Project Report Of Share Khan

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Project Report Of Share Khan

  1. 1. Project Report on “ Demat account” By Chintan P. Gandhi Gunjan S. Shah 1
  2. 2. PROJECT TITLE “ Demat account” A report submitted in fulfillment of the requirements of MBA program COMPANY GUIDE FACULTY GUIDE Mr. Harshit Sur Poonam Purohit MBA – Finance, MBA- HR, Phd(pursuing) Relationship Manager, BIMS, Sharekhan Ltd., Baroda. Baroda. SUBMITTED BY Chintan Gandhi 520843213 & Gunjan Shah 520843078 MBA 3rd Semester- Finance 2
  3. 3. PREFACE The successful completion of this project was a unique experience for me because by visiting many place and interacting various person, I achieved a better knowledge about sales. The experience which I gained by doing this project was essential at this turning point of my career this project is being submitted which content detailed analysis of the research under taken by me. The research provides an opportunity to the student to devote his/her skills knowledge and competencies required during the technical session. The research is on the topic “Share Khan Demat Account”. 3
  4. 4. Acknowledgement It was a great opportunity for us to work with Sharekhan Ltd., pioneers in the field of Finance Industry. We are extremely grateful to all those who have shared their expertise and knowledge with me and without whom the completion of this project would have been virtually impossible. Firstly, we would like to thank our Company Guide Mr. Harshit Sur who has been a constant source of inspiration for us during the completion of this project. He gave us invaluable inputs during our endeavor to complete this project. We are indebted to all staff of Sharekhan Ltd for their valuable support and cooperation during the entire tenure of this project. Not to forget, all those who have kept our spirits surging and helped delivering our best. We thank our faculty guide Mrs. Poonam Purohit who helped us out at every critical situation that We faced in our project and gave us her valuable advice to solve problems. We want to give our special thanks to all members of BIMS, for providing us opportunity to work on this project with this great organization. At last We would like to thank all the respondents met in the preparation, who gave their valuable time to provide us required information and their honest support to complete our project in time. Chintan Gandhi REG. NO: - 520843213 & Gunjan Shah REG.NO: - 520843078 4
  5. 5. CERTIFICATE OF COMPLETION This is certify that the Final Project report entitled “Demat Account” submitted Summer Internship report of the requirement for the degree of MBA, is a work carried out by Chintan Gandhi, Reg No. – 520843213 and Gunjan Shah, Reg No. - 520843078 under my supervision and guidance. Comapany Guide: (_______________________) 5
  6. 6. taBLe oF contentS FoR PRoJect RePoRt S.no Details of Document Page No. 1 Introduction of Share Market 7 2 Company Profile 17 3 SWOT Analysis 28 4 Discussion on Training 30 5 Demat Account of Sharekhan Ltd. 34 6 Buying and Selling 57 7 Need for the Study 61 8 Competitors 62 9 Objective 77 10 Research Methodology 78 11 Data analysis and Interpretation 86 12 Observation and Finding 96 13 Limitation 98 14 Suggestion 100 15 Conclusion 102 16 Bibliography 103 Introduction of Stock Market Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meager and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. 6
  7. 7. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as "The Stock Exchange"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges. TRANSACTION CYCLE: 7
  8. 8. Decision to Placing Order trade Funds or Securities Transaction Trade Execution Cycle Settlement of trades Clearing of Trades A person holding assets (Securities/Funds), either to meet his liquidity needs or to reshuffle his holdings in response to changes in his perception about risk and return of the assets, decides to buy or sell the securities. He selects a broker and instructs him to place buy/sell order on an exchange. The order is converted to a trade as soon as it finds a matching sell/buy order. At the end of the trade cycle, the trades are netted to determine the obligations of the trading member’s securities/funds as per settlement cycle. Buyer/seller delivers funds/ securities and receives securities/ funds and acquires ownership of the securities. A securities transaction cycle is presented above. Just because of this Transaction cycle, the whole business of Securities and Stock Broking has emerged. And as an extension of stock broking, the business of Online Stock broking/ Online Trading/ E-Broking has emerged. 8
  9. 9. At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as “The Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. HISTORY OF ONLINE TRADING: Online stock trading is very old concept for big institutions who trade thru private networks owned by Reuter's "Instinet" and a system called "Posit" since 1969. But it becomes internet based for lay men only in late 90s. Funny, that actually idea was first time used by a company making Beer called "WIT beer" to help its shareholders trade its shares. That’s how "WIT Capital" was born which is considered pioneer of this concept. It was made mainstream and household name by a offshoot of Charles Schwab & Co called eSchwab which is used by millions of people in USA. Lot of NRI's i know play in US stock market even when they come to India for holidays via website of eSchwabe. There are other serious players like E*trade, DATEK online etc. All this companies ask you to start account with US $5000 and you can buy and sell stock using these funds. They also issue you a check book which you can use to make payments from this account. Or use their ATM card to withdraw cash from your stock trading account. Today practically every big name brokerage firm offers online stock trading as it reduces their costs. Earlier they had army of brokers on phone with clients executing trade, which is done by computers accepting orders from clients directly. This firm now offers human access to high net worth accounts, and to rest at charge per trade. 9
  10. 10. E- Broking - A small beginning: You have some money to dabble with. Trading shares on BSE/NSE has always been your dream. When will you ever find the time? And besides, the hassle of finding a broker is not easy. Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them, brokers have taken their trading rooms to the Internet. Known as online brokers, they allow you to buy and sell shares via Internet. There are 2 types of online trading service: discount brokers and full service online broker. Discount online brokers allow you to trade via Internet at reduced rates. Some provide quality research, other don’t. Full service online brokerage is linked to existing brokerages. These brokers allow their clients to place online orders with the option of talking/ chatting to brokers if advice is needed. Brokerage rates here are higher. 5Paisa.com, ICICIDirect.com, IndiaBulls.com, Sharekhan.com, Geojit securities.com, HDFCsec.com, Tatatdw.com, Kotakstreet.com are some of the online broking sites in India. With Net trading in securities and rapid consolidation between multiple stock exchanges, the international securities marketplace is fast becoming a "global village" through the creation of a universal virtual equity market. Compared to the Western countries, online trading is still in its infancy in India. With trading turnover at around Rs. 10 crores per day from online trading compared to a combined gross turnover of around Rs. 9000-10,000 crores handled by the BSE and NSE together, online trading has a long way to go. INTERNET TRADING IN INDIA: In the past, investors had no option but to contact their broker to get real time access to market data. The Net brings data to the investor on line and net broking enables him to trade on a click. Now information has become easily accessible to both retail as well as big investors. 10
  11. 11. The development of broking in India can be categorized in 3 phases: 1. Stock brokers offering on their sites features such as live portfolio manager, live quotes, market research and news to attract more investors. 2. Brokers offering on line broking and relationship management by providing and offering analysis and information to investors during broking and non-broking hours based on their profile and needs, that is, customized services. 3. Brokers (now e-brokers) will offer value management or services such as initial public offerings on line, asset allocation, portfolio management, financial planning, tax planning, insurance services and enable the investors to take better and well- considered decisions. In the US, 82 per cent of the deals are done on line. The European on line broking market is expected to be of $8 billions and is likely to raise five fold by 2002. In India, presently Internet trading can take place through the order routing system, which will route client orders to exchanges trading systems for execution of trades on stock exchanges (NSE and BSE). This will also require interface with banks to facilitate instant cash debit or credit and the depository system for debit or credit of securities. OBJECTIVES OF INTERNET TRADING • Increase transparency in the markets. • Enhance market quality through improved liquidity, by increasing quote continuity and market depth. • Reduce settlement risks due to open trades, by elimination of mismatches. • Provide management information system (MIS). • Introduce flexibility in system, to handle growing volumes easily and to support nationwide expansion of market activity. • Besides, through Internet trading three fundamental objectives of securities regulation can be easily achieved, these are: Investor protection, creation of a fair and efficient market and, reduction of the systematic risks. Other leading cities in stock market operations: 11
  12. 12. Ahmedabad gained importance next to Bombay with respect to cotton textile industry. After 1880, many mills originated from Ahmedabad and rapidly forged ahead. As new mills were floated, the need for a Stock Exchange at Ahmedabad was realized and in 1894 the brokers formed "The Ahmedabad Share and Stock Brokers' Association". What the cotton textile industry was to Bombay and Ahmedabad, the jute industry was to Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta. After the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute shares, which was followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between 1904 and 1908. On June 1908, some leading brokers formed "The Calcutta Stock Exchange Association". In the beginning of the twentieth century, the industrial revolution was on the way in India with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company Limited in 1907, an important stage in industrial advancement under Indian enterprise was reached.Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally enjoyed phenomenal prosperity, due to the First World War. In 1920, the then demure city of Madras had the maiden thrill of a stock exchange functioning in its midst, under the name and style of "The Madras Stock Exchange" with 100 members. However, when boom faded, the number of members stood reduced from 100 to 3, by 1923, and so it went out of existence. In 1935, the stock market activity improved, especially in South India where there was a rapid increase in the number of textile mills and many plantation companies were floated. In 1937, a stock exchange was once again organized in Madras - Madras Stock Exchange Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange Limited). Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the Punjab Stock Exchange Limited, which was incorporated in 1936. Indian Stock Exchanges - An Umbrella Growth: The Second World War broke out in 1939. It gave a sharp boom, which was followed by a slump. But, in 1943, the situation changed radically, when India was fully mobilized as a supply base. On account of the restrictive controls on cotton, bullion, seeds and other commodities, those dealing in them found in the stock market as the only outlet for 12
  13. 13. their activities. They were anxious to join the trade and numerous others swelled their number. Many new associations were constituted for the purpose and Stock Exchanges in all parts of the country were floated. The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940) and Hyderabad Stock Exchange Limited (1944) were incorporated. In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947, amalgamated into the Delhi Stock Exchange Association Limited. RANGE OF PRODUCT AND SERVICES: Market Size: Growth of Online Brokerage market: In five years of its existence in India, online broking has grown to account for a tenth of the total trading volumes. If the numbers are considered for only the retail segments, the growth is starker. Almost half of the Rs 5,000 crore-6,000 crore daily market volumes on the NSE are accounted for by non-retail entities such as foreign institutional investors, domestic institutions, mutual funds and arbitrage traders. Institutions aren't online customers anyway. Of the rest of the retail segment, current estimates suggest that online broking's reach is close to 30 per cent. As of September this year, there were 11.7 lakhs Internet trading accounts registered with the NSE, of which roughly 9.5 lakhs are unique users. It's still a small proportion of the estimated 3 crore Internet users in the country. As more surfers take to trading online, analysts expect their number to keep doubling every year until 30-40 per cent of India's overall trades are done online, as is the case in some mature Internet markets like South Korea's. The Internet's effect here has more to do with the bandwidth it has created for both brokers and clients. Banga, director of India bulls offers an example. "Traders from Ajmer use our online platform. It would otherwise have been prohibitively loss- making to open a branch there." Thanks to the new channel, volumes are growing 13
  14. 14. faster in the non-metros, where transparency is low in offline trading. "These customers were made to pay higher charges by small brokers, since they weren't aware of the market rates," says Vikash Shankar of Sharekhan.com.That is one of the reasons why more than 60 per cent of Sharekhan’s online trading turnover comes from non-metros. Formation of the National Stock Exchange (NSE): With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high-powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit, and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. Trading at NSE can be classified under two broad categories: (a) Wholesale debt market and (b) Capital market. Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc. There are two kinds of players in NSE: (a) Trading members and (b) Participants. Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility. Trading at NSE takes place through a fully automated screen-based trading mechanism, which adopts the principle of an order-driven market. Trading members can stay at their offices and execute the trading, since they are linked 14
  15. 15. through a communication network. The prices at which the buyer and seller are willing to transact will appear on the screen. When the prices match the transaction will be completed and a confirmation slip will be printed at the office of the trading member. NSE has several advantages over the traditional trading exchanges. They are as follows: • NSE brings an integrated stock market trading network across the nation. • Investors can trade at the same price from anywhere in the country since inter-market operations are streamlined coupled with the countrywide access to the securities. • Delays in communication, late payments and the malpractices prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the stock market operations, with the support of total computerized network. Unless stock markets provide professionalized service, small investors and foreign investors will not be interested in capital market operations. And capital market being one of the major sources of long-term finance for industrial projects, India cannot afford to damage the capital market path. In this regard NSE gains vital importance in the Indian capital market system. Why people trust NSE? Unbiased: The National Stock Exchange of India (NSEIL) has been trusted by the securities markets for its unbiased independence and professionalism. The function of forecasting has become more meaningful as the information comes from a source, which is not only reliable but has no vested interest of its own in the market movements. Market Representation: NSE-MIBID/MIBOR is based on rates polled by NSE from a representative panel of 31 banks/institutions/primary dealers. 15
  16. 16. Transparent: The reference rate is released to all the market participants simultaneously through various media, making it transparent with the aspiration of the market. Ensuing transparency helps the market participants to judge the market mood and the probable rate one is likely to encounter in the market. This information is useful not only to the banks but also to the issuers and investors. Reliable: The high level of co-relation between actual deals and the reference rate gives an indication of its reliability. The bootstrapping technique guards against the possibility of cartelization and of extreme observations influencing the mean Scientifically Computed: The methodology of "Polling" with "Bootstrapping" is scientific and the values are generated through a system that has been extensively tested. The technique involves generating multiple data sets based on the rates polled with a dynamically determined number of iterations, identification of outliers, trimming the data set of its extreme values and computation of the mean and its standard deviation. Elimination of Noise: The trimming procedure is vulnerable to market manipulation of the rates due to the amount of sampling noise. Excessive trimming may lead to loss of information whereas no trimming may lead to excessive influence of the extreme values. To derive a true representative benchmark for the market NSE ensures that trimming at any point does not exclude more than 20% of the observation for the bid and for the ask rates. Consistency: The Exchange ensures that everyday the NSE-MIBID/MIBOR along with the respective standard deviations are disseminated to the market at 0955 (IST) for overnight rate and at 1215 (IST) for 14 day, 1 month and 3 month rates. Usage: 16
  17. 17. The NSE-MIBID/MIBOR rate is used as a bench mark rate for majority of deals struck for Interest Rate Swaps, Forward Rate Agreements, Floating Rate Debentures and Term Deposits. Company Profile Sharekhan Ltd. is one of the leading retail stock broking house of SSKI Group which is running successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advice etc. The firm’s online trading and investment site - www.sharekhan.com – was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over one lakh customers. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks. On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a netbased trading 17
  18. 18. station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net. Sharekhan’s ground network includes over 331 centers in 137 cities in India which provide a host of trading related services. Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. To build its trading engine and content. The Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors. With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKI’s institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organization’s revenue, with a daily turnover of over US$ 2 million. The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’ to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop. PROFILE OF THE COMPANY : Name of the company : Sharekhan ltd. Year of Establishment : 1925 Headquarter : ShareKhan SSKI A-206 Phoenix House Phoenix Mills Compound Lower Parel Mumbai - Maharashtra, INDIA- 400013 Nature of Business : Service Provider 18
  19. 19. Services : Depository Services, Online Services and Technical Research. Number of Employees : Over 3500 Website : www.sharekhan.com Slogan : Your Guide to The Financial Jungle. ACHIEVEMENTS OF SHAREKHAN: ARated among the top 20 wired companies along with Reliance, HUJl, Infosys, etc by ‘Business Today’, January 2004 edition. Awarded ‘Top Domestic Brokerage House’ four times by Euro money and  Asia money. Pioneers of online trading in India amongst the top 3 online trading websites  from India. Most preferred financial destination amongst online broking customers. Winners of “Best Financial Website” award. India’s most preferred brokers within 5 years. “Awaaz customers Award 2005”.  Future Plans:  2,00,000 plus retail customers being serviced through centralized call centers/ web solutions.  Branches / Semi branches servicing affluent / aggressive traders through high skill financial advisor.  250 independent investment managers/ franchisee servicing 50,000 highly valued clients.  New initiatives Portfolio management Services and commodities trading. 19
  20. 20. Vision : To be the best retail brokering Brand in the retail business of stock market. Mission : To educate and empower the individual investor to make better investment decisions through quality advice and superior service. Sharekhan is infact- • Among the top 3 branded retail service providers • No. 1 player in online business • Largest network of branded broking outlets in the country serving more than 7,00,000 clients. Get everything you need at a Sharekhan outlet! All you have to do is walk into any of our 640 share shops across 280 cities in India to get a host of trading related services - our friendly customer service staff will also help you with any accouts related queries you may have. A Sharekhan outlet offers the following services:  Online BSE and NSE executions (through BOLT & NEAT terminals)  Free access to investment advice from Sharekhan's Research team  Sharekhan ValueLine (a monthly publication with reviews of recommendations, stocks to watch out for etc) 20
  21. 21.  Daily research reports and market review (High Noon & Eagle Eye)  Pre-market Report (Morning Cuppa)  Daily trading calls based on Technical Analysis  Cool trading products (Daring Derivatives and Market Strategy)  Personalised Advice  Live Market Information  Depository Services: Demat & Remat Transactions  Derivatives Trading (Futures and Options)  Commodities Trading  IPOs & Mutual Funds Distribution  Internet-based Online Trading: SpeedTrade REASON TO CHOOSE SHAREKHAN LIMITED Experience : SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia Money broker's poll held recently, SSKI won the 'India's Best Broking House for 2004 ' award. Ever since it launched Sharekhan as its retail broking division in February 2000, it has been providing institutionallevel research and broking services to individual investors. Technology : With its online trading account one can buy and sell shares in an instant from any PC with an internet connection. One can get access to its powerful online trading tools that will help him take complete control over his investment in shares. Accessibility : Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for investors. These services are accessible through its centers across the country over the internet (through the website www.sharekhan.com) as well as over the Voice Tool. Knowledge : In a business where the right information at the right time can translate into direct profits, one can get access to a wide range of information on Sharekhan limited’s 21
  22. 22. content-rich portal. One can also get a useful set of knowledge-based tools that will empower him to take informed decisions. Convenience : One can call its Dial-N-Trade number to get investment advice and execute his transactions. Sharekhan ltd. have a dedicated call-centre to provide this service via a Toll Free Number 1800-22-7500 & 1800-22-7050 from anywhere in India. Customer Service : Sharekhan limited’s customer service team will assist one for any help that one may require relating to transactions, billing, demat and other queries. Its customer service can be contacted via a toll-free number, email or live chat on www.sharekhan.com. Investment Advice : Sharekhan has dedicated research teams of more than 30 people for fundamental and technical researches. Its analysts constantly track the pulse of the market and provide timely investment advice to its clients in the form of daily research emails, online chat, printed reports and SMS on their mobile phone. SSKI Group Companies-  SSKI Investor Services Ltd (Share khan)  S.S. Kantilal Ishwarlal Securities  SSKI Corporate Finance  I dream Productions  Palm spring estates Pvt Ltd.  Fin flow Investment Pvt Ltd.  I dream Production UK Pvt Ltd. 22
  23. 23.  Share khan Commodities Pvt Ltd.  Archfund Properties Pvt Ltd. SHAREKHAN LIMITED’S MANAGEMENT TEAM: Mr. Dinesh Murikya – Owner of the company: The Sharekhan Group of Companies was brought to life by Mr. Dinesh Murikya. He ventured into stock trading with an intention to raise capital for his own independent enterprise. However, he recognised the opportunity offered by the stock market to serve individual investors. Thus India’s first retail-focused stock- broking house was established in 1925. Under his leadership, Sharekhan became the first broking house to embrace new technology for faster, more effective and affordable services to retail investors. Mr. Tarun Shah – Chief Executive Officer (CEO) of the company: A science graduate from St. Xavier’s College, Mumbai, Mr. Tarun Shah started his professional life in sales and marketing in a chemicals company. His hands on approach and rigorous experience in sales led him to higher challenges that the capital markets provided. In 1987, he joined SSKI, a brokerage firm with over five decades of legendary service to its credit. The capital markets at that time was undergoing a sea change in its character and SSKI under the vision and guidance of Shripal Morakhia and 23
  24. 24. the commitment and hardwork of Mr. Shah was able to change and adopt the new business practices to achieve significant growth in a competitive environment. Accepting new challenges is a way of life for Mr. Tarun Shah. To ensure that SSKI’s foray into retail stock broking business through Sharekhan meets with the same success every other SSKI venture has, Mr. Tarun Shah moved in to spearhead this new effort as CEO of the Sharekhan. Mr. Shankar Vailaya – Director (Operations) of the company: A graduate in commerce from the University of Mangalore and an Associate of The Member of the Institute of Chartered Accountants of India, Mr. Shankar Vailaya heads the operations, finance and legal functions. He is responsible for settlements, depository operations, risk and compliance and regulatory & other legal commitments and Treasury. Shankar has managed broking operations through the most turbulent times of the post securities scam period in 1992 and has managed to steer clear of a flurry of bad papers in the market during 1994-95. Mr. Jaideep Arora – Director (Products & Technology) of the company: Jaideep Arora, completed his B.Tech from IIT (Kanpur) and his PGDM from IIM Kolkata. 24
  25. 25. Jaideep worked with ICICI for 8 years where his work spanned a gamut of functions, which included project finance, equity sales and brokerage, investments etc. During his tenure there he set up and headed the ‘Institutional Equity Brokerage Desk’ at ICICI Securities & Finance Co. Ltd. Jaideep joined Sharekhan in June 2000 as Head of Product Development. A year later he took over the reigns of the online business at Sharekhan. At present Jaideep’s responsibilities include spearheading Sharekhan’s online foray and overall customer acquisition effort. ➢ Pathik Gandotra : Head of Research ➢ Rishi Kohli : Vice President of Equity Derivatives ➢ Nikhil Vora : Vice President of Research PRODUCTS AND SERVICES OF SHAREKHAN LIMITED : The different types of products and services offered by Sharekhan Ltd. are as follows: • Equity and derivatives trading • Depository services 25
  26. 26. • Online services • Commodities trading • Dial-n-trade • Portfolio management • Share shops • Fundamental research • Technical research FINANCIAL PRODUTS AVAILABLE AT SHAREKHAN: 26
  27. 27. C.E.O. Country Head Cluster Head Regional Head SERVICES: Branch Head Always wanted help on what the stock market is all about? Been wondering about how all this works? Well, you don't need to fret any more - the Sharekhan FirstStep is a City Sales Manager designed especially for those who are brand new program new to investing in shares. All you have to do is open a Sharekhan FirstStep Dealer account and we'll guide you through the investing process. Hierarchy of Sharekhan: - Sales Executives ……1........ .…2… ……3……. ……4….. 27 Trainee
  28. 28. SWOT ANALYSIS Strengths: 28
  29. 29. • It is a pioneer in online trading with a turn over of Rs.400crores and more than 800 peoples working in the organization. • SSKI the parent company of Share Khan has more than eight decades of trust and credibility in the Indian stock market. In the Asian Money Broker’s poll SSKI won the “India’s best broking house for 2004” award. • Share Khan provides multi-channel access to all its customers through a strong online presence with www.sharekhan.com, 250 share shops in 130 cities and a call-center based Dial-n-Trade facility • Share Khan has dedicated research teams for fundamental and technical research. Which constantly track the pulse of the market and provide timely investment advice free of cost to its clients which has a strike rate of 70-80%. Weakness: • Localized presence due to insufficient investments for country wide expansion. • Lack of awareness among customers because of non-aggressive promotional strategies (print media, newspapers, etc). • Lesser emphasis on customer retention. • Focuses more on HNIs than retail investors which results in meager market-share as compared to close competitors. Opportunities: • With the booming capital market it can successfully launch new services and raise its client’s base. • It can easily tap the retail investors with small saving through promotional channels like print media, electronic media, etc. 29
  30. 30. • As interest on fixed deposits with post office and banks are all time low, more and more small investors are entering into stock market. • Abolition of long term capital gain tax on shares and reduction in short term capital gain is making stock market as hot destination for investment among small investors. • Increasing usage of internet through broadband connectivity may boost a whole new breed of investors for trading in securities. Threats: • Aggressive promotional strategies by close competitors may hamper Share Khan’s acceptance by new clients. • Lack of sufficient branch-offices for speedy delivery of services. • Other players are providing margin funds to investors on easy terms where as there is no such facility in share khan. • More and more players are venturing into this domain which can further reduce the earnings of Share Khan. 30
  31. 31. DISCUSSION ON TRAINING Student’s work profile(role and responsibilities) : I worked there with SHAREKHAN LTD. with a profile of sales trainee. This profile offers me to understand the need of customer and provide them the best deal possible with maximization of the profit, both for the company as well as for the customer. The most important aspect for the role of trainee is trust. So far fulfillment of the targets one needs to: • Capitalize on the old and loyal clientage which can be building slowly by advising people in the best possible way. • Generating new leads through various activities. Generation of leads : Since I was new in the field so I had to start from scratch and generate new leads to sustain in the market. Cold calling is one of the trusted ways of getting to the customers without meeting them. Although the rate of conversion remained very less, for cold calling the quality and accent remains a very important criterion. This activity gives me mixed result. I often got success and generated many leads through it but it also landed me in awkward position where the customer were in different mood and made us 31
  32. 32. hear words for which a marketer should be always prepared to hear. Corporate calls always remained more difficult to crack with respect to retail sector. The corporate were the most difficult and most temping to get the business from. It took me one one day to crack Hi-tech Gears. At SHAREKHAN LTD. after getting the product knowledge in the first week at the branch I was also allotted distributor to work with. In the initial phase I was accompanied by more experienced staff. After I became known to the market and procedure I started attending calls alone only. After the third week my performance also improved and I was able to get close to the targets, though it looked difficult to achieve in the beginning. To get awareness of the every product I attended diversified calls. This helped me to implement cross selling to get better results. LIMITATIONS: 1. Cold Calling: • Voice and accent plays a major role. • The right time to call a customer cannot be decided, as the customer may in a different mood at the time of calling. • Time consuming • Less success rate 32
  33. 33. 2. Corporate: • Time consuming • Contacts with higher authorities play a major role Description of live experience : I was supposed to use the database provided by the company to make cold calls or by directly meeting people to get new leads. While making cold calls, we need to have: • Good Communication Skills (Voice quality is clear and articulate) • Persistent and able to bounce back from rejection • Good organizational skills. • Ability to project a telephone personality (Enthusiasm, friendliness) • Flexibility: can adapt to different types of clients and new situations. 33
  34. 34. Using a good database is very essential. “Eighty percent of our business comes from 20 percent of our customers" is a frequent statement at any sales convention. There's hardly a sales executive who is not aware of the 80/20 rule”. While talking to customers, I analyze their needs. Whether they want to go for investment purpose or insurance or both. Suggest them the plan that best suits them. If they agree to it then either we send across the agents to close the deal or close it themselves. 34
  35. 35. Problems faced while selling products: • Customer dissatisfied with the services. • People fear that Sharekhan Being a Private company and a new entrant may be able to sustain or not. • Past experience, word of mouth. • Misguidance by agents. • People do not want insurance products. • Lack of knowledge and less awareness about demat account. 35
  36. 36. • People risk appetite is very low, so they are afraid of mutual fund as well. 36
  37. 37. Share khan Demat Accounts Overview of Demat Account : Demat account allows you to buy, sell and transact shares without the endless paperwork and delays. It is also safe, secure and convenient. In India, a demat account, the abbreviation for dematerialized account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialized account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should possess a Permanent Account Number (PAN), and the deadline for submission of PAN details to the depository lapsed on January 2007. Is a demat account a must? Now a day, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of up to 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing. Why demat? The demat account reduces brokerage charges, makes pledging/hypothecation of shares easier, enables quick ownership of securities on settlement resulting in increased liquidity, avoids confusion in the ownership title of securities, and 37
  38. 38. provides easy receipt of public issue allotments. It also helps you avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses. What is dematerialization? Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited into the investor’s account with his/her DP. Why DEMAT a/c likes a BANK a/c? 38
  39. 39. Just as you have to open an a/c with a bank if you want to save your money, make cheque payments etc, you need to open a demat a/c if you want to buy or sell stocks. So it just like a bank a/c where actual money replaced by shares. Example : let’s say your portfolio has 100 of SATYAM, 200 of IBM and 120 of TCS shares. All these will show in you’re a/c. so you don’t have to possess any physical certificate that you own these shares. They all are held electronically in you’re a/c. Steps involved in opening a demat account : First an investor has to approach a DP and fill up an account opening form. The account opening form must be supported by copies of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 01, 2006. All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature. Further, the investor has to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. The DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalized the cost structure for dematerialization by removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has vide circular dated November 09, 2005 advised that with effect from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at 39
  40. 40. transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership. Rights: 1. You can open more than one depository account in the same name with single DP/ multiple DPs. 2. No minimum balance is required to be maintained in a depository account. 3. You can give a onetime standing instruction to your DP to receive all the credits coming to your depository account automatically. DEMAT Benefits?  A safe and convenient way to hold securities.  immediate transfer of securities.  No stamp duty on transfer of securities(0.5 % on physical shares).  Elimination of risks associated with physical certificates such as bad delivery, fake securities , delays , theft etc.  Reduction in paper work.  Reduction in transaction cost.  No odd lot problem , even one share can be sold. 40
  41. 41.  Nomination facility.  Holding investment in equity and debt instruments in a single account.etc. DEMAT Conversion :- 1. Surrender the certificates of physical shares for dematerialization to your depository participants. 2. Depository participant intimates depository of the request through the system. 3. Depository participant submit the certificates to the registrar to the issuer company. 4. Registrar confirms the dematerialization request from depository. 5. After dematerializing the certificates, registrar updates accounts and informs depository of the completion of dematerialization. 6. Depository updates its accounts and informs the depository participant. 7. Depository participant updates demat a/c of the investor. What is a Depository? A depository is an organisation which holds securities of investors in electronic form at the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities. SEBI registered depository’s :- NSDL :- National securities depository limited CDSL :- Central depository services limited Minimum net worth required for a depository is 100 crores 41
  42. 42. NSDL: Although India had a vibrant capital market, which is more than a century old, the paper-based settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standard that handles most of the trading and settlement in dematerialized form in Indian capital market. Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and reduce costs. At NSDL, we play a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry. In the depository system, securities are held in depository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates. DEPOSITORY PARTICIPANTS: A Depository Participant (DP) is described as an agent of the depository. They are the 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. In a strictly legal sense, a DP is an entity that is registered as such with SEBI under the provisions of the SEBI Act. As per the provisions of this Act, a DP can offer depository-related services only after obtaining a certificate of registration from SEBI. SEBI (D&P) Regulations, 1996 prescribe a minimum net worth of Rs.50 lakh for stockbrokers, R&T agents and non-banking finance companies (NBFC), for granting them a certificate of registration to act as DPs. If a stockbroker seeks to act as a DP in more than one depository, he should comply with the specified net worth criterion separately for each such depository. No minimum net worth criterion has been prescribed for 42
  43. 43. other categories of DPs. However, depositories can fix a higher net worth criterion for their DPs. NSDL requires a minimum net worth of Rs.100 lakh to be eligible to become a DP as against Rs.50 lakh prescribed by SEBI (D&P) Regulations. Instruments : The changes in the regulatory framework of the capital market and fiscal policies have also resulted in newer kinds of financial instruments (securities) being introduced in the market. Also, a lot of financial innovation by companies who are now permitted to undertake treasury operations has resulted in newer kinds of instruments - all of which can be traded – being introduced. The variations in all these instruments depend on the tenure, the nature of security, the interest rate, the collateral security offered and the trading features, etc • Debentures • Bonds • Preference Share • Equity Shares • Government securities • Capital Market Processes • Initial Public Offering (IPO) • Private Placement • Preferential Offer/Rights Issue • Private Placement Benefits of Depository System: In the depository system, the ownership and transfer of securities takes place 43
  44. 44. by means of electronic book entries. At the outset, this system rids the capital market of the dangers related to handling of paper. NSDL provides numerous direct and indirect benefits, like: · Elimination of bad deliveries In the depository environment, once holdings of an investor are dematerialized, the question of bad delivery does not arise i.e. they cannot be held "under objection". In the physical environment, buyer was required to take the risk of transfer and face uncertainty of the quality of assets purchased. In a depository environment good money certainly begets good quality of assets. · Elimination of all risks associated with physical certificates Dealing in physical securities have associated security risks of theft of stocks, mutilation of certificates, loss of certificates during movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates and advertisements, etc. This problem does not arise in the depository environment. · No stamp duty For transfer of any kind of securities in the depository. This waiver extends to equity shares, debt instruments and units of mutual funds. · Immediate transfer and registration of Securities In the depository environment, once the securities are credited to the investors account on pay out, he becomes the legal owner of the securities. There is no further need to send it to the company's registrar for registration. Having purchased securities in the physical environment, the investor has to send it to the company's registrar so that the change of ownership can be registered. This process usually takes around three to four months and is rarely completed within the statutory framework of two months thus exposing the investor to opportunity cost of delay in transfer and to risk of loss in transit. To overcome this, 44
  45. 45. the normally accepted practice is to hold the securities in street names i.e. not to register the change of ownership. However, if the investors miss a book closure the securities are not good for delivery and the investor would also stand to loose his corporate entitlements. · Faster settlement cycle The exclusive demat segments follow rolling settlement cycle of T+2 i.e. the settlement of trades will be on the 2nd working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor. Faster disbursement of non-cash corporate · benefits like rights, bonus, etc. NSDL provides for direct credit of non-cash corporate entitlements to an investors account, thereby ensuring faster disbursement and avoiding risk of loss of certificates in transit. ·Reduction in brokerage by many brokers for trading in dematerialized securities Brokers provide this benefit to investors as dealing in dematerialized securities reduces their back office cost of handling paper and also eliminates the risk of being the introducing broker. · Reduction in handling of huge volumes of paper · Periodic status reports to investors on their holdings and transactions, leading to better controls. 45
  46. 46. · Elimination of problems related to change of address of investor, transmission, etc In case of change of address or transmission of demat shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of securities. ·Elimination of problems related to selling securities on behalf of a minor A natural guardian is not required to take court approval for selling demat securities on behalf of a minor. · Ease in portfolio monitoring Since statement of account gives a consolidated position of investments in all instruments. 46
  47. 47. TYPES OF ACCOUNT IN SHAREKHAN LIMITED : Sharekhan offers two types of trading account for its clients : ➢ Classic Account (which include a feature known as Fast Trade Advanced Classic Account for the online users) and ➢ Trade Tiger Account CLASSIC ACCOUNT : This is a User Friendly Product which allows the client to trade through website www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who does not trade too frequently. This account allow investors to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, Demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. This account comes with the following features: a. Online trading account for investing in Equities and Derivatives 47
  48. 48. b. Free trading through Phone (Dial-n-Trade): I.Two dedicated numbers(1800-22-7500 and 39707500) for placing the orders using cell phones or landline phones II. Automatic funds transfer with phone banking facilities (for Citibank and HDFC bank customers) III. Simple and Secure Interactive Voice Response based system for authentication IV. get the trusted, professional advice of Sharekhan limited’s Tele Brokers V. After hours order placement facility between 8.00 am and 9.30 am c. Integration of: Online Trading + Demat Account + Cash to Margin. d. Instant cash transfer facility against purchase & sale of shares. e. IPO investments. f. Instant order and trade confirmations by e-mail. g. Single screen interface for cash and derivatives. TRADE TIGER ACCOUNT: This is an internet-based software application, which enables one to buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently during day’s session to capitalize on intra-day price movement. This account comes with the following features: a. Instant order Execution and Confirmation. b. Single screen trading terminal for NSE Cash, NSE F&O & BSE. 48
  49. 49. c. Technical Studies. d. Multiple Charting. e. Real-time streaming quotes, tic-by-tic charts. f. Market summary (Cost traded scrip, highest value etc.) g. Hot keys similar to broker’s terminal. h. Alerts and reminders. i. Back-up facility to place trades on Direct Phone lines. j. Live market debts. CHARGE STRUCTURE : Fee structure for General Individual: Charges Classic Account Trade Tiger Account Account Opening Nil Nil Brokerage Intra – day – 0.10% Intra – day – 0.10% Delivery – 0.50% Delivery – 0.50% BROKARAGE: 49
  50. 50. It is the charge taken by the guiding company for helping you in buying and selling your shares. There are different charges for Intraday and Delivery. INTRADAY: The day to day buying and selling or daily transactions are called as Intraday. You have to buy or sell the shares within the day only. DELIVERY: It is the three day transaction. The day you buy the share and the next two days after that day is called as Delivery. It includes thre days. If you are buying any share then you have to sell it within three days including the buying day. T+2 = Today + 2 days Depository Charges: Account Opening Charges Nil Annual Maintenance Charges 1st Year Nil 2nd Year 415/- 50
  51. 51. PREPAID ACCOUNT: There are three types of Prepaid account are provided to the customers accordingly they make transactions more and more. All Prepaid accounts are valid for One year only. Scheme of Prepaid Brokerage : Prepaid Brokerage Cash Futures and Options (p.a) Futures Options 2000/- Intra-day – 0.07% 0.07 2% or Rs.90, (Single Side) whichever is Delivery – 0.40% higher 6000/- Intra-day – 0.05% 0.05 1.5% or Rs.75, Delivery – 0.25% whichever is higher 18000/- Intra-day – 0.04% 0.04 1% or Rs.50, Delivery – 0.20% whichever is higher EXPOSURE: Sharekhan also helps their customers by providing them a Four time Exposure. Example :- If a customer invests Rs. 20000, then he will get a exposure of 4 times of Rs. 20000 that means Rs. 20000 * 4 = Rs. 100000. But only for Five days, within 5 days the customer have to pay back the amount otherwisw they will sell your shares. But yes, they will sell the loss amking shares first. If you make any frod , then also you may face the sane problem. 51
  52. 52. But Exposure always helps the customer to invest more and more in profit making scripts. It is like an Overdraft which you have to return within 5 days. HOW TO OPEN AN ACCOUNT WITH SHARE KHAN LIMITED ? For online trading with Sharekhan Ltd., investor has to open an account. Following are the ways to open an account with Sharekhan Ltd.:  One need to call them at phone number provided below and asks that he want to open an account with them. a. One can call on the Toll Free Number: 1-800-22-7500 to speak to a Customer Service executive b. Or If one stays in Mumbai, he can call on 022-66621111  One can visit any one of Sharekhan Limited’s nearest branches. Sharekhan has a huge network all over India (640 centers in 280 cities).  One can also log on to “http://sharekhan.com/Locateus.aspx” link to find out the nearest branch.  One can send them an email at info@sharekhan.com to know about their products and services.  One can also visit the site www.sharekhan.com and click on the option “Open an Account” to fill a small query form which will ask the individual to give details regarding his name, city he lives in, his email address, phone number, pin code of the city, his nearest Sharekhan Ltd. shop and his preferences regarding the type of account he wants. These information are compiled in the headquarter of the company that is in Mumbai from where it is distributed through out the country’s branches in the form of leads on the basis of cities and nearest share shops. After that the executives of the respective branches contact the prospective clients over phone or through email and give them information regarding the various types of accounts and the documents they need to open an account and then fix appointment with the 52
  53. 53. prospective clients to give them demonstration and making them undergo the formalities to open the account. After that the forms that has collected from the clients, is scrutinized in the branch and then it is sent to Mumbai for further processing where after a few days the clients’ account are generated and activated. After the accounts are activated, a Welcome Kit is dispatched from Mumbai to the clients’ address mentioned in the documents provided by them. As soon as the clients receive the Welcome Kit, which contains the clients’ Trading ID and Trading Password, they can start trading and investing in shares. Apart from two passport size photographs, one needs to provide with the following documents in order to open an account with Sharekhan Limited.:  Photocopy of the clients’ PAN Card which should be duly attached  Photo copy of any of the following documents duly attached which will serve as correspondence address proof: a. Passport (valid) b. Voter’s ID Card c. Ration Card d. Driving License (valid) e. Electricity Bill (should be latest and should be in the name of the client) f. Telephone Bill (should be latest and should be in the name of the client) g. Flat Maintenance Bill (should be latest and should be in the name of the client) h. Insurance Policy (should be latest and should be in the name of the client) i. Lease or Rent Agreement. j. Saving Bank Statement** (should be latest)  Two cheques drawn in favour of Sharkhan Limited, one for the Account 53
  54. 54. Opening Fees and the other for the Margin Money (the minimum margin money is Rs. 5000). ** A cancelled cheque should be given by the client if he provides Saving Bank Statement as a proof for correspondence address. NOTE: Only Saving Bank Account cheques are accepted for the purpose of Opening an account. Generally the process of opening an account follows the following steps: LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES CONTACT THE PERSON OVER PHONE OR THROUGH EMAIL FIXING AN APPOINTMENT WITH THE PERSON YES GIVING DEMONSTRATION NO DOCUMENTATION FILLING UP THE FORM SUBMISSION OF THE FORM 54
  55. 55. LOGIN OF THE FORM SENDING ACCOUNT OPENING KIT TO THE CLIENT TRADING Sharekhan Demat Account Services : Sharekhan – Transacting and investing simplified. Get ready to change the way you transact and invest in financial products and services. Whether you wish to transact in equity, equity & commodity derivatives, IPO’s offshore investments or prefer to invest in mutual funds, life & general insurance products or avail money transfer and money changing services, you can do it all through Angel. Simply open a Angel account and enjoy the convenience of handling all your key financial transactions through this one window. Benefits of having an Sharekhan account: • It’s cost effective You pay comparatively lower transaction fees. As an Introductory offer, we invite you to pay a flat fee of just Rs. 750/- and transact through Sharekhan. • Its offers single – Through Sharekhan’s associates, you can transact in equity, equity and commodities derivatives, offshore investments mutual funds, IPO’s life insurance, general insurance, money transfer, money changing and credit cards, amongst others. • Its convenient You can access Sharekhan’s services through 55
  56. 56. •The internet •Transaction kiosks •The phone (call & transact) •Our all – India network of associates on an assisted trade. Its Safe your account is safeguarded with a unique security number that changes every 32 seconds. This number works as a dynamics password to keep your account extra safe. It provide you value- added services at www.sharekhan.com , you get • Reliable research, including views of external experts with an enviable track record • Live news updates from Reuters and Dow Jones • CEO’s / expert views on the economy and financial markets • Tools that help you plan your investments, tax, retirement, etc. in the personal finance section • Risk Analyzer for analysis of your risk profile • Asset allocators to build an appropriate investment portfolio • Innovative use of technology for facilitating The benefits:- Benefits of Demat Account • A safe and convenient way to hold securities; • Immediate transfer of securities; 56
  57. 57. • No stamp duty on transfer of securities; • Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.; • Reduction in paperwork involved in transfer of securities; • Reduction in transaction cost; • No odd lot problem, even one share can be sold; • Nomination facility; • Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately; • Transmission of securities is done by DP eliminating Correspondence with companies; • Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. • Holding investments in equity and debt instruments in a single account. Benefit For Investors Demat account has become a necessity for all categories of investors for the following reasons/ benefits: f SEBI has made it compulsory for trades in almost all scrip’s to be settled in  Demat mode. Although, trades up to 500 shares can be settled in physical form, physical settlement is virtually not taking place for the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates, etc.  57
  58. 58. It is a safe and convenient way to hold securities compared to holding securities in physical form.. No stamp duty is levied on transfer of securities held in Demat form.  NInstantaneous transfer of securities enhances liquidity. I It eliminates delays, thefts, interceptions and subsequent misuse of certificates.  I Change of name, address, registration of power of attorney, deletion of  deceased's name, etc. - can be affected across companies by one single instruction to the DP. Each share is a market lot for the purpose of transactions - so no odd lot problem.  Any number of securities can be transferred/delivered with one delivery order. Therefore, paperwork and signing of multiple transfer forms is done away with. It facilitates taking advances against securities on low margin/low interest. Points To Remember 1. You may choose your DP based on your evaluation of their reputation, service standards, charges, other conveniences, etc. 2. Open depository account with the same holding pattern as there on existing physical securities. You will need to open separate accounts for every different combination of holding pattern. Eg.: If 100 securities of company ABC & 200 58
  59. 59. securities of company PQR are registered in the name of X as first holder & Y as second holder, one account in name of X as first holder & Y as second holder is sufficient. Whereas, if 100 securities of company ABC are registered in the name of X as first holder & Y as second holder & 200 securities of company PQR are registered in the name of Y as first holder & X as second holder, you will need to open two accounts, one in the name of X as first holder & Y as second holder and the second in the name of Y as first holder and X as second holder. 3. Account opening procedure should typically take 2-5 days. 4. In case of holdings of a partnership firm, the account should be opened in the name of the partner(s). 5. In case of holdings of a HUF, the account should be opened in the name of the Karta. 6. In case of a minor, the depository account should be opened in the name of the minor and the guardian’s name should be mentioned. The guardian will sign as signatory on behalf of the minor. For selling the securities of the minor, a court order should be obtained. 7. In case of any difficulties, contact your DP. 8. Only securities admitted by NSDL can be dematerialized. The list is available with your DP. 9. Only securities registered in the name of the account holder can be dematerialized. 59
  60. 60. 10.Dematerialization is normally completed within 15 days after the share certificates have reached the issuer/their R&T Agent. Thus it may take you a month from the date you hand over shares, to receive demat credit. 11.Dematerialization would be done only when the issuer / their R&T Agent is satisfied of genuineness of securities & ownership status 12. All the joint holders should sign the DRF. 13.The pattern of holding in the DRF should match the pattern of holding on the share certificate & the pattern in which account is opened. 14.Demat requests with name(s) not matching exactly with the name(s) appearing on the certificates merely on account of initials not being spelt out fully or put after or prior to the surname, would be processed, provided the signature(s) of the client(s) on the DRF tallies with the specimen signature(s) available with the issuer/ their R & T agent. 15.If the signature in the DRF does not match with the signature available with the issuer/ their R & T agent, the issuer/ their R & T agent may at the time of demat confirmation, ask for additional documentation (like bank attestation/ notarization, etc.) to prove that the certificate belongs to the person who forwarded the DRF. 16.In case there is any problem in processing the DRF, contact your DP and if he cannot resolve the problem you may contact NSDL. 60
  61. 61. RESEARCH SECTION IN SHAREKHAN LIMITED : Sharekhan Limited has its own in-house Research Organisation which is known as Valueline. It comprises a team of experts who constantly keep an eye on the share market and do research on the various aspects of the share market. Generally the research is based on the Fundamentals and Technical analysis of different companies and also taking into account various factors relating to the economy. Sharekhan Limited’s research on the volatile market has been found accurate most of the time. Sharekhan's trading calls in the month of November 2007 has given 89% strike rate. Out of 37 trading calls given by Sharekhan in the month of November 2007, 33 hit the profit target. These exclusive trading picks come only to Sharekhan Online Trading Customer and are based on in-depth technical analysis. As a customer of Sharekhan Limited, one receives daily 5-6 Research Reports on their emails which they can use as tips for investing in the market. These reports are named as Pre-Market Report, Eagle Eye, High Noon, Investors Eye, Daring Derivatives and Post-Market Report. Apart from these, Sharekhan Limited issues a monthly subscription by the name of Valueline which is easily available in the market. 61
  62. 62. Buying and Selling of Dematerialization INTRODUCTION: The procedure for buying and selling dematerialized securities is similar to the procedure for buying and selling physical securities. The difference lies in the process of delivery (in case of sale) and receipt (in case of purchase) of securities. In case of purchase:- • The broker will receive the securities in his account on the payout day. • The broker will give instruction to its DP to debit his account and credit investor’s account. • Investor will give ‘Receipt Instruction to DP for receiving credit by filling appropriate form. However one can give standing instruction for credit in to ones accounts that will obviate the need of giving Receipt Instruction every time. In case of sale:- 62
  63. 63. The investor will give delivery instruction to DP to debit his account and credit the broker’s account. Such instruction should reach the DP’s office at least 24 hours before the pay-in as otherwise DP will accept the instruction only at the investor’s risk. Rights 1. Dematerialized securities can be traded on those stock exchanges connected to NSDL. At present, NSE, BSE, CSE, DSE, LSE, BGSE, OTCEI, MSE, ISE & ASE are connected to NSDL. At these stock exchanges, two segments would be available to trade in dematerialized securities : o Unified (erstwhile physical) segment - In this segment delivery obligation can be met by delivering dematerialized or physical securities at the option of the seller. However, for a select list of securities prescribed by SEBI, securities cannot be delivered in physical form in the unified segment, of stock exchanges connected to NSDL. This list presently covers 160 securities. This list has been expanded to cover a total of 200 securities with effect from January 17, 2000. Over a period, this list would cover all actively traded securities. o Exclusive demat segment - In this segment delivery obligation can be met by delivering dematerialized securities only. Physical securities cannot be delivered in the exclusive demat segment. Procedure Trading in dematerialized securities is done through your broker just like trading in physical securities. After your broker executes the trade, your DP will help to deliver shares to your broker (in case you sell) on the basis of valid instruction 63
  64. 64. given by you to your DP and receive shares from your broker (in case you buy) on basis of valid instruction given by your broker to his DP. Buy dematerialized securities 1. You purchase securities in any of the stock exchanges connected to NSDL through a broker of your choice and make payment to your broker. Make sure you tell your broker you want only demat shares. 2. Broker arranges payment to clearing corporation/ clearing house of the stock exchange. 3. Broker receives credit in his clearing account with his DP on the pay-out day. He can immediately transfer these securities to your depository account, provided your account is already active. 4. Broker gives instructions to his DP to debit his clearing account and credit your depository account. 5. You give instruction to your DP for receiving credit in your depository account. If you have given standing instruction to receive credits, no separate instruction for receiving credit will be required. 6. If the instructions match, your account with your DP is credited. Sell dematerialized securities 1. You sell your dematerialized securities in any of the stock exchanges linked to NSDL through a broker of your choice. 64
  65. 65. 2. You give instruction to your DP for debit of your depository account and credit of your brokers clearing member account at least 24 hours i.e. one working day prior to the pay-in date or before the deadline prescribed by your DP, so that your brokers clearing account is credited at the time arranged with him. 3. On the pay-in day, your broker gives instruction to his DP for delivery to clearing corporation/clearing house of the relevant stock exchange. 4. The broker receives payment from the clearing corporation / clearing house. 5. You receive payment from the broker for the sale in the same manner you would receive payment for a sale in the physical mode. Points To Remember 1. Trading continues to be through brokers. In case of any problem in execution of trade, contact your broker and if he fails to resolve the problem you may contact the stock exchange. 2. When you buy securities through the stock exchange, your brokers clearing account is credited to the extent of the securities purchased, on receipt of instruction from clearing corporation/ clearing house of the stock exchange. Your depository account is credited only when your broker gives a delivery instruction to his DP. Securities are not directly credited to your account by the clearing corporation/ clearing house of the stock exchange. In case your broker does not give a delivery instruction, contact him or concerned stock exchange or SEBI. If your depository account is not credited, in spite of your broker giving valid instruction to his DP, contact the DP and if he fails to resolve the same you may contact NSDL. 65
  66. 66. 3. When you sell securities, you have to give a delivery instruction to your DP to transfer the securities to your brokers clearing account. They are not automatically debited from your account by NSDL or by the clearing corporation/ clearing house of the stock exchange. In case the DP defaults in executing your instruction, the DP is liable to compensate you for the loss incurred, provided your instruction was in order and has been submitted to the DP at least 24 hours i.e. one working day prior to the pay-in date or before the deadline prescribed by DP. In case the DP fails to resolve your problem, you can contact NSDL. 66
  67. 67. Need for the Study The need of the study arises because of the reason that a trainee must understand the company, its achievements and tasks, products and services and also to collect information about its competitors, its products and services offered. So that, after understanding and collecting information about the organization and its competitors, a trainee will be able to work well for the organization. From the study we have learned very much, about the company as well as the strategy of the customers, which helps us a lot at our working days. 67
  68. 68. Competitors HDFC BANK is one of the leading Depository Participant (DP) in the country with over 8 Lac demat accounts. HDFC Bank Demat services offers you a secure and convenient way to keep track of your securities and investments, over a period of time, without the hassle of handling physical documents that get mutilated or lost in transit. HDFC BANK is Depository participant both with National Securities Depositories Limited (NSDL) and Central Depository Services Limited (CDSL). Features & Benefits : As opposed to the earlier form of dealing in physical certificates with delays in transaction, holding and trading in Demat form has the following benefits: Settlement of Securities traded on the exchanges as well as off market transactions. Shorter settlements thereby enhancing liquidity. 68
  69. 69. Pledging of Securities. Electronic credit in public issue. Auto Credit of Rights / Bonus / Public Issues /Dividend credit through ECS. Auto Credit of Public Issue refunds to the bank account. No stamp duty on transfer of securities held in demat form. No concept of Market Lots. Change of address, Signature, Dividend Mandate, registration of power of attorney, transmission etc. can be effected across companies held in demat form by a single instruction to the Depository Participant (DP). Holding / Transaction details through Internet / email. In case you need any more information or have any queries , feedback & complaints , you may please mail us at dphelp@hdfcbank.com Secured & easy transaction processing 69
  70. 70. HDFC Bank Ltd provides convenient facility called 'SPEED-e' (Internet based transaction) whereby account holder can submit delivery instructions electronically through SPEED-e website (https://speede.nsdl.com). SPEED-e offers secured means of transaction processing eliminating preparation of instruction slips and submission of the same across the counter to the depository participant. The 'IDEAS' facility helps in viewing the current transactions and balances (holdings) of Demat account on Internet on real time basis. Disclaimer: Whatever have been stated above are in the good interest of the Investor / Demat Applicants / holders to provide a brief picture about the depository system. You are requested go through the guidelines of the depositories before taking any further action. For detailed guidelines, you are requested to approach your nearest HDFC Bank branch. HDFC Bank will not be responsible for any misunderstanding / act based on the above. Also HDFC Bank might ask for additional information / documentation than what has been stated above to process your application / instruction. ICICI DIRECT ICICI Direct (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, Mutual Funds and Bonds. 70
  71. 71. Trading is available in BSE and NSE. ICICI Direct offers 3 different online trading platforms to its customers. Type of Account: 1. Share Trading Account: Share Trading Account by ICICI Direct is primarily for buying and selling of stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading, Buy Today Sell Tomorrow and Call and Trade on phone. ICICIDirect.com website is the primary trading platform for this trading account. They also provide installable application terminal based application for high volume trader. 2. Wise Investment Account: 1. Online Mutual funds investment allows investor to invest on-line in around 19 Mutual Fund companies. ICICI Direct offers various options while investing in Mutual Funds like Purchase Mutual Fund, Redemption and switch between different schemes, Systematic Investment plans, Systematic withdrawal plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. 2. Active Trader account gives more personalized investment options to the investors. It allows investor to use online and offline stock trading. It also provides with independent market expertise and support through a dedicated Relationship Manager from ICICI. 71
  72. 72. Active Trader also provides commodity trading. Brokerage and fees Account opening fees : Rs 750/- (One time nonrefundable) Brokerage: ICICIDirect.com brokerage varies on volume of trade and inclusive of demat transaction charges, service taxes and courier charges for contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.85% on delivery based trades. Disadvantages of ICICI Direct: 1. Getting access to ICICIDirect.com website during market session can be frustrating. 5Paisa.com 5paisa is the trade name of India Infoline Securities Private Limited (5paisa), member of National Stock Exchange and The Stock Exchange, Mumbai. 5paisa is a wholly owned subsidiary of India Infoline Ltd, India’s leading and most popular 72
  73. 73. finance and investment portal. 5paisa has emerged as one of leading players in e- broking space in India. The company’s brokerage is one of the lowest in the industry. It also provides the research on commodities. Investors can benefit from its analysis and advice available at the click of the mouse. For those who prefer to trade the traditional way, India Infoline investor points are available across the country. India Infoline was founded by a group of professionals in 1995. Its institutional investors include Intel Capital, one of the leading technology companies in the world promoted by the U K government, ICICI, TDA and Reeshanar. The company offers a slew of products such as stock and derivatives broking, commodities broking and mutual funds. India Bulls Indiabulls is India's leading retail financial services company with 77 locations spread across 64 cities. Its size and strong balance sheet allows providing varied products and services at very attractive prices, our over 750 Client Relationship Managers are dedicated to serving your unique needs. Indiabulls is lead by a highly regarded management team that has invested crores of rupees into a world class Infrastructure that provides real-time service & 24/7 access to all information and products. The Indiabulls Professional Network offers real-time prices, detailed data and news, intelligent analytics, and electronic trading capabilities, right at your finger-tips. This powerful technology is complemented by our knowledgeable and customer focused Relationship Managers. Indiabulls offers a full range of financial services and products ranging from Equities, Derivatives, Demat services and Insurance to enhance wealth. 73
  74. 74. Kotak Securities Limited (kotakstreet.com): Kotak Securities Ltd., a strategic joint venture between Kotak Mahindra Bank and Goldman Sachs (holding 25% - one of the world’s leading investment banks and brokerage firms) is India’s leading stock broking house with a market share of 5 - 6 %. Kotak Securities Ltd. has been the largest in IPO distribution - It was ranked number One in 2003-04 as Book Running Lead Managers in public equity offerings by PRIME Database. It has also won the Best Equity House Award from Finance Asia - April 2004. The company has a full fledged research division involved in Macro Economic studies, sectoral research and company specific equity research combined with a strong and well networked sales force which helps deliver current and up to date market information and news. Kotak Securities Ltd is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) providing dual benefit services wherein the investors can use the brokerage services of the company for executing the transactions and the depository services for settling them. The company has 42 branches servicing around 1, 00,000 customers. Kotakstreet.com the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments. Kotak Securities Limited manages assets over 1700 crores under Portfolio Management Services (PMS) which is mainly to the high end of the market. Kotak Securities Limited has newly launched “Kotak Infinity” as a distinct discretionary Portfolio Management Service which looks into the middle end of the market. 74
  75. 75. Motilal Oswal Securities Ltd. (MOSt): One of the top-3 stock-broking houses in India, with a dominant position in both institutional and retail broking, MOSt is amongst the best-capitalized firms in the broking industry in terms of net worth. MOSt was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology have enabled it to blossom into a thousand-member team. The institutional business unit has relationships with several leading foreign institutional investors (FIIs) in the US, UK, Hong Kong and Singapore. In a recent media report MOSt was rated as one of the top-10 brokers in terms of business transacted for FIIs. The retail business unit provides equity investment solutions to more than 50,000 investors through 270 outlets spanning 150 cities and 22 states. MOSt provides Advice-Based Broking, Portfolio Management Services (PMS), E-Broking Services, Depository Services, Commodities Trading, and IPO and Mutual Fund Investment Advisory Services. Its Value PMS Scheme gave a 160% post-tax return for the year ended March 2004. With value investing at the core of its investment philosophy, a strong research team consistently provides high-performance ideas. MOSt’s equity research has been consistently ranked very highly in surveys conducted by leading international publications like Asiamoney and Institutional Investor. In Asia Money Brokers Poll 2003 MOSt has been rated as the Best Domestic Research House - Mega Funds ,while in 2000 and 2002 it has been rated as the Best Domestic Equity Research House and Second best amongst Indian Brokerage firms respectively. 75
  76. 76. IDBI Capital Market Services Ltd. IDBI Capital is a leading Indian securities firm offering a complete suite of products and services to individual, institutional and corporate clients. IDBI Capital Market Services Ltd. (IDBI Capital), a wholly owned subsidiary of Industrial Development Bank of India (IDBI), is a leading Indian securities firm, offering a complete suite of products and services to individual, institutional and corporate clients. Our services include fixed income trading, equities brokerage, debt and equity derivatives, research, private placements, depository services, portfolio management and distribution of financial products. Over the last five years, we have emerged as a leading player in each of these businesses.  March 1995 - Commenced Equity Broking on NSE CM segment  July 1995 - Built agent Distribution Network across the country  October 1996 - Commenced Debt Broking on NSE WDM segment  December 1996 - Started operations as a Depository Participant  1996 - Started to act as Arranger to Privately Placed Bond issues  April 1998 - Commenced operations as a Portfolio Manager  February 1999 - Acquired membership of BSE, Mumbai  November 1999 - Started operations as a Primary Dealer  June 2000 - Acquired Derivatives memberships of BSE and NSE  March 2002 - Achieved an outright secondary market turnover exceeding Rs100,000 cr in G-Secs  October 2002- Commenced trading in Interest Rate Swaps 76

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