the sensitivity of the market in an effective manner. The number of companies listed on the Bombay Stock Exchange has registered a phenomenal increase from 992 in the year 1980 to about 3,200 companies by the end of March 1994 and their combined market capitalization rose from Rs. 5,421 crores to around Rs.5,63,748 crores on 31st March 1996. These factors necessitated compilation of a new broad-based index series reflecting the present market trends in a more effective manner and providing a better representation of the increased equity stocks, market capitalization as also the newly emerged industry groups. Towards this end, the exchange constructed and launched on 27th May 1994, two index series viz. the BSE 200 and the DOLLEX. 51
  • 52. Coverage: The equity shares of 200 selected companies from the specified and non- specified lists of this exchange have been considered for inclusion in the sample for BSE 200. The selection of companies has primarily been done on the basis of current market capitalization of the listed scrips on the exchange. Besides market capitalization, the market activity of the companies as reflected by the volumes of turnover and certain fundamental factors were considered for the final selection of the 200 companies. Choice of Base Year: The financial year 1989-90 has been chosen as the base year for the price stability exhibited during that year and due to its proximity to the current period. NSE: The 13 year old National Stock Exchange (NSE) has outshined the 130 year old. Bombay stock exchange (BSE) in terms of turnover and volume. The BSE has lost its market share in these segments from 36 percent to 31 percent in the last three years. While, the turnover in BSE stood at Rs. 1,996 crore as on March 24, 2005, the turnover in NSE was Rs.3,926 crore. The volumes (numbers of shares traded) of NSE at 2.94 crore was also much higher than the volumes of BSE. In the derivatives segment, the NSE is a clear winner. It currently accounts for about 97 percent of the country’s equity derivatives volume. However, the BSE was the first stock exchange in the country to start trading in derivatives segment on June 9, 2000. The NSE has rewritten a number of rules and upset many traditions. As the derivatives segment has immense effect on the cash market, the movement in this segment mostly determines the trend in the market. 52
  • 53. Against nearly 1,000 companies listed on the NSE, the BSE has nearly 4,800 listed companies despite such a huge number of listed companies; the total market capitalization of BSE is around Rs.17 lakh crore. On the other hand the NSE has a total market cap of Rs.16.7 lakh crore. The most tracked index on NSE, CNX, and Nifty also has more number of stocks than the BSE Sensex. While, the Nifty represents 50 stocks, the Sensex represents only 30 stocks. The presence of more stocks on Nifty also gives a better valuation than Sensex. 53
  • 54. Latest Marketingstrategies of Sharekhan 1. SURVEY & INSPECTION:- The growth in technology and communications has impacted every aspect of business in some or the other forms. These effects are enduring and have changed the very way in which business is carried out. The stock market is one such institution whose very existence has been challenged by the growth in information technology. It has turned very idea of a stock market on its head. Technology has impact the working of stock markets in every sense. However, useful starting point for this study would be the study of dematerialization, or demat as it is Popularly known as. This is simply because demat has change the way stocks are held and traded and therefore has effect on every other function of the market. Dematerialization in simple terms means the conversion of shares from physical to electronic form. Demat, enabled by the use of technology is probably is single most important factor which has repercussions on every aspect of the stock markets. Demat in India started with the creation of NSDL (National stock depository limited) in 1996. UTI was one of the first institutions to use demat when it decided to dematerialize 50% of its holdings in 1997. SEBI gave a boost to demat, with compulsory trading on shares in demat form in specified scrips by institutional investors from Jan 15, 1998. 54
  • 55. Table 1: percentage of trade in demat form Timeline Percentage of trade in demat form Apr 2002 2.5% Dec 2008 79.3% Since 2012 99% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% Percentage of trade in demat form Apr-02 Dec-08 Since 2012 Dematerialization has benefited the market and the market players in more than one way. Demat is instrumental in: 55
  • 56. • Abolition of market lots • Introduction of rolling settlements • Enhancing liquidity • Brining stamp duty to zero • Reducing chances of bad delivery • Increased lending by banks and other FIs SEBI extended demat to IPO during capital reforms in capital markets in 2002. The premise being elimination of problems due to loss of allotment letters, share certificates etc., encouraging shareholders to out of for demat credit allotments, trading compulsorily in demat form within an option of holding shares in physical form for retail investors. BSE, the first exchange to be set up in India, Started as a floor-based exchange. However, NSE, setup as an alternative to BSE, was an electronic (computerized) exchange. With advancements in technology, both these exchanges moved to SBTS (Screen Based Trading System) in 1997. While NSE introduced NEAT (NSE’s Online Trading System) in May 1997, BSE introduced BOLT (BSE’s Online Trading System) in September 1997 in Mumbai. The outcome has phenomenal with respect to the number of trades taking place on these two exchanges. Information Flow: Any trading system disseminates data to market constituents, in other words, information is freely available. This has two disadvantages- • It makes easier for off-exchange transactions to occur because of availability of information. 56
  • 57. • It makes off-exchange transactions attractive due to absence of trading costs. On the other hand rapid flow of information has also meant increased volatility in the markets. In financial terms, volatility is: The degree to which the price of a security, commodity, or market rises or falls within a short-term period. An obvious reason for market volatility is technology. This includes more timely information dissemination, improved technology to make trades and more kinds of financial instruments. The faster information is disseminated, the quicker markets can react to both negative and positive news. Improved trading technology makes it easier to make it easier to take advantage of arbitrage opportunities, and the resulting price alignment arbitrage causes. Finally, more kinds of financial instruments allow investors more opportunity to move their money to more kinds of investments positions when conditions change. Adverse impacts of IT on stock markets: Some other interesting observations about impact of technology on stock markets – 1. The vintage capital model teaches us that technological change destroys old capital. We have gone further and argued that major technological change – like the IT revolution – destroys old firms. It does so by making machines, workers, and managers obsolete. Product-market entry of new firms and new capital takes time, and their stock-market entry takes even longer. In the meantime, the stock market declines. We have argued that aggregate valuation can fall below the present value of dividends because capital, private companies. Later, these companies are IPO’s, and only then does their value become a part of stock-market capitalization. 2. Indeed, the innovation may, at first, reduce the market’s value because some firms, usually large or old, will cling to old technologies that have lost their momentum. (a) The market declined in the late 1960’s because it felt that the old technologies either had lost 57
  • 58. their momentum or would give way to IT. And (b) IT innovators boosted the stock market’s value only in the 1980’s. To sum up, we can say that computerization and automation are not to be avoided. Technology has been able to make the stock markets accessible to every individual. It has also led to positive developments in terms of reduced costs and fewer errors. But, as some experiences have indicated, IT cannot be applied as a panacea for all problems. Regulation and knowledge dissemination are still important. The use of technology should be proceeding by a detailed study and assessment of all other alternatives. The key to successful use to technology is the appreciation of its constraints. 3. CANOPY:- Canopy method is one of the best method to aware the public about the something or about some product and to collect the data to accomplish the target. Sharekhan used/conducted Canopy, at various places where people mostly go or get together, such as malls, garden, banks and their ATMs, and other fabulous places. We have a proper format of questionnaire for that purpose, which should be filled by the visitor’s to the camp. That questionnaire has two part one about the awareness of visitor to stock market and second about their personal detail. In personal detail he should have to give their name, phone no and address, each part is mandatory to fill. 58
  • 59. 4. Advertisement through website:- This advertisement method is used by sharekhan to get popular among the net users. As we know Internet is most important factor of the human being life in today’s era of advancement. There is a form type pop-up occur on screen of the user that should be filled by user. 59
  • 60. That information automatically distributed to their nearest sharekhan outlets. And a contact made by sales executives to that client for their help. For more details or to open an account, submit the form and our representative will get in touch with you... Name: Email : City: Phone: Pin code: Nearest Sharekhan Office: Sharekhan client? Yes No *Min Investment for PMS is 10 Lacks Submit 60
  • 61. 5. Pumplates distribution:- Pumplates that having the key features of the broking company and address of nearest outlet to contact for help. These are distribute by the trainees, executives or other hired persons, mostly to those places where huge rush passed daily. These also supports to the outlets to collect the raw data for their further use to making them their customer and providing services. Pumplates consist key features and new achievements of the company that aware to the customer for their special services. 6. Survey Findings: This survey shows the how much the market capture by the different companies & how they satisfy their customer with the aim of profit maximization. The leader in the market is Icicidirect.com. Another leader in the market is Sharekhan, which is also on the second place & gives satisfaction to their customer in the better way. 61
  • 62. RESEARCH METHODOLOGY Methodology for Market Research: I have divided the entire city into zones and drew out samples out of each zone. The size of samples drawn from each zone depended on the prospective ness of the particular area. For e.g., if a particular research area consisted of Offices then the sample size would obviously be higher than an area like shopping mall or PVR. This is because office employees constitute the service sectors who are the active investors of today. Also, the office areas consist of people from the business class who have always been in the hunt for quick money, not to forget that smart and timely investment in the share market can yield to enormous returns. After dividing the city into zones, the target audience was probed using interviews and questionnaires. These were later analyzed to draw out conclusive results. 62
  • 63. Methodology for Customer Acquisition : The leads for customer acquisition primarily came from the questionnaires filled up by the prospective customers. A part from these customers was also pitched through personal references and contacts. Moreover the organization takes every possible effort in order to spread mass awareness. As a result of this publicity campaign, influenced prospective customers approach the organization. There are various ways to make people aware about the organization as such marketing research, Canopy, Personal References, Pop-up windows having collaboration with various portals e.g. Rediffmail.com. Person with adequate interest leaves his contact information. Later on these leads are contacted personally for further development. The organization has efficient sales stuff that excels in this job. Part time trainees are also appointed for the same. This work force been perfectly supervised by the managers. Thus all these factors sum up into a result oriented work force. These leads were the contacted through tale-calling and after developing a relationship, they were pitched in at the addresses provided by them. After giving them a presentation about the product and its advantages over its competitors, they were promised of a Demo by company sales force in case a sale had resulted. Also references were collected from such people and the same methodology was repeated. For each and every customer personal quarries have been entertained after the sale is done. 63
  • 64. Technique used by research team:- (a) Daily moving averages: Buy shares of companies that are trading above a particular long term DMA. 200 DMA is a very popular moving average. Select a shorter term moving average for the "sell" trigger. This trigger can depend on the ferocity of the rise in share price. The more ferocious the rise the shorter should be the time period for the loss cutting moving average. (b) Trend Lines: Cut losses when price of the share breaks either a trend line or a strong support. Similarly check your buys so as to ensure that they do not coincide a break in a trend line or support. On its way down from Rs 650 recently the share price of M&M looked very attractive when it briefly stabilized at Rs 350 but the share had broken a major support as also the north bound trend line. All value investors who picked up the share at that time have seen their value halve within days. (c) Accumulation/Distribution: If this indicator shows a downward trending and price is seen going up, tighten your stop losses as the price generally corrects to the trend of this indicator. (d) Price - ROC: This measures how fast the price is rising relative to the past price rise. If the share price is at a 52 week high but 'Price - ROC' is not - take notice - this could be your best price. Tighten the stop loss. (e) Moving Average cross over: If a shorter-term moving average dips below the longer term moving average there is a lack of interest in buying in the stock. If this happens when you have just bought - SELL. You can always buy later when you are sure of the stock's prospects. It may in the long-term move up but you may be able to pick it up much cheaper. 64
  • 65. (f) Volumes: Any rise in share price unaccompanied by volumes may be the handiwork of the 'O' brigade. Similarly if volumes rise with a fall in price, money is moving out of your stock and you may like to get out too. In any case do not buy when share prices fall with increased volumes. Wait till volumes and the price stabilize. (g) Crests and Troughs: The share price should be forming higher crests and troughs. Try to buy on troughs following the peak that pierced a long term moving average. Cut losses if subsequent troughs are formed below the selected DMA. 65
  • 66. COLLECTION OF DATA The study was conducted by the means of personal interview with respondents and the information given by them were directly recorded on questionnaire. For the purpose of analyzing the data it is necessary to collect the vital information. There are two types of data, this are- • Primary Data • Secondary data PRIMARY DATA:- Primary data can be collected through questionnaire. The questionnaire can be classified into four main types. • Structured non disguised questionnaire • Structured disguised questionnaire. • Non structured non disguised questionnaire • Non –structured disguised questionnaire. For my market study, I have sleeted structured non-disguised questionnaire because my questionnaire is well structured, listing of questions are in a prearranged order and where the object of enquiry is revealed to the respondents. To making a well-structured questionnaire, we have adopted three type of questions- • Open ended question • Multiple choice questions 66
  • 67. These types of questions are easy to understand and easy to give required answers. SECONDARY DATA:- Secondary data means data that are already available i.e. they refer the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data, than he has to look into various sources from where he can obtain them, in this case he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may either be published data or unpublished data. Usually published data are available in: • Various publications of the central, state and local government; • Various publications of foreign government or of international bodies and their subsidiary organizational; • Technical and trade journals; • Books, magazines and newspapers; • Reports and publications of various associations connected with business san industry, stock exchanges etc.; • Reports prepared by research scholars, universities, economists etc; • Public records and statistics, historical document and other source of published information. The source of unpublished data are many; they may be found in diaries, letters, unpublished biographies and autobiographies and also may be available with scholars and research 67
  • 68. workers, trade associations, labor because and other public private individuals and organization. 68
  • 69. DATA ANALYSIS 1.Share Market Preference:- Interpretation: This chart shows that number of 60 % of people interested in share market .Right now most people shows their interest to invest in this rather than savings. 69 60 40 0 20 40 60 80 100 120 No Yes
  • 70. 2.Portfolio size: 0 10 20 30 40 below 10 upto50 30-40 20-30 10-20 0-10 Interpretation Most people fears to risk of share market therefore rarely they are interested to invest more than 10 lakh. 70
  • 71. 3.Awareness about Sharekhan: 70 30 0 20 40 60 80 No Yes Interpretation: Mostly customers in the market are aware about the Sharekhan due to their Achievement and growth in sort period and their goodwill that generated through their services. 71
  • 72. 4. facilities awareness: 55 45 0 10 20 30 40 50 60 No Yes Interpretation Most customer are interested in Sharekhan for investing option so they have maximum knowledge about their facilities. 72
  • 73. 5.New Features awareness: 0 10 20 30 40 50 60 70 Yes No Interpretation About 60 % customer shows their keen interest to know about Sharekhan therefore they are mostly aware about new plans and feature of this. 73
  • 74. 6.Knowing about Sharekhan 20 25 10 45 Friend Website Newspaper others Interpretation Most customer knows about Sharekhan company from their friend because they are using services of Sharekhan and suggested to their friends to invest through Sharekhan. 74
  • 75. 7.Interest to service use 20 70 10 0 10 20 30 40 50 60 70 Offline Online Both I Interpretation Most people want to use online service due to some shortcomings of offline services like telephone line congestion etc. 75
  • 76. SWOT ANALYSIS Strengths: The do-it-yourself framework of online share trading offers retail investors the three benefits of transparency, access and efficiency. Paperwork diminishes significantly, and no more painful trips to your broker to check if everything’s in order online trading has made it possible to universalize access to retail investors. This was earlier very difficult, as the cost of servicing often-outweighed transaction volumes. Online brokerage ranges between 0.01- 0.05 percent of the value of transactions for non-delivery-based traders, and 0.20 percent for delivery- based trades. Once major investments in online infrastructure are over and done with and with the economies of scale coming into play – it is expected that brokerage rates would head further head further downwards. Access to online trading and latest financial happenings, apart from quotes and unbiased investment analyses, all consolidate into a value added product mix in tandem with evolving markets that are freer and fairer. The net result: n inquisitive, informed and demanding investor. Today’s investor is more involved in managing his or her assets and analyzing a vast array or investment options. Technology and today’s enabled investor have, turn, driven competition, resulting in reduced costs of trading, transparency in dealings, and 76
  • 77. pricing info that is accurate and real time. More and more investors now want to know how their trades are executed, and whether they have received the best possible price. Critical components of execution quality include the prices at which orders were executed as well as the speed of execution. The quality of execution, in turn, hinges on efficient order routing. We owe this to our investor fraternity. Weakness: Everything in the world has a flip has side to it- Transaction velocity is crucial and more often than not, connections are lousy. There’s also a degree of investor skepticism about online payment and settlement mechanisms in spite of all the encryption and firewalling brought into playtime and technology will soon assuage these concerns, which hark back to the ‘physical’ days. “The three main technology obstacles which have prevented Internet broking from taking off are: • Lack of Internet penetration • Bandwidth infrastructure • Poor quality of ISP infrastructure” Opportunities: You have some money to dabble with trading shares on BSE/NSE has always been your dream. When will you ever find the time? And besides, the hassle of finding a broker is not easy. This is your main opportunity. 77
  • 78. Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them, brokers have taken their trading rooms to the Internet. Known as online brokers, they allow you to buy and sell shares via Internet. There are 2 types of online trading service discount brokers and full service broker. Discount online brokers allow you to trade via Internet at reduced rates. Some provide quality research, other don’t. Full service online brokerage is linked to existing brokerages. These brokers allow their clients to place online orders with the option of talking / chatting to brokers if advice is needed. Brokerage rates here are higher. 5 paisa.com, icicidirect.com, indiabulls.com, Sharekhan.com, geojitsecurities.com, hdfcsec.com, tatatdw.com and kotakstreet.com are some of the online broking sites in India. Threats: On to some threat perception – Domestic funds, foreign institutional investors and operators comprise the three main market constituents. And all three include term investors as well as opportunities in their pecking order. Some, for instance, hitch their fate with what the FIIs are up to. All this spells spurting volumes. But nobody gives a damn about the resultant volatility. And some, not all, offer free investment advice over the net to lure rookie investors with misleading information. Prices of scripts can also be influenced to the advantage of vested interests, courtesy the net unlike in the US; stockbrokers out here willingly (or under the force of circumstance) assume the role of advisors, sans the neutral, non-vested stance. So, how does all this impinge on the ordinary guy’s ordinary dreams? Hurdles for online share trading:- 1. Internet fraud: 78
  • 79. In India, we see this kind of frauds happening in different way due to nature of our society. Here when you talk to broker’s staff while buying or selling, he will usually advice you to buy share which he has bought and plans to dump when price goes up. We have seen enough of pump and DUMP even without help of internet in cases of Harshad Mehta boom of 1992 and Ketan Parekh boom of 2000 (he even had cult following with index of 10 shares called K-10). Today lot of investor’s depending on TV channel for recommendation about stocks to sell, or buy or hold. Channels like CNBS offer array of experts from economist to brokers to analyst. Most of these people have vested interest in stocks they recommend and promote. One of the most common forms of securities fraud on the Internet involves an imposter who attempts to manipulate the price of a stock by disseminating phony press releases or information, or creating phony websites. A recent example of this scheme is the hoax perpetrated against US based, Pair Gain Technologies. 2. Volatility of India’s Stock Markets: Recent market developments have one more focused attention on the volatility that has come to characters India’s stock markets. Movements in the Sensex during the two years have clearly been driven by the behavior of foreign institutional investors (FIIs), who were responsible for net equity purchases of as much as $6.6 and $8.5 billion respectively in 2003 and 2004. These figures compare with a peak level of net purchases of $3.1 billion as far back as 1996 and net investments by FIIs of just $753 million in 2002. In sum, the sudden FII interest in Indian markets in the last two 79
  • 80. years account for the two bouts of medium – term buoyancy that the Sensex recently displayed. Given the presence of foreign institutional investors in Sensex companies and their active trading behavior, their role in determining share price movements must be considerable. Indian stock markets are known to be narrow and shallow in the sense that there are few companies whose shares are actively traded. Thus, although there are more than 4700 companies listed on the stock exchange, the BSE Sensex incorporates just 30 companies, trading in whose shares is seen as indicative of market activity. This shallowness would also mean that the effects of FII activity would be exaggerated by the influence their behavior has on other retail investors, who, in herd-like fashion tend to follow the FIIs when making their investment decisions. 3. Rampant Speculation: The Indian stock markets are perhaps the only place in the world where you can buy shares without having to put money on the table and sell shares you do not own. This extraordinary situation has facilitated rampant speculation by all sorts of operators – the indigenous variety. FIIs and even our own native financial institutions (FIs) as the massive UTI scandal of recent years has demonstrated. So, when the stock markets were made to collapse by a record 800-plus points on May 17 under the pretext that the left is opposed to divestment, the profits reaped by short sellers were astronomical and incalculable. Could this situation have been avoided? As aforesaid, the answer is yes. The electronic monitoring system in both the Bombay Stock Exchange and the bigger National Stock Exchange automatically stopped trading for half-an-hour when the two markets respectively 80
  • 81. collapsed by 10 percentage points. Thereafter when trading resumed and the markets fell further to another stipulated lower level, the electronic system automatically stopped all trading again for another two hours. A similar situation had occurred on Tuesday, Sept 11, 2001, the day of the terrorist attacks in New York City. At the end of the day the stock exchange authorities of both the New York Stock Exchange and the heavily weighted software exchange called NASDAQ suspended all trading for the remainder three working days during that fateful week to safeguard investor interests. So, advanced capitalism does know how to intervene “politically” in the markets when fundamental interests are in danger of violation by short sellers. 81
  • 82. 82
  • 83. CONCLUSION Sharekhan used the strategies to sell them in spite of selling their services to penetrate the today’s competitive age. Such strategies like canopy, market survey, pump late distributing etc. Therefore they are able to understand the customers’ problem and try to solve them and make a healthy relation with them for their proper guidance and achieving the maximum profit. 83
  • 84. LIMITATIONS Lack of Awareness of Stock Market: Since the area is not known before it takes lot of time in convincing people to start investing in shares primarily in IPO’s. Services of SHAREKHAN: We cannot give proper comment on competitor’s services till we use it. But I try to collect as accurate information as possible. As we all know services are intangible and we cannot predict its quality, it is a thing to feel not to see. No Proper Assurance of Right Information: The main data sources are websites, telephonic information and offices visit.  The data on websites might be possible, not get updated.  The marketing person might be possible, is not through with all concepts to which I contacted.  Sometimes, they try to hide information . Lack of Techno Savvy People and Poor Internet Penetration: Since most of the people are quite experienced and also they are not techno savvy. Also Internet penetration is poor in India. Some respondents are unwilling to talk: Some respondents either do not have time or willing does not respond, as they are quite annoyed with the phone call. Inaccurate Leads: Sometimes leads are provided which had error in it which varies from only 5 digit phone numbers to wrong phone number. 84
  • 85. SUGGESTIONS • SHAREKHAN should be organize seminar kitty parties with their customers. • SHAREKHAN should be start welfare programmes to make aware of stock market people. • SHAREKHAN should be focused on customer satisfaction and the product availability and treat their customer as GOD. The best way of competing with the competitor is to make your customer satisfied, which results in the loyalty of your customers for your company. • SHAREKHAN should provide better services after selling the services. 85
  • 86. BIBLIOGRAPHY Book and Newspapers: • C. R. Kothari “Research Methodology” New age international private limited(second revised edition-2004) • The Economic Times, Business Standard, Business Line etc. • Intelligent Stock Market Investing by N. J. Yasaswy. • The Indian Securities Market by Tadashi Endo. • The Big Picture Reflections on Our Economic Times by T.T. Ram Mohan. URLs: • http.www.netcontent.share • http.www.prweb.com.releases2005_7prweb261788hun. • http:www.me-mdia.com.centerfolds_stortes59110html. • http:www.sharekhan.com • http:www.google.com • http: www.sharekhanlearning.com 86
  • 87. QUESTIONNAIRE 1. Do you invest in stock market?  Yes  No 2. What percentage of your earnings do you invest in share trading?  Up to 10%  Up to 25%  Up to 50%  Above 50% 3. Are you aware about brand name Sharekhan?  Yes  No 4. How you know about Sharekhan?  Friend  Website  Newspaper  Others (specify)……… 5. Are you known about facilities provided by Sharekhan?  Yes  No 6. Which service you like more in Sharekhan?  Online 87
  • 88.  Offline  Both 7. Do you know about new features of Sharekhan?  Yes  No 8. Is Sharekhan market strategies better than other companies?  Yes  No 9. What are your expectations about future of Sharekhan? _____________________________________________________ ____________________________________________________ 10. How Sharekhan can help you realize your stock market dream? _____________________________________________________ ____________________________________________________ PERSONAL DETAIL NAME: _________________ AGE: __________________ CONTACT NO:______________ 88
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