A study on progress and investors perception towerds dematerialization of shares at edelweiss
EXECUTIVESUMMARY<br />The Capital market in our Indian economy is undergoing a process of structural transformation and one such change is dematerialization. Dematerialization was a major policy measure introduced by SEBI in 1996 to improve operational efficiency of the Indian stock markets and it was made compulsory with effect from 15th January 1998. Dematerialization is a process by which physical certificates of an equivalent number of securities in electronic form and credited to the investor's account maintained with the depository participant (DP).<br />This report focuses the progress of investors accounts and dematerialization of shares in NSDL and CDSL. Trend percentage and trend line are the spastical tools that have been used to identify the progress on dematerialization. the investor’s perception towards dematerialization of shares had been analyzed based on a sample of 100 investors through structured questionnaire.<br />“Study on progress and investors perception towards dematerialization of shares.”is the topic head of the project report.<br />Financial products are those products which have values in monetary terms. The Financial products are intangible in nature that means the customer cannot even touch, smell or feel it. In this manner, it becomes a challenge for the sales personnel in financial sector to convince the customer to invest in it. The sales personnel can only guarantee for the benefit that the customer will get after a certain period of time span.<br />The evaluation of financial planning has been increased through decades, which is best seen in customer rise. Now a day’s investment of saving has assumed great importance. According to the study of the Market, it is being observed that markets are doing well in investments like, Mutual funds, Shares, Life Insurance etc. In near future a proper financial planning is required to invest money in all type of financial product because there is good potential in market to invest. <br />The main objective of this project is to know the Progress and Consumers perception towards the Dematerialization of Shares with the people’s awareness and various instruments available for Personal Financial Advising facility provided by Edelweiss Broking Ltd.<br />Dematerialization<br />Dematerialization is a process by which physical certificates of an investor are converted into electronic form and credited to the account of the depository participant. Dematted securities do not have any certificate numbers or distinctive numbers and are dealt only in quantity, i.e., the securities are replaceable.<br />Investors can dematerialize only those certificates that are already registered in their names and are in the list of securities admitted for dematerialization. These are: shares, scrip’s, stocks, bonds, debentures, stock or other marketable securities of a like nature in or of any incorporated company or other body corporate, units of mutual funds, rights under collective investment schemes and venture capital funds, commercial paper, certificate of deposit, securities debt, money market instruments and unlisted securities, underlying sharing of American Depository Receipts and Global Depository Receipts issued to non-resident holders. Dematerialization is the process of converting physical holdings into electronic form with the depository wherein the share certificates are shredded and corresponding entry of the number of shares is done in the opened with the depository.<br />The securities held in dematerialized form are fungible; that is, they do not bear any notable feature like distinctive number, folio number or certificate number. Once shares get dematerialized, they lose their identity in terms of share certificate distinctive numbers and folio numbers.<br />Following requisites are necessary for dematerialization of securities: <br />1. Investors should have a depository account. <br />2. Securities should be from the eligible list of securities issued by the depository. <br />3. Securities must be in the name of the account holders and owned by him. <br />4. Separate demat requisition form is required for each issuer company. <br />5. Dematerialization Request Form (DRF) should be signed by all the holders so as to match specimen signature.<br />Object Of Demat System<br />India has adopted this system in which book entry is done electronically. It is the system where no paper is involved. Physical form is extinguished and shares or securities are held in electronic mode. Before the introduction of the depository system by the Depository Act, 1996, the process of sale, purchase and transfer of shares was a huge problem and the safety perspective was zero.<br />Securities that can be dematerialized<br />The entire depository system in India is governed by the rules made by the market regulator - SEBI. According to the SEBI (Depositories and Participants) Regulations, 1996, the following securities are eligible for holding in dematerialized form.<br />1. Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of similar nature of any incorporated company or other body corporate, including underlying shares of ADRs and GDRs.<br />2. Units of mutual funds, rights under collective investment schemes and venture capital funds, commercial paper, certificate of deposit, securitized debt, money market instruments, government securities, national saving certificates, kisan vikas patra and unlisted securities.<br />What is a Depository?<br />The Depositories Act defines a depository as “a company formed and registered under the Companies Act, 1956 and which has been granted a certificate of registration under subsection (1A) of section 12 of Securities and Exchange Board of India Act, 1992.” The main function of a depository is to dematerialize securities and enable their transactions in book entry form.<br />As per The Bank for International Settlements (BIS), depository is “a facility for holding securities which enables securities transactions to be processed by book entry. Physical securities may be immobilized by the depository or securities may be dematerialized (so that they exist only as electronic records)”.<br />In simple terms depository is an organization where securities of an investor are held in electronic form. <br />(REF: BSE—BCCD study material v3)<br />Who is a Depository Participant?<br />A Depository Participant (DP) is an agent of the depository through which it interfaces with the investor and provides depository services. Public financialinstitutions, scheduled commercial banks, foreign banks operating in India with the approval of the Reserve Bank of India, state financial corporations, custodians, stock-brokers, clearing corporations /clearing houses, NBFCs and Registrar to an Issue or Share Transfer Agent complying with the requirements prescribed by <br />SEBI can be registered as DP. Banking services can be availed through a branch whereas depository services can be availed through a DP.<br />As on September 30, 2008, a total of 711 DPs (266 NSDL, 445 CDSL) are registered with SEBI.<br />(REF: http://investor.sebi.gov.in/faq/dematfaq.html)<br />Number of Depositories in India<br />At present two Depositories viz. <br />National Securities Depository Limited (NSDL)<br />NSDL is a public limited company incorporated under the Companies Act, 1956. Four renowned institutions participate in it. Unit Trust of India (UTI), Industrial Development Bank of India (IDBI), National Stock Exchange of India (NSE), State Bank of India (SBI).UTI is the largest mutual fund of India and IDBI is the largest development bank, NSE is the largest stock exchange of India and SBI is the largest commercial bank of India having clearing facility. HDFC and Citibank also share in this system. NSDL is managed by Board of directors headed by a managing director. It is governed by its bye-laws and its business operations are regulated by business rules. NSDL interfaces with the investors through players or business partners. Constituents of depository compromise of clearing corporation, brokers, clearing member, registrar and transfer agents, company or issuer, stock exchange, bank depository participant and investors. All are electronically linked to the main depository for the settlement of trades and to perform a daily reconciliation of all accounts held with NSDL.<br />Central Depository Services (India) Limited (CDSL) <br />Second agency is CDSL - Central Depository Service (India) Limited. Main functions of this agency are centralized database and accounting. Major participant in CDSL are LIC, GIC and BSE. This agency is set up with the object to keep in mind to accelerate growth of scripless trading, with major thrust of individual participation and creating competitive environment, responsible to the user’s interests and demands to enhance liquidity. CDSL aims to retain the entire data of the investors in the central database of CDSL.<br />NSDL and CDSL essentially perform the following functions through their various participants<br />1. Enable surrender and withdrawal of securities to and from the depository.<br />2. Maintain investor holdings in the electronic form.<br />3. Effect settlement of securities traded on the Exchanges.<br />4. Carry out settlement of trades not done on the Stock Exchanges i.e. Off Market Trades.<br />5. Coordination of benefits accruing on the depository accounts of investors.<br />(REF: https://www.ilfsdp.com/faq_general.htm)<br />Objectives of the Study<br /><ul><li>To Study the progress of Dematerialization of Shares.
To identify the investor’s awareness towards dematerialization of Shares
To examine the satisfaction level of the investors towards the benefits of dematerialization of Shares
To identify the investor’s opinion towards various charges levied by the depository participants.
To offer suggestions based on the result of the study.</li></ul>RESEARCH METHODOLOGY:<br />Research methodology is a systematic way to solve the research problems. It refers to searchfor knowledge, a scientific and systematic search for information.<br />Marketing research is the systematic design, collection, analysis and reporting of data and finding relevant to a specific marketing design, collection, analysis and reporting of data and finding relevant to a specific marketing situation facing the company.<br />RESEARCH DESIGN:<br />Type of Research:<br />The research was a Descriptive Research.<br />Descriptive Research:<br />Descriptive research is also called Statistical Research. The main goal of this type of research is to describe the data and characteristics about the population or phenomenon being studied. The idea behind this type of research is to study frequencies, averages, and other statistical calculations. Descriptive research is mainly done when a researcher wants to gain a better understanding of a topic. It is quantitative and uses surveys and panels and also the use of probability sampling. Descriptive research is the exploration of the existing certain phenomena.Descriptive research generally precedes explanatory research.<br />SAMPLING DESIGN:<br />Sampling may be defined as the selection of some part of an aggregate or totality on the<br />basis of which a judgment or inference about the aggregate or totality is made. It is the<br />process of obtaining information about an entire population by examining only a part of it<br />in which generalizations or influences are drawn based on the samples about the parameters of population from which the samples are taken.<br />Random Sampling:<br />Random sampling is the sampling technique I have used in my research.<br />SAMPLING AREA:<br />Gurgaon, NCR<br />SAMPLE SIZE:<br />100<br />INDUSTRY OVERVIEW<br />HISTORY<br />HISTORY OF THE STOCK BROKING INDUSTRY<br />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. <br />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.<br />In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business.<br />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.<br />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.<br />DEVELOPMENT<br />An important early event in the development of the stock market in India was the formation of the Native Share and Stock Brokers’ Association at Bombay in 1875, the precursor of the present-day Bombay Stock Exchange. This was followed by the formation of associations /exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). IN addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently.<br />In order to check such aberrations and promote a more orderly development of the stock market, the central government introduced a legislation called the Securities Contracts (Regulation) Act, 1956. Under this legislation, it is mandatory on the part of stock exchanges to seek government recognition. As of January 2002 there were 23 stock exchanges recognized by the central Government. They are located at Ahmedabad, Bangalore, Baroda, Bhubaneswar, Calcutta, Chennai,(the Madras stock Exchanges ), Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kanpur, Ludhiana, Mangalore, Mumbai(the National Stock Exchange or NSE), Mumbai (The Stock Exchange), popularly called the Bombay Stock Exchange, Mumbai (OTC Exchange of India), Mumbai (The Inter-connected Stock Exchange of India), Patna, Pune, and Rajkot. Of course, the principle bourses are the National Stock Exchange and The Bombay Stock Exchange, accounting for the bulk of the business done on the Indian stock market.<br />While the recognized stock exchanges have been accorded a privileged position, they are subject to governmental supervision and control. The rules of a recognized stock exchanges relating to the managerial powers of the governing body, admission, suspension, expulsion, and re-admission of its members, appointment of authorized representatives and clerks, so on and so forth have to be approved by the government. These rules can be amended, varied or rescinded only with the prior approval of the government. <br />BSE(BOMBAY STOCK EXCHANGE)<br />The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualized and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956.<br />The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redressed of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education program and making available to them necessary informative inputs.<br />A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer.<br />NSE(NATIONAL STOCK EXCHANGE)<br />NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equities and the Futures and Options Segment in June 2000 for various derivative instruments.<br />NSE has been able to take the stock market to the doorsteps of the investors. The technology has been harnessed to deliver the services to the investors across the country at the cheapest possible cost. It provides a nation-wide, screen-based, automated trading system, with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through on-line system has helped in integrating retail investors on a nation-wide basis. The standards set by the exchange in terms of market practices, Products, technology and service standards have become industry benchmarks and are being replicated by other market participants. Within a very short span of time, NSE has been able to achieve all the objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian Capital Markets to its present form. The Indian Capital Markets are a far cry from what they used to be a decade ago in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service.<br />NCDEX (NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE)<br />NCDEX started working on 15th December, 2003. This exchange provides facilities to their trading and clearing member at different 130 centers for contract. <br />In commodity market the main participants are speculators, hedgers and arbitrageurs.<br />Promoters of NCDEX are <br />National Stock Exchange(NSE)<br />ICICI bank<br />Life Insurance Corporation(LIC)<br />National Bank for Agricultural and Rural Development (NABARD)<br />IFFICO<br />Punjab National Bank (PNB)<br />CRISIL<br />WHY NCDEX?<br />NCDEX is nationalized screen based system which is providing transparent, private and easy services.<br />NCDEX is one of the traditional media which gives online information<br />NCDEX is one of the Indian commodity exchange, constructed on the basis of the current national institutes the exchange has been established with the coloration of leading institutes like NABARD, LIC, NSI etc….<br />In India NCDEX has maximum settlement guarantee fund.<br />NCDEX has appointed two exports for checking quality at the time of delivery<br />FACILITIES PROVIDED BY NCDEX<br />NCDEX has developed facility for checking of commodity and also provides a wear house facility<br />By collaborating with industrial partners, industrial companies, news agencies, banks and developers of kiosk network NCDEX is able to provide current rates and contracts rate.<br />To prepare guidelines related to special products of securitization NCDEX works with bank.<br />To avail farmers from risk of fluctuation in prices NCDEX provides special services for agricultural.<br />NCDEX is working with tax officer to make clear different types of sales and service taxes.<br />NCDEX is providing attractive products like “weather derivatives” <br />MCX(MULTI COMMODITY EXCHANGE)<br />‘MULTI COMMODITY EXCHANGE’ of India limited is a new order exchange with a mandate for setting up a nationwide, online multi-commodity marketplace, offering unlimited growth opportunities to commodities market participants. As a true neutral market, MCX has taken several initiatives for users in a new generation commodities futures market in the process, become the country’s premier exchange.<br />MCX, an independent and a de-mutualized exchange since inception, is all set up to introduce a state of the art, online digital exchange for commodities futures trading in the country and has accordingly initiated several steps to translate this vision into reality.<br />Market Watch:<br />The market watch window is used to view the market details for a particular or group of contracts and for a particular instrument type. This window displays the following details: Symbol, Expiry, price quotation unit, buy qty, buy price, sell price, sell qty, last traded price, D.P.R, volume (in 000’s), value (in lac),% change, average trade price, high, low, open, close & open interest. <br />TRANSACTION CYCLE<br />Placing OrderSettlement of tradesDecision to tradeTrade ExecutionClearing of TradesFunds or SecuritiesTransaction Cycle<br />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.<br />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.<br />MAJOR PLAYERS<br />S S KANTILAL ISHWARLAL SECURITIES PVT LTD. (www.sharekhan.com)<br />ICICI WEB TRADE LTD. (www.icicidirect.com)<br />5 PAISA.COM (www.5paisa.com)<br />KOTAK SECURITIES LTD. (www.kotakstreet.com)<br />INDIABULLS (www.indiabulls.com)<br />MOTILAL OSWAL SECURITIES LTD. <br />HDFC SECURITIES LTD. (www.hdfcsec.com)<br />UTI SECURITIES LTD.<br />IDBI CAPITAL MARKET SERIVICES LTD.<br />REFCO SIFY SECURITIES PVT LTD.<br />ParametersA/c Opening FeeBrokerageInterfaceTrading A/cDematDeliverySquare OffBanks Associated withEdelweiss750Nil0.500.10HDFC,ICICI,AXIS,YES Bank,Kotak MahindraSharekhan750NIL0.500.10HDFC, UTI, OBC, IDBI & CitibankICICI Direct750NIL0.750.18ICICI BankIndiabulls7502500.400.10N.A.5 paisa800NIL0.200.05Citibank, HDFC, OBC, UTI & ICICI BankKotak Street500N.A.0.590.06Kotak Bank & CitibankHDFC Securities700NIL0.500.15HDFC & Other 4 Banks<br />S. S. KANTILAL ISHWARLAL SECURITIES PVT. LTD. (sharekhan.com):<br />Sharekhan, India’s leading stock broker is the retail arm of SSKI, and offers you depository services and trade execution facilities for equities, derivatives and commodities backed with investment advice tempered by decades of broking experience. A research and analysis team is constantly working to track performance and trends. That’s why Sharekhan has the trading products, which are having one of the highest success rates in the industry. Sharekhan is having 240 share shops in 110 cities; the largest chain of retail share shops in India is of Sharekhan. <br />In future, Sharekhan is planning to enter in Mutual funds, Insurance sector and banking sector to expand beyond the market currently covered by it. And it has started MF (Mutual Funds) on priority basis but wants to grow in it.<br />ICICI Web Trade Ltd. (ICICIdirect.com):<br />ICICIdirect.com was the first entrant into e-broking. ICICdirect.com provides the 3-in-1 to the users which ties in their saving bank account and their Demat account to their brokerage account electronically. This integration ensures that money is transferred to/from their bank account and the shares are transferred from/to their Demat account automatically without writing any cheques or transfer instructions while carrying out their trades in shares.<br />ICICIdirect.com has the option of trading in shares in cash, margin or spot segments. An investor can also invest in 14 Mutual Funds (Prudential ICICI MF, Franklin Templeton India MF, Alliance Capital MF, JM MF, Birla Sun Life MF, Sundaram MF, IL&FS MF, Principal MF, HDFC MF, Standard Chartered MF, Reliance Capital MF, Kotak Mahindra MF, TATA MF and DSP MERRILL LYNCH MF) through their trading account.<br />ICICIdirect.com doesn’t provide the facility of trading in a traditional way.<br />5PAISA.COM<br />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 finance and investment portal. 5paisa has emerged as one of leading players in e-broking space in India. <br />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.<br />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 UK government, ICICI, TDA and Reeshanar. The company offers a slew of products such as stock and derivatives broking, commodities broking and mutual funds.<br />Kotak Securities Limited (kotakstreet.com):<br />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.<br />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.<br />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.<br />INDIA BULLS<br />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.<br />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. TheIndiabulls 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.<br />Indiabulls offers a full range of financial services and products ranging from Equities, Derivatives, Demat services and Insurance to enhance wealth and to achieve the financial goals.<br />Motilal Oswal Securities Ltd. (MOSt):<br />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.<br />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.<br />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<br />In AsiaMoney 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.<br />HDFC Securities Ltd (HDFCsec):<br />HDFC securities is a brand brought to you by HDFC Securities Ltd, which has been promoted by the HDFC Bank & HDFC with the objective of providing the diverse customer base of the HDFC Group and other investors a capability to transact in the Stock Exchanges & other financial market transactions. The services comprise online buying and selling of equity shares on the National Stock Exchange (NSE). Buying and selling of select corporate debt and government securities on the NSE would be introduced in a subsequent phase. In a few months, they will also start offering the following online trading services on the BSE and NSE:<br />1. Buying and selling of shares on the BSE<br />2. Arbitrage between NSE & BSE<br />3. Trading in Derivatives on the NSE<br />4. Margin trading products.<br />They are also planning to include buying and selling of Mutual Funds, IPO subscriptions, Right issues, purchase of Insurance policies and asset financing.<br />UTI SECURITIES LTD.: (UTISEL)<br />UTI Securities Ltd was incorporated on June 24, 1994 by Unit Trust of India as a 100% subsidiary and on the repealing of the UTI Act, the capital is now held by the Administrator of the Specified Undertaking of Unit Trust of India (ASUUTI). UTI Securities has been working as an independent professional entity for providing financial intermediary and advisory services to its corporate and retail clientele.<br />The Company has presence in major cities with 20 branches and 50 franchisees to service a wide range of clients. The company has also invested in the joint-venture company with Standard Chartered Bank viz. Standard Chartered UTI Securities (P) Ltd. that is engaged in primary dealership and Government securities. The company is very soon going to start Commodity Trading through its subsidiary, USEc Commodities Ltd, which provides facility of commodity trading on NCDEX and MCX. <br />IDBI Capital Market Services Ltd.<br />IDBI Capital is a leading Indian securities firm offering a complete suite of products and services to individual, institutional and corporate clients.<br />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. The 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.<br />March 1995 - Commenced Equity Broking on NSE CM segment<br />July 1995 - Built agent Distribution Network across the country<br />October 1996 - Commenced Debt Broking on NSE WDM segment<br />December 1996 - Started operations as a Depository Participant<br />1996 - Started to act as Arranger to Privately Placed Bond issues<br />April 1998 - Commenced operations as a Portfolio Manager<br />February 1999 - Acquired membership of BSE, Mumbai <br />November 1999 - Started operations as a Primary Dealer<br />June 2000 - Acquired Derivatives memberships of BSE and NSE<br />March 2002 - Achieved an outright secondary market turnover exceeding Rs100,000 <br />October 2002- Commenced trading in Interest Rate Swaps<br />REFCO - SIFY SECURITIES INDIA PVT. LTD<br />Refco-Sify Securities India Pvt. Ltd., headquartered in Mumbai, is a joint venture between the Refco Group Holding Ltd., USA; and Satyam Infoway Limited (NASDAQ: SIFY) to offer online and offline equity and derivatives trading for retail customers as well as execution and clearing services for financial institutions. <br />Refco also provides clients with prime brokerage services, fixed income, equities, foreign exchange, OTC derivatives and asset management. Refco is a leader in providing clients with the latest technological advances in products and services. Its proprietary systems and global infrastructure provide the flexibility to meet all client requirements.<br />INDUSTRY ANALYSIS<br />Industry Analysis using Porter’s 5 forces Model<br />SUPPLIERS<br />NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI, SHCIL, ICICIdirect.com, etc. Also these regulatory bodies have got an upper hand as the bargaining power stock broking houses like SSKI, etc. would be less.<br />NSE & BSE are playgrounds where common an investor trade through stock broking houses, for which they have to take permission from NSE/BSE.<br />NSE & BSE are under the purview of SEBI, that’s why stock broking houses like SSKI, have low bargaining power. But here there is one advantage that NSE/BSE have i.e. they cannot go for forward integration.<br />Web maintainers are companies which maintain web sites & technical aspects of the same. Here stock broking houses like SSKI can have more bargaining power due to stiff competition among web maintaining companies.<br />Web maintainers are companies who make and maintain software’s for stock broking houses. If say for example stock broking houses switches over to other web maintainers then that company cannot understand the mechanisms of software’s. So it is quite high switching cost.<br />BUYERS<br />There are various types of investors who trade through stock broking houses like SSKI, which includes investors like small investors, medium net worth investors, business partners, institutional investors and mutual fund companies.<br />Here the bargaining power of stock broking houses depends on how big the investor is.<br />So here we can say that bargaining power of stock broking houses is high in case of small investors & HUF.<br />While the bargaining power is moderate in case of HNI (High New Worth Investors)/ MNI’s (Medium Net Worth Investors) and business partners.<br />But the in case of mutual fund companies and institutional investors bargaining power is less.<br />There is competitive buzz in stock broking industry; competitors are offering low brokerage and best services with added feature. So switching cost is pretty much less. So the buyer can easily switch over to competitors product.<br />COMPETITORS<br />The company is facing the competition from local as well as national level players. The local players provide facility for off-line trading while the national players like ICICIdirect.com and Kotakstreet.com, HDFC Security provide online trading services.<br />There are also other big names like Indiabulls, Motilal Oswal, 5paisa and Marwadi encircles the company form both the sides by providing online and off-line trading with competitive services.<br />POTENTIAL ENTRANTS<br />The potential entrants in like Investmart, Jeojit and Cipher which are coming in near future to Rajkot City.<br />Nationalized banks are also thinking to enter in this field by tying up with broking houses. E.g. Bank Of Baroda.<br />SUBSTITUES<br />Here substitutes are such instruments which can be used instead of investing in shares.<br />The instruments like Bank FD, insurance, mutual funds are the substitutes.<br />If the use of this instruments increase this may be disadvantage for the stock broking houses.<br />The companies and banks which are having these instruments can plunge into this industry.<br />ENTRY BARRIERS<br />Huge capital: - Capital is necessary not only for fixed facilities but also for customer’s credit and absorbing start up losses. To start a stock broking house, one needs huge capital for technology up gradation and skilled manpower.<br />Technology: - Technology for stock broking houses is life saving device. Stock broking requires huge capital to make their products user friendly, which in turn requires capital to employ skilled manpower. Thus, technology could be one of the entry barriers.<br />Regulatory Constraints: - Obtaining a license is a tedious job for a stock broking house. It should comply with the regulation of the governing bodies like SEBI, NSDL, etc. For a stock broking houses to plunge into the stock broking industry, it needs to have some kind of financial background and expertise. Thus, regulators constraints could be an entry barrier.<br />Experience curve: - The core competency in this industry is the services which are provided to the end-users and the research based activities which includes “TIPS”, fundamental as well as technical script analysis. Also the most important thing which helps already established firms is-“TRUST” which people would be having on firms like SSKI , Motilal Oswal, etc. this is very difficult for new companies to imitate. <br />Network: - The “Reach” to the customer is the key factor in the industry. The network of the companies like Motilal Oswal, Sharekhan, and ICICI is very efficient and spreaded all over India. It will take time for a new entrant to establish such a huge network (e.g. Marwadi), which say that, “Network can come up as most difficult entry barrier to overcome.”<br />Expected Retaliation: - Whenever a new player comes in the industry, the old companies have an option to reduce the prices of their product. This kind of practice is called expected Retaliation which is also possible in this industry in terms of less brokerage rates and reduced account opening charges. E.g. before the entry of so many mew companies, Sharekhan was having two types of accounts viz. speed trade speed trade plus, which were costing 1000 & 1500 account opening charges respectively. But due to competition, they have come up with only one account i.e. speed trade plus with the account charges of Rs.1000.<br />COMPETITIVE ANALYSIS<br />FOLLOWER:<br />The followers are those who just blindly follow the other player which are leader and challenges.<br />The players like 5 paisa, Motilal Oswal, HDFC Securities, Kotakstreet are the followers.<br />LEADER:<br />Edelweiss Broking Ltd. is a leader in the online account which is having 1, 80,000 accounts in the country.<br />While in offline account Sharekhan is leading with 64,000 offline accounts.<br />NICHER:<br />Edelweiss Broking and ICICI Direct are the two stock broking houses which are focusing only on online investors.<br />CHALLENGER:<br />Sharekhan, Kotakstreet and Indiabulls come under this head.<br />Sharekhan challenges competitors by providing quality services and research based advice.<br />Indiabulls is also challenging with low brokerage rates and class one services.<br />Traditional Broking<br />Traditionally In stock Market, the investors invest their money in shares under the guidance of the Brokers of any stock broking company. This is convenient to those investors who are not familiar with the computer and the use of internet. But it requires more dealers to the share broking companies to give guidance related to investment. There was a chance of inaccuracy of price because it is a time consuming process. The cost of the company also increases due to more paperwork. The investor point of view, there was a problem of privacy. The information of investor may leak by the broker. So, to remove these limitations of traditional broking, there was an emergence of new concept e-Broking. <br />E- Broking<br />Today is world of technology. So, the person who adopt it, get the success. So, E-Broking means broking through electronic means. E-Broking is the broking in which the investors who are familiar with the use of computer and Internet they directly trade in stock market. They trade any time at any place when the stock market is open. The cost of transaction is also reducing with time. The investors have a large range of option for the trading. It is a paperless transaction so it reduces the cost of company. There was a facility of live streaming quotes, which give exact price of share which prevailing in the market at that time. There are two types of online trading service: DISCOUNT BROKER and FULL SERVICE ONLINE BROKER.<br />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 brokerage. These brokers allow their client to place online orders with the option of talking/chatting to brokers if advice is needed. Brokerage rates here are higher. online trading is still in its infancy stage in India. with trading turnover at around Rs.10 crores per day from online trading compared to a combined gross turnover of around Rs.9000-10000 crores handled by the BSE and NSE together, online trading has a long way to go.<br />INTERNET TRADING IN INDIA:<br />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. <br />The development of broking in India can be categorized in 3 phases: <br />Stock brokers offering on their sites features such as live portfolio manager, live quotes, market research and news to attract more investors. <br />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. <br />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. <br />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. <br />COMPANY PROFILE<br />-857254445Edelweiss, a rare flower found in Switzerland. A graphic flower that represents ideas. Around it, the protective arms of the letter ‘e’: They believe ideas create wealth, but values protect it. It is the practice of this core thought that has led to Edelweiss becoming one of the leading financial services company in India. Its current businesses include investment banking, securities broking, and investment management. They provide a wide range of services to corporations, institutional investors and high net-worth individuals.<br />The core inspiring thought of ‘ideas creating wealth and values protecting it’ is translated into an approach that is led by entrepreneurship and creativity and protected by intellectual rigor, research and analysis. <br />Edelweiss Today<br /><ul><li>One of the leading financial services companies in India
One of the largest equity research teams</li></ul>–Differentiated research capabilities<br />–Only Quant team in India<br />–Only Analytics team in India<br />–Highly respected and acknowledged Thematic Research<br /><ul><li>In India</li></ul>–Closed over 100 transactions in investment banking<br />–Top 5 Domestic Brokerages in India<br />–Top 3 Derivatives Desks<br /><ul><li>One of the first and largest alternative investment desks</li></ul>Edelweiss Approach <br />Client FocusEdelweissis driven by the emphasis we place on building long-term relationships with our clients. We work closely with our clients to equip them with the ability to address large, fast-growing market opportunities. Our emphasis on long-term relationships also means that we have a significant ongoing involvement with almost all of the clients that we work with. Execution OrientationEdelweissfocuses obsessively on delivering high quality execution through its experienced team of professionals. Each team is led by senior personnel and is highly research and ideas driven. Edelweiss places strong emphasis on confidentiality and integrity in a sensitive business environment. CultureEdelweiss fosters a culture that is entrepreneurial and results-driven and that emphasizes teamwork and intellectual rigor. It’s team is encouraged to display higher levels of initiative, drive, and hunger for learning and taking on additional responsibility. Professional IntegrityEdelweiss place a strong emphasis on confidentiality, honesty and integrity in our business dealings Edelweiss expect its people to maintain high ethical standards, both in their professional and personal lives.Edelweiss strive to be fair in all our dealings. It respects its competitors. Research DrivenAll businesses of Edelweiss are built on a research and analytics foundation. The company’s understanding of underlying market trends and strong analytical expertise has resulted in a demonstrated ability to identify emerging trends and themes early. Edelweiss seek to provide the highest quality research and investment opinions to its clients. <br />Board of Directors of Edelweiss Capital Limited<br /><ul><li>Rashesh Shah
Navtej S. Nandra </li></ul>Company Secretary<br /><ul><li>B. Renganathan</li></ul>Statutory Auditors<br /><ul><li>B S R & Associates</li></ul>Internal Auditors<br /><ul><li>M. P. Chitale & Co.</li></ul>Bankers<br /><ul><li>Axis Bank Limited
State Bank of India</li></ul>Senior Management Team <br />Rashesh ShahChairman & CEODeepak MittalCEO, Edelweiss Tokio Life Insurance Company LimitedNaresh KothariPresident & Co-head Institutional Equities, Private Client ServicesPeeyoosh ChaddaCo-head - Asset Management Vikas KhemaniExecutive Vice President &Co-head - Institutional Equities Venkat RamaswamyExecutive Director Himanshu KajiCFO & Group COORujan PanjwaniPresident & Co-head - Asset ManagementRajeev MehrotraExecutive Vice President & Head - Special Opportunities InvestmentsRavi BubnaExecutive Vice President & Co-Head - ECL Finance<br />Edelweiss Business Principles <br />‘Ideas create, values protect’ is how we define what Edelweiss believes in. But when we say ‘values protect’ what do we mean? Here’s a handy guide to the values and principles we will live by and live up to.We will be a Thinking Organization. We will constantly bring ‘thought’ to everything we do. Our clients’ and our own success depends on our ability to use greater ideation and more imagination in our approach. We will be Fair to our clients, our employees and all stake holders. We want our clients and our employees to be ‘richer’ for their relationship with us. We will take care of our People seriously. Our policies – in spirit and in letter – will ensure transparency and equal opportunity for all. We will go beyond the normal goals of attracting, recruiting, retaining and rewarding fine talent: We will ensure that every individual in Edelweiss has an opportunity to achieve their fullest potential. We will operate as a Partnership, internally and externally. Though individuals are very often brilliant, we believe teamwork and collaboration will always ensure a better and more balanced organization. We will also treat our clients as partners and show them the same respect and consideration that we would toward our internal team members. We will focus on the Long Term. Though the world will change a lot in the coming years and our assumptions for the future may not hold up, we will reflect on the long-term implications of our actions. Even when making short-term decisions we will be aware of the long-term implications. We will focus on Growth for our clients, employees and shareholders. Our Reputation and image is more important than any financial reward. Reputation is hard to build and even harder to rebuild. Reputation will be impacted by our ability to think for our clients, maintain confidentiality and by our adherence to our value system. We will Obey and Comply with the rules of the land. We will maintain the highest standard of integrity and honesty. When we are unclear we will seek clarifications. We will respect Risk. Our business is going to be a constant challenge of balancing risk and reward. Our ability to constantly keep one eye on risk will guide us through this fine balance. Our Financial Capital is a critical resource for growth. We will endeavor to grow, protect, and use our financial capital wisely. <br />Brokerage Plans:<br />Advance Brokerage (ADB) Plans:<br />Standard Plans(For Margin Money):<br />Value added services with each subscription plan:<br />Plan 1 (Code: EBSPN01)*<br />• Client profiling and investment need analysis<br />• Weekly call on products that suit client profile<br />Plan 2 (Code: EBSPN02)*<br />• Free subscription to Xpress – Web-based Trader Terminal Screen<br />• Client profiling and investment need analysis<br />• Weekly call on products that suit client profile<br />Plan 3 (Code: EBSPN03)*<br />• Free subscription to Xpress – Web-based Trader Terminal Screen<br />• Fundamental research reports from Edelweiss' coverage of client's choice and the updates on those stocks<br />• Client profiling and investment need analysis<br />• Special analytical reports as published by Edelweiss from time to time, which suit the client's profile and requirement<br />• Weekly call on products that suit client profile<br />Plan 4 (Code: EBSPN04)*<br />• Free subscription to Xpress – Web-based Trader Terminal Screen<br />• Invitation to participate in select EW conferences and seminars<br />• Fundamental research reports from Edelweiss' coverage of client's choice and the updates on those stocks<br />• Client profiling and investment need analysis<br />• Special analytical reports as published by Edelweiss from time to time, which suit the client's profile and requirement<br />• Weekly call on products that suit client profile<br />Plan 5 (Code: EBSPN05)*<br />• Free subscription to Xpress – Web-based Trader Terminal Screen<br />• Quarterly meeting with analyst<br />• Invitation to participate in select EW conferences and seminars<br />• Fundamental research reports from Edelweiss' coverage of client's choice and the updates on those stocks<br />• Client profiling and investment need analysis<br />• Special analytical reports as published by Edelweiss from time to time, which suit the client's profile and requirement<br />• Weekly call on products that suit client profile<br />Plan Code: EBSPN06-08*<br />• Free subscription to Xpress – Web based Trader Terminal Screen<br />• Quarterly meeting with analyst<br />• Invitation to participate in select EW conferences and seminars<br />• Fundamental research reports from edelweiss coverage of client’s choice and the updates on thoseStocks<br />• Client profiling and investment need analysis<br />• Special analytical reports as published by edelweiss from time to time, which suit the client’s profile andrequirement<br />• Weekly call on products that suit client profile<br />Edelweiss USP’s:<br />Trading system<br /><ul><li>Integrated online and offline
You can call a dealer and trade, and monitor your trades
Access quotes, stock snapshot, world markets in a snap
Access your portfolio and Watch list on mobile - only service to do so
Unique Desktop tool - no other service offers this
Fabulous Desktop tool - access Research and Portfolio offline, anytime, anywhere
Desktop captures the entire MyEdelweiss section
Customize your view and the way you want to look at stocks through the MyEdelweiss section
MyEdelweiss offers portfolio tracker, research and strategies - fully customizable
Don’t track research - research tracks you – MyEdelweiss section offers Research on 1. your stock portfolio 2. Stock you wish to track 3. Type of research 4. investment horizon</li></ul>Research<br /><ul><li>Institutional Equities Research - first in India to be offered to individual clients
Research reports from Edelweiss Research, ranked 4th by Asia Money for 2008.
Research coverage across 20+ sectors covering 70% of Market Cap.
Consolidated financial statements provided on the companies - only site to do so. View both consolidated and stand alone results
Macro and Micro economy research reports on regular basis.
Fundamental and Technical analysis to pick the right stock
Peer group comparison based on fundamental and technical analysis.
Unique stock views - bucketing stocks based on qualitative and quantitative parameters
7 Daily Reports offering a view on cash, F&O, technical and fundamental view on the overall market
Sectoral research on various sectors on regular basis.
In-depth and incisive Quarterly result analysis on the same day as results for all stocks covered - with a view on the future
Edelweiss ratios based on factors such as solvency, growth, profitability
Continuous Market commentary based on events, actions and announcements.
Regular updates on forthcoming and past IPO's.
Daily reports and updates on commodities, currencies and debt markets.
Easy and relevant access to Research with links at the right places - no need to hunt for research on your stocks
Quarterly and Monthly research on Current and Future Environment.
Intuitive scheme selector to arrive at MF schemes to match your investment profile and needs
Stay ahead with regular updates on SMS and email - also updated on web site instantly
Edelweiss Stock Ranks on 200 stocks based on price, value, growth. Also composite ranking for each stock in coverage universe</li></ul>Edelweiss presence:<br />Product Profile<br /><ul><li>Investment Banking
Client Advisory Services</li></ul>Investment Banking<br />Edelweiss Investment Banking business is dedicated to providing corporations, entrepreneurs and investors, the highest quality independent financial advice and transaction execution. Its professionals offer a full range of services and transaction expertise, including private placements of equity, capital raising services in public markets, mezzanine and convertible debt, mergers and acquisition and restructuring advisory services. It have a track record of successfully closing more than 100 transactions to date.Edelweiss focused effort and research-driven approach enable its professionals to be among the most knowledgeable and best in the business. Their business has been built on strong relationships, innovation, and uncompromising ethical standards. They aim to create significant value for entrepreneurs and mature companies by helping them execute the right capitalization strategy.<br />Offerings<br />Private Equity Advisory<br />Structured Finance Advisory<br />Mergers and Acquisitions Advisory<br />Real Estate Advisory<br />Equity Capital Markets<br />Infrastructure Advisory<br />Debt Restructuring Advisory<br />Institutional Equities<br />Edelweiss Securities Ltd., a subsidiary of Edelweiss Capital Ltd., is the equities arm of the Edelweiss Group. The company is a corporate member of both The Bombay Stock Exchange and The National Stock Exchange of India Limited, providing equity broking and research services, as well as marketing of equity related products, including IPOs/FCCBs, to domestic and foreign institutional investors.Institutional Equities – Insightful Research. Winning StrategiesIn their approach lies our difference. In a short span of six years, Edelweiss Capital’s Institutional Equities Business (IE) has become one of the top five domestic brokerage houses and top three derivatives desks. They are the only brokerage on the Street with a quant desk that provides a wide product range, servicing all investor categories. Our innovative mindset, unparalleled research, agile sales teams, and intensive execution systems have enabled them to relentlessly service their clients in newer and different ways.Edelweiss cater to a wide clientele comprising leading domestic and international institutional investors, including Pension Funds, Hedge Funds, Mutual Funds, insurance companies, and banks.<br />Theme Research<br /> Theme-based fundamental research What is theme-based research?Inductive research or connecting the dots across economy-wide trends, thereby providing a different perspective. Creating a hypothesis of the evolution of trends over a longer period of time. Why are themes important?Themes play out over long periods of time; potential payouts are also over a longer duration. The breadth of the pay-back is also not restricted to a few companies, but potentially a number of multi-baggers are created in different sectors. Edelweiss have been one of the earliest to cover the private capital markets in India and profile high growth sectors and companies. Edelweiss' research has helped in developing an in-depth understanding of these new, high growth areas, particularly in the Indian context, by analyzing industry dynamics and emerging trends as well as showcasing some of the exciting private companies in each sector. Their goal is to find companies in the early stages of significant growth.<br />Asset Management<br />Edelweiss Asset Management offers a range of investment products and advisory services across the risk return spectrum to individual and institutional investors. Their close focus on client requirements is their inspiration in designing products which offer the best opportunity for asset growth with a constant focus on risk and preservation of capital. Over the past 7 years Edelweiss have significantly strengthened our equity product offerings to cover the entire gamut of products. It have developed significant expertise in providing advisory services in the alternative investments space through a deep knowledge of non traditional asset classes such as derivatives.Their products are designed to provide their clients with superior performance through market cycles by virtue of their deep understanding of the equities markets and analytical approach to risks and return.<br />Offerings<br />Portfolio Management<br />Mutual Funds<br />Other Products<br />Bespoke Advice - Discretionary Portfolio Services give you the benefit of investment advice designed to achieve your financial objectives.Professional Management - The service provides professional management of equity portfolios with the objective of delivering consistent long-term performance while controlling risk.Continuous Monitoring - We recognize that portfolios need to be constantly monitored and periodic changes made to optimize the results.Risk Control- Risk team is responsible for establishing our investment strategy and providing us real time information to support our portfolio managers.‘Personal’ Fund Manager – The client’s portfolio is professionally managed by a fund manager who is easily accessible to the investor unlike in a Mutual Fund in addition to which we provide a designated Relationship Manager for the client who can offer asset allocation advisory on your entire portfolioSuperior Returns – Portfolio returns are protected in volatile markets through hedging in derivatives and short-term capital gains can be set-off against business income for clients in a PMS as compared to Mutual Fund<br />Wealth Management<br />At Edelweiss, Wealth Management is a PracticeIt is a specialized profession where experts combine their efforts to meet the wealth planning, investment, and financial management needs of individuals, families, family offices, or corporates. More than just Financial ServicesEdelweiss Wealth Management takes one step closer to clients, by providing an "all-in-one approach”. Customized Financial SolutionsAdvice on asset allocation and thereby creating customized financial solutions for HNWIs, NRIs, Trusts and Corporates Wide range of Innovative Advisory servicesEdelweiss offer advisory services on Structured Products, Portfolio Management, Mutual Funds, Insurance, Derivative Strategies, Direct Equity, IPOs, Real Estate Funds and Art Funds.Based on Edelweiss holistic investment approach they advise clients, using a mix of asset classes & innovative products.<br />Portfolio Management ServicesAdvise on Portfolio Management Services Direct EquityProviding in-house research based advice on select stocks Structured ProductsProducts that offer our clients unique risk-reward equations that are customized to their investment objectives Mutual FundsResearch based recommendations on Top Picks in Mutual Funds InsuranceLife & General Insurance Advisory Real Estate FundsAdvise on Investment in Real Estate through Fund Structure IPOsAdvising & facilitating financing on select IPOs based on their in-house research Art FundsAdvise on Investment in Art through Fund Structure Derivatives StrategiesAdvise on Arbitrage Strategies offering superior risk-return characteristics<br />Advisory Process <br />Identify lifestyle Goals Identify and quantify lifestyle goals Detail current personal & financial situation Assess Identify Key Issues Evaluate current financial position Review wealth creation, retirement estate planning Review tax structures e.g. individual, family offices & private companies Analysis & Planning Assess financial strategy options to meet goals gap analysis Identify most appropriate investments to match risk profileWealth Management Strategy Tailored financial strategies to achieve stated goals Detail recommended asset allocation & investments Wealth creation & estate planning advise to protect wealth Strategy Presentation & Implementation Strategies & rationale discussed Wealth Manager facilitates the implementation of all recommendations Review Review progress towards achieving lifestyle goals Review appropriateness of asset allocation & investments Review new goals <br />Private Client Brokerage<br />The Private Client Services Group at Edelweiss is focused on providing products, strategies and services to High Net worth Individuals and Corporate Clients. We have geographic reach through our Branches, Channel Partners & Investment Consultants in over 19 locationsin India. The PCG team has highly trained equity professionals, who act as your Equity Advisor. Our ESL Equity Advisor proactively helps you take informed investment decisions and build a healthy portfolio.Edelweiss draw on its strong presence and industry leadership to develop a portfolio of offerings designed to serve the spectrum of financial needs.Edelweiss main objective is to provide clients with all the tools and services they need to reduce the administrative burdens of managing money and focus on what you do best - maximizing your trading performance, building your business, and attracting new sources of capital.Edelweiss investment philosophy is rooted in the following :<br />Capital preservation is key - Capital gains follow from a well-thought out investment strategy. <br />Invest in stocks with a long term view. <br />Use a combination of top-down and bottom-up approach to arrive at a basket of investment worthy stocks <br />Invest on the basis of fundamental analysis of companies taking into account market sentiments. <br />Maintain discipline in booking profits and use index futures to manage short term volatility. <br />Wholesale Financing<br />Edelweiss Financing understands your needs and helps you meet liquidity requirements. We offer various products and services to individuals and corporates with a close focus on client requirements while designing our products.Over a period of time we have been offering short term loans against securities and/or to buy new securities. We also provide finance for investment in primary market issues. We help promoters by financing against their share holding to meet their business requirements, expansion of businesses and for diversification of the lines of business.We possess expertise in financing short and long term loan facility, risk analysis, transfer and assessment besides a broad spectrum of services. The company is headquartered in Mumbai and our network of branches across India enables us to service you across locations.<br />Offerings<br />IPO Financing<br />Loan against securities<br />Promoter Funding<br />ESOP Funding<br />Client Advisory Services<br />At Edelweiss Client Advisory Services, our team is driven not just by the quality of our ideas, but also professional ethics and integrity. We take pride in our philosophy of offering advice which is in the best interest of our clients. Our emphasis on building long term relationship ensures that we work closely with our clients empowering them to gain from market opportunities through our online portal www.edelweiss.inwww.edelweiss.in is a product that offers a unique online investment experience that is intuitive, information rich and a hassle-free way to trade online. It defines the next level in online trading technology. It enables intelligent investing with market strategies custom suited to the client’s investment profile and current portfolio.<br />Marketing Strategies of Edelweiss<br />Business Advertisements<br />Asset Management<br />Institutional Equities<br />Insurance Broking<br />Investment Banking<br />Private Client Services<br />Wealth Management<br />DATA COLLECTION<br />Data collection means collections of information, facts or figures for the problem.<br />SOURCES OF DATA<br />Primary Data:<br />Primary data is the first hand information obtained by investigating. Primary source is one itself collects the data.Primary data can be collected by observation, by interviews, by face to face questioning,by using questionnaire, when the needed data do not exist or are dated, inaccurate, incomplete, or unreliable.<br />Secondary Data:<br />Secondary data is collected by others already and theresearcher is using that information for his own research purpose.Secondary data can be collected from published reports, newspaper, websites, journals,publications of national and international organization.<br />Primary Data:<br />Questionnaires <br />Personal Interview<br />CONTACT METHODS:<br />The respondents were contacted directly (Personal Interviewing). It is the most versatile method. The interview was of intercept type in which respondents were asked to answer the questions on the spot. The method is time consuming but it provides better results as it involves face to face to interaction with the respondent which is missing in case of telephonic, mail and other methods of interviewing. <br />Secondary Data :<br /><ul><li>News papers & magazines
Websites.</li></ul>DATA ANALYSIS<br />Based on what the various respondents’ opinion, the data collected was analyzed using<br />figures. No rigorous mathematical analysis could be done. All estimations are solely on<br />judgment. For questions percentage was calculated and represented in the form of charts.<br />After representing the data in the form of charts the same were interpreted to get in-depth<br />knowledge about the problem as well as general information, which helped the researcher<br />to come at appropriate conclusions about the study and to give relevant recommendations.<br />FIELD WORK<br />The survey was conducted for 8 weeksin Gurgaon, NCR. The survey was conducted at various financial markets like SCF market, Sector-14 market etc.<br />Data Representation:<br />To represent the data collected some graphical charts, tables and statistical tools are used.<br />RESEARCH TOOLS <br />Software:Microsoft Excel<br />Data Analysis and Interpretation<br />Month-YearNumber of Investor's Accounts(In Lacks)Trend Percentage(%)Jan-0023.22100Jan-0134.21147Jan-0237.18160Jan-033.95163Jan-0452.03224Jan-0563.01271Jan-0675.6326Jan-0779.03340Jan-0893.72403Jan-0996.86417Jan-10105.85456<br />Month-YearActual Demat Quantity(Shares in Crores)Trend Demat Quantity(Shares in Crores)Increase or DecreaseJan-0015501871363Jan-0137212858863Jan-0251675530-363Jan-0368768201-1325Jan-04836910872-2503Jan-051286613543-677Jan-0617472162151257Jan-0720270188861384Jan-0823690215572133Jan-0928287242284059Jan-1035114269008214<br />Month-YearNumber of Investor's AccountsTrend Percentage(%)Jan-0028545100Jan-0176003266.2567875Jan-02128252449.2976003Jan-03247369866.5930986Jan-046291592204Jan-0510113973543Jan-0618612886521Jan-07287350810066.5896Jan-08479822216809.32563Jan-09552747919364.08828<br />Month-YearActual Demat Quantity(Shares in Crores)Trend Demat Quantity(Shares in Crores)Increase or DecreaseJan-0057-286343Jan-0119217814Jan-02482642-160Jan-038211106-285Jan-0414011571-170Jan-0519082035-127Jan-0627222499223Jan-0731252963162Jan-08498234221560Jan-09708138913190<br />Data analysis of this report depends upon a strong convention that perception of a individual highly depends upon the awareness of individual towards the topic. Along with the awareness other things which matters in this topic are Source of Income, Reason of Investment, Income of an Individual, Age Factor. There are several other factors which affect an investor’s perception but they all depend upon individual and also for short term. Hence we are concise to important factors only.<br /><ul><li>Nature of occupation</li></ul>Objective: To determine the difference of perception due to difference in source of Income.<br />Table:<br />Nature of OccupationNo. of RespondentsSalaried 42Self-employed32Retired8Others18Total 100<br />Graph:<br />Interpretation:<br />The study was conducted only on investors who are classified on the basis of the occupation, respondent among the salaried are 42%, self-employed are 32%, retired are 8% and others are 18%.The possible of the respondent is dominated by salaried followed by self-employed which may lead to positive impact on Online trading.<br /><ul><li>Objective of Investment</li></ul>Objective: To determine the difference in perception due to difference in objective of Investment<br />Table:<br />Objective of InvestmentNo. of RespondentsLiquidity25Source of income25Tax Benefit15Capital appreciation25Others10Total100<br />Graph:<br />Interpretation:<br />75% people are interested in (25%) liquidity, (25%) source of income and (25%) capital appreciation. And remaining 25% are interested in (15%) tax benefit, and (10%) others.<br /><ul><li>Knowledge of share market</li></ul>Objective: Difference in Knowledge of market also play an important role on the perception of investors, hence it is necessary to know about the investor knowledge about market. Also to know whether promotional activities are required to improve perceptions or not.<br />Table:<br />Knowledge of share marketNo. of respondentsPartial55Completed25Nil20Total100<br />Graph:<br />Interpretation:<br />On that basis, we conclude that 25% people know about the securities investment and 20% people know nothing about the securities investments and 55% people have partial knowledge about it, so, some promotional activities are required for increasing the awareness about security market.<br />Rated in 5 parameters as <br />1-Highly Aware 2- Aware3- Neutral4- Not Aware 5- Highly not aware<br />Assessment of the customer’s awareness and knowledge about the following details of the securities and capitals industry. Questionnaire is divided in two parts (i) Awareness towards Services & (ii) Awareness towards the charges levied by the DP. <br /><ul><li>Awareness about Demat Account</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware15Aware70Neutral10Not Aware5Highly not aware0<br />Graph:<br />Interpretation:<br />From the graph, it is evident that 70 % of the respondents are aware about the demat account. 15 % are highly aware whereas only 5 % are not aware about the demat account.<br /><ul><li>Procedure of account opening:</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware25Aware55Neutral10Not Aware8Highly not aware2<br />Graph:<br />Interpretation<br />55 % of the respondents are aware about the procedures of opening demat account, 25 % are highly aware, hence 75 % are aware about the process. Only 8 % are not aware and 2 % are highly not aware, hence 10 % are not aware about the process.<br /><ul><li>International Securities Identification Number:</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware0Aware5Neutral10Not Aware45Highly not aware40<br />Graph:<br />Interpretation:<br />Only 5 % of the respondents are aware about the International Securities Identification number.45 % are not aware and 40 % are highly not aware, hence 85 % have no awareness related to this subject.<br /><ul><li>Mode of receiving corporate benefits</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware15Aware30Neutral20Not Aware20Highly not aware15<br />Graph:<br />Interpretation:<br />30 % of the respondents are aware and 15 % are highly aware about the corporate benefits. 20 % of the respondents are neutral and not aware about the benefits.<br /><ul><li>Transaction Statement</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware10Aware40Neutral30Not Aware15Highly not aware5<br />Graph:<br />Interpretation:<br />40 % of the respondents are aware about the transaction statement, 30 % are neutral, whereas only 10 % are highly aware about the transaction statement.<br /><ul><li>Nomination</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware20Aware43Neutral14Not Aware18Highly not aware5<br />Graph:<br />Interpretation:<br />43 % of the respondents are aware about the nominations, 20 % are highly aware and 5 % of the respondents are highly not aware about the subject.<br /><ul><li>Transmission of Demat securities</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware3Aware16Neutral25Not Aware26Highly not aware30<br />Graph:<br />Interpretation <br />30 % of the respondents are highly not aware and 26 % of the respondents are not aware about the subject. Only 16 % are aware about the transmission of demat securities and 3 % are highly aware.<br /><ul><li>Rematerialization of Demat securities</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware3Aware24Neutral31Not Aware23Highly not aware19<br />Graph<br />Interpretation <br />24 % of the respondents are aware about the rematerialization of the demat securities. 31 % have neutral view and 23 % are not aware about the subject.<br /><ul><li>Lending & Borrowing of Demat securities</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware0Aware7Neutral36Not Aware27Highly not aware30<br />Graph<br />Interpretation<br />Only 7 % of the respondents are aware about the lending and borrowing of demat securities whereas 27 % are not aware and 30 % respondents are not highly aware about the subjects. <br /><ul><li>Freezing of Demat Account</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware11Aware24Neutral30Not Aware23Highly not aware12<br />Graph<br />Interpretation<br />24 % of the respondents are aware of the freezing of the demat account, 11 % are highly aware. On the other hand, 23 % are not aware and 12 % are not highly aware about the subject.<br /><ul><li>Reduction in paper work</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware27Aware38Neutral20Not Aware9Highly not aware6<br />Graph<br />Interpretation<br />38% of the respondents are aware about the reduction in paper work due to dematerialization of shares, 27% are highly aware hence it can be said that this process have a high awareness.<br />Only 9% of the respondents are not aware and 6% are not highly aware of the subject.<br /><ul><li>Quick Transfer of ownership</li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware22Aware33Neutral22Not Aware16Highly not aware7<br />Graph:<br />Interpretation:<br />33% of the respondents are aware about the quick transfer of ownership of shares due to dematerialization of shares, 22% of respondents are highly aware whereas 16% of respondents are not aware and 7% are highly not aware.<br /><ul><li>Reduction in Brokerage </li></ul>Table:<br />Rating ParametersNo. of RespondentsHighly Aware10Aware37Neutral21Not Aware19Highly not aware13<br />Graph:<br />Interpretation:<br />It is evident from the graph that 37% of the respondents are aware about the reduction in brokerage but only 10% are highly aware about the subject. On the other hand 19% of the respondents are not aware and 13% are Highly not aware about the subject.<br /><ul><li>Elimination of Bad deliveries</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware6Aware42Neutral20Not Aware18Highly not aware14<br />Graph<br />Interpretation:<br />It is evident from the graph that 37% of the respondents are aware about elimination of Bad deliveries, but only 10% are highly aware about the subject on the other hand 19% of the respondents are ot aware and 13% are not highly not aware about the subject.<br /><ul><li>Faster Settlement Cycle</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware12Aware53Neutral21Not Aware11Highly not aware3<br />Graph<br />Interpretation:<br />More than half of the respondents i.e. 53% are aware about the faster settlement cycle, 12% are highly aware and only 11% are not aware about the subject.<br /><ul><li>No Courier/postal charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware16Aware20Neutral25Not Aware24Highly not aware15<br />Graph<br />Interpretation<br />20% of the respondents are aware about the absence of postal/courier charges , 16% are highly aware of the subject. Where is 24% of the respondents are unaware about the absence of courier charges.<br /><ul><li> Low transaction cost</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware10Aware15Neutral15Not Aware20Highly not aware40<br />Graph<br />Interpretation:<br />Only 15% of the respondents are aware about the reduction in transaction cost whereas 40% are highly not aware about the subject, hence awareness should be created among the customers regarding the subject.<br /><ul><li>No Stamp duty</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware5Aware35Neutral20Not Aware15Highly not aware25<br />Graph<br />Interpretation<br />From the graph it is evident that 35% of the respondents are aware about the absence of stamp duty but as much as 25% are highly not aware about the subject, Hence awareness should be created regarding subject.<br /><ul><li> Electronic credit of shares</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware5Aware32Neutral10Not Aware15Highly not aware38<br />Graph<br />Interpretation<br />It is evident from the graph that 38 % of the respondents are highly not aware about electronic credit of shares , 32% are aware about the subject, Hence awareness should be created regarding the subject.<br /><ul><li>No odd lot problem</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware13Aware20Neutral27Not Aware22Highly not aware18<br />Graph<br />Interpretation<br />Only 20% of the respondents are aware about the elimination of odd lot problem, 13% are highly aware but 22% are not aware about the subject.<br /><ul><li> Faster distribution of benefits</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware16Aware23Neutral22Not Aware21Highly not aware18<br />Graph<br />Interpretation<br />23% of the respondents are aware about the faster distribution of benefits but 21% are not aware and 18% are not highly aware about the subject.<br /><ul><li> Saves transaction time</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware25Aware35Neutral20Not Aware18Highly not aware2<br />Graph<br />Interpretation<br />35% of the respondents are aware about the reduction in transaction time due to dematerialization of shares, 25% are highly aware but only 18% are not aware about the subject.<br /><ul><li> Periodic Status report</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Aware11Aware21Neutral12Not Aware29Highly not aware27<br />Graph<br />Interpretation<br />29% of the respondents are not aware about the periodic transaction reports and 27% are not highly aware about the subject. On the other hand only 21% are aware about the subject.<br />Respondents opinion about the different charges levies by depository participants<br /><ul><li> Account Opening charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh48Medium39Low13<br />Graph<br />Interpretation<br />48% of the respondents think that the account opening charges are high. 39% think that it is moderate whereas only 13% feel that its is low.<br /><ul><li> Annual Maintenance charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh19Medium29Low52<br />Graph<br />Interpretation<br />52% of the respondents think that the annual maintenance charges are low but only 19% think that it is high.<br /><ul><li> Custodian Charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh22Medium57Low25<br />Graph<br />Interpretation<br />55% of the respondents think that custodian charges are moderate whereas 24% of the respondents think it is low but 21% think it is high.<br /><ul><li> Transaction charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh25Medium46Low29<br />Graph<br />Interpretation<br />46% of the respondents think transection charges are moderate where as 29% and 25% of respondents think its low and high respectively.<br /><ul><li> Market/Off market Charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh25Medium36Low39<br />Graph<br />Interpretation<br />39% of the respondents think the Market/off Market charges are low 36% think its moderate whereas 25% think its high.<br /><ul><li> Pledge/Hypothecation charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh50Medium24Low26<br />Graph<br />Interpretation<br />50% of the respondents think that Pledge/Hypothecation charges are high, whereas 26% and 24% think low and moderate respectively.<br /><ul><li> Dematerialization Charges</li></ul>Table<br />Rating ParametersNo. of RespondentsHigh28Medium44Low28<br />Graph<br />Interpretation<br />44% of respondent think that dematerialization charges are moderate while 28% think its low but 28% of the respondents feel it to be high.<br /><ul><li> Satisfaction Level Of Investors towards Demat Account</li></ul>Table<br />Rating ParametersNo. of RespondentsHighly Satisfied21Satisfied35Neutral19Dissatisfied16Highly Dissatisfied9<br />Graph<br />Interpretation<br />35% of the respondents are satisfied by the dematerialization of shares , 21% are highly satisfied whereas 16% are dissatisfied and 9% are highly dissatisfied.<br />Suggestions& Recommendations <br /><ul><li>Suggestions for the Study:
The Investors should be provided withtheir statement of accounts at regular intervals without any delays after the transaction takes place. The depository participants should also inform the investors about their day to day trading activities and their account balance
Depository Participants should send pamphlets and magazines containing information about the latest changes in the demat segment to their client. When there are any new facilities offered by the depositories to the investors, it should be properly intimated to investors. Depository participant are also advised to conduct a number of investors awareness programs and advertise their offer of services in various newspapers and popular magazines.
The investors can put their complaints to their depository participants and in case of failure of depository participants to resolve the complaints, then the investor can write to the Investor Grievance cell of NSDL or CDSL.
NSDL and CDSL are asked to create a Net Forum/E-Forum in order to exchange their market information regularly between the investors and depository or investors and depository participants or depository Participant and depository.
Depository Participants can make it a regular practice to organize frequent meetings for their investors so as to strengthen their relationship with the existing investors. This would definitely give an opportunity for the DPs to take note of grievances if any and offer prompt settlement of issues.
In order to retain the investors, the depository participants should offer their services promptly and kindly, In addition to this, Depository Participants can also select one long time investor year by year and provide them with Gifts.</li></ul>Conclusion<br />Now a days, share markets occupy a key roleboth in the development of economy and individual investors in their business, The Indian capital market had thuswitnessed numerous changes in the recent years, and one such change is Dematerialization.<br />Dematerialization of securities play a vital role in improving and modernizing the capital market and enhance the levels of investor's perception measures which aim at eliminating the bad deliveries and forgery of shares. Thus, the study shows a clear picture on the progress of investor's accounts and dematerialization of shares in NSDL and CDSL and the Investor's perception towards Dematerialization of Shares.<br />Bibliography<br /><ul><li>National Electronic Settlement and Transfer (NEST UPDATE), April2000.
National Electronic Settlement and Transfer (NEST UPDATE), April2003.
National Electronic Settlement and Transfer (NEST UPDATE), April2007.
National Electronic Settlement and Transfer (NEST UPDATE), April2010.
www.edelcap.com.</li></ul>Questionnaire<br />Instruction: Please use the following divisions for answering the questions:<br /><ul><li>Highly Aware 2- Aware3- Neutral4- Not Aware 5- Highly not aware
Do you know about the-</li></ul>1).De Mat Account: 1. 2. 3. 4. 5. <br />2).Procedure of account opening:<br /><ul><li> 2. 3. 4. 5.</li></ul>3).International Securities Identification Number:<br /><ul><li> 2. 3. 4. 5.</li></ul>4).Mode of receiving corporate benefits:<br /><ul><li> 2. 3. 4. 5.</li></ul>5).Transaction Statement<br /><ul><li> 2. 3. 4. 5.</li></ul>6).Nomination<br /><ul><li> 2. 3. 4. 5.</li></ul>7).Transmission of Demat Securities:<br /><ul><li> 2. 3. 4. 5.</li></ul>8).Rematerialization of Demat Securities:<br /><ul><li> 2. 3. 4. 5.</li></ul>9).Lending & Borrowing of Demat securities:<br /><ul><li> 2. 3. 4. 5.</li></ul>10).Freezing of Demat Account:<br /><ul><li> 2. 3. 4. 5.</li></ul>11).Reduction in Paper work<br /><ul><li> 2. 3. 4. 5.</li></ul>12).Quick Transfer of ownership<br /><ul><li> 2. 3. 4. 5.</li></ul>13).Reduction in Brokerage<br /><ul><li> 2. 3. 4. 5. </li></ul>14).Elimination of Bad deliveries<br /><ul><li> 2. 3. 4. 5.</li></ul>15).Faster settlement Cycle<br /><ul><li> 2. 3. 4. 5.