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Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
Comparitive study of online share trading account and market potential of il&fs online share trad
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Comparitive study of online share trading account and market potential of il&fs online share trad

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  • 1. A study on ONLINE SHARE TRADING ACCOUNT 1 A PROJECT REPORT ON COMPARITIVE STUDY OF ONLINE SHARE TRADING ACCOUNT & MARKET POTENTIAL OF IL&FS ONLINE SHARE TRADING ACCOUNT AT IL&FS INVESTSMART LTD BY BHUSHAN BHATT MBA 3RD SEMESTER PUNE UNIVERSITY 2005-2007 VISHWAKARMA INSTITUE OF MANAGEMENT, PUNE
  • 2. A study on ONLINE SHARE TRADING ACCOUNT 2 CERTIFICATE This is to certify that the project titled COMPARATIVE STUDY OF ONLINE SHARE TRADING ACCOUNT AND MARKET POTENTIAL OF IL&FS ONLINE SHARE TRADING ACCOUNT is a bonafide work carried out by Mr.Bhushan D Bhatt. He has successfully completed the project work for the partial fulfillment of Master of Business Administration (MBA) from Pune University (2005-2007). He has worked under our guidance and supervision according to our satisfaction. Prof: Smita Sovani Dr.Sharad Joshi (Project Guide) (Director)
  • 3. A study on ONLINE SHARE TRADING ACCOUNT 3 ACKNOWLEDGEMENT First off all, I would like to extend my gratitude towards Pune University for giving me an opportunity to take up this project as preparing this project has definitely broadened my horizons. Next, I would like to extend my thanks to Vishwakarma Institute of Management, Pune for providing me with the necessary ware withal to successfully complete this project. I would also like to thank my institute director Dr. Prof. Sharad Joshi, my very helpful project guide Prof. Smita Sovani and Prof. Yuvraj Lahoti for their continuous support and guidance. I would specially like to thank Mr.Khurshid Khan and Mr. Ketan Bhatia (Deputy Manager-eBusiness) of IL&FS INVESTSMART Ltd for encouraging me and providing me with the necessary information and material, the blend of which has made it a knowledgeable project.I would also like to express my gratitude towards Mr. Viren Shetty (Manager-eBusiness), Mr. Amit Kedia and Mr. Mukesh Sah of IL&FS INVESTSMART for helping me whenever the need arised inspite of their busy schedules Last but not the least, my sincere thanks to my family and friends without whose support this project would not have become a reality.
  • 4. A study on ONLINE SHARE TRADING ACCOUNT 4 PREFACE The history of e trading goes back to 1983, when a doctor in Michigan placed the first online trade using E*TRADE technology. What began with a single click over 16 years ago has now taken the world by storm. The concept was visualized by one Bill Porter, a physicist and inventor who provided online quotes and trading services to many US firms like Fidelity, Charles Schwab, and Quick & Reilly. This led Bill to wonder why, as an individual investor, he had to pay a broker hundreds of dollars for stock transactions. With incredible foresight, he saw the solution at hand: someday everyone would own computers and invest through them with unprecedented efficiency and control. And today his dream has become a reality. With the global firms turning their eyes on INDIA as a country with immense potential for growth thanks to globalization and various economic reforms, the Indian stock markets are places receiving a lot of attention. Trading and investing in shares is gaining momentum and with the Internet facility virtually at every part of the country, it has become a reality for even a smallest person wanting to invest his surplus money but did not know where to go until recently.
  • 5. A study on ONLINE SHARE TRADING ACCOUNT 5 CONTENTS EXECUTIVE SUMMARY OBJECTIVE INTRODUCTION (ABOUT IL&FS) PROMOTERS AND SHARE HOLDERS PRODUCTS AND SERVICES ONLINE SHARE TRADING TRADING PLATFORMS VALUE ADDS CHANNELS USED INTERFIRM COMPARISON RESEARCH METHODOLOGY MARKET POTENTIAL OF IL&FS (SURVEY ANALYSIS) INTERPRETATION OF DATA CONCLUSION RECOMMENDATIONS ANNEXURE BIBLIOGRAPHY
  • 6. A study on ONLINE SHARE TRADING ACCOUNT 6 EXECUTIVE SUMMARY IL&FS INVESTSMART is a financial multiplex that has a variety of financial products under its stable such as mutual funds, insurance, online share trading, commodity trading etc. Each one of them caters to different customer needs. Again, it also has many competitors in each and every area. Share trading is one such are, which is receiving tremendous attraction in the recent times. The reason behind this is tremendous growth of the Indian economy, increasing profitability of the Indian firms as well as a spurt of foreign investment in India. Considering this reason and the rising popularity of share trading IL&FS INVESTSMART has come up with a unique product called as online share trading account which enables people to buy, sell, shares, stocks of any company listed on the BSE and NSE through the Internet. The first part of the project concentrates on the company s profile, its sub-products or trading platforms and compares IL&FS online share trading account with the major competitors. The second part of the project deals with a questionnaire, which is circulated randomly among fifty people. Based on their answers and point of views, assumptions are made. Taking this data into consideration, interpretations are made regarding the popularity of e-trading, awareness of IL&FS online share trading account among people vis-à-vis its competitors and what needs to be done by IL&FS to increase its customer base.
  • 7. A study on ONLINE SHARE TRADING ACCOUNT 7 OBJECTIVES: An objective is the brainchild behind any project report. A project report will always have a certain objective which needs to be accomplished. Following are the objectives behind the preparation of my project at IL&FS INVESTSMART LTD To compare IL&FS online share trading account with three big players in the market, i.e.ICICI, KOTAK and HDFC as well as with a latest entrant which is 5 PAISA, in the city of MUMBAI. Identify the areas where IL&FS scores above its competitors and what are its weak links. Know the market potential of IL&FS considering the fact that there are many competitors in this field with some more firms expected to join the fray in the near future. This will be done with the help of a questionnaire. Provide suggestions to the company regarding what else it can do to stand apart in this ever competitive field and thereby emerge as a market leader.
  • 8. A study on ONLINE SHARE TRADING ACCOUNT 8 INTRODUCTION: ABOUT IL&FS Investsmart Limited IL&FS Investsmart was set up with the objective of becoming one of the leading full services brokerage house in the country with a strong expertise in web based technology as well as strengths in physical distribution IL&FS Investsmart Limited (IIL) is an initiative in the field of Financial Services started by Infrastructure Leasing & Financial Services (IL&FS), an institution known for its innovative and pioneering initiatives in the areas of Infrastructure, Corporate Finance and Investment Banking. IIL was set up in October 1997 and it began its retail operations in September 1998. IIL reflects the commitment of IL&FS to bring its financial expertise within the reach of the discerning investor. Today with a presence in more than 65 cities across India through more than 175 outlets, IIL has become one of the most prominent players in the Financial Services Industry with service offerings across all the categories. RETAIL BUSINESS: The Retail Business Division at IIL is involved in dealing with a range of products, which include Equity Investments, Commodity Trading, Fixed Income products, Mutual Funds, as well as Insurance & Home Loans Advisory services. In addition it also offers allied services to facilitate the investment process. Custodial and Depository services are offered through the IL&FS Depository Services The other important business units at IIL include the Institutional Equity Broking, Project Syndication, and Merchant Banking & Institutional Debt Broking Divisions.
  • 9. A study on ONLINE SHARE TRADING ACCOUNT 9 INSTITUTIONAL EQUITY BUSINESS: Institutional Equity Business (IEB) thrives on strong relationships it has built among domestic mutual funds, banks, financial institutions, insurance companies and private sector funds over the past few years. IEB also has well-developed relationships among corporates, leveraged from its institutional pedigree. Efficient execution, quality research and high degree of compliance with stock exchange regulations and ethical business standards back IEB's services to institutional investors through IPOs, Equities, Derivatives and Mutual Funds. IEB is well positioned to offer support to the complete range of investment banking services to corporates. PROJECT SYNDICATION: The Project Syndication division has been inherited from IL&FS. The syndication desk has so far worked on Debt Syndication of various large Infrastructure Projects in the country. The mandate includes Debt structuring of highly complex and difficult projects. Project Syndication focuses on the role of an Arranger of Project and Structured loans. While fund mobilization services are provided across various areas, infrastructure sectors remain key focus area for syndication activity. The services under Project Syndication include project loan syndication, structured debt syndication and debt restructuring. The syndication business thrives on its extensive contact base and strong relationships developed over the years with Banks and Financial Institutions. MERCHANT BANKING:
  • 10. A study on ONLINE SHARE TRADING ACCOUNT 10 The Merchant Banking division offers a complete range of services, which includes management of IPO's, rights issues; buy back offers, open offers, and private placements of equity. Its extensive contact base and strong relationships developed with Venture Capital Funds and Private Equity Funds for equity placements, contributes to an effective delivery platform for its clients. DEBT BROKING DIVISION: The Debt division has an active presence in the secondary and primary debt placement markets. It deals in various products including Govt. Securities, Treasury Bills, Bonds and Debentures, State guaranteed papers and Commercial papers. It has strong relationship with Institutional clients like Banks, Primary Dealers, Mutual Funds, Provident Funds and Corporates. Debt-on-Net address all Fixed Income participants with attendant advantages of Speed, Transparency and lower costs in the primary Market. It also offers one of its kind, complex and robust investment valuation tools, in addition to value research and information on the debt and money markets in India.
  • 11. A study on ONLINE SHARE TRADING ACCOUNT 11 PROMOTERS AND SHAREHOLDERS OF IL&FS INVESTSMART LIMITED: IIL (IL&FS Investsmart limited) was promoted by IL&FS in 1997,has come a long way since its inception. It s a matter of great pride for IIL that some of world s biggest organizations are becoming equity owners of the company. The stockholding pattern as of today involves IL&FS which holds 66.01% equity stake, while Softbank Asia Infrastructure Fund L.P. (SAIF) and E*TRADE FINANCIAL, through its wholly owned subsidiary E*TRADE Mauritius Limited collectively holds 34% of the equity shares in IIL. BACKGROUND OF THE PROMOTERS OF IL&FS IL&FS: IL&FS was promoted as a joint venture between Central Bank Of India, (CBI), Unit Trust Of India, (UTI), and Housing and Finance Development Corporation, (HDFC). With the objective of extending its reach and resources and broad base its shareholding, IL&FS inducted reputed domestic & foreign investors such as International Finance Corporation, Washington, ORIX Corporation, Japan, Credit Commercials de France (CCF), State Bank of India and the Government of Singapore as its shareholders. Within a short span, IL&FS has grown into a multifaceted company with a networth of over Rs.6700 million and an asset base of over Rs.39000 million. Broadly the activities of IL&FS include: Financial Services including Investment Banking, Asset Financing. Commercialization of Infrastructure Projects. Asset Management Services to wide range of funds. Capital Markets & Merchant Banking Services. Securities brokerage including distribution of Financial Securities & Investment. Management planning services.
  • 12. A study on ONLINE SHARE TRADING ACCOUNT 12 SOFTBANK ASIA INFRASTRUCTURE FUND: SAIF is a leading Asian private equity firm headquartered in Hong Kong. SAIF is a strategic joint venture between Softbank Corporation and Cisco Systems that was formed in early 2001 to make investments in information technology, media, and telecom related companies based (or with significant operations) in the Asia Pacific region. SAIF focuses its efforts primarily on China, India and Korea. Cisco Systems, Inc. is the sole limited partner of the Fund and has committed $404 million in the first of a series of funds. Over the years, Softbank has made investments in E*TRADE FINANCIAL, Yahoo!, UTStarcom, Shanda, Sify Limited, & Intelligroup. E*TRADE MAURITIUS LIMITED: E*TRADE Mauritius Limited, an indirectly wholly owned subsidiary of E*TRADE FINANCIAL Corporation, identifies strategic investment opportunities throughout the Indian Ocean Rim. E*TRADE FINANCIAL CORPORATION: The E*TRADE FINANCIAL family of companies provide financial services including brokerage, banking and lending for retail, corporate and institutional customers. With 2.7 million households and 3.5 million customer accounts worldwide, U.S.-based E*TRADE FINANCIAL Corporation operates branded web sites in 12 countries. MANAGEMENT TEAM OF IL&FS: Over the years, the formidable team at IL&FS Investsmart Securities Limited, has been responsible for the overall management of the company and has provided direction in diverse areas of business strategy, operating management, regulatory reporting, human resources development, product development etc. Here s an overview of the team.
  • 13. A study on ONLINE SHARE TRADING ACCOUNT 13 1) Mr.Hemang Raja: Managing Director and CEO Mr. Hemang Raja, has more than 2 decades of varied experience, his core competencies in financial services industry encompassing the functions of accounts, finance, project related exposure, all India marketing and investment banking. He holds a Master's degree in Business Administration from Abilene Christian University, Texas, USA, in 1982 and Bachelor's degree in Commerce from Bombay University, in 1979. During his career, he has been associated with companies like Candy Filters India Limited, Blue Star Limited, 20th Century Finance Corporation Limited, Yokogawa Keonics Limited, and later joining IL&FS in 1990. He joined IL&FS Investsmart Securities Limited on 1999 and has since been heading the organization. 2) Mr. R.C. BAWA: Managing director Mr. R.C. Bawa has more than 3 decades of rich experience in the Indian Banking Sector and carries strong relationships with many Indian banks. His educational qualifications are Post Graduation in Personal Management & Industrial Relationship, M.A. (Political Science) from Meerut University, and BA from Punjab University. After being associated with organizations like Syndicate Bank and the National Housing Bank, joined IL&FS in 1995 and moved to IL&FS Investsmart Securities Limited in 2002. Currently, he is responsible for sourcing as well as syndication of Project Debt. He has been instrumental for a number of initiatives of the Group with the Banking Sector. 3) Mr. Sandeep Presswala: Chief Operating Officer, Retail Business Mr. Sandeep Presswala has over 15 years of experience in the Capital Markets. A Chartered Accountant, he joined IL&FS in 1997. He worked as Senior Manager responsible for investment banking activities including corporate finance, infrastructure product advisory and merchant banking activities from 1997 to 1999. He Joined IL&FS Investsmart Securities Limited in 1999. Currently, as COO-Retail Business, he is responsible for the entire retail business, including development of various branches, achieving branch level profitability, and setting up business plans & strategy.
  • 14. A study on ONLINE SHARE TRADING ACCOUNT 14 4) Mr. Sachin Joshi: Chief Financial Officer Mr. Sachin Joshi has over 16 years of financial management experience. His educational qualifications are Graduate CWA (1991), ACA (1990), LLB (Gen) and B Com (1985). He joined the IL & FS in 1994 as Manager - Resources. His responsibilities included credit rating of the company, funds mobilization from banks, domestic and multilateral institutions to take care of the working capital and other term loan requirements of the IL&FS Group. He joined IL&FS Investsmart Securities Limited in 1999 and is currently the Chief Financial Officer. He is responsible for the Accounts & Finance, Operations & Risk Management, Human Resources Development, and Administration functions. 5) Mr. Deepak Chhabria: CEO-Asia Pacific Mr. Deepak Chhabria has over 15 years of industry experience nurturing excellent relationships with Corporates, Domestic Institutions and FII s. He is a commerce graduate from Bombay University, 1989 and has done a course on technical analysis from ICFAI. Started his career in financial markets in 1992 on the institutional desk at Prabhudas Lilladher where he was instrumental in expanding the business in both institutional and corporate clients. Later he moved on to Birla Sun Life Securities to set up their institutional business. In 10 years time he built a profitable financial advisory business across Equities, Mutual Funds and Derivatives. He joined IL&FS Investsmart Securities Limited in 2004. 5) Mr. Girish Nadkarni: COO Investment Banking and Institutional Equity Business Mr. Girish Nadkarni has over 15 years experience. He holds a Post Graduate Diploma in Management from IIM, Ahmedabad (1990), ICWA (1991) and B Com, 1988, from Mumbai University. During his career he was associated with organizations like ICICI Limited, ITC Limited, TAIB Securities (India) Limited. He is member on the Panel of Market Advisors CNBC India and Star News. He started his career with ICICI Limited and gained exposure to the areas of Project analysis and developed financial pricing and tax structuring models for lease business. After this he joined ITC Ltd. and his core function was to do Strategic Planning, Treasury Operations and restructuring. He was
  • 15. A study on ONLINE SHARE TRADING ACCOUNT 15 also part of the team involved in structuring merger of ITC Classic Finance with ICICI. After completing 6 years at ITC he moved to TAIB Securities as Director. He joined IL&FS Investsmart Securities Limited in 2004. In his current capacity, he is responsible for Institutional Equity, International Business, and Placements with additional responsibility of monitoring Merchant Banking activities. 6) Mr. Rajesh Kotian: COO Syndication Business Mr. Rajesh Kotian has over 14 years of varied experience, including 11 years in the financial services sector. He is a commerce graduate from the Bombay University and a Chartered Accountant (1991). He started his career in the treasury division of WIMCO Ltd. and subsequently worked for 2 years for the Bombay Oil Industries Ltd. in the finance function. He joined IL&FS in 1994 as Assistant Manager - MIS and Budgets. Since then, his experience in IL&FS has also encompassed Financial Accounting, Operations, Treasury and Liability management. His last assignment was with IL&FS as Head of Resources, in charge of the Liability profile, across domestic and international lenders. He has moved to IL&FS Investsmart Securities Limited in May 2005 and currently heads the Project Syndication desk, responsible for business development, structuring and execution of debt mobilization mandates for achievement of profile targets. 7) Mr. Kersi Tavadia: Chief Technology Officer Mr. Kersi Tavadia has more than 2 decades of experience with some of India's large corporate houses. A Post Graduate in Computer Science, he has been leading IT department in various financial institutions prior to his stint at IL&FS Investsmart Securities Limited. During his last assignment he was heading the IT team at Motilal Oswal Securities Ltd and was instrumental in setting up of their portal www.motilaloswal.com as well as the retail technology network for their brokerage house. Kersi joined IL&FS Investsmart Securities Limited as Chief Technology Officer in 2004. 8) Mr. R. Sreesankar: Head- Research
  • 16. A study on ONLINE SHARE TRADING ACCOUNT 16 Mr. R Sreesankar has more than 2 decades of experience with large corporate houses. He completed his Bachelor of Science from University of Calicut, and started his professional career in 1986 with Canara Bank as Credit Officer. During his career he has been associated with organizations like DSP Merrill Lynch Investment Managers Ltd as Chief Investment Officer, SSKI Securities as Chief Executive Officer, Baring Asset Management as Product Head, South Asia at London, United Kingdom, ABN Amro Securities Ltd as Senior Manager-Equity Research and Canbank Mutual Fund. His last assignment was with Polaris Software as Vice President responsible for investment strategy of its business. Joined IL&FS Investsmart Securities Limited in 2005. In his current capacity, he is heading Company s research desk.
  • 17. A study on ONLINE SHARE TRADING ACCOUNT 17 PRODUCTS AND SERVICES IL&FS has a number of products and services under its stable. Not everybody is an investment professional; there is always a need for someone who can guide investors through the complex maze of investment options with unbiased and expert advice. Someone, who can be a friend and an expert who would understand the needs of the investor and help him achieve his financial goals. IL&FS Investsmart is one such financial service organization, catering to requirements of individuals & institutions by providing a broad spectrum of value added products and services for both of them. Here is the range of financial solutions for both individuals as well as institutions Retail Offering Institutional Offering Wealth Management Services Portfolio Management Services Securities Broking - Equities & Derivatives Depository & Custodial Services Distribution of Financial Products Merchant Banking Product Syndication Institutional Equity Broking and Sales Institutional Debt Broking and Sales 1) Wealth Management Services: At IL&FS Investsmart believes in partnering the customer s investments all the way through. This distinguishing feature is implemented through InvestSaathi, Wealth Management Solutions. Most of us require some assistance in making selections appropriate to our individual needs. We need sound advice from people who have the expertise to decipher the financial jargon of investment options available today. InvestSaathi is like the Smart Friend that you can rely on, who will help you maximize your investments and reach your financial goals. IL&FS s relationship managers interact
  • 18. A study on ONLINE SHARE TRADING ACCOUNT 18 with the customers on a periodic basis to discern their changing needs in tune with the changing environment. Accordingly, they will also help to review, re-evaluate and restructure their existing portfolio, as and when needed. IL&FS s experienced team s customised plans are based on the customer s investment objectives, his risk profile, time horizon and financial needs. they assist the customers through the process of maximizing their wealth. Research is the fundamental basis of all sound investment decisions and superior research allows IL&FS to deliver superior solutions. The firm s investment solutions are backed by in-depth research generated by a top-drawer research team. 2) Portfolio Management Services: Extending its expertise to personal financial advisory services, IL&FS also offer portfolio management services to its investors. The primary focus of portfolio management services is to provide individualised portfolio management through personalised portfolios, designed to fit the customer s specific investment parameters. One can choose his own securities, ensuring transparency and flexibility in all operations. IL&FS has a range of portfolio management services to suit your individual needs. 3) Securities Broking- Equities and Broking: Equity Trading Personal, transparent, prompt and convenient, trading through IL&FS Investsmart is simple and effective. Being member of the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and an institutional promoted broking house, it caters to all the trading needs of a trader, through a network of experienced dealers across the country & its comprehensive website www.investsmartindia.com. Customers have the facility of choosing between three different types of products, each one being unique and catering to
  • 19. A study on ONLINE SHARE TRADING ACCOUNT 19 different trading needs. They are Smart trade, Smart invest and Smart start. They will be explained later in detail. Derivatives Trading: IL&FS offer derivative trading in equities, in the NSE Futures and Options segment, through specialist dealers in this division. Under derivatives trading, IL&FS recommends trading on futures, strategies and options, hedging with Nifty and other products and opportunities of riskless arbitrage between various segments. 3) Depository and Custodial Services: IIL facilitates the entire process of dematerialising shares through its parent company IL&FS. IL&FS DP provides personalised service with the highest standards of efficiency. For your convenience you will continue to deal with Investsmart. The company also arranges to open Custodial Accounts for the safe keeping of the customer s securities through its parent company IL&FS. This service keeps track and takes care of all the shares related activities of a customer, ranging from: share transfer, issues of dividends and interest payments, to monitoring announcements of rights / bonus issues etc. 4) Distribution Of Financial Products: Investsmart, with its expertise in delivering complete investment solutions to its clients, offers various different financial products into categories like Mutual Funds, Fixed Income Products, Home Loans, Insurance etc. Mutual Funds IL&FS s executives help to select the right scheme from over 500 offerings, that will match the needs, goals and risks of the customer. In addition to this, they also help to
  • 20. A study on ONLINE SHARE TRADING ACCOUNT 20 constantly monitor the customer s MF portfolio, making changes to adapt to the changing needs or the market scenario, in order to make his money work for him more. Fixed Income Products A gamut of fixed deposits, bonds and debt instruments make up this section of investments. The company s managers evaluate these options thoroughly, to match the individual liquidity requirements. Home Loans IL&FS S facilities also extend to Home Loans Consultancy, to help one select the scheme that is best suited to his financial profile. Prompt and convenient loan processing procedures helps one realise his dreams later. Insurance Advisory IL&FS S Insurance team assesses the insurance needs of a person and then advises him on the choices that match his requirements. IL&FS offer a range of insurance products, including pension plans through our subsidiary companies. 5) Merchant Banking Services: The Merchant Banking function of IL&FS Investsmart comprising of the Equity Capital Market division, offers a complete range of services. This includes management of IPOs, rights issues, buy back offers, open offers, and private placements of equity. Its extensive contact base and strong relationships developed with Venture Capital Funds and Private Equity Funds for equity placements, contributes to an effective delivery platform for its clients. 6) The Project Syndication Services:
  • 21. A study on ONLINE SHARE TRADING ACCOUNT 21 The Project Syndication Business of IL&FS Investsmart has been inherited from IL&FS. The syndication desk has so far worked on Debt Syndication of large Infrastructure Projects being implemented by IL&FS. The mandate includes Debt structuring of highly complex and difficult projects. Project Syndication focuses on the role of an Arranger of Project and Structured loans. While fund mobilisation services are provided across various areas, infrastructure sectors remain key focus area for syndication activity. The services under Project Syndication include project loan syndication, structured debt syndication and debt restructuring. The syndication business thrives on its extensive contact base and strong relationships developed over the years with Banks and Financial Institutions. 7) Institutional Broking and Sales: Institutional Equity Business of IL&FS Investsmart (IEB), thrives on strong relationships it has built among domestic mutual funds, banks, financial institutions, insurance companies and private sector funds over the past few years. IEB also has well-developed relationships among corporates, leveraged from its institutional pedigree. Efficient execution, quality research and high degree of compliance with stock exchange regulations and ethical business standards back IEB s services to institutional investors through IPOs, Equities, Derivatives and Mutual Funds. IEB is well positioned to offer support to the complete range of investment banking services to corporates. 8) Institutional Debt Broking and Sales: The IL&FS Investsmart Institutional Debt division deals in primary and secondary debt placement and distribution. DebtonNet, a part of the IIL Institutional Debt division is an internet enabled platform, which has been promoted as a transparent electronic marketplace for primary debt market products, through its website, www.debtonnetindia.com. The website addresses all issuers, investors and intermediaries
  • 22. A study on ONLINE SHARE TRADING ACCOUNT 22 with the attendant advantages of speed, transparency and lower costs. It also offers one of its kind, complex and robust investment valuation tools, in addition to value research and information on the debt and money markets in India. The Debt division has an active presence in the secondary and primary debt placement markets. It deals in various products including Govt. Securities, Treasury Bills, Bonds and Debentures, State guaranteed papers and Commercial papers. It has strong relationship with Institutional clients like Banks, Primary Dealers, Mutual Funds, Provident Funds and Corporates. Debt-on-Net address all Fixed Income participants with attendant advantages of Speed, Transparency and lower costs in the primary Market. It also offers one of its kind, complex and robust investment valuation tools, in addition to value research and information on the debt and money markets in India.
  • 23. A study on ONLINE SHARE TRADING ACCOUNT 23 PRESENCE AND REACH: ILFS Investsmart currently caters to over 80000 retail customers through more than 200 outlets across 80 locations encompassing almost every Indian state. Here is the view of the company s presence across the country.
  • 24. A study on ONLINE SHARE TRADING ACCOUNT 24 ONLINE SHARE TRADING ACCOUNT: 1) WHAT IS ONLINE TRADING? SEBI committee has approved the use of Internet as an order routing system (ORS) for communicating clients orders to the exchanges through brokers. ORS enables investors to place orders with his broker on an online basis. Once the broker s system receives the order, it checks the authenticity of the client electronically and then routes the order to the appropriate exchange for execution. On execution of the order, it is confirmed on real time basis. The orders originating from the PC s of the investors are routed through the Internet to the trading terminals of the designated brokers with whom they are connected and further to the exchange for trade execution. Soon after these orders are matched and result into trades, the investors get confirmation about them on their PC s through the same Internet route. Online trading allows you to buy and sell shares on the stock exchanges (BSE and NSE) through the Internet. It is truly a powerful medium to be in direct control of your investments. The Internet revolution has been changing the fundamentals of our society. It shapes the way we communicate and the way we do business. It brings us closer and closer to vital sources of information. It provides us with means to directly interact with service- oriented computer systems tailored to our specific needs; therefore, we can serve ourselves better by making our own decisions. Today, investors can use revolutionary Internet Client-Server technology to buy and sell stocks nearly anywhere, anytime This new access by the online trading customers to low-cost transactions and cutting-edge, real-time market information that formerly belonged only to brokers has opened up extraordinary new investment opportunities as well as a crucial need for state-of-the-art information. 2) WHY SHOULD ONE INVEST ONLINE? WHAT ARE THE ADVANTAGES OF INVESTING ONLINE?
  • 25. A study on ONLINE SHARE TRADING ACCOUNT 25 There are many reasons that convince people to invest online. Today investors can use revolutionary internet-client-server technology to buy and sell stocks nearly anywhere, anytime. It saves a lot of time as well as the extra hidden cost that one incurs while dealing with a normal broker. Online investing has reached mainstream proportions. With Internet transmission times of less than a second to anywhere in the world, dealing over the Internet is faster. It is a powerful medium to be in control of your investments One can now get the latest quotes of scrips on the Internet and place an order almost instantly. One can quickly sift through over thousands stocks to find those with the greatest potential. One can maximize his/her return on investment using technical indicators that can help him/her quickly identify favorable investment opportunities. WHY ONLY CHOOSE INVESTSMART ONLINE OR IL&FS? 1) FREDOM OF INFORMATION: The Internet can provide a new sense of control over your financial future. The amount of investment information available online is truly astounding. It's one of the best aspects of being a wired investor. For the first time in history, any individual with an Internet connection can: Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and the global economy Conduct extensive financial research on any company Talk with other investors around the world
  • 26. A study on ONLINE SHARE TRADING ACCOUNT 26 At Investsmart one can get real-time stock quotes, daily roundups of the stock market, expert commentary, and a deep community of fellow investors. 2) CONTROL YOUR MONEY: One of the great appeals of using an Investsmart online account is the fact that the account belongs to the customer, and is under his direct control. When he wants to buy or sell stock, he need not call his broker anymore; hope that he is in the office to place his order; possibly argue with the broker about the order; and hope that the transaction is executed instantly. 3) ACCESS TO MARKET: At the most basic level, an online trading account with Investsmart gives more agility in buying and selling stocks. This is through sophisticated information streams, dedicated trading platforms and sophisticated tools for accessing the markets. 4) ENSURES THE BEST PRICE FOR INVESTOR: Investsmart specializes in the technique that offers the best price for the buy and sell orders of the investors and traders. Also due to the high level of transparency with regard to display of information relating to the specific stocks and company profiles, one will be able to get the best quote for his orders. 5) OFFERS GREATER TRANSPARENCY: Online trading at Investsmart offers a greater transparency by providing its customers with an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and finally ending with a credit into your depository account. All these stages are subject to inspection, thus bringing in transparency into the system.
  • 27. A study on ONLINE SHARE TRADING ACCOUNT 27 6) ENABLES HASSLE FREE TRADING: Online trading integrates the bank account, trading account and the demat accounts of the customer, which leads to easy and paperless trading 7) ALLOWS INSTANT TRADE EXECUTION: An Investsmart online customer will be able to execute the entire trading transaction, right from logging on to our site, to the execution and settlement of your bank account, in a very short period of time. 8) PROVIDES A LEVEL PLAYING FIELD: Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders. This provides a level playing field for all investors in the securities market. 9) REDUCES SETTLEMENT RISK: This method of trading reduces the settlement risk for the investor, as in this case all short sell orders are squared off at the specified cut-off time and not allowed to be carried forward. 10) LIVE FINANCIAL NEWS AND ANALYSIS: As a client of Investsmart online, you are given free access to streaming news to give you the latest financial information as it occurs. 11) ONLINE HELP DESK: You can contact the Tele Trading Executives from the Tele Trading team during and after market hours. Any questions you might have will be
  • 28. A study on ONLINE SHARE TRADING ACCOUNT 28 addressed quickly and your trading ideas and strategies can be discussed with them. 12) INSTANT ORDER TRADE CONFIRMATIONS: Every trade is confirmed immediately and you will receive an on-screen confirmation following every trade with full details for your records. This avoids costly errors that would have been discovered when it is too late. 13) INTEGRATED ACCOUNTS: Your Bank, Depository and online account are integrated for your convenience. As an Investsmart online client you have the choice of opening a bank account upto 5 different banks. 14) SECURITY: Investsmart Online works hard to keep your account and personal information secure. From updated security technology to advanced fraud prevention measures, we have the people and tools in place to provide a strong defense against electronic scams and fraud.
  • 29. A study on ONLINE SHARE TRADING ACCOUNT 29 DIFFERENT TRADING PLATFORMS UNDER INVESTSMART ONLINE TRADING ACCOUNT: Keeping in mind different requirements of different types of customers and their trading patterns, IL&FS INVESTSMART has devised three different types of products-each being unique and trying to give maximum possible help to the customer. The different trading platforms are: 1) SMART TRADE 2) SMART INVEST 3) SMART START 1) SMART TRADE: Smart Trade is an EXE based desktop software designed for active traders who transact frequently to capture favorable short-term price movements. The platform offers active traders the tools they need to make critical decisions with confidence. Smart Trade is designed and built from the ground up to address the needs of active traders. Smart Trade makes the most of state-of the-art technology to deliver power, speed and reliability. Through an easy-to-use interface, users are provided with the same tools and advantages that the professionals enjoy. Features of Smart trade: Fully Customizable display. Dynamic Charts with Indicators Real-Time market data. Live order status Track your orders real time Real time position updates. Derivative chain Lock terminal option
  • 30. A study on ONLINE SHARE TRADING ACCOUNT 30 Software requirements for Smart trade: Smart trade can work very easily with the following configurations on your personal computer. The operating system needs to be either windows 98/2000 or windows XP. The other requirement is that the system also needs to be a Pentium 3 or Pentium 4. Internet connection is also needed to run Smart trade. It can be a broad band or a dial up connection. The Browser type should be Microsoft internet explorer(version 6.0 or higher) and it needs to be Java enabled. Benefits of Smart trade are also many: FULLY CUSTOMIZABLE DISPLAY: The save desktop option allows you to save your created trade screen layout, so the next time you access the application the created layout is not lost. Dynamic Charts with Indicators: Provides you a wealth of charting capabilities and timing indicators, which allow you to go right into the action with real-time daily charts, and intra-day charts. Watch price movements by minutes, days, or weeks. EOD CHARTS: SmartTrade puts up to 5 years of in-depth market history at your command with the power to instantly back-test any trading strategy you design, before risking one rupee of your trading capital. REAL-TIME MARKET DATA: Get real time market data from both the NSE and BSE similar to what your broker gets. ADVANCED ALERT CAPABILITIES: Alert Window allows you to be free from watching every tick. Users can be notified once a security has reached the set
  • 31. A study on ONLINE SHARE TRADING ACCOUNT 31 parameters. Multiple securities can be monitored using the set parameters. These alerts can be triggered both visually and audibly. LIVE ORDER STATUS: Tracking all your orders is made easy through the order status screen. Further drill down into all details pertaining to an order is available in the order detail sub report. TRACK YOUR ORDERS REAL TIME: Track your stock order and trades in real- time. REAL TIME POSITION UPDATES: All your positions are updated automatically and instantly. No need to use the refresh button at all. DYNAMIC BUYING POWER: Reflects your credits and debits instantly on every trade execution. No need to refresh each statement to know your latest buying limits. DERIVATIVE CHAIN: This feature provides you with a list of all derivative contracts available for the selected security. To view derivative prices of a security just right click on the symbol and click on derivative chain LOCK TERMINAL OPTION: If your system is unattended this function locks the trading platform for you and can be accessed again only on providing the proper login details. MESSAGE WINDOW DOCKING: This feature enables you to receive trading messages, intra-day trading calls, and messages from both the exchanges flashed real time onto your screen. 2) SMART INVEST: SmartInvest is a browser-based system designed for customers who transact occasionally. It is ideal for investors who believe in the Buy and Hold approach towards investment in equities
  • 32. A study on ONLINE SHARE TRADING ACCOUNT 32 SmartInvest's capability as a browser-based trading platform gives you the benefit of real-time streaming data with the flexibility of trading on any Internet capable system. With access to both the NSE & BSE, you are in the driver's seat when routing your order to the best price on either of the exchanges. SmartInvest sophisticated yet easy to use point and click order entry interface allows you to react more quickly to the markets and make better decisions. Software requirements of Smart invest: Smart invest needs the following configurations on a computer: The operating system needs to be either windows 98/2000 or windows XP. The other requirement is that the system also needs to be a Pentium 3 or Pentium 4. Internet connection is also needed to run Smart trade. It can be a broad band or a dial up connection. The Browser type should be Microsoft Internet explorer (version 6.0 or higher) and it needs to be Java enabled. The software requirements are just like that of Smart trade. There are various benefits of using Smart invest such as INSTANT LOADING: The browser-based applet system allows you instant access to your account with no wait time, unlike other systems that take a few minutes to load. WORKS BEHIND A PROXY: This platform can be accessed on any Internet enabled network. You can access it even from your place of work. LIVE STREAMING QUOTES: Keep an eye on the stocks you care about most with streaming, real-time quotes and customizable market data. Color-coded price changes help you to spot trends and react to them quickly. MULTIPLE WATCH LISTS: The new watch list option allows you to create upto 10 watch lists. Each watch list can be personalized by inserting securities which you would like view as a group.
  • 33. A study on ONLINE SHARE TRADING ACCOUNT 33 NSE& BSE ACCESS: Flexibility of trading on both the NSE & BSE via a single screen SINGLE ORDER FORM FOR CASH AND FNO: Single order form offers you the convenience of transacting in various segments of the market without having to switch between multiple windows. POINT AND CLICK ORDER ENTRY: Makes order entry quick and simple with a click on the security the same gets inserted into the order form on your trade screen. HOT KEY FUNCTIONS: Using a single keystroke (Hot Key) function you can achieve important tasks very similar to a broker's terminal. Accessing important reports is also one keystroke away. MARKET DEPTH WINDOW: IT gives an immediate "at a glance" info about the stock you are following. The view provides the best 5 bid and offer quotes and the outstanding order quantities BACK OFFICE ACCESS: View segment wise ledger bills and contract notes, trades, positions, account balance, realized/unrealized profit & loss, and buying power all in real time. 3) SMART START: SmartStart is a powerful browser based trading system for those who are relatively new to online investing. A unique integrated account, which integrates your banking, broking, and demat accounts. A comprehensive trading service, which allows you to invest in equities and derivatives. SmartStart trading platform allows you the flexibility of trading on any Internet capable system, with access to both the NSE and BSE. Software requirements of Smart start: The operating system needs to be either windows 98/2000 or windows XP. The other requirement is that the system also needs to be a Pentium 3 or Pentium 4.
  • 34. A study on ONLINE SHARE TRADING ACCOUNT 34 Internet connection is also needed to run Smart trade. It can be a broad band or a dial up connection. The Browser type should be Microsoft Internet explorer (version 6.0 or higher). Benefits of using Smart start are as follows: NSE& BSE ACCESS: Flexibility of trading on both the NSE & BSE via a single screen. FULLY CUSTOMIZABLE DISPLAY: The save desktop option allows you to save your created trade screen layout, so the next time you access the application the created layout is not lost INTEGRATED ACCOUNTS (BANK. DEMAT & TRADING):Integrates your banking, broking and demat accounts. This enables you to trade in shares without going through the hassles of tracking settlement cycles, writing cheques and Transfer Instructions, chasing your broker for cheques or Transfer Instructions etc. LIVE ORDER STATUS: Tracking all your orders is made easy through the order status screen. Further drill down into all details pertaining to an order is available in the order detail sub report. TRACK YOUR ORDERS: Track your stock order and trades. DYNAMIC BUYING POWER: Reflects your credits and debits instantly on every trade execution. No need to refresh each statement to know your latest buying limits. WORKS BEHIND A PROXY: This platform can be accessed on any Internet enabled network. You can access it even from your place of work.
  • 35. A study on ONLINE SHARE TRADING ACCOUNT 35 BACK OFFICE ACCESS: View segment wise ledger bills and contract notes, trades, positions, account balance, realized/unrealized profit & loss, and buying power all in real time.
  • 36. A study on ONLINE SHARE TRADING ACCOUNT 36 VALUE ADDS: IL&FS offers its customers many other competitive features. These features add to the authenticity of the product of IL&FS. The value adds are summarized below. 1) SMART CHART: Real time market moves and easy trend analysis for the sophisticated trader. One of the key elements of any trading system is market timing. Many traders fail to account for timing when making trading decisions, and those who do often rely on their instinct of market timing rather than empirical data. SmartCharts allows the sophisticated investor to see markets move and spot trends with intra-day and historical charts. One can view tick-by-tick pricing and volume, plus add fully customizable technical studies and indicators IL&FS Investsmart Securities Limited provides real-time charting which was available only to a select audience earlier. SmartCharts is ideal for an active trader who would like to take advantage of the intra-day movements in the market. SmartCharts allows displaying charts of all stocks and derivatives. Many of the popular technical analysis indicators can also be plotted. SmartCharts allows one to view nearly 5 years of historical data, allowing you to back-test your strategies before implementing them. 2) SMART EXPOSURE:IL&FS also provides this unique service where its customers are allowed to have limits against shares to help them unlock the hidden value of the stock they hold. Avail of additional exposure in the markets: as an Investsmartonline customer one can use Smart Limits to avail of fresh limits against the shares he has in his depository
  • 37. A study on ONLINE SHARE TRADING ACCOUNT 37 account with IL&FS Investsmart Securities Limited for taking further exposure in the markets. Built-in solution for tracking and risk management: Smart Limits also come with a built- in comprehensive tracking cum risk management solution to help you leverage, just that extra bit without taking undue and unnecessary risk with your positions. 3) SMART SECURE: IL&FS INVESTSMART SECURITIES LIMITED has taken adequate measures to ensure that your account is safe. Some of the key SmartSecurity features are given below: Security is important when transaction data is flowing across the Internet, and when data is stored on computer systems. Investsmart Securities Limited takes care to ensure that transaction data is safe at all times. Our computer systems are protected by managed firewalls, intrusion detection system and hardware redundancy to maximize the availability of service. All transactions executed through our website are in a safe and secure environment as it uses 128-bit SSL (Secure Socket Layer) technology. This ensures that the User communicates with an authentic Internet website set up by Investsmart Securities Limited and confidentiality is ensured as the data exchanged over the Internet is encrypted. Our computer systems are located in physically secure locations with restricted access. IL&FS Investsmart Securities Limited maintains daily back ups of the data residing in our computer systems to meet any unforeseen calamity. The Internet trading site is a secured one and is certified by Verisign The Investsmart Securities Limited site also displays the date and time of your last visit so that you can check whether there was any unauthorized log-in. The password generation is completely system driven and even our employees are unaware about it.
  • 38. A study on ONLINE SHARE TRADING ACCOUNT 38 At Investsmart Securities Limited, we follow a two-step password authentication to make your account more secure. The first password is entered at the time of login and the second one prior to trading. You are required to compulsorily change the password at the time of first login. 4) SMART CALL: An Investsmart online customer will receive quick and efficient service from our Tele Trading Executives who are dedicated to assist you for all your requirements related to order placement and dissemination of Investsmart research inputs. Investsmart online takes customer service very seriously. It constantly monitors its performance and works continuously to make improvements. One even need not have a computer to avail this service and can just call the customer service, which is toll free, and get his or her order booked. The customer is given a unique identification pin number, which needs to be given by him to the customer service advisor so that he can book the order. This identification number saves a lot of time as the customer need not wait in the queue with those of the other calls and can get his work done quickly. 5) SMART ALERT: an IL&FS Investsmart Securities Limited customer can avail of this service which provides you our daily Intra-day Calls and Investment Ideas* on SMS. Whether a person is a day-trader or serious investor, IL&FS will deliver stock information (short-term and long-term calls) to his or her cell-phone everyday This will help the customer in taking informed decisions before buying or selling any stocks. IL&FS Investsmart Securities Limited registered customers will receive this service completely FREE of charge for the first month.
  • 39. A study on ONLINE SHARE TRADING ACCOUNT 39 6) SMART NEXT: an Investsmart online customer will have the power of one more unique product - SRS (Sell Receivable Shares)* at his fingertips Freedom to exit overnight positions immediately: One can have the freedom to exit his open positions before they are settled without waiting for two whole days Unlock value: SRS unlocks value for its customer by letting him capitalize on the price escalations and also helps him exit positions in case he is of the view that the market trend is downwards. The customer needs to Just login to his Investsmart online account and sell them from the Unsettled Positions Statement under the Trading Menu.
  • 40. A study on ONLINE SHARE TRADING ACCOUNT 40 MEDIUMS USED BY IL&FS TO REACH OUT TO THE POTENTIAL CUSTOMERS As mentioned earlier, IL&FS Investsmart covers virtually the entire country. The company has a sound base in every part of the country and can cater to different types of customers from different parts, having a different point of view as well as different financial capabilities. However, this is not an easy task and considering all the hurdles coming in the way of reaching out to the customers everywhere across the country. As a result IL&FS has not just used one channel to reach out to the customers but has six different mediums to communicate with them. All these different types of channels make the decision of the potential customer to be or not to be with IL&FS very easy as all the information that he wants can be received quickly and efficiently. CALL:IL&FS has two dedicated phone numbers out of which one is toll free. The toll free number is 1800-22-4444 and for people with difficulty in accessing this CALL SMS E_MAIL REGISTER ONLINE BRANCH COURIER CHANNELS/MEDIUMS
  • 41. A study on ONLINE SHARE TRADING ACCOUNT 41 toll-free number, there is also a Reliance number 022-3063-7777.Once the call is made the company s customer acquisition executive will get in touch with the person who has made the call within the next 24 hours. SMS: All one needs to do here is type TRADE and send it as an SMS to 7827 and the company s customer acquisition cell will get in touch with that person by calling him. E MAIL: One only needs to register himself at the company s e-mail address, which is register@investsmartindia.com outlining his requirements and company s customer acquisition cell will get in touch with that person within the next 24 hours. REGISTER ONLINE: One can register online by logging on to the company s website and Click on the Open an Account link on any of its pages or key in his basic details on the Investsmartonline home page and the Customer Acquisition Executive will get in touch with him within 24 hours. BRANCH: With 202 outlets in over 87 cities across INDIA, IL&FS covers almost every state. One can walk in at any of these IL&FS outlets to get his doubts sorted out. The branch executives will guide him accordingly keeping in mind his needs and requirements. COURIER: This is the conventional and the simplest of all the methods in order to get any information one wants to get regarding online share trading account at IL&FS.One can send a mail by courier or through the regular post service at the company s registered office address which is: Online Trading Customer Service, IL&FS Investsmart Securities Limited, The IL&FS Financial Centre, Plot C-22, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. On receipt of the letter the concerned person will be contacted at the earliest
  • 42. A study on ONLINE SHARE TRADING ACCOUNT 42 COMPARING IL&FS WITH ITS COMPETITORS: IL&FS has recently entered into the online share trading market and faces competition with many giants such as ICICI, HDFC and KOTAK .It also has a new competitor in the name of 5PAISA, which has been promoted by INDIAINFOLINE. With so many firms in this field as well as some big brokers it becomes very crucial for IL&FS to bring the right kind of product that suits it target customers and achieves competitive advantage as well. We will now compare each of the above-mentioned firms with IL&FS and later conclude as to what are the advantages that IL&FS has and what are the areas where it needs an improvement. The following table and the points that follow will give a useful insight regarding the same NAME INVESTSMART 5 PAISA HDFC ICICI KOTAK Account type 2 in 1 2 in1 3in 1 3 in 1 3 in1 A/C opening charges Rs 750 smartinvest Rs 1000 smarttrade Rs 500 Rs 700 Rs 750 If margin is more than 1000000- no charges Rs 750 Min bal in e brokerage A/C Nil Nil Nil Nil Nil Min bal in trade account Nil 5000 Nil Nil Nil Type of trading Cash Yes Yes Yes Yes Yes
  • 43. A study on ONLINE SHARE TRADING ACCOUNT 43 Exposure 4 times, no carry forward Delivery- 2times, trading a/c-4 times Delivery- 2times, trading a/c-4 times 3 to 4 times 4 to 6 times, depends on ac time Brokerage structure Delivery 0.6% of the value of trade 0.25%(advance brokerage) 0.5% of the trade or Rs 15,whichever is higher 0.75% of the value of the trade 0.5% to 0.18%- depends on slab Square off 0.10% 0.05% 0.15%-1 leg (0.30% both sides) 0.2- 0.425 0.6 to 0.3- depends on slab Per trade Rs 14 Delivery 25p per Rs 100.trading 25p per Rs 100.spot sale-Rs 1 Nil (brokerage for below rs50000 will be less than Rs 25 or 2.5% of transaction value) 5 paisa Trading platforms 3 1 1 1 1 Links with banks 5 1 1 1
  • 44. A study on ONLINE SHARE TRADING ACCOUNT 44 ANALYSIS: All the above firms charge an annual maintenance charge of Rs 500 over and above the normal account opening charge, which is waived off for the first year. However it can be observed that apart from this there are many differences between the products of all the above-mentioned firms. It can be observed that all the above products differ not only in the way they charge the brokerage to their customers but also the services they give to them which also means that they may be targeting different types of customers. Some provide a 3 in 1 account which links the customer s demat account with his trading and savings account while some of them only provide a 2 in 1 account which only links the customer s demat account with his trading account. The advantage in a 3 in 1 account is that the customer can trade smoothly without facing any obstacles as his amount gets credited to the service provider s account quickly as there is a link between the demat account and the saving account of the customer. The advantage in having a 2 in 1 account especially with IL&FS is that one can not only trade online but also trade offline. One can give cheques of a particular amount to IL&FS in advance and can later trade within that much amount. This also reduces the risk of over trading which can prove very costly at times. However, with a 2 in 1 account the rigidity increases as the customer does not have a direct link between his demat and savings account. Another difference especially between IL&FS and its various other competitors is regarding its account opening fees .IL&FS charges Rs 750 for the SMART INVEST trading platform and Rs 1000 for SMART TRADE trading platform while all its competitors i.e. 5 PAISA, HDFC, ICICI and KOTAK charge a flat account opening fee of Rs 500, rs 700, Rs 750 and Rs 750 respectively. This is because none of the competitors of IL&FS provide as much flexibility as IL&FS does. IL&FS charges Rs 1000 for those customers who trade regularly and hence provide them with software through which they can trade further efficiently. They overcome the problem which people who browse and trade go through such as
  • 45. A study on ONLINE SHARE TRADING ACCOUNT 45 website not in working condition, website or the page under construction. A website is also found slow as compared to software itself so obviously for the people who trade regularly and for those for whom even a slightest increase or decrease in the price of a particular stock makes the difference, SMART TRADE is the best option available as compared to any other product or a service by anyone. Again IL&FS also provides the normal browser based SMART INVEST which is just like any other web based product of any other competitor, be it ICICI or KOTAK or 5 PAISA. It means that the company is not only targeting the high end customers which trade in bulk but is also trying to attract normal customers considering that the number of people in India who trade in bulk are far lesser than the huge mass that trades in normal quantities Another point of difference between all the above-mentioned firms is that of the type of trading and the exposure given by them to their customers. Exposure means the freedom to trade till a particular amount. For example if a person is trading with Rs 10000 and if the exposure provided by his service provider is 4 times than he can trade upto the value of Rs 40000. Now, over here, IL&FS provides exposure of 4 times but only on daily trading and not on delivery based trading as compared to others who do provide exposure on delivery as well. This aspect needs to be looked into as there are many traders who would like to get exposure on delivery and not just on daily trading. The next and one of the most important aspects to be considered is the difference in brokerage structure between all the firms providing the online share trading account. While ICICIdirect (ICICI s online share trading wing) charges the highest brokerage of 0.75 %, 5 PAISA and KOTAKSTREET (KOTAK s online share trading wing) are those companies whose brokerage on delivery is one of the lowest. KOTAK charges a brokerage of a mere 0.18% on select slabs on delivery. IL&FS charges a brokerage of 0.60% on delivery which means it is not as high as that of ICICI but certainly a little above average considering the fact that even the big players such as HDFC and KOTAK charge a brokerage which is less than 0.50%. This aspect needs some attention as the company is new and
  • 46. A study on ONLINE SHARE TRADING ACCOUNT 46 brokerage is the first and the foremost thing, which attracts or detracts a potential customer. However brokerage on square off is one area where IL&FS scores above the majority of its competitors. It charges a mere 0.10% on square off as compared to the likes of ICICI and HDFC who charge a brokerage of 0.15 and 0.20 respectively and only KOTAK scores above IL&FS in this regard. It means that the company is trying to attract customers who trade on a daily basis and not those who purchase a particular stock and take its delivery. The thought behind this being that daily trades will bring in regular income through the brokerage that is charged to its customers IL&FS provides three different trading platforms in the form of Smart trade, Smart invests and Smart start as against only one trading platform provided by all its competitors. This is another area where the company stands apart from all the other players in the market. It scores above when compared with its competitors as the different products under one common roof are customised and suit to the varied trading needs of different individuals. It further means that the company wants not just one type of customer, say the one who trades in bulk on a daily basis or a normal investor, but wants to get people from all the brackets of society as far as possible. One more area where IL&FS scores above its competitors is the number of banks it has got links with. It has links with five premier banks of the country, namely HDFC, CITIBANK, CENTURION BANK, UTI and .On the other hand market players such as ICICI and HDFC provide only one bank account link with their online trading account, which is with their own bank account. This again leads to a conclusion, which is similar to the one, mentioned above that the firm is not just aiming one type of customer but it is aiming diversity. Through so many trading links the company also aims to get a huge customer base as a person wanting to trade with a big player such as ICICI but not having a savings account with it will automatically get attracted to a market player like IL&FS. In addition to the above mentioned distinction between IL&FS and its various other competitors providing a similar product with their own unique selling
  • 47. A study on ONLINE SHARE TRADING ACCOUNT 47 propositions there is one more set of competitors who are called as brokers. Before online trading was introduced in the BSE and the NSE, trading used to be carried out only by these brokers. However, this type of trading was highly ambiguous, froth with the danger of scams and frauds, involved a lot of paper work and also resulted in the customer getting cheated by the broker who most of the times used to provide him with unreal information about a particular company. As a result, the customer used to end up picking up a wrong stock and make huge losses. However, with the advent of online trading, the impact of these type of brokers has lessened as there is no paper work, prices of the stocks come streaming online which are there for everyone to see along with their annual results, their annual sales.etc. Still the brokers claim that they charge a brokerage that is far lesser than what almost all the online share trading firms charge. A normal broker is said to be charging a brokerage of 0.50% on delivery, which is 0.10% less than what IL&FS charges. However, the facilities such as general economy news, company news and analysis, streaming quotes, multiple watch lists of the stocks listed at both THE BSE and THE NSE, ability to create own market watch list and view own portfolio anytime are not provided by the normal broker. A customer need not call his broker but straight away log on to the company s website and trade himself. This also saves time, which is a very important factor in stock trading as share prices change by every minute. Further at IL&FS, the customer is provided with a unique client identity number, which no one apart from the customer himself has. Thus all the important facts about the customer s portfolio, his stocks and their market value can be viewed by none other than that particular himself and are kept 100% secret. This increases the security level as well as makes the product authentic. Again there are no hidden charges with an IL&FS online share trading account such as delivery charges, service tax, demat charges and other charges which one might face when trading with a normal broker. IL&FS thus, is a clear winner when compared to a normal broker, as there is more security and greater satisfaction to a customer when trading with the former than with the latter.
  • 48. A study on ONLINE SHARE TRADING ACCOUNT 48 RESEARCH METHODOLOGY: Research Methodology is a systematic method of discovering new facts or verifying old facts, their sequence, inter-relationship, casual explanation and the natural laws which governs them. Research Methodology explained by Redman and Mory are as follows systematized effort to gain new knowledge Research Methodology is original contribution to the existing stock of knowledge making for its advancement. It is the purist of truth with the help of study. Observation, comparison and experiment. In short also covers the systematic method of finding solution to a problem is research. It also covers the systematic approach concerning generalization and the formulation of the theory. Different stages involved in research consists of enacting the problem, formulating a hypothesis, collecting the facts or data, analyzing the facts and reaching certain conclusion either in the form of solution towards the concerned problem or in generalization for some theoretical formulation. In Research Methodology mainly Data plays an important role. The Data is divided in two parts: a) Primary Data. b) Secondary Data. Primary is the data, which is collected directly by direct personal interview, interview, indirect oral investigation, Information received through local agents, drafting a schedule, drafting a questionnaire. Secondary is the data, which is collected from the various books, magazine and material, reports, etc. The data which is stored in the organization and provide by the HR people are also secondary data. The various information is taken out regarding that subject as
  • 49. A study on ONLINE SHARE TRADING ACCOUNT 49 well other subject from various sources and stored. The last years data stored can also be secondary data. This data is kept for the internal use of the organization. This is the Research Methodology used in the project. The primary and secondary data method has been used in this project. Unless the data is collected no project can be complete. So both these data is very important in the project. The research instrument used for this survey is a structured questionnaire. The questionnaire contains both open-ended and closed-ended questions. The questionnaire provides a provision with respect to rating scales.
  • 50. A study on ONLINE SHARE TRADING ACCOUNT 50 MARKET POTENTIAL OF IL&FS ONLINE SHARE TRADING ACCOUNT-SURVEY ANALYSIS: Online trading in India started in February 2000 when a couple of broking houses started offering online trading to their customers. However, IL&FS introduced online share trading only a year ago. As of today there are more than 7 big players offering the online share trading product and this number is sure to rise. The last six years has seen a lot of changes in the Indian markets. With the boom in the Indian economy and the stock markets going through a bull run the popularity and the attraction towards trading in shares has increased manifold. Again its knowledge has also increased amongst the people. The market is huge but it also needs to be tapped appropriately. Anything less offered by IL&FS as compared to its competitors or any feature not convincing enough from the customer s point of view can be detrimental to the success of the firm s product. Hence in order to know the market potential of IL&FS vis-à-vis its competitors, a survey was conducted to assess the popularity and awareness among people about shares and IL&FS online share trading account. SAMPLING METHOD: The sampling method so as to obtain a representative sample is the Non-probability sampling methods. Under Non-probability sampling, the question addressed the basic questions relating to investing or trading in stocks and whether trading takes place online or offline, if online-which broking house and why. A random sample of 50 people was taken. I selected the respondents to the survey on the basis of judgment sampling with convenience taken into account. ASSUMPTIONS: The sample selected represents the population fully
  • 51. A study on ONLINE SHARE TRADING ACCOUNT 51 The data has been collected by administering an open and close-ended questionnaire of end investors with the assumption that the primary data collected is true and reflects the actual preferences of the investors/traders. The sample selected has thorough knowledge of the subject of shares. LIMITATIONS OF STUDY: The respondents who have not given any information are not included in the sample but do come under the population. It was not possible to cover each and every client of each and every broking house and hence a sample of 50 people was taken. The market share of all the online share trading products is only for the city of MUMBAI. The market share of all the companies may differ in different cities. It may also differ nationally.
  • 52. A study on ONLINE SHARE TRADING ACCOUNT 52 INTERPRETATION OF DATA: Chart 1: Penetration of online trading products among respondents 0 5 10 15 20 25 30 35 40 45 50 A B WEST Out of the 50 respondents, 43 (86%) had invested in shares through any online trading product. this shows that the penetration of online share trading product among the populace is high inspite of the fact that it was introduced only 6 years ago. However, this reach is in a city like Mumbai, which is considered the commercial hub of the country; hence one can expect the penetration level of online share trading products to be a little low in other smaller cities/towns.
  • 53. A study on ONLINE SHARE TRADING ACCOUNT 53 Chart 2: Age wise distribution of online trading products 0% 1000% 2000% 3000% 4000% 5000% 6000% 18-35yrs 35-50yrs 50& above West As can be seen from above charts, 50% of the people using online share trading products fall in the age group of 18-35 years, which shows that the popularity of online share trading products is at its peak in this age group and is the lowest for the age group of 50 years and above. This may be due to the fact that people in the age group of 18-35 years are well versed with computers, have fewer responsibilities and can afford to take risks. The age group of 35-50 years shows a little smaller figure, which may be because at this stage some people use computers while some don t and some are just unwilling to put money into shares due to increasing responsibilities and hence the question of online trading does not arise. People above 50 years are nearing retirement and in some cases even retired, so they might have some excess cash and hence they too are willing to invest in shares through Internet, which is less cumbersome and tedious as compared to offline trading.
  • 54. A study on ONLINE SHARE TRADING ACCOUNT 54 Chart3: Gender wise distribution of online trading products 0 5 10 15 20 25 30 35 40 MALE FEMALE West In the sample of 50 respondents although 72 % of the male respondents traded online, 28 % females also used online trading products to buy and sell shares which is an encouraging sign as it means that online trading has made it possible even for females to participate in an area which was untreaded by them until recently. It s an encouraging sign as the number of potential customers has now increased.
  • 55. A study on ONLINE SHARE TRADING ACCOUNT 55 Chart 4: Information source 0 5 10 15 20 25 30 35 PRINT TV NEWSLETTR INTERNET OTHERS WEST 39% of the respondents came to know about the online trading account through the Internet itself, hence it may be concluded that the Internet is the most effective medium as far as getting the customer s attention is concerned. Second most popular medium turned out to be newsletters, which are not much far from the internet.32% of the respondents, came to know about the online trading account through the newsletter subscription. The potential of television and print medium of promotion doesn t seem to have been utilized fully as they lag behind with only 8% and 13% respectively of the total respondents interviewed came to know about the online trading accounts them.8% of the respondents also came to know about the online share trading products through other sources such as getting messages on the phone, getting calls from the company s call centre, getting influenced by friends or relatives etc which again means that there are many other mediums apart from those specified above which can be tapped to market this product.
  • 56. A study on ONLINE SHARE TRADING ACCOUNT 56 Chart5: Satisfaction with their choices 0 10 20 30 40 50 60 70 80 YES N0 West Most of the people are satisfied with their choices. However 30 % of the total respondents were not satisfied with their products, which could be a potential avenue for consumers waiting to be tapped by the competitors as well as new firms entering into the e-trading market.
  • 57. A study on ONLINE SHARE TRADING ACCOUNT 57 Chart6: popularity of various online trading products 0 5 10 15 20 25 30 35 40 ICICI KOTAK HDFC IL&FS 5 PAISA West ICICI is the most popular online share trading product followed by KOTAK but there is a huge difference between them. HDFC is at par with KOTAK. IL&FS is at the fourth position with 14% popularity and 5 PAISA is fifth with less than 10% popularity. IL&FS s popularity is quite encouraging from the company s point of view considering the fact that it has begun its online trading operations only about a year ago
  • 58. A study on ONLINE SHARE TRADING ACCOUNT 58 CONCLUSIONS: It can be concluded that IL&FS INVESTSMART, although new to the online share trading field, has been able to build a sound customer base if the survey conducted is to be believed. IL&FS INVESTSMART has a strong presence in almost every part of the country which can eventually lead to a very big customer base. The company will find it relatively easy to further introduce its other latest products through its strong reach throughout the country. IL&FS has varied product platforms which are specifically designed to cater to varied customer needs which leads to a conclusion that the firm has designed the product keeping the customer in mind. A sound base in almost the entire country and as much as six different mediums used by the company to reach out to potential customers means that the company is going all out to increase its market share. The brokerage charged by IL&FS INVESTSMART is relatively high as compared to some of the big players in the market such as HDFC and KOTAK but low as compared to ICICI. An IL&FS online trading customer can even trade offline and he/she need not have an internet connection. This facility is not available with all the companies providing online trading facility. Considering the data it can be concluded that there is a high level of penetration of online trading products, women are also beginning to trade online and it is the younger generation (18 to 35 yrs) that trades the most. Considering the data it can also be concluded that most of the people are satisfied with their choices of online trading accounts and that ICICI DIRECT is a clear market leader as far as the popularity of the various online trading companies are concerned.
  • 59. A study on ONLINE SHARE TRADING ACCOUNT 59 RECOMMENDATIONS: The brokerage structure needs to be revised. It is already on the higher side with 0.60% as compared to HDFC and KOTAK. Again, the brokerage charged should be customized. It should be based on the client s turnover. Slabs should be made on the basis of the client s turnover. Higher the turnover- lesser the brokerage. IL&FS should also try and increase its level of presence in certain sections of the media such as Television and Radio. Tie-ups with business channels such as CNBC, NDTV PROFIT or ZEE BUSINESS can be of great advantage. IL&FS can also sponsor certain business related events or programmes .It may lead to greater awareness about the product amongst the people .Already certain business houses are doing it. It is also a good idea from the point of view of maintaining corporate social responsibility. This will not only benefit the company s online share trading product but will also benefit the other products which may be launched later on. Increase the distribution network for in form of drop boxes and get in tie ups with mobile phone galleries with reliance web shops or set up drop boxes at railways stations which will facilitate easy payment opportunities for the client. Have incentives 2 the clients when they give references, 5 references - 50% brokerage waiver on the next 2 trades or 500 rupees credit to your account. Kotak is already offering such a kind of service. Increase after market hours time to benefit of the customers. The above mentioned steps might increase the company s expenditure initially but it can be a profitable exercise in the long run.
  • 60. A study on ONLINE SHARE TRADING ACCOUNT 60 ANNEXURE QUESTIONNAIRE 1) WHAT IS YOUR NAME? ANS: 2) WHAT IS YOUR AGE? 1] MALE 2] FEMALE 3) WHAT IS YOUR OCCUPATION? 1] STUDENT 2] SERVICE 3] PROFESSIONAL 4] SELF EMPLOYED 4) WHAT WOULD BE YOUR LIKELY INVESTMENT OVER THE NEXT ONE (1) YEAR? 1] UPTO RS 1 LAKH 2] RS 1- 3 LQKH 3] RS 3- 5 LAKH 4] RS 5 LAKH AND ABOVE 5) DO YOU TRADE OFFLINE OR ONLINE? ANS: 6) WHICH IS THE MOST IMPORTANT PARAMETER WHILE SELECTING AN ONLINE SHARE TRADING ACCOUNT? 1] BRAND NAME 2] BROKERAGE 3] SECURITY 4] LOCATION 5] OTHER FACILITIES 7) THROUGH WHICH ONLINE SHARE TRADING ACCOUNT DO YOU TRADE? 1] ICICI 2] KOTAK 3] HDFC 4] IL&FS
  • 61. A study on ONLINE SHARE TRADING ACCOUNT 61 5] 5 PAISA 8) HOW DID YOU COME TO KNOW ABOUT IL&FS ONLINE TRADING ACCOUNT? 1] TV 2] PRINT 3] INTERNET 4] FRIENDS 9) WHY DID YOU CHOOSE IL&FS ONLINE TRADING ACCOUNT? 1] BROKERAGE 2] ADVISE 3] EFFICIENT AND QUICK TRADING 4] SECURITY 10) ARE YOU SATISFIED WITH YOUR CHOICE? IF NOT, WHY? ANS: 11) GIVEN AN OPPORTUNITY, WOULD YOU LIKE TO CHANGE OVER TO ANOTHER ONLINE SHARE TRADING ACCOUNT AND FOR WHAT REASONS? ANS:
  • 62. A study on ONLINE SHARE TRADING ACCOUNT 62 BIBLIOGRAPHY: Websites: www.investsmartonline.com www.icicidirect.com www.kotakstreet.com www.hdfcsec.com www.5paisa.com www.INVESTools.com Books: NSE s capital markets module
  • 63. A study on ONLINE SHARE TRADING ACCOUNT 63
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