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A project report on

  1. 1. 1) A PROJECT REPORT ON “STRATEGIC APPROACH OF KARVY STOCK BROKING LTD AND ITSCOMPETITORS REGARDING DEMAT ACCOUNT AND SHARE TRADING --- ACOMPARATIVE OVERVIEW” SUBMITTED TOK.R.MANGALAM INSTITUTE OF MANAGEMENTN- BLOCK, KAILASH COLONY, NEAR SOUTH DELHI CLUB NEW DELHI-1100482)CONTENT Serial Number Topic Page Number1. CERTIFICATE OF THE ORGANISATION 3 2. CERTIFICATE OF THE INSTITUTE 4 3.ACKNOWLEDGEMENT 5 4. PREFACE 6 5. DECLARATION 7 6. OBJECTIVES OF TRAINING 8 7.EXECUTIVE SUMMARY 9 8. SCOPE OF THE STUDY 10 9. INTRODUCTION TO THE INDUSTRY11-22 10. INTRODUCTION TO THE COMPANY 23-37 11. SWOT ANALYSIS 38-39 12. KARVYPRODUCT 40-42 13. COMPETITORS OF KARVY 43-45 14. REVIEW OF LITERATURE 46-51 15.RESEARCH METHODOLOGY 52-55 16. DATA ANALYSIS 56-66 17. FINDINGS 67 18.CONCLUSION 68 19. RECOMMENDATION 69 20. BIBLIOGRAPHY 70 21. ANNEXURES ANDQUESTIONNIARE 72-733) CERTIFICATE OF THE ORGANISATIONThis is to certify that ………………., pursuing MBA+PGPM+PGCM at K. R. Mangalam Institute ofManagement, New Delhi, has worked under my supervision and guidance on his dissertation entitled―Strategic Approach of Karvy Stock Broking Ltd. And It„s CompetitorsRegarding Demat Account & Share Trading--- A Comparative Overview‖ at Karvy StockBroking Limited, Burdwan from August 1st 2009 to September 12th 2009. To the best of my knowledgethis is an original piece of work. During his project he was found to be very sincere, regularand attentive to small details whatsoever told to him. I wish him best of luck and success inlife. Dated, BurdwanBranch Head Karvy Stock Broking Ltd.4) CERTIFICATE OF THE INSTITUTE This is to certify that the project report entitled ―Strategic Approach of Karvy Stock Broking Ltd. AndIt„s Competitors Regarding Demat Account & Share Trading --- A Comparative Overview‖at Karvy Stock Broking Limited is a bonafide record of work done by ……………….., and submitted inpartial fulfillment of the requirements of MBA+PGPM program of K. R. Mangalam Institute ofManagement, New Delhi. Dated, New DelhiLecturer KIM-New Delhi
  2. 2. 5)ACKNOWLEDGEMENTSometimes words fall short to show gratitude, the same happened with me during thisproject. The immense help and support received from Karvy Stock Broking Limitedoverwhelmed me during the project.My sincere gratitude to …………………… (Branch Manager, Karvy) and …………………….. (Director, KIM,New Delhi), for providing me with an opportunity to workwith Karvy Stock Broking Limited.I am highly indebted to ………………………. (I.R.O., Karvy) and company projectguide, who has provided me with the necessary information and his valuable suggestion andcomments on bringing out this report in the best possible way.I also thank ……………………., faculty guide, KIM New Delhi who has sincerelysupported me with the valuable insights into the completion of this project.Last but not the least; my heartfelt love for my parents, whose constant support andblessings helped me throughout this project.6) PREFACEPrivate sector is one of the fastest growing sectors in the country. After the liberalizationthe Private industry still holds vast opportunities for young and experienced professionals.Among the Private Stock Broking Companies, Karvy Stock Broking Ltd. Is the key player andhas been making efforts to improve efficiency and customer services.There are many companies in the market which are providing the financial product likeinsurance, mutual funds, demat account services, general insurance, portfolio management
  3. 3. services, wealth management, gold coins, money changing, money transfers and the others.Including Demat Account services. Karvy Stock Broking Ltd. offers stock broking services,mutual fund services, insurance, commodity, IPO services, gold coin exchange and foreignexchange services, Share Registry, Mutual Fund Registry, and PAN Service below the singleroof. Hence, Karvy Stock Broking Ltd. provides many financial products on the singlewindow. It consists of 7 units namely: -1. Stock broking services2. Demat3. Mutual Funds4. IPO5. Commodity6. Forex7. GoldSeven.) DECLARATIONI hereby declare that the project report titled “Strategic Approach of Karvy StockBroking Ltd. And It‟s Competitors Regarding Demat Account & Share Trading---A ComparativeOverview” is a genuine research work done by me and it has not been publishedanywhere earlier. Date: Place: NEW DELHI8.) OBJECTIVE OF TRAININGThe objectives of my project include the following:-1. To study the financial products and services of Karvy Stock Broking Ltd.2. To make a comparative study of competitors of Karvy Stock Broking Ltd. in Burdwan.3. To find out potential investors or customers for Karvy Stock Broking Ltd. and present attitude
  4. 4. of investors regarding share market in Burdwan town.4. To analise the marketing strategies of Karvy Stock Broking Ltd. and suggest new strategies.So, the objective of the project is to identify the market potential of Demat Account servicesoffered by Karvy Stock Broking Ltd. and a comparative analysis of the competitors of KSBL inBurdwan town.9.) EXECUTIVE SUMMARY This project has been a great experience for me and at the same time it gave me enough scope toimplement my analytical ability. Stock Broking leading industry which is basically my concern industryaround which my project has to be revolved is really a very complex industry. This project as a whole canbe divided into two parts: - The first part gives an insight about demat account and share trading and itsvarious aspects. It is purely based on what I learned at Karvy Stock Broking Ltd. One can have abrief knowledge about demat and share trading and all its basics through the project. Apart from it I havealso gained knowledge briefly about mutual fund, general insurance etc. This entire topic has beencovered in a very systematic way. The language has been kept simple so that even a layman couldunderstand. All the data„s have been well analyzed with the help of charts and diagram. The second partconsists of data and their analysis, collected through a questionnaire which helps me to clearly know theterms and condition of different leading stock broking companies and their business strategies. It coversthe topic “Strategic Approach of Karvy Stock Broking Ltd. And It‟s Competitors Regarding DematAccount & Share Trading---A Comparative Overview”. The data collected has been well organizedand presented. Hope the research findings and conclusions will be of use. I have really enjoyed duringthe time period of summer internship because I gained much better knowledge about the share markettrading activities not only a single Karvy Stock Broking Ltd. but also gained another Company„s sharetrading activities. The practical knowledge givesme enough scope to implement my experience in related companies in the near future. I am able to knowbetter how to manage the employees work and to take necessary steps to enhance growth anddevelopment of the employees as well as the company„s wellness.10.) SCOPE OF THE STUDYThe scope of the study refers to the job that to know about the activities of theorganization. The study means that the analysis of the products of the company on which he/shehas to focus. During the summer training the volunteer need to find out the corporate strategies of therunning company and The mile stone which the company has covered during its journey. In thesummer training, it is necessary for the student that he /she involve with the experience guys toget the knowledge about the company. That is how the company has got the success, Or if it is
  5. 5. going in the loss, why.In my training period I have found that the Karvy group is the biggest group in Indiancompanies. I felt that I can learn the more in the Karvy Stock Broking Ltd.Karvy Stock Broking Ltd. is the part of the Karvy Group of Companies which is agrowing company in the financial products.11.) Introduction to the Indutry12.) History of Stock BrokingThe history of stock brokers can be traced back to the origins of the first stock exchange in 1602 atAmsterdam. Even before that brokers are said to have existed in France dealing with governmentsecurities. The Amsterdam Stock Exchange was involved in buying and selling of shares for the DutchEast India Company. However, the first real stock exchange came up in Philadelphia in the UnitedStates during the late 18th century. Later it was the New York stock exchange which saw a rise in itspopularity. Wall Street, as it was called, became the hub of brokerage activities. Earlier stock brokers werelargely unorganized, but later most of them joined hands to form institutes and organizations. Till the1980s stock broking services were used only by the wealthy class who could afford them. Later with theadvent of the Internet, stock broking became very easy. Thus, the price tag on stock brokers loweredconsiderably and their services became available even to the common man. The stock broking duties arenow mostly taken up by major organizations with the smaller companies being absorbed by them. InIndia, too with increasing globalization the major corporations are penetrating deeper into the society. History of Stock Exchanges in India:Stock markets refer to a market place where investors can buy and sell stocks. The price at which eachbuying and selling transaction takes is determined by the market forces (i.e. demand and supply for aparticular stock). Let us take an example for a better understanding of how market forces determinestock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of an upwardmovement in its stock price. More and more people would want to buy this stock (i.e. high demand) andvery few people will want to sell this stock at current market price (i.e. less supply). Therefore, buyers willhave to bid a higher price for this stock to match the ask price from the seller which will increase the stockprice of ABC Co. Ltd. On the contrary, if there are more sellers than buyers (i.e. high supply and lowdemand) for the stock of ABC Co. Ltd. in the market, its price will fall down. In earlier times, buyersand sellers used to assemble at stock exchanges to make a transaction but now with the dawn of IT, mostof the operations are done electronically and the stock markets have become almost paperless. Nowinvestors don„t have to gather at theExchanges, and can trade freely from their home or office over the phone or through Internet.
  6. 6. History of the Indian Stock Market - The OriginOne of the oldest stock markets in Asia, the Indian Stock Markets has a 200 years old history.Year 1800 : East India Company was the dominant institution and by end of the century, business in itsloan securities gained full momentum. Year 1830 : Business on corporate stocks and shares in Bank andCotton presses started in Bombay. Trading list by the end of 1839 got broader Year 1840 : Recognitionfrom banks and merchants to about half a dozen brokers Year 1850 : Rapid development of commercialenterprise saw brokerage business attracting more people into the business Year 1860 : The number ofbrokers increased to 60 Year 1860-61 : The American Civil War broke out which caused a stoppage ofcotton supply from United States of America; marking the beginning of the "Share Mania" in India Year1862-63 : The number of brokers increased to about 200 to 250 Year 1865 : A disastrous slump beganat the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850could only be sold at rs 87.) Pre-Independence Scenario - Establishment of Different Stock ExchangesYear 1874 : With the rapidly developing share trading business, brokers used to gather at astreet (nowwell known as "Dalal Street") for the purpose of transacting business. Year 1875 : "The Native Shareand Stock Brokers Association" (also known as "The Bombay Stock Exchange") was established inBombay Year 1880 : Development of cotton mills industry and set up of many others Year 1894 :Establishment of "The Ahmedabad Share and Stock Brokers Association"Year 1900 : Sharp increase in share prices of jute industries in 1870s was followed by a boom in teastocks and coal Year 1908 : "The Calcutta Stock Exchange Association" was formed. Year 1920 :Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers.Year 1923 : When recession followed, number of brokers came down to 3 and the Exchange was closeddown Year 1934 : Establishment of the Lahore Stock Exchange. Year 1936 : Merger of the LahoreStock Exchange with the Punjab Stock Exchange. Year 1937 : Re-organization and set up of the MadrasStock Exchange Limited (Pvt.) Limited led by improvement in stock market activities in South India withestablishment of new textile mills and plantation companies. Year 1940 : Uttar Pradesh Stock ExchangeLimited and Nagpur Stock Exchange Limited was established Year 1944 : Establishment of "TheHyderabad Stock Exchange Limited"Year 1947 : "Delhi Stock and Share Brokers Association Limited" and "The Delhi Stocks and SharesExchange Limited" were established and later on merged into "The Delhi Stock Exchange AssociationLimited" Post Independence Scenario The depression witnessed after the Independence led to closure of a lot of exchanges in the country.LahoreStock Exchange was closed down after the partition of India, and later on merged with the Delhi StockExchange.Bangalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963. Most of theotherExchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts(Regulations) Act, 1956. The Exchanges that were recognized under the Act were:
  7. 7. 1. Bombay 2. Calcutta3. Madras4. Ahmedabad5. Delhi 6. Hyderabad 7. Bangalore8. IndoreMany more stock exchanges were established during 1980s, namely: Cochin Stock Exchange (1980) Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982) Pune Stock Exchange Limited (1982) Ludhiana Stock Exchange Association Limited (1983) Gauhati Stock Exchange Limited (1984) Kanara Stock Exchange Limited (at Mangalore, 1985) Magadh Stock Exchange Association (at Patna, 1986) Jaipur Stock Exchange Limited (1989) Bhubaneswar Stock Exchange Association Limited (1989) Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989) Vadodara Stock Exchange Limited (at Baroda, 1990) Coimbatore Stock Exchange Meerut Stock ExchangeAt present, there are twenty one recognized stock exchanges in India which does not include the Over TheCounter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).Government policies during 1980s also played a vital role in the development of the Indian StockMarkets. There was a sharp increase in number of Exchanges, listed companies as well as their capital,which is visible from the following table:Indian Stock Exchange Growth 1946 1961 1971 1975 1980 1985 1991 1995No. of Stock Exchanges 7 7 8 8 9 14 20 22No. of Listed Cos. 1125 1203 1599 1552 2265 4344 6229 8593
  8. 8. No. of Stock Issues of Listed Cos. 1506 2111 2838 3230 3697 6174 8967 11784Capital of Listed Cos. (Cr. Rs.) 270 753 1812 2614 3973 9723 32041 59583Trading Pattern of the Indian Stock MarketIndian Stock Exchanges allow trading of securities of only those public limited companies that are listedon theExchange(s). They are divided into two categories:Types of TransactionsThe flowchart below describes the types of transactions that can be carried out on theIndian stock exchanges:Listed Securities of Public Limited CompaniesSpecified Securities (Forward List) Non Specified Securities (Forward List)Equity Share of Company That are Dividend Paying Growth Oriented Companies Paid up Capital of atleast Rs. 50 Million Market Capitalisation of at least Rs. 100 Million Has more then 20,000 ShareHolderEquity Share of Companies Not Covered in Specified SecuritiesTypes of TransactionsThe flowchart below describes the types of transactions that can be carried out on theIndian stock exchanges:Listed Securities of Public Limited CompaniesSpecified Securities (Forward List) Non Specified Securities (Forward List)Equity Share of Company That are Dividend Paying Growth Oriented Companies Paid up Capital of atleast Rs. 50 Million Market Capitalisation of at least Rs. 100 Million Has more then 20,000 ShareHolder
  9. 9. Equity Share of Companies Not Covered in Specified SecuritiesTransaction on Indian Stock ExchangeSpot Delivery Transaction Includes Transactions that require delivery and payment within stipulated time period at the time ofentering into the contract This period shall not be more that 14 days following the date of contractForward Transaction Transactions in which Delivery and Payment can be extended by further period of14 days each. The overall period should not exceed 90 days from the date of contract Transactionspermitted only in case of specified shares