An analysis of awareness of different investment instruments available in indian stock market.

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DECLARATION
Title of Project Report:
“A COMPREHENSIVE STUDY ON AWARENESS, PREFERENCE &
PATTERN OF INVESTMENT IN INDIAN STOCK MARKET”
I declare that…
(a) The work presented for assessment in this Summer Internship Report is my own, that
it has not previously been presented for another assessment and that my debts (for words,
data, arguments and ideas) have been appropriately acknowledged.
(b) The work conforms to the guidelines for presentation and style set out in the relevant
documentation.
Date: ………………..
SURAJ KUMAR
A0101911053
MBA Class of 2013

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CERTIFICATE
I Ms. ............. hereby certify that Suraj Kumar student of Masters of
Business Administration at ........Business School, ........ University Uttar Pradesh has
completed the Project Report on ― “A Comprehensive Study on Awareness,
Preference & Pattern of Investment in Indian Stock Market”, under my guidance.
Ms. ........................
Assistant Professor
Department of Economics

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ACKNOWLEDGEMENTS
On the Successful Completion of this report, I would like to express my gratitude
to everybody who assisted and guided me in completing this report and making it a
memorable and successful one.
I wish to extend my deep and sincere thanks to Md. .............................., ABM
Amrapali Aadya Trading & Investment Pvt. Ltd. whose motivation, constructive
ideas, and vital inspiration to work hard and set high targets propelled me to learn a lot
about Online Trading and Stock Market and for his support through this analysis and
report preparation phase. The results and learning from this comprehensive research
project helped me in gaining in-depth knowledge of the subject and gave necessary
direction to my cognitive process.
I am extremely grateful to Mr. ............................, Relationship Manager, Sales
Division, who rendered his valuable advice and kind assistance at every step and helped
me in presenting this report successfully. I am thankful to him for sharing with me the
necessary insights about how Amrapali‟s Sales & Marketing division works and its a/c
opening procedures.
Lastly, I am beholden to my family and friends for their blessings and
encouragement and thank Ms. ..........................., lecturer, .......... Business School, Noida
for supporting and guiding me throughout the project and Mr. ......................., Executive
Vice President (AVP), Amrapali Aadya Trading & Investment Pvt. Ltd. for
providing me the opportunity & means to complete this project.

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TABLE OF CONTENTS
DECLARATION ........................................................................................................................ii
CERTIFICATE......................................................................................................................... iii
ACKNOWLEDGEMENTS........................................................................................................iv
LIST OF TABLES...................................................................................................................viii
LIST OF FIGURES....................................................................................................................ix
ABSTRACT ...............................................................................................................................x
CHAPTER 1: INTRODUCTION.............................................................................................1
1.1 Introduction to the Topic ...................................................................................................1
1.1.1 Awareness about investment opportunities ..................................................................2
1.2 Industry background..........................................................................................................3
1.2.1 History of stock exchange...........................................................................................3
1.2.2 Behavior of Household Savings in India......................................................................3
1.3 Company Profile................................................................................................................4
1.3.1 Services Offered .........................................................................................................5
1.3.2 Vision & Mission........................................................................................................5
1.3.3 Objectives of Organisation..........................................................................................6
1.4 Purpose of the Study ....................................................................................................7
1.5 Context of Study................................................................................................................8
1.6 Significance of the Study...................................................................................................9
1.7 Theoretical Framework....................................................................................................11
1.7.1 BSE and NSE ...........................................................................................................12
1.7.2 Types of Investment..................................................................................................13
1.7.3 Stock Trading ...........................................................................................................14
1.7.4 Online and Offline Trading .......................................................................................14
1.7.5 Demat Account and Trading Account........................................................................15
1.7.6 Depository and Depository Participants.....................................................................15
1.7.7 Sensex and Nifty.......................................................................................................16
1.7.8 Indian Broking Industry ............................................................................................16
1.7.10 Investment Options in India ....................................................................................17
CHAPTER 2: REVIEW OF THE LITERATURE ................................................................18

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CHAPTER 3: RESEARCH METHODS AND PROCEDURES ...........................................25
3.1 Purpose of the Study........................................................................................................25
3.1.1 Research Objectives..................................................................................................25
3.2 Research Design..............................................................................................................26
3.2.1Research Methodology ..............................................................................................26
3.3 Data Collection................................................................................................................27
3.3.1 Instruments Used ......................................................................................................27
3.3.2 Sampling Design.......................................................................................................27
3.4 Data Analysis ..................................................................................................................27
3.5 Limitations ......................................................................................................................28
CHAPTER 4: DATA ANALYSIS AND FINDINGS..............................................................29
4.1 Demographic Profile of Respondents...............................................................................29
4.2 Awareness of Instruments................................................................................................32
Shares ...............................................................................................................................32
Mutual Funds ....................................................................................................................33
Insurance...........................................................................................................................33
Derivatives- (Futures & Options).......................................................................................34
Currency/Forex .................................................................................................................34
Commodity .......................................................................................................................35
Fixed Deposits/ Recurring Deposits/ PPF...........................................................................35
Real estate/Land/Plot.........................................................................................................36
Respondents also seem to have good knowledge about investments in real estate which is
clear from Table 4.8. .........................................................................................................36
4.3 Pattern of Investment.......................................................................................................37
Timing and Duration of Investment ...................................................................................38
Market level for investments..............................................................................................41
4.4 Preferences......................................................................................................................42
4.5 Summary of the Findings.................................................................................................50
CHAPTER 5: CONCLUSIONS AND RECOMMENDATION.............................................52
5.1 Conclusion.................................................................................................................52
5.2 Recommendations ...........................................................................................................53
5.3 Implications for Practice..................................................................................................54
REFERENCES........................................................................................................................55

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BIBLIOGRAPHY ...................................................................................................................56
Books....................................................................................................................................56
Internet Sources.....................................................................................................................56
APPENDIX A: QUESTIONNAIRE .......................................................................................57
APPENDIX B: FIGURES & TABLES...................................................................................64
Choice of Instrument .............................................................................................................64
Objectives behind Investment................................................................................................68
Source of Reference ..............................................................................................................70
Factors Influencing Decision .................................................................................................71
Preferred Area of Investment.................................................................................................73
Influencing Factors in Buying Company‟s Shares..................................................................76
Preferred Investment Instrument............................................................................................78
Preferred Mode of Communication........................................................................................79

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LIST OF TABLES
Table 4.1 Awareness of Stocks/IPO/Equity/Shares ........................................................32
Table 4.2 Awareness of Mutual funds………………………………………………….. 33
Table 4.3 Awareness of Insurance .................................................................................33
Table 4.4 Awareness of Derivatives- (Futures & Options) .............................................34
Table 4.5 Awareness of Currency/Forex........................................................................34
Table 4.6 Awareness of Commodity..............................................................................35
Table 4.7 Awareness of Fixed Deposits/ Recurring Deposits/ PPF.................................35
Table 4.8 Awareness of Real estate/Land/Plot ...............................................................36
Table 4.9 Ratio of investors & non-investors.................................................................37
Table 4.10 Bullish Vs Bearish………………………………………………………….. 41
Table 4.11 Long term growth…………………………………………………………... 43
Table 4.12 Extra incomes………………………………………………………………. 44
Table 4.13 Company's Brand name…………………………………………………….. 45

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LIST OF FIGURES
Figure 1.1 Investment options in India………………………………………………….17
Figure 4.1 Gender Ratios of Respondents………………………………………...…… 29
Figure 4.2 Age Group of Respondents……………………………………………….... 30
Figure 4.3 Qualification of Respondents………………………………………………. 30
Figure 4.4 Annual Income of Respondents……………………………………………....31
Figure 4.5 Experience of investing (IN Years)……………………………………....…. 37
Figure 4.6 Time Horizon of Investment………………………………………………... 38
Figure 4.7 Percentage of income invested in market……………………………….…... 39
Figure 4.8 When do investors shell out money…………………………………………. 40
Figure 4.9 Size of Investment…………………………………………………..………. 40
Figure 4.10 Preference rank of Stocks………………………………………………….. 42
Figure 4.11 Banking as Preferred Sector……………………………………………….. 46
Figure 4.12 Choice of Index…………………………………………………..………... 47
Figure 4.13 Financial Position of Company as an Influencing Factor…………..……... 48
Figure 4.14 Equity Ranked as 1st
Choice……………………………………...…….….. 48
Figure 4.15 SMS as a Preferred Medium of Communication……………………..…… 49

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“A COMPREHENSIVE STUDY ON AWARENESS, PREFERENCE &
PATTERN OF INVESTMENT IN INDIAN STOCK MARKET”
Suraj Kumar
ABSTRACT
Investing is an activity of putting money in an instrument for the purpose of
getting a good return on the investment and for the growth of the principle amount. There
are a large number of investment instruments available to the investors like bank
deposits, forex, mutual funds, derivatives, commodities, insurance, shares, govt.
securities, corporate bonds, gold, real estate etc. Investors invest their money in these
instruments for getting good returns and the money invested in turn helps in the growth
of the economy.
The investors will invest the money only when they have knowledge & awareness
of different investment options that are available to them. The aim of the study was to
find out the Awareness about investment instruments among investors. The objectives
were to check the level of awareness for various investments, finding out what factors do
the investors consider before investing their money and thus finding out their preferences,
what are their pattern of the investment and are they aware of the various benefits of
investing in Stock Market.
The study was conducted as part of the author‟s summer internship at Amrapali
Aadya Trading & Investment Pvt. Ltd. which is a broking firm headquartered in Delhi
and has 35 branches all over the country. It provides a wide variety of services like online
trading, depository services, insurance, technical support etc.
The research was a descriptive study. It was carried out by distributing a
structured questionnaire among the respondents who were selected via convenient
sampling from among the residents of Delhi NCR and the clients of Amrapali Aadya
Trading & Investment Pvt. ltd. The data collected from the study was analysed with the
help of statistical tools using SPSS.20, cross tab was used for this purpose by the author.

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The primary findings of the study were that the level of awareness among the
respondents for various investment instruments was not very high with an average of
20.4% of the people having a good knowledge of Stocks; only 18% have good
knowledge of mutual funds & so on for the various investment instruments. It was found
that the level of knowledge increased with the increase in the income of the respondent.
The respondents preferred to invest in shares among all the instruments present in stock
market. They look at safety of principle amount invested while selecting an investment
option. The respondents preferred to invest small amounts regularly as compared to a
large amount at a single time.
These research findings can be utilized by broking firms, investors and scholars
for further analysis on secondary market trading and to understand this issue critically.
The author also recommended some steps for increasing the awareness level of people
specially the young professionals who are a very good potential market for investment
companies. It was felt that increasing awareness is the first step in increased market
penetration for the investment instruments.
Data is presented with the help of self-explanatory charts & tables. Interpretations
have been made together. And the most crucial, the „Recommendation‟ section bears
author‟s personal comments. This report is a written account of what author learnt and
experienced during project and author has tried to complete this report with as much
perfection as possible to make it more meaningful and purposeful.

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CHAPTER 1: INTRODUCTION
1.1 Introduction to the Topic
“An investment operation is one which, upon thorough analysis, promises safety of
principle and a satisfactory return. Operations not meeting these requirements are
speculative.”- Graham & Dodd.
An investment is the choice by the individual, after thorough analysis, to place or
lend money in a vehicle (e.g. property, stock securities, bonds etc.) that has sufficiently
low risk and provides the possibility of generating returns over a period of time. Investing
is the active redirection of resources: from being consumed today, to creating benefits in
the future; the use of assets to earn income or profit.
There are a large number of investment instruments available to the investors.
These investment instruments perform different tasks. The insurance is mainly used to
provide risk cover to the individuals; property investments are usually for long term
gains; bank FDs and government securities are used mainly for secure returns on
investments while equity investment and Mutual Funds are used for wealth creation as
they give very high returns. Though they give very good returns to the investors the risk
associated with these instruments is also higher. As a result it is likely that the investors
also lose their money while investing in these instruments.
The present scenario is a good time to study what the investors are expecting from
their investments and how aware they are about the different modes of investments that
are available to them. With the recovery of the stock markets the investors are also
looking to get back to investing. The time is very good for marketing of various
investment instruments as the investors want to put their idle money to some productive
use.

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1.1.1 Awareness about investment opportunities
During the summer internship the author conducted the research- “A
comprehensive study on Awareness, Preference & Pattern of investment in Indian stock
market”. This was an important research for the company as it would give them some
idea about how much needs to be done to spread awareness among the people about the
various investment avenues. Checking the existing level of awareness amongst the
individuals is the first step in spreading the awareness.
India is a country with a very young demographic and the young professionals are
the major target for investment firms. It is generally seen that many people are not aware
about the diverse modes of investments available and it is necessary to spread this
awareness before marketing the various products to the people. The purpose of the
research was to find the gaps which could subsequently be filled by awareness programs.
To keep the existing customers happy it is important to know their preferences.
Customer satisfaction is still one of the single strongest predictors of customer retention.
It‟s considerably more expensive to attract new customers than it is to keep old ones
happy. In a climate of decreasing brand loyalties, understanding customer preference and
measuring customer satisfaction are very crucial.
There is obviously a strong link between customer satisfaction and customer
retention. Customer's perception of Service and Quality of product will determine the
success of the product or service in the market. With better understanding of customer‟s
pattern of investment & preferences, companies can determine the actions required to
meet the customer‟s needs. They can identify their own strengths and weaknesses, where
they stand in comparison to their competitors, chart out path for future progress and
improvement.

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1.2 Industry background
The investment industry is on the bloomy side. As now a day‟s maximum people
are interested in investment in various instruments.
1.2.1 History of stock exchange
The trading in securities in India was started in the early of 1973. The stock
exchange operating in the 19th century was those of Bombay set up in 1875 and
Ahmedabad set up in 1894. These were organized as voluntary non-profit making
associations of brokers to regulate and protect their interests. Before the control on
securities trading became a central subject under the constitution in 1950, it was a state
subject and the Bombay securities contact (control) act, 1925 used to regulate trading in
securities. During the war boom, a number of stock exchanges were organized at
Bombay, Ahmedabad and other centers but they were not recognized. Soon after it
became a central subject, central legislation was proposed and a committee headed by
Mr. A.D. GORWALA went into bill for securities regulation. On the basis of securities
regulation, Securities Contract (control) Act became law in 1956. At present there are 23
recognized stock exchanges in India. Number of Investors is increasing day by day. The
stock exchange is a double auction market. Quite distinct from the common market in
which only one seller and many buyers in a stock exchange a number of potential buyers
and potential sellers co-exist all competing both among themselves and with one another
in making bids, counter-bids, offers and counter-offers.
1.2.2 Behavior of Household Savings in India
Household savings in general and savings in the form of financial assets in
particular exhibited remarkable growth since late eighties. The aggregate household
savings as share to GDP, which was only 1.5 per cent during 1970-71, went up to 4.9 per
cent in 1980-81. It went up sharply to 14.2 per cent in 1990-91 and further to 19.7 per
cent in 1994-95 before coming down marginally to 18.5 per cent in 1998-99. The growth
of household savings during the decade of eighties has been facilitated by a simultaneous
increase in physical as well as financial assets. While household savings in physical

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assets increased from 3 per cent of GDP in 1980-81 to 7.8 per cent in 1990-91, savings in
the form of financial assets increased from 2 per cent to 6.4 per cent for the
corresponding period. Financial savings during first half of the nineties registered
remarkable growth from 6.4 per cent of GDP in 1990-91 to 11.9 per cent in 1994-95.
However, the share of financial savings to GDP fluctuated since 1995-96.
The buoyancy in the economy is estimated to lead to a four-fold increase in
India's investable wealth from US$ 250 billion in 2007 to US$ 1 trillion by 2012.
Simultaneously, according to a report by Celent, an international consultancy firm,
India's wealth management segment will rise to an estimated 42 million households by
2012 from about 13 million households in 2007.
Clearly, there is huge potential in this segment. Significantly, wealth management
revenues are expected to account for 32-37 per cent of the total full-service financial
institutions by 2012. The market is also expected to undergo a structural transformation
with organized players increasing their market share. The attractiveness of India in the
global financial market is also reflected in the Indian cities - Mumbai, New Delhi and
Bangalore - finding a place of pride in the list of the world's top 75 commercial centres,
as per the 2008 Mastercard Worldwide Centres of Commerce Index.
1.3 Company Profile
Amrapali Aadya Trading & Investment Pvt. Ltd. is one of the renowned online
stock brokers in India which is the financial division of real estate giant Amrapali Group.
It offers online and offline services of stock market and other services of financial needs.
Presently company offers Stock Market Services to more than 10,000 clients for both
online and offline services. It has been Prioritizing customer focus and changing needs of
customer for last 06 Years, resulting in a strong satisfied clientele in all expertise,
pillaring organization strong day by day.
Amrapali Aadya Trading & Investment Pvt. Ltd. offers dematerialization services
as a participant in Central Depository Services Limited (CDSL), through its Depository
operations. The company is a member of both BSE & NSE. Incorporated as Aadya

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commodities Pvt. Ltd, the company later merged with leading real estate developer
Amrapli group, thus forming Amrapali Aadya Trading & Investment Pvt. Ltd.
Amrapali Aadya is using some of the best brains in trading and some of the best
software and hardware systems to give its clients maximum profit. Two basic trading
software used are ODIN and NOW.
1.3.1 Services Offered
Amrapali Aadya Trading & Investment Pvt. Ltd. provides a number of services to
its partners and clients. They have a unique 360 degree Platform which gives all the
services necessary for the client to grow and prosper in the stock market trading. The
various services which are offered to the client are:
Internet Trading.
Electronic Contract Notes.
Risk Management and Surveillance.
Online Banking Gateway.
Online Back Office Integration.
Depository Services.
End To End Trade Solutions.
Exclusive Services for HNI and NRI Clients.
Mutual Fund, IPO‟s and Insurance.
Research is carried out daily on the basis of the current market scenario.
1.3.2 Vision & Mission
Thus it is seen that Amrapali provides its cutomers immense support in growing
their portfolio size. It is committed to see that the customers grow and develop. This is
reflected in the vision and mission of the company.

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Vision:
To be the leader in our field of business through,
Total Customer Satisfaction
Commitment to Excellence
Determination to Succeed with strict adherence to compliance
Successful Wealth Creation of our Customers
Mission:
Ensure creation of the desired value for our customers, employees and associates,
through constant improvement, innovation and commitment to service & quality. To
provide solutions which meet expectations and maintain high professional & ethical
standards along with the adherence to the service commitments.
1.3.3 Objectives of Organisation
To focus on Customer-First-Attitude, to offer service level second to none.
To adhere to high standard business practice and to maintain high standards to
client for being truly competitive.
To be a leading research and advisory based stock broking house of India,
respects for professionalism.
To hold our self tide to norms and privileges like: Investor education, HNI
Services, Research Analysis, Risk Management, Most possible online services.

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1.4 Purpose of the Study
The money we earn is partly spent and the rest is saved for meeting future
expenses. Instead of keeping the savings idle one may like to use savings in order to get
return on it in the future. This is called Investment. Investment is the act of committing
money or capital to an endeavor with the expectation of obtaining an additional income
or profit. There are ample Financial Instruments available in the market for investment;
each instrument has its own features. To invest money in financial instruments is not so
easy. It needs depth study where to invest so that their investment could be safe along
with the growth of money. In present scenario everyone wants to invest his money but
having their own different objectives. It may be growth of capital, tax minimization,
retirement planning, to balance out inflation rate, safety etc. The investors always mess
with these objectives which creates confusion of where to invest, which tendency they
have to prefer at the time of investment, which factors influence their investment
decisions, how to plan their investment portfolio and to whom to prefer for taking that all
decisions.
So the study was conducted to know investor‟s awareness & preference regarding
their investment. It included what they think at the time of investment, what are the
various factors they keep in mind at investment or affects their decisions regarding
investment. The investment decision is very typical to take, as it needs proper planning.
This study suggest that people are reluctant while investing in stock and
commodity market due to lack of knowledge Main purpose of investment is returns and
liquidity, commodity market is less preferred by investors due to lack of awareness. The
major findings of this study are that people are interested to invest in stock market but
they lack knowledge. Through this report the author was also able to understand, what the
preferred choice of investment are and what customers want in an investment instrument
on the basis of which we come to know what can be the basis of pitching to a potential
client. Author also gave suggestions to the company, what improvement can be done to
marketing strategy.

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1.5 Context of Study
Many individuals find investments to be fascinating because they can participate
in the decision making process and see the results of their choices. Not all investments
will be profitable, as investor will not always make the correct investment decisions over
the period of years; However, one should earn a positive return on a diversified portfolio.
Investing is not a game but a serious subject that can have a major impact on investor's
future well being. Virtually everyone makes investments. Even if the individual does not
select specific instrument such as stock, investments are still made through participation
in pension plan, and employee saving program or through purchase of life insurance or a
home or by some other mode of investment like investing in Real Estate (Property) or in
Banks or in saving schemes of post offices. Each of this investment has common
characteristics such as potential return and the risk one must bear. The future is uncertain,
and one must determine how much risk one is willing to bear since higher return is
associated with accepting more risk.
The individual should start by specifying investment goals. Once these goals are
established, the individual should be aware of the mechanics of investing and the
environment in which investment decisions are made. These include the process by
which securities are issued and subsequently bought and sold, the regulations and tax
laws that have been enacted by various levels of government, and the sources of
information concerning investment that are available to the individual.
Today the field of investment is even more dynamic than it was only a decade
ago. World event rapidly changes that alter the values of specific assets the individual has
so many instruments to choose from, and the amount of information available to the
investors is staggering and continually growing. The key to a successful financial plan is
to keep apart a larger amount of savings and invest it intelligently, by using a longer
period of time. The turnover rate in investments should exceed the inflation rate and
cover taxes as well to allow one to earn an amount that compensates the risks taken.
Savings accounts gives money at low interest rates and market accounts do not contribute
significantly to future rate accumulation. While the highest rate come from stocks, bonds

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and other types of investments in assets such as real estate. Nevertheless, these
investments are not totally safe from risks, so one should try to understand what kind of
risks are related to them before taking action. The lack of understanding as how stocks
work makes the myopic point of view of investing in the stock market ( buying when the
tendency to increase or selling when it tends to decrease) perpetuate. To understand the
characteristics of each one of the different types of investment one must have enough
financial knowledge.
Furthermore, inflation has served to increased awareness of the importance of
financial planning and wise investing. More Inflation is a worry for each and every
individual. Due to Inflation value of money in future will decrease. To Cope up this,
investors wants to invest their money and earn certain rate of return which is more than
rate of Inflation. Having clear reasons or purposes for investing is critical to investing
successfully. Like training in a gym, investing can become difficult, tedious and even
dangerous if you are not working toward a goal and monitoring your progress. In this
Paper author examines the awareness level of investors & also try to find out their
preferences and pattern regarding investments.
1.6 Significance of the Study
A brief cursory look of any economy will definitely and easily point out the
significant role played by the financial system. It is a trust that pools the savings, which
are then invested in capital market instruments such as shares, debentures and other
securities. It works in a distinctively different matter as compared to other saving
organization such as banks, national savings, post offices, non-banking financial
companies etc. Market is full of uncertainty and on the top of that new event is adding up
to the fuel. Take the output trend in infrastructure and industry. The stock market have
bid farewell to badla system and have introduced sophisticated finance products and other
options of investments that are giving right to the holder to buy or sell units at a
predetermined rates.

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In this 21st century the digital revolution has transformed the economy in to a
new economy which empowered the customer with new set of capabilities such as;
1.Access to greater amount of information, 2.Wider variety of available good and
services 3.Greater ease of interacting with the service provider.
In Service industry it is not enough if the product meets the functional
requirements of the customer, it should also meet certain other customer expectations like
the behaviors/attitude of the person who provides service. The customer satisfaction is
the combination of both technical features & human behavioral aspects. The quality
management only addresses the systems and processes; service addresses the customer
service independently. In today‟s new economy, it is essential to address the enablers for
customer satisfaction for business growth with utmost importance as they are
interdependent in nature.
This research project is quite relevant to the today‟s generation of online trading
community. The following things can be useful for online trading community:
They should know their customer‟s pattern of investment.
They should probe the preferences of clients to know some areas of improvement.
They should get the broking companies to do effective segmentation of their
market based on research analysis for better trading.
In most industrialized countries a substantial part of financial wealth is not managed
directly by savers, but through a financial intermediary, which implies the existence of an
agency contract between the investor (the principal) and a broker or portfolio manager
(the agent). Therefore, delegated brokerage management is arguably one of the most
important agency relationships intervening in the economy, with a possible impact on
financial market and economic developments at a macro level.
This report aims to generate information on various factors influencing consumer
decision while making an investment. The research also tried to find out the association
of demographic factors with awareness & preference of the consumers. Companies can
utilize this information for identifying the awareness levels of their respective services &
products offered. Also companies can evaluate their positioning and promotion strategies

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based on the factors influencing the choice of a particular instrument. This report also
contains broad based trends on consumer profile, awareness levels, usage patterns and
investment industry as a whole which can be utilized to make inferences about the future.
Further, the investment decisions is full of complexity because of volatility of market
conditions, Inflation rate fluctuations, impact of Global environment, Cash reserve ratio,
and Repo rates. Therefore, it is imperative to analyze these factors while taking an
investment decision.
Keeping above in mind, the study has been done to see the preferences & pattern of
investors. The study is useful to company in providing the understanding about the
investor‟s awareness to devise the suitable product/marketing strategies, which would
helps it in making their policies or strategies in order to attract them. Further financial
planner get advent to make portfolio according to response given by respondents, which
belong to different occupations, having different income level, different age level or
which instrument is mostly liked by the investors for investment. The study would further
helpful for readers in understanding about the various investment opportunities available
in the market.
1.7 Theoretical Framework
Indian stock market is one of the oldest stock markets in Asia with a glorious past
that caters to the huge population of India and gives them investment opportunities. In
1875 Bombay Stock Exchange (BSE) was established by 22 brokers. From that time
onwards the Indian Stock market has grown in leaps and bounds, and has become a
forceful and competent stock market at the international level.
The depression after Independence led to closure of a lot of stock exchanges in
the country. Lahore Stock Exchange was closed down after the partition of India, and
later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was
registered in 1957 and got recognition in 1963. Most of the other Exchanges were in a

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miserable state till 1957 when they applied for recognition under Securities Contracts
Act, 1956 (Stock market of 2009).
But Government policies during 1980's played a vital role in the development of
the Indian Stock Markets. And there was a sharp increase in number of Exchanges, listed
companies as well as their capital.
1.7.1 BSE and NSE
The main focus of stock trading in India is on the companies that are registered
with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Many
other stock exchanges are also there in India, but they are small fish compared to these
two large stock exchange.
The Bombay Stock Exchange is the symbolic head of the stocks trading in India
and lists over 5,034 listed Indian companies as of December 2010. The equity market
capitalization of the companies listed on the BSE was 1.63 trillion dollar as of December
2010, making it the 4th largest stock exchange in Asia and the 8th largest in the world.
The BSE has also the largest number of listed companies in the world ("Bombay stock
exchange," 2010).
Another stock exchange in India the National stock exchange is the 9th largest
stock exchange in the world by market capitalization and largest in India by daily
turnover and number of trades, for both equities and derivative trading. NSE has a market
capitalization of around 1.59 trillion dollar and over 1,552 listings as of December 2010
("National stock exchange," 2010). Majority of the companies (4867) are listed with
Bombay Stock Exchange, followed by Delhi Stock Exchange (2913) Calcutta Stock
Exchange (2875) and National Stock Exchange (1334).

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1.7.2 Types of Investment
There are various ways to invest money such as:
Bonds: They are called fixed-income securities and refer to any securities that are
founded on debt. When one purchases a bond, one is lending out your money to a
company or government. In return, they agree to give interest on the money and
eventually pay back the amount lent out. Bonds are relatively safe but the rate of return is
lower.
Stocks: When one purchases stocks or equities he/she becomes a part owner of the
business. This entitles him/her to vote at the shareholder‟s meeting and allows to receive
any profits that the company allocates to its owners. Stocks are volatile and they fluctuate
in value on a daily basis. When one buys a stock, he/she is not guaranteed anything. But
compared to bonds, stocks provide relatively high potential returns.
Mutual Funds: A mutual fund is a collection of stocks and bonds. When one buys a
mutual fund, he/she is pooling his/her money with a number of other investors which
enables to pay a professional manager to select specific securities for him/her. The major
advantage of a mutual fund is that one can invest money without the time or the
experience that are often needed to choose a sound investment.
Futures: A future is just what it's called a contract. It is not equity in a stock or
commodity. It is a contract to make or take delivery of a product in the future, at a price
set in the present. In formalized trading of futures contracts on exchanges, agreements
specify price, quantity and the month of delivery. Futures can be used either to hedge or
to speculate on the price movement of the underlying asset.
Options: It is a financial derivative that represents a contract sold by one party (option
writer) to another party (option holder). The contract offers the buyer the right, but not
the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-
upon price during a certain period of time or on a specific date.
There are also other alternative investment opportunities such as: Forex, Gold,
Real estate etc.

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1.7.3 Stock Trading
In simple words, stock is a share in the ownership of a company. Holding a
company's stock means to be one of the many owners (shareholders) of a company and
having a claim to everything the company owns. As an owner, one is entitled to his/her
share of the company's earnings as well as any voting rights attached to the stock.
Earlier days a stock was represented by a stock certificate which was a piece of
paper that was proof of ownership. But in today‟s computer age, stock is stored
electronically by broker. This is done to make the shares easier to trade. In the past, when
a person wanted to sell his shares, that person physically took the certificates down to the
broker. But now stocks can be purchased with a click of mouse.
Most stocks are traded on exchanges where both buyers and sellers meet and
decide on a price. The purpose of a stock exchange is to facilitate the exchange of
securities between buyers and sellers, and reducing the risks of investing. Some
exchanges are physical locations where transactions are carried out on a trading floor.
The other types of exchanges are virtual, composed of a network of computers where
trades are made electronically.
1.7.4 Online and Offline Trading
Traditionally stock trading was done through stock brokers personally or through
telephones. As number of people trading in stock market increased enormously in last
few years, some issues like location constrains, busy phone lines, miss communication
etc. started growing in stock broker offices. Then Information technology helped stock
brokers to solve those problems by Online Stock Trading method.
Online stock trading is an internet based stock trading facility where Investor can
trade shares through a website without any manual intervention from the broker. It also
provides investors with rich, interactive information in real time including market
updates, investment research and robust analysis.

P a g e | 15
Still some people like offline stock trading where the customer calls the broker to
enquire about the stock prices. Then the broker asks some personal details to verify his
identity. After that customer can order the amount and the price at which he wants to buy
a particular stock. The broker places the order on behalf of the customer. Similarly, the
customer can also sell the shares in offline mode. And the customer can monitor all these
transactions by logging into his account. The main advantage in offline trading is time-
saving.
1.7.5 Demat Account and Trading Account
Physical share certificates are converted into electronic format is known as
Dematerialization or Demat. Currently almost 99 percent of shares traded in Indian stock
exchanges are in demat mode. One has to open a demat account if he/she want to buy or
sell stocks, just like a bank account where actual money is replaced by shares. Demat
account allows one to buy, sell and transact shares without the endless paperwork and
delays.
Similarly, a trading account works as an intermediary between the savings
account and demat account. When one want to buy shares, first the money is transferred
from his/her savings account to trading account. After that required amount of shares are
purchased and finally shares are stored in electronic form in the demat account. It works
just in opposite way during the time of selling shares.
1.7.6 Depository and Depository Participants
A depository is an entity which holds securities of investors in electronic form at
the request of the investors through a registered Depository participant. Currently there
are two depositories in India they are:
a. National Securities Depository Limited (NSDL)
b. Central Depository Services Limited (CDSL)

P a g e | 16
Depository provides a safe and convenient way to hold securities and enables
instant transfer of securities. It eliminates the risk associated with physical certificates
such as bad delivery, fake securities, Delays, thefts etc. It also provides services such as:
Dematerialization, Rematerialization, transfer of securities and change of beneficial
ownership.
Depository Participant (DP) acts as intermediaries between the depository and the
investors. The relationship between the DPs and the depository is governed by an
agreement made between the two under the Depositories Act. Hence a depository
participant acts as a custodian of securities held in dematerialized form and carries out
instruction to transfer the same. Currently, CDSL has 553 DPs whereas NSDL has only
293 DPs.
1.7.7 Sensex and Nifty
The Sensex is basically an indicator that gives an idea about whether most of the
stocks have gone up or have gone down. It is an indicator of all the major companies of
the Bombay Stock Exchange. BSE came out with this stock index in the year 1986 that
subsequently became the barometer of the Indian stock market. It is calculated taking into
consideration prices of 30 largest and most actively traded stocks of the BSE listed
companies. The base year of Sensex is 1978-79 and the base value is 100. Similarly,
Nifty is an indicator of all the major companies listed with National Stock Exchange. It is
calculated based on 50 major stocks listed with NSE. And the base year is taken as 1995
and the base value is 1000.
1.7.8 Indian Broking Industry
The Indian broking industry is one of the oldest trading industries that have been
around even before the establishment of the BSE. Despite passing through a number of
changes in the post liberalization period, the industry has found its way towards
sustainable growth. The number of brokers in various stock exchanges rose from 6,711 in
1994-95 to 9,335 in 2006. The number of brokers in all the exchanges together peaked to
10,213 in the year 2001 but gradually declined when the regional stock exchanges began
to lose business in the light of wide ranging market structure reforms.

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According to the survey conducted by Dun and Bradstreet India (D&B India)
among 33 Indian equity broking firms, the income of broking firms has seen a growth of
20.8% to Rs. 54,983 million in 2010. The overall profit of the broking firms eroded up to
70% in 2009 because of global financial crisis. But the trend has been changed in 2010
with profit level growing 86% to Rs. 19,990 million. Similarly, the major cost overhead
across all broking firms was employee compensation (34.2%) in overall expenses.
1.7.10 Investment Options in India
Figure1.1 Investment options in India
[Source- Delhi Business Review X Vol. 8, No. 1 (January – June 2007)]

P a g e | 18
CHAPTER 2: REVIEW OF THE LITERATURE
Any research builds on the research carried out previously on the given subject.
The purpose of the literature review is to review what has previously been done on the
subject and analyze it in the present context so that an effective understanding can be
established.
Before conducting this project, some work which has been done previously on the
subject of the awareness, preference & pattern of investment were consulted. This helped
the author greatly in building up a framework for his project. A review of the works is
presented below.
N. Geetha1
& Dr. M. Ramesh2
(Nov 2011) - They conducted the study with the
objective to analyze the investment choice of people in Kurumbalur. Analysis of the
study was undertaken with the help of survey conducted. After analysis and interpretation
of data it was concluded that in Kurumbalur respondents were medium aware about
various investment choices but they did not know about stock market, equity, bonds and
debentures. The study was conducted by taking a limited number of samples. This study
reflects the perceptions of those respondents who are residing in Kurumbalur. There
might be a chance that the perceptions of the respondents of different area may vary due
to diversity in social life, living pattern, income level etc. All the age groups studied
given more importance to investment in Insurance, NSC, PPF and bank deposits. Income
level of a respondent is an impotent factor which affects portfolio of the respondent.
Middle aged group, Lower income level groups respondents preferred to invest in
Insurance, NSC, PPF and bank deposit rather than any other investment avenues. In
Kurumbalur respondents were more aware about various investment avenues like
Insurance, PPF, bank deposits, small savings like post office savings etc. For that
awareness program has to be conducted by Stock Brokering firms because most of the
respondents are unaware about this new service and about stock market.
1
Research Scholar, Dept. of Business Administration, Annamalai University.
2
Associate Professor, Dept. of Business Administration, Annamalai University, India.

P a g e | 19
Luigi Guiso3
and Tullio Jappelli4
(2005) - In their research paper they
document lack of awareness of financial assets in the 1995 and 1998 Bank of Italy
Surveys of Household Income and Wealth. It then explores the determinants of
awareness, and finds that the probability that survey respondents are aware of stocks,
mutual funds and investment accounts is positively correlated with education, household
resources, long-term bank relations and proxies for social interaction. Lack of financial
awareness has important implications for understanding the stockholding puzzle and for
estimating stock market participation costs.
Starting from the observation that in two large, representative surveys of Italian
households a significant fraction of consumers are not aware of the existence of basic
financial assets such as stocks and mutual funds, this paper makes two contributions to
the literature on household portfolios. First, it proposes an explanation for the mechanism
whereby asset awareness may be acquired. In addition, social learning represents a
further channel through which potential investors can become aware of financial assets,
though it may induce distributors to disseminate less information. In the empirical
analysis, it shows that awareness is positively affected by demographic variables –
education, wealth, and income and birth cohort – that increase the probability of
stockholding, long-term bank relations, intensity of social interactions and national
newspaper readership in the area where investors live. Second, we show that lack of
awareness can help explain limited participation in financial markets. Ignorance of
investment opportunities is a specific impediment to stockholding that goes beyond the
generic reference to fixed adoption costs as a cause of non-participation typically found
in the literature. Their calculations show that if all investors were aware of risky assets,
stock market participation could increase substantially (and even double) from its current
level. Yet they also find that a large fraction of potential investors do not own stocks even
if aware, suggesting that other barriers exist even when awareness is accounted for.
3
University of Sassari, Ente Luigi Einaudi for Monetary, Banking and Financial Studies, and CEPR
4
University of Salerno, CSEF, and CEPR

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Manoj Kumar Dash5
(2008) - In the study the author aims to gain knowledge
about key factors that influence investment behavior and ways these factors impact
investment risk tolerance and decision making process among men and women and
among different age groups. The individuals may be equal in all aspects, may even be
living next door, but their financial planning needs are very different. It is by using
different age groups along with Gender that synergism between investors can be
generated. In this context, demographics alone no longer suffice as the basis of
segmentation of individual investors. Hence keeping this in mind, the present study is an
attempt to find out Factors which affects individual investment decision and Differences
in the perception of Investors in the decision of investing on basis of Age and on the basis
of Gender. The study concludes that investors‟ age and gender predominantly decides the
risk taking capacity of investors.
He concluded that the modern investor is a mature and adequately groomed
person. In spite of the phenomenal growth in the security market and quality Initial
Public Offerings (IPOs) in the market, the individual investors prefer investments
according to their risk preference. For e.g. Risk averse people choose life insurance
policies, fixed deposits with banks and post office, PPF and NSC. Occasions of blind
investments are scarce, as a majority of investors are found to be using some source and
reference groups for taking decisions. Though they are in the trap of some kind of
cognitive illusions such as overconfidence and narrow framing, they consider multiple
factors and seek diversified information before executing some kind of investment
transaction. The purpose of this study was to determine whether the variables such as
demographic characteristics (age, gender) and investment patterns could be used
individually or in combination to both differentiate among levels of men and women
investment decisions and risk tolerance and develop some guidelines to the investment
managers to design their investment schemes by considering these views of individuals.
5
Assistant Professor, ABV- Indian Institute of Information Technology and Management, Gwalior, India

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Dhiraj Jain6
(April 2012) - In his research he points out that investment markets
are becoming more risky and each and every passing day makes investors behave
differently upon different market dynamics. The basic methods of market analysis
(Fundamental, Technical and Quantitative) though are playing an important role in
investment decisions, the behavior of the investors has become more important and hence
the study “Behavioral Finance” emerging and becoming the topic of various researches
and studies. In extension to the same, this study reviews the literature on one of the most
meaningful concepts in behavioral finance, the decision factors which are influenced by
market movements and examines the perceptions, preferences and various investment
strategies adopted by investors in the Indian stock market on the basis of a survey of 110
respondents based in Udaipur and are investors in the stock market during September
2011-January 2012. The study analyses the rationality of the investors of Udaipur during
different market expectations, dividend and bonus announcements, and the impact of age,
income levels and other market related information on investment decisions of investors
from Udaipur.
The research brings out certain characteristics of investors living in Udaipur. The
ability to understand the judgment criteria like rationality and irrationality in investment
pattern and behavior which enables the investor to be cautious as its consequences affect
the lifestyle, asset value and relationship with others. The present study has shown that
investors prefer investing in both primary and secondary market instruments. Most of the
decision are rational and influenced by the various information available in market. It was
also found that investors prefer the wait and watch policy for taking their decision, and
are very cautious and their decisions are influenced by various psychological factors and
behavioral dimensions.
6
Asst. Professor , Pacific Institute of Management , Udaipur

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E. Bennet7
et al and Eva Esther Shalin8
(Jan 2012) - The research says that the
investor‟s sentiment can be defined as investors‟ attitude and opinion towards investing
in the Stocks. The aim of this research is to analyze the individual investor‟s sentiment.
This study also analyses the influence of market specific factors on investors‟ sentiment.
The investor‟s attitude towards investing is influenced by rumors, intuition, herd behavior
among investors and media coverage of the stock. A simple random sample of 375
investors in Tamil Nadu was chosen for the study. These investors were administered a
structured schedule, containing pre-validated scales to measure the investor sentiment.
Once the constructs were found to be both reliable and valid, the impact of Herd
Behavior, Internet Led Access to Information and Trading, Macro Economic Factors,
Risk and Cost Factors, Performance Factors and Confidence Level of Institutional
Investors, Best Game in Town Factors were tested by using the Bootstrapping method.
The Market Specific Factors had a significant impact on the investors‟ sentiment in India.
They concluded that investors feel that the stock prices in India will rise for the
next 12 months. The second aspect of investor‟s optimism is the expectation that the
points dropped by 3% in Bombay Stock Exchange / National Stock Exchange will be
followed by a quick recovery. Besides, the investors are again optimistic about Indian
Stock market‟s ability to bounce back and view easy access to tools and technology via
the internet and the low cost of trading as a contributory factor. As witnessed in the stock
market in the past few years, individual investors looked for buying opportunities each
time a favorite stock fell. Since the cost of trading is low, the investors would buy each
time the price dipped. This ensured that any minor dips are unsustainable for these stocks.
The factors influencing investor‟s expectation of stock prices rising for the next 12
months are the low rate of inflation, interest rate, unemployment rate and price of fuel.
The investor optimism or nothing can go wrong attitude is reflected in the belief that
there is no alternative investment option other than the stock market and the stock market
is the best game in town. It is also found from the interactions with selected investors that
Provident Fund and Gratuity would not be able to cover the investor‟s old age /
7
Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli – 620 024.
India.
8
Department of Information Technology, Pentecost University College, Accra, Ghana, West Africa.

P a g e | 23
retirement life. Therefore to manage the retirement / old age, the investors know that they
would need to save and invest in stock market. Out of various vehicles to invest, the
investors find the Indian stock market to be very attractive. The low returns offered by
Post Office, Government Bonds etc. make them relatively unattractive and persuade them
to invest in stocks.
The Neilson Life survey (2008) - The survey was conducted by Neilson a well
known market research company. The goal of the study was to study the investment
scenario in India and find out which investment instruments were popular with the Indian
public. This subject has a close correlation with the research subject of the present
project. The survey was conducted by distributing questionnaires and interviewing people
from all over the country. Working men and women from SEC A, B, and C in the age
group 22-50 years were interviewed. The study involved 12,760 respondents. The survey
indicated that for Indian investors insurance was the most popular form of investment
with 44% people investing in it. Bank Fixed Deposits which has 35 percent votes. Gold
(33%) and Property (23%) are the other favorites among locals. The current financial
turmoil makes it a tough case for equity markets. Life Insurance topped the list of future
investment instruments with 30 percent respondents agreeing to consider it as a future
investment option, followed by Bank Fixed Deposits (11%), Gold and Property (both
7%), and Life Insurance Child Plans (6%). This was attributed to the fact that due to the
financial crisis the people were increasingly looking forward to safer investment options.
The survey also studied the marketing of the investment options and found that
Agents are the main source of information on insurance policies. Friends/ peer group
emerge as a significant source of information (58%). Media also plays an important role
in spreading awareness about various insurance policies, which includes Television
Advertisements (55%), Newspapers (35%), and Outdoor Hoardings (33%).
These three surveys formed the basis of conducting this research and helped in
formulating a direction for this research. The basics about Mutual Funds and their
marketing as well as research methodology are explained in the subsequent chapters.

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In order to study the behavior a review of literature was done to develop the
concept and understand what had been done earlier. Stock market‟s performance is not
simply the result of intelligible characteristics but also due to the emotions that are still
baffling to the analysts. Despite loads of information bombarding from all directions, it is
not the cold calculations of financial wizards, or company‟s performance or widely
accepted criterion of stock performance but the investor‟s irrational emotions like
overconfidence, fear, risk aversion, etc., seem to decisively drive and dictate the fortunes
of the market. There are a lot of investment choices and one must select the most
appropriate one. The person dealing with the planning must know all the various
investment choices and how these can be chosen for the purpose of attaining the overall
objectives. The details of making the investment along with the various ways in which
the investment has to be maintained and managed.

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CHAPTER 3: RESEARCH METHODS AND PROCEDURES
3.1 Purpose of the Study
Since the year 2000 a big boom has been witnessed in the Indian Stock Market
when the market showed the coming up of Online Trading System many online stock
trading companies came but initially due to lack of online trading some companies
vanished and some survived. The companies which survived are getting the handsome
returns also attracting the foreign Investment Companies. Nowadays this sector is facing
cut-throat competition and also provides huge growth prospects. The study then goes to
evaluate and analyze the findings so as to present a clear picture of awareness of the
investors about various investment instruments and also their preferences & pattern so
that broking firms can utilize the findings in devising marketing strategies in the online
trading & demat service sector.
The present financial environment provides ample opportunities of investment to
the investors. The decision to invest in right instrument is too complex which can meet
their expectations perfectly. So a study has been done which explain about the perception
of respondents what they exactly see at the time of investment which includes their
tendency, preference and factors through which an investor is influenced. The study also
focuses on analyzing the investment patterns of the investors.
3.1.1 Research Objectives
To study awareness of various financial products like Equity, Commodity,
Currency, Mutual Funds, Derivatives, etc., among investors.
To Study the preference of investors towards various investment instruments
available in stock market.
Study of influencing factors affecting the investment decision.
To study the pattern of investment in different instruments.

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3.2 Research Design
The research design specifies the methods and procedures for conducting a
particular study. The type of research design applied was “Descriptive” as the objective
was to find awareness of customer about various investment instruments available in
Indian stock market. The objectives of the study restricted the choice of research design
up to descriptive research. Therefore, no fixed hypothesis was set up. This survey will
help the firm to know how & why the investors invest in different investment
instruments & which factors affect their investment preference.
As the name implies, objective of research was to describe something-usually
market functions or characteristics. The research was basically a typical descriptive
research and it was pre-planned and well structured. The research was a formal one and
its design specified the methods for selecting the sources of information and collecting
data from other sources.
3.2.1Research Methodology
Research methodology is a way to systematically represent a research on any
problem. It may be understood as a science of analyzing the details of how research is
done scientifically. The methodology may differ from problem to problem, yet the basic
approach towards the research remains the same. It is undertaken by the researchers in
studying the research problem along with the logic that works behind them. It tends to
define the methodology for the solution of the problem that has been undertaken for the
purpose of the study. This part focuses on the techniques that were used for the
collection, classification and tabulation of data. The latter part explains the manner in
which the data was analyzed; so as to reach to conclusive results.

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3.3 Data Collection
3.3.1 Instruments Used
The primary data was collected by preparing a Questionnaire & it was done by
administering a survey. The questionnaire used was a printed, well structured formalized
schedule to obtain and record specified and relevant information with fair accuracy and
completeness. An Online9
Survey was also done with the same Questionnaire due to time
constrain. The questionnaire consisted mainly of close ended questions (dichotomous &
multiple choices) and rank order scale. The questioning process was face to face interviews
and the questionnaire was designed in such a way that it could be understood and
answered easily by the respondents. Respondents were asked to tick one option in multiple
choice questions and were asked to rate certain given parameters on rating scale (Likert scale).
The questionnaire included questions based on the investment pattern, general awareness of
investment instruments, criteria for investment & factors affecting choice of investment
instruments.
3.3.2 Sampling Design
The sample comprised of 50 respondents in an age-group of 20 to 65. The sample
was selected on non-probability basis using convenient and location sampling. A
representative sample consisting of students, working professionals, businessmen and
housewives was used. All people residing in Delhi-NCR between 20 & 65 years of age
were considered the population.
3.4 Data Analysis
The information from primary data was verified for accuracy, adequacy and
pertinence to the objectives of this study. The data so obtained was coded and tabulated
9
http://www.surveygizmo.com/s3/978499/A-COMPREHENSIVE-STUDY-ON-AWARENESS-PREFERENCE-
amp-PATTERN-OF-INVESTMENT-IN-INDIAN-STOCK-MARKET

P a g e | 28
and recorded for analysis. This was done using Statistical Package for Social Sciences
(SPSS.20). Analysis of the entire data collected from questionnaire was done by applying
various statistical techniques such as Tabulation, Graphs, Pie Charts, etc., in a systematic
manner.
3.5 Limitations
The present research paper was aimed to achieve the defined objectives in full
earnest and accuracy, although there were certain limitations:
Time and Cost – The time and cost play an important role where one goes for a
particular study. Both of these factors become constraints especially when a study is
conducted at academic level.
Sample Size – Due to time and cost constraints the large sample was not taken. Since the
study conducted was with a small sample hence the exact picture cannot be revealed and
the findings cannot be generalized.
Choice of Population - The population selected was limited to the places in Delhi NCR.
Hence results would have altered if some other population had been selected.
Inherent Discrepancies in the Questionnaire - The questionnaire might be having some
undetectable errors and limitations, which could shape the responses into a particular
fashion. No pre-test was done before the circulation of the questionnaire.
Bias in Response - The data is entirely based on responses given by respondents which
may be biased due to their personal bias in replying the questions. They may not be very
serious or interested in replying the questions and take it very lightly, due to which data
may not be very accurate.
Negligence by Respondents - People were not willing to answer the entire questionnaire
due to the less time available to them. Many were reluctant in divulging their financial
details.

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CHAPTER 4: DATA ANALYSIS AND FINDINGS
During the survey a data of 50 respondents was collected. However data of only
49 respondents was used for analysis purpose due to redundancy factor. An analysis of
the data is shown below.
4.1 Demographic Profile of Respondents
Gender The data of 49 respondents included 41 males and 8 females. This is shown in
the pie chart below (Figure 4.1).
Figure 4.1 Gender Ratio of Respondents

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Age Groups Majority of the respondents fell in age group of 20-25 years. The age profile
of the respondents is shown in the Figure 4.2 below.
Figure 4.2 Age Group of Respondents
Education Majority (59.18%) of the respondents had Educational Qualification of Post
Graduate or at least was Graduate (38.78%) which is shown in Figure 4.3 below.
Figure 4.3 Qualification of Respondents

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Income A survey of the incomes of the respondents was done. The incomes were divided
into four levels: - Rs. 0 to 100,000; Rs. 100,000 to 200,000, Rs. 200,000 to Rs. 300,000,
Rs. 300,000 to Rs. 400,000 and more than Rs. 400,000. The distribution of the
respondents based on the income levels is as shown Figure 4.4 below.
Figure 4.4 Annual Income of Respondents

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4.2 Awareness of Instruments
The researcher asked the respondents to indicate the level of awareness they have
about various investment instruments. The respondents were asked to rate their level of
awareness on 5 levels: - Not Aware, Have heard of it, Somewhat Aware, Good
Knowledge and Expert. The results of this are indicated below with the help of frequency
tables.
Shares
The level of awareness among the people for shares as an investment instrument is shown
in Table 4.1.
Table 4.1 Awareness of Stocks/IPO/Equity/Shares
Frequency Percent Valid Percent Cumulative
Percent
Valid
Not Aware 1 2.0 2.0 2.0
Have Heard Of It 21 42.9 42.9 44.9
Somewhat Aware 16 32.7 32.7 77.6
Good Knowledge 10 20.4 20.4 98.0
Expert 1 2.0 2.0 100.0
Total 49 100.0 100.0
Many people relate investment with share markets. There are a lot of small
investors who invest a part of their money directly in shares. Many people are not expert
in the share market. This is clearly reflected in the Table 4.1 where most people said that
they were somewhat aware or had good knowledge of the share market but were not
experts.

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Mutual Funds
With only 18.4 % of the respondents having good knowledge of Mutual Funds, the
awareness is very low as shown in Table 4.2.
Table 4.2 Awareness of Mutual funds
Percent
Valid
Not Aware 1 2.0 2.0 2.0
Have Heard Of It 7 14.3 14.3 16.3
Expert 1 2.0 2.0 100.0
Total 49 100.0 100.0
Insurance
However, the awareness of Insurance is more than Shares & Mutual Funds
among the investors as shown in the Table 4.3.
Table 4.2 Awareness of Insurance
Percent
Valid
Have Heard Of It 4 8.2 8.2 8.2
Expert 2 4.1 4.1 100.0
Total 49 100.0 100.0

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Derivatives- (Futures & Options)
No one among the investors said that he/she is an expert in Derivatives trading
which signifies a very low level of awareness regarding Derivatives market as shown by
Table 4.4 below.
Table 3.4 Awareness of Derivatives- (Futures & Options)
Percent
Valid
Not Aware 7 14.3 14.3 14.3
Have Heard Of It 14 28.6 28.6 42.9
Total 49 100.0 100.0
Currency/Forex
In forex trading also none of the respondent felt that they are expert in this
particular trading domain, with majority of them saying that they have heard
of it but don‟t exactly know what it is which is shown in Table 4.5 below.
Table 4.4 Awareness of Currency/Forex
Percent
Valid
Not Aware 3 6.1 6.1 6.1
Have Heard Of It 17 34.7 34.7 40.8
Good Knowledge 11 22.4 22.4 100.0
Total 49 100.0 100.0

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Commodity
Commodity trading has the lowest awareness among all investment
instruments as majority (39 %) saying that they have only heard of it as
shown in Table as shown in Table 4.6 below.
Table 4.5 Awareness of Commodity
Percent
Valid
Have Heard Of It 19 38.8 38.8 38.8
Expert 1 2.0 2.0 100.0
Total 49 100.0 100.0
Fixed Deposits/ Recurring Deposits/ PPF
FDs, PPF & RDs seems to be the most used instrument for investment by the
respondents because majority (47 %) of respondents has good knowledge of
these instruments and around 10 % of them feel they are expert in these as
shown in Table 4.7 below.
Table 4.6 Awareness of Fixed Deposits/ Recurring Deposits/ PPF
Percent
Valid
Not Aware 1 2.0 2.0 2.0
Expert 5 10.2 10.2 100.0
Total 49 100.0 100.0

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Real estate/Land/Plot
Respondents also seem to have good knowledge about investments in real
estate which is clear from Table 4.8.
Table 4.7 Awareness of Real estate/Land/Plot
Percent
Valid
Not Aware 2 4.1 4.1 4.1
Expert 5 10.2 10.2 100.0
Total 49 100.0 100.0

P a g e | 37
4.3 Pattern of Investment
Out of 49 selected data, 69% of respondents said that they invest their money in
share market in one way or the other. And majority (59%) of them were investing since
last 1 to 5 years and a good chunk of people (32%) were investing since last 1 year or less
as shown by the table 4.9 & pie chart below (Figure 4.5).
Table 4.9 Ratio of investors & non-investors
Percent
Valid
Yes 34 69.4 69.4 69.4
No 6 12.2 12.2 81.6
Earlier, but now stopped 9 18.4 18.4 100.0
Total 49 100.0 100.0
Figure 4.5 Experience of investing (IN Years)

P a g e | 38
Timing and Duration of Investment
Before making an investment it is important to know when you will make the
investment and for how long? The answers to these questions reveal how the investors
view the investments and the market climate. The author asked the respondents some
questions regarding the timing duration of the investment.
Duration of investment The respondents were asked the duration for which they would
like to invest their money. The result is as shown in the figure 4.6 below.
Figure 4.6 Time Horizon of Investment
The data shows that most of the respondents were interested in short term
investments of less than 6 months in stock market. This was followed by those who felt
that the investment should be only for 6 months to 1 year.
The results indicate that there is a lack of clarity for the ideal period of
investment. It is generally seen that investments made over a longer period of time yield

P a g e | 39
better returns than for a short period of 1-6 months. Thus there is a need to spread the
awareness about the benefits of long term investments.
Amount of Investment The investors have a choice of investing a large amount at one
time or investing small amounts regularly. In case of shares they can buy a large number
of shares at once or buy small number of shares at a regular interval. For investing in
mutual funds the investors have an option of investing a large amount as a one-time
investment or investing in S.I.P. wherein a fixed amount is debited from the bank account
on a regular basis for the purpose of investments.
The respondents were asked about the percentage of income they deploy for the
investment purpose. The results are shown in Figure 4.7 below.
Figure 4.7 Percentage of income invested in market.
A majority (49%) of respondents invest 0 to 15% of their income in stock market
closely followed by 44% who invest 15-30% of their income.

P a g e | 40
Figure 4.8 When do investors shell out money?
The data in Figure 4.8 clearly shows that majority of the respondents (41%) feel
that it is better to invest regularly (Quarterly) than at one time. This is because when one
invests a small amount regularly one can get the benefit of rupee cost averaging. Over a
period of time by making small investments we tend to overcome any short term losses
and so get a better return on our investments.
Figure 4.9 Size of Investment

P a g e | 41
As is clear from Figure 4.9, majority (37%) of respondents have a good amount
(Rs. 50,000/- to 1,00,000) of money invested in stock market as is clear from Figure 10.
This was closely followed by people who have investments ranging from Rs. 1 lakh to 3
lakh, which was 34% of respondents. There were around 8 % respondents who said that
they have invested more than Rs. 3 lakh in stock market.
Market level for investments The expected returns from an investment depends strongly
on the economic climate at the time of making the investment. One barometer for the
economic climate can be the Sensex. The respondents were asked at which Sensex trend
they would prefer to investment. The results are as shown in Table 4.10 below.
Table 4.10 Bullish Vs Bearish
When do you mostly invest your money?
Percent
Valid
Bullish Trend 31 63.3 63.3 63.3
Bearish Trend 18 36.7 36.7 100.0
Total 49 100.0 100.0
As can be seen from Table 4.12, 63% of the respondents feel that the best time to
invest is when the market is in upward trend. This maybe because from a low level the
market is expected to rise and as such the value of the investment will also rise giving a
good return on the investment. 36.7% of the respondents feel that one should invest in
market when it is showing downward trend. This can also be a good strategy because
many people think that they will gain when the market will become bullish. It may lead
to some losses on the short term but over a long term they will gain.

P a g e | 42
4.4 Preferences
Choice of Instrument Respondents were asked to rank a variety of instruments on the
basis of their preference to invest in those specified instruments. When it comes to
investment in stocks majority 20 respondents ranked it as their no. 1 choice of investment
as shown in Figure 4.10. Likewise Mutual fund was ranked at 5th
position by 11
respondents; insurance was ranked at 2nd
by 12 respondents, Derivatives, currency &
Commodity at 6th
, 7th
and 8th
position respectively. However, Fixed Deposit as an
instrument was also ranked 1st
by 12 respondents and investment in Real
estate/Flats/Plots share 8th
position with commodity. (See appendix B for Tables).
Figure 4.10 Preference rank of Stocks

P a g e | 43
Objectives behind Investment The researcher asked the respondents to tell about their
objectives behind the investment in stock market, it required them to choose from
multiple options given in the questionnaire. There may be more than one objective behind
selection of an instrument so respondents were asked to tick all the options that apply, so
the total response may be greater than 100%.
As opposed to the common belief that people want to make quick money in stock
market, 65% respondents said that their objective behind investment is long term growth
as shown in Table 4.11. When extra income was asked as an objective of investment in
stock market, 61 % gave affirmative response (Table 4.12). Similarly, motive of capital
preservation was prevailing in 36.7% respondents, safe investment & steady growth was
not much of a concern while investing in stock market as both had a 28% positive
response (Refer to Tables in appendix B). 36.7 % chose to invest in stock market with an
objective of preservation of capital and 49 % of respondent seek some kind of tax benefit.
There were still 42 % who wanted quick returns. 34 % invested to meet their future
expenses which they felt would not have been met by investing in other conventional
avenues of investment. A meager 10 % had some other objective for investing in stock
market.
Table 4.11 Long term growth
Percent
Valid
No 17 34.7 34.7 34.7
Yes 32 65.3 65.3 100.0
Total 49 100.0 100.0

P a g e | 44
Table 4.12 Extra income
Percent
Valid
Unchecked 19 38.8 38.8 38.8
Checked 30 61.2 61.2 100.0
Total 49 100.0 100.0
Source of Reference for Investment Investment is a high involvement product and
people do a lot of research before investing in any instrument. A study of the sources of
information that the people use before investing will help a company in defining how to
best spread the awareness about the product.
The author asked the respondents to name the sources of information that they use to
gather the information before investing. The results are shown below. (Refer to Appendix
B for Frequency Tables)
(A) Newspaper/Financial Magazines 45%
(B) Business News Channel 63%
(C) Internet/Websites 57%
(D) Friends/Family/Relatives 47%
(E) Investment Advisors/ Financial Planners 53%
(F) Other 26%
People may select more than one checkbox, so percentages may add up to more than
100%.
As seen from the results people use multiple sources of information before investing
in any instrument. Media (Newspapers Magazines and Internet) are the most popular
sources of information. With the advent of the internet all the information required by the
people is available at the click of a mouse. The people can look at past trends, and
compare the various options before investing.

P a g e | 45
Friends and Family as well as investment advisors are also very popular sources of
information. The people want to know about the past experience of other investors before
investing their own money. This is the reason that they consult their friends and family
before making any decision. The investment advisors and financial planners are looked
upon as people who have knowledge and experience and so people consult them.
Factors influencing decision Respondents were asked about the factors they consider
before investing in stock market. Company‟s brand name seemed to be the biggest factor
influencing the investors decision while investing in shares with 67.3% considering it as
an important factor as shown in Table 4.13.
Table 4.13 Company's Brand name
Percent
Valid
Unchecked 16 32.7 32.7 32.7
Checked 33 67.3 67.3 100.0
Total 49 100.0 100.0
Respondents considered a wide variety of factors before investing (Refer to appendix
B) viz. area or sector of investment-53%, Research Manger‟s past record- 42.9%,
Liquidity of instrument-53.1%, Economic policies by RBI & SEBI-51%, broker‟s
prediction and advice-51%. However, they were indifferent towards Market rumors &
speculations (only 34.7%).

P a g e | 46
Preferred Area of Investment Researcher asked the respondents to rank the sectors in
order of their preference of investment. 15 respondents ranked banking sector at No. 1
position (Figure 4.11). 11 respondents selected Real Estate sector at rank 2nd
. IT sector
had a tie between the respondents as equal percentage 11 respondent ranked IT at 2nd
as well as on 3rd
position. Automobile sector was ranked 3rd
by 15 people,
pharmaceutical sector was ranked 4th
by 12 and metals was ranked 7th
by 19
respondents respectively. Petroleum/Gas/Energy sector was ranked 6th
by 9
respondents. (See Bar Charts in Appendix B).
Figure 4.11 Banking as Preferred Sector

P a g e | 47
Choice of Index Respondents were asked to mark their responses according to their
preference regarding indices they chose for trading. Majority (49%) of them like to invest
in Large Caps (Figure 4.12)which means that they are risk averse & want to invest their
money in blue chip companies as the volatility in these stocks is less. Mid caps as a
choice was closely followed by large caps with around 45% respondents going for
investment in mid cap shares. Very few people (6%) seemed interested in investing in
small caps, which shows that they have high purchasing power.
Figure 4.12 Choice of Index
Influencing Factors in Buying Company’s Shares Researcher asked respondents about
the factors which influences them to buy shares of a company. Respondents were
instructed to rank the factors in order of importance they give to each factor. Financial
position & strength of the company was ranked 1 by 28 respondent (Figure 4.13). The
current or prevailing market position of a company was ranked as 2nd most important
factor while choosing a company for investment in its shares. Good will & brand name of
the company was ranked 3rd by 17 respondents, whereas future prospects of the company
was ranked 4th by 21 respondents. (Refer to Appendix B for Graphs).

P a g e | 48
Figure 4.13 Financial Position of Company as an Influencing Factor
Preferred Investment Instrument The author asked respondents to rank four
instruments which are traded in stock market primarily. These were equity, derivatives,
currency and commodities respectively. Equity came out as the undisputed choice for
investment in stock market with majority (59.18%) of respondents ranking it at no. 1
position which is shown in Figure 4.14. Derivative was also ranked at no. 1 but only by
28.5% of the respondents (Refer to appendix B). Commodity as an investment avenue
was ranked at 2nd
position by 38.7% of respondents and currency at 4th
by 53% of
respondents.
Figure 4.14 Equity Ranked as 1st
Choice

P a g e | 49
Preferred Mode of Communication Respondents were asked to tell about their
preferred mode of communication between them and the broking firm for receiving
research reports, daily tips, trade confirmation etc. SMS was the 1st
choice for almost
62% of the respondents (Figure 4.15). SMS was closely followed by e-mail which was
ranked at 2nd
position by 36% of respondents. Interestingly, instant messaging had a tie at
2nd
position but with a lesser number of respondents supporting it at no. 2 (30%). Phone
call was ranked at no.4 by 34% of respondents. The hard copy or print out of the reports
& tips was the least preferred with majority (70%) of respondents ranking it at 5th
position. (See Appendix B for Pie Charts).
Figure 4.15 SMS as a Preferred Medium of Communication

P a g e | 50
4.5 Summary of the Findings
The study reveals many facts that have come up and these facts can either be used
as opportunities in exploring and expanding the business as well as can be used as
safeguards against threat. To prepare an effective marketing strategy, a company must
study its competitors as well as its actual and potential customers. A company should
maintain good relation with distributor and retailers. A company‟s closest competitors are
seeking to satisfy the same customers and needs and making similar offers. As important
as a competitive orientation is in companies should manage a good balance of consumer,
Dealer and competitor monitoring.
The information will prove beneficial in taking proactive action or combating
competition. The standing of the company and its competitors in the minds of the
customers is a vital factor in deciding the success of business. The study aims at finding
out the pattern of investment & preferences in choice of investment instruments in terms
of certain parameters, as adjudged by consumers. This information is a good guide to
management as it brings out the areas where the company needs to improve. Thus the
study is basically aimed at providing the management desired vital information about the
customer‟s need & problems.
The major findings:
The study reveals that male investors dominate the investment market in India.
Most of the investors possess higher education like post-graduation and above.
Majority of the active and regular investors belong to professional, sales &
managerial related employment, non-financial management and some other
occupations are very few.
Most investors opt for two or more sources of information to make investment
decisions.
Most of the investors discuss with their family and friends before making an
investment decision.
Percentage income that they invest depend on their annual income, more the
income more percent of income they invest.

P a g e | 51
The investment habit was noted in a majority of people who participated in the
study.
Most investors prefer to park their fund in avenues like life insurance, fixed
deposit, & real estate.
Most of the investors get their information related to investment through
electronic media next to print media.
Most of the investors are financial illiterates.

P a g e | 52
CHAPTER 5: CONCLUSIONS AND RECOMMENDATION
5.1Conclusion
In conclusion it can be stated that there is a very high need for the spread of
awareness among the people for various investment products. When people are
aware of these products then only they will invest their money. The money that is
invested will ultimately go towards nation building and the development of the
country.
The awareness about Equities and the secondary market operations as a long-term
capital investment needs to be enhanced. This may include creating awareness
amongst people about risks factors involved with investment in primary and
secondary market and the allied instruments.
A few sectors have been found to be preferred over the others. New investor may
be bogged down with dreams of lucrative returns and then suffer losses because
of this. Proper awareness about risk mitigation instruments, hence, becomes a
very important factor.
Diversification is one of the key elements. As the income level of people
increases the awareness of investment instrument increases. Same is the case with
education level. People prefer to invest small amounts at regular interval (say
quarterly) than investing big amount at one time. Investors generally invest 10 to
15 percent of their income in stock market which provides a huge potential for
broking firms to tap the market.
Most of the people prefer to trade online & they trade on delivery which provides
potential for earning interests by broking firms. People tend to trade when the
market is bullish so it is a big challenge to make people trade during bearish
market condition.
Most of the people want to trade in shares of banking sector as they see great
potential in that and also the want to trade in large caps. Most preferred mode of
communication between the customer & broking firm is SMS for delivery of
reports, daily tips and trade confirmation.

P a g e | 53
5.2 Recommendations
After analyzing the data and presenting the findings of the study the author would
like to give the some recommendations.
The purpose of the study was to see the awareness, preference & pattern of
investment in stock market. As is clear from the findings of the study there is some level
of awareness among the people but it is not very high. More awareness needs to be
spread among the people.
The following steps can be taken to spread the awareness among the investors:
1. The college students are the people who will soon be entering in the workforce
and start earning money. Thus it is important to spread the awareness about the
investment among the college students. To do this the company can organize
seminars and presentations in the college campuses where the representatives of
the company can give information and answer the queries of the college students
regarding all the aspects of the investment. This may also get good returns for the
company as many students may approach the company for investing their money.
2. Awareness among the Young Professionals. There are many industries like call
centers where the bulk of employees are young. These people have recently
entered the workforce and have started earning. The level of awareness among
these people regarding investment is less and the company must make efforts to
spread the awareness among these professionals. This can be done by means of
posters pasted within the campus of these organizations. The companies can also
set up canopies in places like canteens where the people come frequently. The
company can offer various investment products to the people via these canopies.
3. Awareness among General Public. The general public can be made aware about
investment opportunities by use of canopies set up in public places like malls,
metro stations marketplaces etc.

P a g e | 54
5.3 Implications for Practice
The leverage of this project lies in understanding customer's awareness,
preference and pattern of investment in stock market as an investment tool. It will help,
know and understand the target customer better and how to lure them to invest more. This
study will help to report the scope of such financial instruments as a product of sale. The
project gives an opportunity to understand the changing and varied customer choices and
the pattern in which they invest their money. It also enables the use of various marketing
activities which can be undertaken to increase sales or customer acquisition:
Those who are already investing in securities market can be given another
investment opportunity that will diversify their portfolio genuinely.
Companies may also tap the areas where penetration is poor, it can be made
possible by better offer with its product i.e. margin level, loan on low percentage.
Brand loyalty also needs to be strengthened by customer relationship model,
keeping a wide network of financial consultant and providing them with adequate
training and support so that the customers can be satisfied to the fullest and
thereby making new customers and pushing the existing ones for repurchase.
Improvement in distribution system- It may be done by involving more
middlemen with a defined territory so that a systematic procedure and follow up
can be done.

P a g e | 55
REFERENCES
Dhiraj Jain, (April 2012), “A study on impact of market movements on
investment decision- “An empirical analysis with respect to investors in Udaipur,
Rajasthan” Researchers World, Vol.–III, Issue 2(2), April.2012 [88], E-ISSN
2229-4686, ISSN 2231-4172.
E. Bennet et al and Eva Esther Shalin (Jan 2012) “The impact of investors‟
sentiment on the equity market: Evidence from Indian stock market” African
Journal of Business Management Vol. 6(2), pp. 475-483, 18 January, 2012.
International Journal of Business and Management Tomorrow Vol. 2 No. 3
(ISSN: 2249-9962 March|2012).
Kelkar, Vijay (2011). “On the Economics of Stock Exchange” Annual (second)
Shri R. Venkataraman, Endowment Lecture, March 29.
Luigi Guiso and Tullio Jappelli, (2005), “Awareness and Stock Market
Participation” Review of Finance (2005) 9: 537–567, © Springer 2005, DOI
10.1007/s10679-005-5000-8.
Manoj Kumar Dash, (2008), “Factors Influencing Investment Decision of
Generations in India: An Econometric Study” Asian Journal of Management
Research, ISSN 2229 – 3795.
N. Geetha & Dr. M. Ramesh, (Nov 2011), “A Study on People‟s Preferences in
Investment Behavior” IJEMR – November 2011-Vol 1 Issue 6 - Online - ISSN
2249 – 2585 - Print - ISSN 2249 – 8672.

P a g e | 56
BIBLIOGRAPHY
Books
Kothari C. R. (2005) “Research Methodology” 5/E- New Age International
Limited.
Kotler Philip (2011) “Marketing Management” 13/E- Pearson Publication Pvt.
Ltd. New Delhi.
Internet Sources
http://www.nseindia.com/products/content/equities/equities/eq_security.htm
http://amrapaliaadya.in/Abouut-Us.aspx
http://www.nse-india.com/research/content/nse_working_papers.htm
http://beta.bseindia.com/static/about/introduction.aspx?expandable=0
http://en.wikipedia.org/wiki/Investment

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