1. INDIAN SECURITIES MARKET
Securities market has essentially three categories of participants, namely the
issuer of securities, investors in securities and the intermediaries and two categories of
products, namely the services of the intermediaries, the securities including
The securities market has two interdependent and inseparable segments, the
new issues (primary market) and the stock (secondary) market. The primary market
provides the channel for sale of new securities while the secondary market deals in
securities previously issued.
• 1850 – Shares of banks and securities of East India Company traded in Mumbai
under a sprawling banyan tree in front of Town Hall, which is now in the Horniman
• 1875 – Brokers organized an association known as the Native Share Brokers
Association, and the country’s first stock exchange the Bombay Stock Exchange
(BSE), set up in Mumbai with 318 members. The membership fee gradually
increased from Re 1 in 1887 to Rs 1,000 in 1896, and Rs 48,000 in 1920.
• 1956 – Securities Contract Regulation Act passed
• 1957 – The BSE and eight other stock exchanges registered under the Securities
Trading Contract Act.
• 1982 – The BSE classifies scripts into Group A for carry forward, and Group B for
• 1986 – The BSE 30-share Sensitivity Index (a.k.a. the Sensex) compiled; updated
every two minutes.
• 1987 – Stock Holding Corporation of India set up.
B. K. School of Business Management 1
• 1992 – Ordinance promulgated for granting statutory powers to the SEBI. The
Over-The-Counter Exchange of India begins operations. The National Stock
• 1994 – The NSE’s debt segment begins operations on June 30; and the capital
market segment begins on-line script less trading on November 3.
• 1995 – The BSE computerizes its trading operations, signaling the end of 120
years of floor-trading with open out-cry system of share-trading and the beginning
of screen-based trading on the BSE.
• 1996 – NSE 50 index launched April 22. NSDL set up as the first depository in
India, and the NSE commences trading in dematerialized securities on December
• 2000 – The SEBI approves the report on net trading brought out by the SEBI
committee on Net based trading and services. Pursuant to the circular, stock
exchanges are required to give permission to members to start Net-based trading
after ensuring fulfillment of the minimum conditions. The NSE is the first exchange
to grant provisional permission to Cochin-based Geojit Securities to commence
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2. - AT A GLANCE
• Founded in 1922, SSKI is One of India’s Oldest Brokerage Houses having Eight
Decades of Experience into –
o Institutional Broking
o Investment Banking
o Retail Broking
• One of the Founding members of The Stock Exchange, Mumbai and Pioneer
SSKI Institutional Broking:
Since 1984 SSKI foray into Institutional Broking and Corporate Finance.
SSKI group also comprises Institutional broking and Corporate
Finance 18 years ago. While the Institutional broking division caters to the
largest domestic and foreign institutional investors, the corporate finance
division focuses on niche areas such as infrastructure, telecom and
media. SSKI holds a sizeable portion of the market in each of these segments.
o Forerunner of investment research in the Indian market,
o SSKI provide the best research coverage amongst broking houses in
India. The company’s research team was set up in dec.1992 and is rated
as one of the best in the country. Voted four times as the Top Domestic
Brokerage House by Asia money Survey, SSKI is consistently ranked
amongst the top domestic brokerage houses in India.
o Research group was set up in December 1992.
o It acts as a pioneer of investment research in the Indian market aimed at
generating quick investment ideas
o Its Research team is rated as one of the best in the industry…. Across
retail & institutional
o Group interest in Investment Banking, Institutional Broking and Retail
o It is an Integrated equity solutions provider
o It has its Institutional Clients Spread across India, Far East, UK and US.
o It commands Major Share of the Institutional as well as Foreign
Institutional Investors (FII) Business in India.
B. K. School of Business Management 3
oo 0SSKI Institutional Research is rated as one of the Best in the Industry0SSKI Institutional Research is rated as one of the Best in the Industry
as well as among Fund Managers Surveys -as well as among Fund Managers Surveys -
Best Domestic Securities HouseBest Domestic Securities House
Euromoney Survey July-95, ‘96Euromoney Survey July-95, ‘96
Top Ranked Domestic Brokerage HouseTop Ranked Domestic Brokerage House
Asiamoney Survey Sept-94, ’95, ’96, 98 & ‘04Asiamoney Survey Sept-94, ’95, ’96, 98 & ‘04
SSKI Investment Banking:
The Investment Banking Arm of the SSKI Group is having its presence into –
o Venture Capital & Private Equity
o Infrastructure Advisory & Financing
o Focus on Infrastructure, Technology & Media
o Many 1sts goes to our credit, in Deal Sizes, in Sectors, in Deal
1st Telecom Offering – BPL Cellular Holdings
India’s First Private Port – Gujarat Pipavav Port
1st M&A-Cellular – Essar & Hutchison
1st Web Service Provides – Plantesia
1st Retail Chain Offering - Shoppers Shop
SSKI Retail Broking
• SSKI Entered into Retail Broking in 1985.
• Sharekhan is the Retail Broking Arm of the BIG 80 Years old organization, SSKI.
• Sharekhan is the Brand Name given to its Retail Business.
B. K. School of Business Management 4
Sharekhan Retail Broking – In Detail
SSKI carries out its Retail Broking Activities under Sharekhan Brand Name.
Sharekhan is One of India’s Leading Broking Houses
Providing a Complete Life-Cycle of Investment Solutions
in EQUITIES, DERIVATIVES, COMMODITIES & DEPOSITORY
Sharekhan is having its retail presence across India through --
o Sharekhan Branches & Franchisees
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Growing network of Share Shops
• 280 Share Shops
in 123 Cities
• Uniform Service
Sharekhan offers you –
Sharekhan Outlets act as Full Service Investment Solutions Provider, providing you
wide range of services like --
• Equity & Derivatives Trading on NSE and BSE
• Online Trading
• Commodities Trading on MCX & NCDEX
• Portfolio Management Services
• Depository Services
• IPO Services
• Wide Range of Customized Research Products
• Uniform Service Standards
B. K. School of Business Management 6
The Strength of Sharekhan is in its Specialized & Customized research Products
addressing the investment philosophy of verities of Investors and Traders in the
secondary stock market.
- In Detail
• The Business of the company overhauled 5 years ago in 2000.
• The site was also launched on February 8, 2000 and named it as
B. K. School of Business Management 7
• It is One of the Leading Online Players controlling considerable portion of the
Overall E-Broking Business in Indian Securities Market.
• The SpeedTrade account of Sharekhan is the next generation technology product
launched on April 17, 2002.
• SpeedTradePlus was launched on October 28, 2002 for one more feature of
Trading in Derivatives together with Equity in the Same Single Screen
• SpeedTrade BSE Online Trading Launched recently in May-2005.
• Sharekhan adds More than 6000 customers Every Month.
• It offers its customers with the trade execution facilities on the NSE, for cash as
well as derivatives along with in-built depository services.
• Ensures convenience in trading experience:
Sharekhan’s trading services are designed to offer an easy, hassle free trading
experience, whether trading is done daily or occasionally. The customer will be
entitled to a host of value added services, in the investment process depending on
his investing style and frequency. and offers a suite of products and services,
providing the customer with a multi-channel access to the stock markets.
• It gives advice based on extensive research to its customers and provides them
with relevant and updated information to help him make informed about his
• Sharekhan offers its customers the convenience of a Broker-Cum-DP.
• It helps the customer meet his pay-in obligations on time thereby reducing the
possibility of auctions. The company believes in flexibility and therefore allows
accepting late instructions without any extra charge. And execute the instruction
immediately on receiving it and thereafter the customer can view his updated
account statement on Internet.
• Sharekhan Depository Services offers demat services to individual and corporate
investors. It has a team of professionals and the latest technological expertise
dedicated exclusively to their demat department. A customer can avail of Demat
Remat, Repurchase, Pledge, Transmission facilities at any of the Sharekhan
branches and business partners outlets.
Year 2001: Sharekhan was given the ‘Best Financial Website Award’ by Chip
B. K. School of Business Management 8
Year 2005: Recently Sharekhan has been awarded as India’s most preferred
stock broker under “consumer award 2005” research conducted by AC Nielsen-
ORG MARG for Awaaz in the “stock broking “category. There were four stock
broking houses in the competition: Sharekhan, ICICIDirect.com, Kotakstreet &
B. K. School of Business Management 9
Winner of Chip
3. TYPES OF TRADING
Offline Trading System
New era of internet evolution has changed the way
business is done now a days and obviously Indian security market cannot remain
untouched with such a big change. However traditional way of trading which an
offline is trading has deep roots in Indian stock market history and still it’s prevalent
in the business.
In such a trading system, an investor and a broker come into direct
contact with each other and the transaction takes place. The investor goes to the
broker for the purpose of buying or selling of securities and for that he has to make
a payment to settle the transaction. In this trading system broker charges
comparatively higher brokerage. Offline trading system exposes both the parties to
the risk factor. Here investor is required to put a margin amount with the broker, but
if the broker defaults then customer loses his investment amount. On the other
hand some times investors are not able to fulfill their requirement of bringing
amount above margin and as a result broker has to complete the transaction.
Following are the different ways in which brokers complete the transaction.
• They would require full funding before the pay in day.
• They may debit the customer's account with the margin money and keep hold on
balance amount. On pay-in day, the balance amount will be transferred to
• The broker would debit only the margin amount and would wail to the customer
to pay on the pay-in day.
If the margin goes below the specified limit, the website of the broker
would give warning to the investor to replenish the same. Brokers can either ask for
blanket permission/power of attorney from the customer to replenish the same or
take risk on that, in which case they may also square off the contract.
As a matter of prudence, the broker would have checked the balance in the
customer's account, but the balance may go down between trade day and the pay-
in day. Here, brokers would have to decide the extent of risk if at all they are ready
to take. In periods of volatility, especially when markets are failing, decision-making
of the broker as to the extent of risk he is willing to take would be very important.
Customers would face the risk of leakage of personal information.
B. K. School of Business Management 11
Merits of Offline trading
• Less Margin
Generally, company charges 25% margin while the brokers charge
nearly 10%margin from the investors in case of trading in derivatives.
Sometimes broker charges negligible amount and he allows trading up to his
limit. This shifts the investors from trading online to the trading with the brokers.
For example: Local Brokers like MotilalOswal, Ratnakar, PravinRatilal,
Khandwala etc. allow trading in shares with less margin and low brokerage.
• Flexibility in credit period
Local Brokers allow their customers to trade in shares with longer credit
periods which facilitate the payments for the investors. Whereas in Online
trading a customer is required to make the payment in less than 2
days(because of T+2 trading cycle) which is not the case in offline trading. The
conventional system also allows making delay in settlement of payment if the
relation with the broker is good.
• Customized Advice
Normally, investors would like to take the advice of the broker before
taking an investment decision. Internet trading would lack this personal touch.
As far as customization of data using data mining is concerned, that would not
attract customers looking for something different. Some of the brokers are of
the view that they would have to provide advisory services to the customers.
But, with increased volumes they will have to balance their preferences and
needs of the customers.
Demerits of Offline Trading System
• Problems in getting in touch with the Broker
• Limited Clientele
• Problem of Attention from the Broker due to load
• Reliance on the Broker's information
• Customer has to believe what the broker says
• Broker might not give the best price
• Reconciliation of accounts and cash settlements
• Geographical Restriction
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Online Trading - A New Dimension of Trading
WHAT IS E-TRADING?
• E-trading is the mechanism of buying / selling securities via the Internet.
• E-trading is considered as a logical extension of e-commerce.
To put it simply, e-commerce is buying and selling through electronic
medium. There could be not being a better place than the stock market, where
tremendous volumes are traded, to exploit the opportunities of e-commerce. But,
there are certain inherent characteristics of this market, which make it more
vulnerable to risks associated with e-commerce. The market requires knowledge,
information, ability to analyze and quick decision-making. This requires utmost care
while trading on the net. A single click can make or destroy investor's wealth.
E-Trading is a service offered on the Internet for purchase and sale of
shares. In the real world, you place orders on your stockbroker verbally (personally
In Online Trading, a customer can access a stockbroker's website
through his internet-enabled PC and place orders through the broker's internet-
based order routing and trading engine. These orders are routed to the Stock
Exchange without manual intervention and executed thereon. The order routing to
the exchange will happen in a matter of seconds. The order execution once it
reaches the exchange system is similar to that of an offline transaction,
History of E-Trading In Global Scenario
The history of e-trading began in 1983, when a doctor in Michigan placed
the first online trade using E*TRADE technology. What began with a single click
over 16 years ago has now taken the world by storm. The concept was visualized
by one Bill Porter, a physicist and inventor with more than a dozen patents to his
Credit: who provided online quotes and trading services to Fidelity, Charles
Schwab, and Quick & Reilly. This led Bill to wonder why, as an individual investor,
he had to pay a broker hundreds of dollars for stock transactions.
Today his dream has become a reality. E-trading has become a way of
investing in the developed world and is soon catching on in developing countries
B. K. School of Business Management 13
too. Since that time, online trading has increased dramatically - according to an
unprecedented efficiency and control.
Recent estimate, there are 7.8 million individuals trading online, making
807000 trades per day. Currently, there are over 200 broker-dealers providing retail
investors with the ability to trade online. Along with the growth in online trading,
there has been a surge in investor complaints related to online trading. The
downfall of a few international dotcom like Value America Inc, Net Inoperative Ltd,
Toysmart.com, boo.com has not diminished the opportunities thrown by internet
trading. There are investment banking firms which offer a suit of services such as
online trading, research reports, real-time market commentary, Java-based charts,
analysis and other professional services. E-Trade has presence in around 119
countries, as one of the renowned players in the international market.
E-Trade Securities Inc was floated in 1992 to offer online investing
services through America Online and CompuServe and launched www.etrade.com
in 1996. Recently, it announced strategic alliances with Wit Sound Vies, the online
banking subsidiary of Wit Capital Group Inc, to capitalize on the complementary
core strengths of the two groups. TD Waterhouse, the second largest global
brokerage, has over 2.9 million customer accounts worldwide and more than $150
billion in customers' assets under administration. In addition to securities trading
services, it also provides banking, mutual funds and other financial
products/services to its customers.
History of e trading in Indian context
Net trading begins in India....
On Jan 31st
2000, the Securities Exchange Board of India (SEBI)
formally notified all the stock exchanges, giving them a green signal for Net/Online
trading. The various players of the securities market, which includes NSE, BSE,
other regional stock exchanges and the brokers, had been waiting long for the go-
ahead sign. Trading via the net is expected to generate greater volumes than ever
before and this has attracted a large number of players. One day after SEBI
announced its regulations for net trading, Kerala based ‘Geojit Securities’ took the
lead and started online trading in Mumbai. The Kerala State Industrial Development
Corporation (KSIDC) decided to join Geojit Securities in 1994. It has a 24% stake in
the equity, the balance belonging to Geojit Securities itself. This is the only venture
in India where a state owned development institution is participating in the equity of
a stock broking company. The first net transaction was a trade for 100 shares of
Reliance executed by DR Mehta, Chairman, and SEBI for the Chairman of Geojit
Securities. Today there are many other big brokerage firms like MotilalOswal,
Kotak Securities, SSKI and ICICI Direct running successfully.
B. K. School of Business Management 14
WORKING OF E-TRADING
How it works?
Trading has two aspects of working one is technical and second One is
procedural. We will see both aspect and how it is working?
Sitting in ones own home or office or even from your car, as long as you
can access the net, you can trade on the market. There are three basic things
needed for e-trading:
• A saving account,
• A D-Mat account and
• A trading account.
The steps in e-trading replicate the real life situation and are fairly simple to
follow. Once these three accounts are opened, the money and shares are
transferred to your bank and Demat account automatically, electronically and
without any paper work.
• The first step is of course to open an account. One can open multiple
accounts with himself or herself as the first name in the account. Then it is
necessary to determine the type of account that you want and how you want to pay
for the trades you make. Joint accounts are allowed but for that you will need to
have certain information about those people. Accounts can be Individual, Joint,
Sole Proprietorship, Corporate, or Partnership etc.
The form filling requires simple personal details like full legal name,
Citizenship status, Residency status, employer's name and address, your
passportPAN number, Date of birth etc.' One can download the forms or request
for them by post or even request for a representative of the firm to come over to
help you with the form. Post-submitting, you are allotted a USERID and
PASSWORD while giving details for registration. Then an Account reference
Number is generated and displayed to you. These three things are unique to an
individual and ensure security of transactions. The acceptance of the application is
communicated by email.
• Once you have got your USER ID and PASSWORD and your account
has been set up, you can access the website and login using the same. The
second step is then to Fund Your Account. In order to start trading online it is
important that you deposit money in your bank account before placing a buy order.
In order to place a sell order you must have shares in your DEMAT Account. You
can sell your shares anytime as long as shares are there in your DEMAT Account.
B. K. School of Business Management 15
In order to place a buy order you need to fund your account. You can do this by
depositing money in your bank account or else you can sell some shares existing
in your Demat account and use the proceeds of sale to fund your purchase
transaction. The amount of money required before placing a buy order would
depend on the value of order and the type of e-invest account you have enrolled
for - whether cash or margin.
In a Margin account one can use a line of credit to buy marginable
securities or for overdraft protection. Such an account is opened after taking
into consideration Annual income, Net worth, description of your investment
objectives, as it involves lending a line of credit. In a cash account, the amount
of securities bought has to be backed by the cash in the account.
• Then comes placing the order:
For this you enter your Trading password and go to trade.
From the Trading tab, select Enter Order under the Stocks heading.
Select a transaction type: Buy, Sell and ShortSell.
At Number of Shares', type the number of shares that you want to buy.
At 'Stock Symbol or Name(s)', type the stock symbol. If you don't know the
symbol click 'Find Symbol', type the company name, click 'Search' and click
the symbol that you want from the list.
For a market order, select 'Market'. Otherwise, select 'Limit'. 'Stop Loss' or
and enter the price.
'Market Order': you just ask the broker to buy or sell your stocks at the
best price available.
'Limit Order': you tell the broker to trade only when the stock hits a
certain price or better.
'Stop Loss': you tell the broker to sell your shares if the stock drops
below a certain price.
Select either 'Good for Day' or 'Good Until Canceled'. If you want to place an
'All-or-None' order, click 'All or None'. Type your trading password and click
B. K. School of Business Management 16
If you want to change your order, click 'Modify' and make your changes.
To see if your order has been executed and filled as you expect, check your
account balance. The 'Account Balances' page shows your account equity
(the value of your account) and your buying power. To check your account
balance, click the 'Accounts Services' tab, make sure the correct account
number displays at 'Select Account' and click 'Go'. At Total Account Value',
see your account balance.
For a new price, select the appropriate option button and then enter the
price (unless you're changing it to a market order). You cannot change the
stock symbol or the transaction type (Buy. Sell, Sell Short, or Buy to cover).
Enter your trading password and click 'Preview Change Order'. Or, if you
want to cancel your changes, click 'Do Not Change'.
In order to cancel a stock order, from the Trading' tab, select 'View Open
Orders' under the 'Stocks' heading. Make sure you're currently in the correct
account. Click 'Cancel' beside the order you want to cancel. Review the
information presented to make sure this is the order you want to cancel.
Click 'Cancel Order'. Enter the symbol or the name of the scrip; press "GO"
or the relevant button.
• The Account Opening Charge, commission rates and the minimum limit of
transaction vary from site to site. Other charges can include Annual Services
Charges, Custody charges, D-Mat account charges etc. Also most online traders
offer a host of other tools to aid the investment decision. A full research back up in
terms of reports, articles, opinions, etc., live time quotes, latest news on the scrip,
technical charts to see how the stock's price has changed over time.
So sitting at home one can take an investment decision at ease after having
researched and read up fully about the stock. With the advent of online trading, it
would seem that the markets are just a click away. Please however, do remember
that currently in India the handful of online trading offers are mere order routing
systems. But it will not be long enough before the entire system goes online.
Benefits of E-broking
• Seamless Trading
E-broking integrates Bank, Demat account and Brokerage account. Transfer
of money and shares from and to Bank account and Demat account is done
• No Geographical Restriction
B. K. School of Business Management 17
Customers have access to site from anywhere in world. So even if customer
is out of station, customer can take the advantage of market condition.
• No Time Restriction
Customer can trade not only during market hours but also when market is
closed. He is required to give limit as to at what price he wants to buy or sell the
shares. When market will open, the shares will be purchased or sold automatically
at that particular price or best favorable price.
• Online Brokers Make Investing Cheaper
By charging drastically lowered commissions; online brokers offer cheaper
access to financial markets, consequently encouraging more investing, as is
evident by the increasing number of day-traders. The latter are individuals who
have tried to make a career out of buying and selling stocks very quickly, often
making and closing dozens of trades in a single day.
• The Online Investor Is Self-Reliant
Because online trading greatly diminishes the role of brokers. Investors have
more freedom when making investment decisions and come to rely on themselves
when developing strategies. The online investor is responsible for researching,
making decisions, entering an order and using a computer. All this makes online
investors the masters of their domain and leaves them with no one to blame. Thus,
online trading promotes self-empowerment.
• Offers Greater Transparency
Online trading gives greater transparency to the investors by providing them
an audit trail. This involves a complete integrated electronic chain starting from
order placement, to clearing and settlement and finally ending with a credit to the
depository account of the investor. Each of the above mentioned stages are subject
to inspection, thus bringing in transparency into the system. Greater transparency
helps in reducing the systematic risk for the investor. This is possible as the market
related information affecting the stocks gets communicated to the investor on a
regular basis. Due to this increased exposure, the investor can take necessary
steps, which would reduce his overall market risk.
• Enables Hassle Free Trading
Online trading integrates the bank, the brokerage firm and the demat
accounts which leads to easy and paperless trading for the client.
• Quick Trading
B. K. School of Business Management 18
The investor will be able to execute the entire trading transaction, right from
logging on to the broker's site, to the execution and settlement of his bank account,
in a very short period of time.
• Provides A Level Playing Field
Trading on the net, gives even the smallest retail investor access to
information that earlier was available only to the big traders. This provides a level
playing field for all investors in the securities market.
• Reduces The Settlement Risk
This method of trading reduces the settlement risk for the investor, as in this
case no short sale is possible i.e. the seller will not be able to sell the securities
unless he has actual possession of them. In the case of a demat account (which is
required for an online transaction), when a seller wants to sell the securities, his
demat account is checked by the Depository Participant before executing the sale
transaction. This reduces the settlement risk for the buyer, who is assured of the
delivery of the securities.
Loopholes in E-Broking
• Lack Of Speed
If customers in large number access the site at the same time, server gets
overloaded, so it results into delay in process.
• Security Aspect
There may be chances of hacking of password if customer is not alert. This
may cause a major loss to the investor.
• Lack Of Flexibility
If the customer is not alert about his position on last trading day and if he is
not able to square off his position, he has to take delivery compulsory or if he
doesn't have enough liquidity, the site will automatically square off his position. This
action may or may not be in benefit of customer. Whereas in conventional broking,
broker will inform the customer time to time or will take the decision himself in favor
of the customer.
• Computer Illiteracy:
Literacy of Computers is mandatory for traders using this online trading
service. So for those who are computer illiterate, using websites serves as a
handicap for them.
B. K. School of Business Management 19
Trading Vs E-Trading
The advent of technology has added a new dimension to broking system.
Through E-broking system, broking has become more transparent and faster. It has
reduced the back office paper work. It settles the account within a couple of days
rather than long period of time. It has also eliminated physical transfer of shares
and money by invent of Demat account and on line banking.
When anyone wants to enter into the market for trading purpose, there is
common process through which individual has to pass either in conventional
broking or E-broking which is basically divided in three parts.
Decision -> Execution -> House keeping
Now let us understand how E-broking makes itself different from
conventional broking in this process.
Decision about choosing particular scrip is made by investor himself based
on his knowledge and his experience about market condition. Sometimes investors
seek advice from broker and they both decide about investment. Thus in
conventional broking and E-broking decision parts remain same.
In execution part of broking, E-broking is completely different from
conventional system. This can be explained from graph below.
Conventional Broking E-broking
Call Log on
Get Rates See the rates online
Give order Punch in order
through phone through e-mail
B. K. School of Business Management 20
After matching of order at a predetermined price, the question of
payments and deliveries of securities /transfer of shares take place where also
wide difference in terms of operation can be seen.
Conventional Broking E-broking
Payment through Payment through
Physical Cheque Online Banking
Transfer of shares Transfer of shares
in paper form in paper less form
House keeping of Demat Keeping of
Materialized shares Dematerialized shares
Advantage of Online Trading Over Conventional Trading
• The speed of transaction
• Ease of settlement in the paperless mode
• Confidentiality of transaction
• More transparent
• More convenient
• Broker's reach to large number of customers with less cost
Limitation Of On Line Trading Over Conventional Trading
• Lack of internet penetration
• Lack of expertise in share market
• High brokerage
B. K. School of Business Management 21
• High operating cost
In this type of market, there are only two parties i.e. the broker and the
investor. The Exchange does not come into picture at all. So the transactions
taking place are out of the purview of the exchange, which in other words can also
be termed as illegal. In this type of market the brokerage is quite low as there isn’t
actual transaction or delivery of security as such. The transaction is written in a
book as to keep record of buying and selling price and quantity. If buy price is
higher than sell price then difference is paid by investor and that amount is profit for
broker and loss of investor and vice versa.
Major Driving Forces of Grey Market:
Nowadays even grey market is also quiet popular because
of many advantages: -
• No Margin
The trader is not required to keep any deposit as margin to buy or sell
the shares. There is credit flexibility allowed to a large extent.
• Trading of Index
Prediction of Index is Easier than of Security. In a SEBI regulated
market, a trader is not allowed to trade in Nifty or Sensex in equity market, while in
grey market, trading in Nifty or Sensex in equity market is permitted.
• Longer Trading Period (One Week)
The trading duration in this market is of one Week and the settlements
are made on the end of each week (Friday). So investor can take 5 days position in
the trading. This can be considered as a major driving force for this market.
• Advantage Of Future And Equity Price Difference
There is one simple rule known by everyone that “on the Last Thursday
of every month security and its future’s value matches”. How to take advantage of
it??? It’s possible on grey market with a fix profit not affected with the market
Reliance security price is: - 440
Reliance Future is traded at: - 400
B. K. School of Business Management 22
Now, Investor will Sell Reliance Shares at 440 and Buy reliance
future at 400 so on the last Thursday of the month when both the prices match,
investor will reverse the transaction.
Profit in Equity Profit in Futures Net Profit **
420 20 20 40
480 (-40) 80 40
360 80 (-40) 40
** Brokerage is not deducted in Net Profit
This can be possible legally in some cases but with very large
investment because futures are traded only in lot sizes.
• Risk of Defaulting Broker
B. K. School of Business Management 23
Remember the time when you left orders with your broker in the morning
and received a confirmation fax late in the evening?
You wondered whether you had acquired the shares at the best possible
price for the day. Today, the picture is different. Imagine a scenario where you log on
to your account, get the live quotes of scripts you are interested in, get advise
from experts and research reports on your investment choice and then just click the
mouse to place your order, pay the amount due (which automatically gets debited
into your account with the on line brokerage firm), get your account statement, and
the delivery of your shares into your Demat account. All this is through just one click
of a mouse. Seems like a dream? But with online trading this has become a reality. A
few seconds later, you get the confirmation on your screen. And after the trade
settlement, your bank and DP accounts will reflect the changes accordingly.
The speed of transaction, confidentiality about the prices and ease of
settlement in the paperless mode should be good reasons for retail investors to
jump on to the Net. All they need is a PC, a modem, a subscription to an ISP, an
account with a bank (which has a web presence) and a depository account. And
they can choose from a plethora of e-trading web sites.
So, finally the changing trend is known as E-trading which really means
Buying and selling securities via the Internet or other electronic means such as
wireless access, touch-tone telephones, and other new technologies with online trading.
In most cases customers access a brokerage firm's Web Site through their regular
Internet Service Provider. Once there, customers may consult information provided on
the Web Site and log into their accounts to place orders and monitor account activity"
B. K. School of Business Management 24
What does Share khan offer?
Share khan offers online trading account through which a customer can buy and
sell shares in an instant from any part of the globe trough website. It does not take
into account any type of physical restriction of going to the broker for carrying out a
transaction or any type of settlement of payment. It facilitates the customer a
speedy and hassle free transaction. Share khan’s product consists of a 3-in-1
concept, which integrates:
1. Trading Account
2. Demat Account
3. Linking with the Savings account.
Through its trading account, a share khan customer can directly transfer his funds
from his savings bank account affiliated to share khan to his trading account
without any paper work. He can buy and sell shares from the website and also view
the market prices of the shares he trades on the terminal.
Share khan .com allows trading at present only on NSE. BSE trading will be shortly
available. To open an account a customer requires filling up a form consisting of 12
agreements, a passport size photograph, a residential proof, a photo id proof and a
cheque drawn of respective amount in favour of S. S. Kantilal Ishwarlal securities
After opening an account with Share khan, a customer will be given User id,
Membership password and trading password, which will enable him to access his
account and trade.
Share khan offers 3 types of products according to the volume-based requirements
of the investors that are as follows:
4 CLASSIC ACCOUNT
• This account allows the client to trade through the website and is suitable for the
• Here maximum scripts that can be shown on the terminal are only 25. Also the
technical charts are not available.
• It’s a JAVA BASED APPLET, which allows trading only through website and see
latest prices of the scripts of your choice which is attached below.
• This account also allows trading in Derivatives.
• The lifetime registration charge for this account is Rs.750 and there is no
constraint of minimum turnover.
B. K. School of Business Management 25
5 SPEED TRADE ACCOUNT
• This is ideal for active traders who transact frequently during day’s trading
session to capitalize on intra-day price movements.
• Speed trade is an Internet-based application available on a CD, which provides
everything a trader needs on one screen, thereby, reducing the time required to
execute a trade.
• SPEEDTRADE offers a tick-by-tick update on stock price movements with market
depth and intra-day chart and lets the client do his own stock/technical analysis.
• While the Lifetime charge for this account is Rs.1000 with a minimum brokerage
of Rs.1000 to be paid monthly.
6 SPEED TRADE PLUS ACCOUNT
• Speed trade plus has all the above-mentioned features with an additional power
to also trade in Derivatives.
• Speed Trade Plus extends the power of online trading from cash
markets to Futures & Options. On a single screen, a customer can trade cash as
well as future & option contracts.
• Other features include advanced Intra-Day Charting (Bar & Japanese Candlestick
Charts), easy order placement and instant trade confirmations in seconds, price
alerts, research calls, and derivative tool-kit to help the customer trade like the
• While the Lifetime charge for this account is Rs.1500 with a minimum brokerage
of Rs.1500 to be paid monthly.
Share khan has affiliation with 5 banks, which allows its customers to enjoy the
facility of instant credit and transfer of funds from his savings bank account to his
share khan trading account. The affiliated banks are as follows:
ORIENTAL BANK OF COMMERCE
B. K. School of Business Management 26
AFTER HOUR ORDERS
Share khan customers also enjoy the facility of placing orders even after the trading
hours, and the orders are executed as soon as the market opens.
It is also an exclusive service available to all Share khan customers for trading in
shares via the telephone. On dialing the toll free number 1600-22-7050 and on
entering the customers TPIN number, the customer will be directed to a tele-broker
who will buy or sell shares for him.
Last but not the least, the USP of share khan is its timely advice that it gives to its
customers 4 times in a day through e-mails. Among these e-mails sent,
• One is pre-market mail indicating the position of the market (i.e. either bullish
or bearish trend) when it opens.
• The other two e-mails are the during market hours mails which indicate as to
how the market will move and in which direction.
• The fourth e-mail that is called the post market mail or the eagle eye is the
most important and valuable suggestion.
In this e-mail, all the scripts that are under coverage are segregated into 5
clusters. Each cluster represents a certain profile in terms of business
fundamentals as well the kind of returns the customer expects over a certain time
horizon. This he3lps the customer identify the stocks that match to his objectives.
B. K. School of Business Management 27
4. EQUITY RESEARCH
All the suggestions, tips and high performance trading recommendations are
received from the research team of Share khan consisting of 38 dedicated analysts
who have years of working experience in the industries that they track, and a proven
track record in using their knowledge of the investment science to deliver results.
Share khan boasts of strike rates as high as 70-90% in booking
recommendations in the money. “The company believes in not to lose money and to
make some. “
Efficient Execution on BSE, NSE, Derivatives
Advice in many shapes
Wealth of content and tools to help you make sound investment decisions
Stability and Security
Good risk management
Substantial shareholding by prestigious foreign institutions.
The scientific approaches that determine market direction and help you decide
what stocks to buy or sell. Whether it is for the short term or the long term, there is
method in this madness!
Research is classified into 3 analyses:
This science analyses balance sheets, management quality, sectoral
trends and the economy. Value investing or cash flow analysis. In depth and
close tracking of company related performance.
Doing it the Sharekhan way using the bottom-up approach, the idea is to
focus on stock picking, i.e. identifying winning ideas for our clients.
It is classified into two:
B. K. School of Business Management 28
• Sharekhan Research
Our tigers dig meaty Stock Ideas out of the heart of the market and
bring them to you. Their skill at identifying their prey--Stock Ideas--while
keeping your taste for investment in mind is reflected in the depth of their
research and the performance of the ideas. The Market Strategy reports, on the
other hand, identify the hunting-ground for Stock Ideas, i.e. sectors and stock
groups that are ripe for performance, discuss the state of the economy and
its impact on the stock market as well as advise you on dealing with the impact
of socio-political issues on the market.
It is classified into two:
The Market Strategy reports identify the hunting-ground for
Stock Ideas, i.e. sectors and stock groups that are ripe for
performance, and discuss the state of the economy and its impact
on the stock market. Market Strategy also takes a longer-term
view on stocks, i.e. three to six months. It outlines our
expectations of the broad market and defines a broad strategy. It
gives a five-legged rating to a list of stocks that we think will
outperform the market during the given time period.
Stock Ideas is aimed at Sharekhan’s trading clients. It
presents our best stock picks in today's market. We categories
these companies into six clusters to help you identify the stocks
that fit your time horizons and return objectives the best. Each
cluster represents a certain profile in terms of business
fundamentals as well as the kind of returns you can expect of it
over a certain time horizon.
Stock Ideas are given in form of two ways:
Recommendation – In recommendation we give advice to clients
which shares to buy, hold and sell.
Evergreen: Dominant players with strong brands, robust
management credentials, supernormal shareholder returns.
Will steadily compound 18-20% pa for next 5 to 10 years.
B. K. School of Business Management 29
Apple Green: Potentially steady compound, but 5-10-year
graph is a bit unclear. Could gallop at 25-30% pa over the
next 2-3 years.
Emerging Star: Young companies likely to rule chosen
niches. Even better, the niches could balloon into full-blown
markets. Potentially ten- baggers if you’re patient.
Ugly Duckling: Trading below fair value or at huge
discount to peer group. But something’s cooking. Could
double in two to three years’ time. Swans, anybody?
Vulture’s Pick: Companies with valuable assets at
throwaway prices. Buy and await predators. Startlingly high
returns possible. Patience is vital, my dear.
Cannonball: Season’s favorites. Typically fast gainers in
rising markets could return 30-50% within 6 months. Get in,
cash in, and get out.
Institutional Research - Each individual company is analyzed and its
results are placed on our site. Here Rating is given on relative basis, in
the form of underperformer, neutral and outperformed.
Outperformer: This stock will outperform the market by
giving a relatively higher return than a market-based index.
Neutral: This stock is expected to more or less give you
the index rate of return or a return not significantly higher or
lower than the market index.
Underperformer: This stock is expected to lose value on a
relative basis when compared to a market-based index.
Sector Watch – Here each sector is analyzed thoroughly. For e.g.
Pharma sector, automotive sector, and various other sectors.
Price, Volume and Open Interest. The scientific study of these
parameters using charts to simulate accumulation and distribution patterns. Use
of the Dow Theory, Elliott wave analysis, moving averages and momentum
indicators. Forecasting of stock and index trends plus developing trading
strategies based on the forecasts with appropriate risk-reward ratio. It is again
divided into two
B. K. School of Business Management 30
The cash market encompasses the entire gamut of listed stocks on
Indian stock exchanges. The cash market refers to the secondary market
where you may day trade or take delivery. Every product developed for
the cash market can be replicated in the futures & options market (if it is
listed there) by following the trading levels of the cash market for
execution in the derivatives market.
• Momentum Calls: The demand for catching fast movements in
stocks for a 1-7-day period has led to the emergence of this product.
Momentum Calls help you make a quick buck with the use of stop
losses and a risk-reward ratio of 1:2 at least. The idea is to identify
momentum the moment it begins and get onto the bandwagon. But if the
move does not happen we move out as fast at minimum loss rather than
wait for stop losses to be triggered. This improves efficiency in trading
and maximizes profits.
• Punter’s Call: A daily view on how the market and the major
indices, i.e. the Sensex and Nifty, are expected to behave during the
day. Closest support and resistance levels plus moving averages are
provided to help traders take decisions.
• Fortnightly View: A fortnightly recap and analysis of our market
view over the short, medium and long term.
Derivatives are about opportunities in derivatives market. In
Daring Derivatives, stock option premiums are traded to capture
price movements; margin trading is carried out using the futures
segment; and low-priced options of stocks that are about to make
a big move in the last week before expiry of the options are
identified to help you make a killing. The calls cover index futures
If you don’t care about balance sheets or charts and only want to know
what the market grapevine has to offer, this is for you. What’s moving and who
is buying what? Our networking and years of experience bring all such
information to you.
It is analyzed in two ways:
Dealing Room: The most experienced dealing room with years of experience in
stock market research, always in touch with what is happening. We provide this
information to clients through SpeedTrade, and to our branches and franchisees
through Yahoo Messenger, telephone and SMS.
B. K. School of Business Management 31
Dealing Room’s Favourites: Straight from the horse's mouth, the
product is an outcome of our ability to have our finger on the pulse
of the market. It's about stocks that are part of the market
grapevine, on top of the dealing room's watch-list and vetted by
our charts. You could hold the stocks for a few days to a few
weeks. That you need to use stop losses with them goes without
Intra-day Market Calls & Information: Based on information
from informed sources we push intra-day calls and information
related to the market that allow clients to take advantage of day
Editorial: The editorial keeps a track of all the market information and feeds it
live into the Web and brings it to you at the end of the day via the daily
newsletter Eagle Eye
Live Markets: The Live Markets section begins your morning with
the latest news from the corporate world and analysis of how the
equities markets fared across the globe. Once the opening bell
goes off, Live Markets kicks in as a real-time commentary on the
market. It is updated several times a day and provides a blow-by-
blow account of market action. It is spiced liberally with breaking
news with a dash of the rumors floating in the market.
Market Commentary: Market Commentary brings you a bird's
eye view of the day's market action.
B. K. School of Business Management 32
5. SEVEN Ps OF SHARE KHAN
• Product Variety
Share khan offers 3 types of online trading accounts for its customers specially
designed according to their volume in share trading. Those 3 varieties are:
Classic- for retail investors
Speed Trade: for high net worth investors with large and active
equity portfolio who need to monitor and action swiftly
Speed trade plus: for high net worth investors dealing in derivative
User Friendly, attractive & colorful Website designed by Infosys.
www.Sharekhan.com has been specially designed to facilitate its users
to buy and sell shares instantly at anytime and from anywhere they like.
The site is user friendly allowing even a layman to easily operate without
Share khan’s product comes with the following features:
Trade execution in a fraction of a second!
Single Screen Trading Terminal
Real time streaming quotes. Price watch on any number of
Hot keys similar to Brokers Terminal.
Customized Alerts based on Multiple Parameters.
Back up Facility to place trades on Direct Phone Lines.
Intra day charts, updated live, tick-by-tick.
Instant Order Trade Confirmation in the same window
Live margin, position, marked to market profit & loss report.
Flexibility to customize screen layout and setting.
Facility to customize any number of portfolios & watch lists.
Facility to cancel all pending orders at one click.
Facility to square off all transactions at one click.
Top Gainers, Top Losers, and Most Active, updated live.
Index information; index chart, index stock information live.
B. K. School of Business Management 33
Market depth, i.e. Best 5 bids and offers, updated live for all
Online access to both accounts and DP.
Live updated Order and Trade Book.
Details of pending executed and rejected orders.
Online access to Customer Service.
128 - Bit super safe encryption.
Facility to place after market orders
Online fund transfer facility from leading Banks
Online intra-day technical calls.
Exhaustive database of over 2000 companies
Historical charts and technical analysis tools.
Last but not the least, ideas that help you to make money!!!
• Brand Name
The company as a whole in its offline business has named itself as
SSKI Securities Pvt. Ltd -Sevaklal Sevantilal Kantilal and Ishwarlal
Securities Pvt. Ltd. The company has preferred to name
themselves under a Blanket Family Name.
But in its online division started since 1997, the company preferred
to name itself as “SHARE KHAN”. The Brand Name “SHARE
KHAN” itself suggests the business in which the company is
dealing so that the consumer could easily identify the product or
Recently Sharekhan has been awarded as India’s most preferred
stock broker under “consumer award 2005” research conducted
by AC Nielsen-ORG MARG for Awaaz in the “stock broking
“category. This award will strengthen Sharekhan’s brand image.
Share khan offers its customers, depository services and trade
execution facilities for equities, derivatives and commodities
backed with investment advice tempered by decades of broking
experience. The teams of its dedicated analysts are constantly at
work to track performance and trends.
Dial-n-trade is also an exclusive service available to all Sharekhan
customers for trading in shares via the telephone. On dialing the
toll free number 1600-22-7050 and on entering the customers T-
PIN number, the customer will be directed to a call centre
executive who will buy or sell shares for him.
Sharekhan provides online tips four times a day which consists of
information like premarket anticipation, intraday opportunities,
post market analysis and next day prediction.
B. K. School of Business Management 34
• Price List
750 1000 1500
Nil 1000 1500
Share khan in its online business charges brokerage as follows:
- In equity Market:
On Trading: 0.1%
On Delivery: 0.5%
- In Derivative Market:
First leg: 0.1%
Same day settlement: 0.02%
Next day settlement: 0.1%
• Service Tax
10.2% on brokerage
• Turnover tax + Stamp duty
0.02% (Rs. 20 on every turnover of Rs. 100000)
For investors with High Net worth, there are slabs in brokerage rates.
• Payment Period
The transaction settlement date in the securities market is T+ 2 days
i.e. the payment of the transaction taken place has to be made within
two days of its occurrence.
• Credit terms
Share khan allows its customers to trade up to 4 times i.e. by keeping
14th margin with them.
B. K. School of Business Management 35
• Dematerialization charges
Rs.5 per certificate or Rs.35 per scrip whichever is higher.
Online share trading is totally a new concept in Indian Market. Generally
investor doesn’t like to come out from conventional way of share trading. Share khan
has introduced this product in. The concept and Product are still new in the market.
Therefore the company has undertaken extensive promotion campaign to create
awareness about the product. Share khan adopts the following tools for promoting the
Direct Sales: Direct Sales is one the oldest way and the most effective way which is
used worldwide to sell the product. Until now Sharekhan was used to sell the product
mainly through direct sales.Infact major portion of Sharekhan’s existing customers has
been acquired through this way. There are 250 share shops in 123 cities and in each
of them there is around 15 to20 employees working in direct sales force.
Advertising: Sharekhan has realized the importance to strengthen its brand name
and create the awareness among the investor community to invest in the stock market.
Sharekhan has used aggressively print as well as electronic media to market the
They have taken the services of celebrity like Boman Irani and produced an
electronic advertisement in which Sharekhan covey the message that investment in
the share market gives highest return than one can get in mutual funds.
Sales promotion: Sharekhan has started a unique program called First Step for
those who want to invest first time in stock market. Through this first step program
Sharekhan is trying to remove first time jitter of the investors by explaining the basics
of the stock market and showing them the way how they should proceed in the stock
market which is really the first step to invest in the stock market.
What is the first step program?
It answers some fundamental questions which are there in the mind of new
entrants in the stock market field. In this first step program, Sharekhan has answered
B. K. School of Business Management 36
Why should one invest in shares?
Invest to create wealth
Shares – the best investment option
Benefits of share investing are many
How do I buy / sell shares?
Invest through primary and secondary markets
A beginner’s guide to the stock market
Placing an order to buy/ sell shares
How do I select the right shares?
Science of investing in shares
Components of fundamental research
Learning to judge an IPO
How can I minimize risks and maximize returns
Types of risk involved in investing in shares
Become a successful investor
How can I benefit from online trading?
Using your computer to trade
Trading online is convenient
Benefits of trading on Sharekhan.com
7 REASONS WHY YOU SHOULD CHOOSE SHAREKHAN
1) 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 institutional level research and
broking services to individual investors.
2) TECHNOLOGY: with our online trading account you can buy
and sell shares in an instant from any PC with an internet connection.
You will get access to our powerful online trading tools that will help you
take complete control over your investment in shares.
3) ACCESSIBILITY: sin addition to our online and phone trading
services, we also have a ground network of 240 share shops across 110
cities in India where you can get personalized services.
4) KNOWLEDGE: in a business where the right information at
the right time can translate into direct profits, you get access to a wide
range of information on our content-rich portal, Sharekhan.com. You will
B. K. School of Business Management 37
also get a useful set of knowledge based tools that will empower you to
take informed decisions.
5) ONVENIENCE: You can call our dial n trade number to get
investment advice and execute your transactions. We have a dedicated
call center to provide this service via a toll free number from anywhere in
6) CUSTOMER SERVICE: Our customer service team will assist you for
any help that you need relating to transactions, billing, demat and other
queries. Our customer service can be contacted via a toll free number,
email or live chat on sahrekhan.com.
7) INVESTMENT ADVICE: SHAREKHAN has dedicated research teams for
fundamental and technical research. Our analysts constantly track the
pulse of the market and provide timely investment advice to you in the
form of daily research emails, online chat, printed reports and SMS on
The Company also arranges seminar in corporate world for
creating awareness about the product. Recently, it had organized for a
seminar in ONGC, IIM.
• Direct Marketing
Company emphasizes more on direct marketing, as many people
are still not aware of this new way of smart trading. For this, the company
recruits and trains sales representatives so as to explain the product and
solve customer queries related to the product. This is the most effective
way to communicate the three-in-one concept which company offers.
This is another promotional tool company is using to boost up its
sales. For this, the company collects the database of the people
belonging to different professional segments.
Share khan uses various channel alternatives to reach to its customers
Retail Share Shops
B. K. School of Business Management 38
Access the website from any part of the globe.
Share khan has the largest chain of retail share shops in India. It has 250
share shops located in 123 cities all over India like Pune, Thane, Chennai,
Kolkata, Bangalore, Lucknow, Darjeeling, Kanpur, Baroda, Midnapore,
Surat, Delhi, Ghaziabad, Hyderabad, Allahabad, etc.
Selection: Employees are selected on the basis of their experience and
qualification as applicable to the job.
Training: Intensive training is provided to the employees till a week once they
join and even at times required after that.
Motivation: The employees are motivated through incentives they are provided.
• Research Team
Share khan has a team of dedicated analysts who have years of working
experience in the industries that they track, and a proven track record in
using their knowledge of the investment science to deliver results.
• Customers, the heart of Sharekhan are really treated loyally like the
kings. The customer care, which comprises of highly trained executives
operating from 9:30 to 8:00 p.m.
• Locality of the office: In Ahmedabad, two franchise outlets are located in
posh areas like Navrangpura and Maninagar.
• Office Environment: The ambience within the office is what can make the
customer feel comfortable in trading. The cordial and friendly atmosphere
at office is like a full time motivation for the employees.
• Interiors and Infrastructure: The office is well furnished and has 24
computer terminals on which tick-by-tick price movements of the securities
B. K. School of Business Management 39
• In this service organization, the ways in which the customers receive
delivery of the service constitutes the process. Here, the process involves
adding ‘value’ or ‘utility’ so that the customers get full satisfaction for the
money spent by them.
• Here the process begins from the step when customer wants to open e-
invest account and ends when his account is actually activated.
• All Indian residents and NRI are eligible to avail this service.
• Customers can open a Sharekhan e-invest account by filling a single
This form includes 12 agreements like
1. Main form with customer details
2. Agreement between Sharekhan and client in respect of the online
investment support service offered.
3. Agreement between the Depository Participant and the client for
providing the transaction statement through Internet.
4. Irrevocable power of attorney
5. Agreement between the DP and the person seeking to open an
account with the DP.
6. Maintenance of client’s account on a running account bases by SSKI.
7. Agreement giving the right of lien on the credit balance of client in NSE
8. Agreement giving the right of lien on the credit balance of client in BSE
9. Risk disclosure document (cash segment)
10.Power of attorney
11.Member and client agreement.
12.Web-online agreement between member-broker and client.
Analysis of the Application Form
1. Main form
In main form all important details about customers are covered up.
Like his correspondence address, residential address, bank details, Pan No.
details, details about nominee etc.
2. Web online agreement between member broker and client
This form includes:
Who can be member broker
Definition of client
Duties and responsibilities of both
Requirements for opening a online demat account
B. K. School of Business Management 40
Rules and regulations of cash segment and derivative segment on web
3. Member and client agreement
This form contains the provisions as to what are terms and conditions in
capital market segment. Derivative segment operative Clauses
4. Agreement between Share khan and the client in respect of the online
investment support services offered
What all facilities Sharekhan.com would be providing
Up to what client is liable and what are authority responsibility in relation
Registration and account opening
Subscription rates and regulations
Clearing and settlement of transaction
5. Agreement between the DP and the person seeking to open an account
with the DP
It mainly contains charges charged by Share khan as DP to its clients for
various services offered by him.
6. Irrevocable power of attorney
The power of attorney is irrevocable until all dues payable by client to
member broker are satisfactorily settled and agreed between them.
7. Agreement between the DP and client for providing the transaction
statement through internet
It contains the agreement of in what way client would be getting
transaction through internet
8. Power of attorney
Here Share khan is irrevocably nominated, appointed as true and lawful
attorney for certain acts for Demat account.
9. Risk disclosure document
Risk involved for cash segment to client. Investor’s rights and obligations
are mentioned in it.
• This form will help him open the Sharekhan trading account along with a
bank account and DEMAT account.
• There are three options available to the customer for applying:
1. Through toll free number: 1-1600-11-7050
2. Through visit to any of the Sharekhan centers in the city.
B. K. School of Business Management 41
3. Through filling up the application form online.
• Customer is required to give residential proof and an identity proof along
with the application form.
• On submitting the application form, it will be processed at Bombay and
all the required accounts will be set up. If the application is not processed
because of lack of details, application will be rejected and the customer
will be contacted by company’s representative or by mail.
• Once the application is accepted the customer will be informed by mail
as well as through post.
• Customer will be sent a login ID, membership and trading password, DP
number, customer ID once the form is processed.
• Now the customer can login to the account from any place and start
trading. In case, he faces some difficulty, he can contact the company
through mail or can give a call to customer care or personally visit the
B. K. School of Business Management 42
6. EVALUATION OF INDIAN E-PORTALS
Share khan: Online Trading Terminal and customized investor advise
ICICI direct: Brand Name and various investment options
5 Paisa: Low Brokerage and no account opening charge
HDFC securities: Brand Name
KOTAK securities: Terminal Speed and good after sales service
B. K. School of Business Management 43
India Bulls: competitive brokerage
Share khan: Absence of BSE Online Trading
ICICI direct: High Brokerage
5 Paisa: No Brand Name & unreliable
HDFC securities: High Brokerage
KOTAK securities: Deposit
India Bulls: no net banking facility
B. K. School of Business Management 44
7. APPLICATION OF MANAGEMENT CONCEPTS IN
PEST Changes Affecting Share Market
Current UPA government policy regarding oil marketing companies is very
confusing for the investor community. The price of the petrol, diesel, LPG & kerosene
is not decided by simple supply and demand equation, but it is manipulated under the
pressure of left parties which results in very poor valuation of oil marketing companies’
In 2004 parliament election when UPA alliance came in power stock market
replied negatively and it cracked down to 800 points.
Because of the fall in the bank saving rate, people are transferring their saving
towards equity markets either directly of through mutual funds in search of higher
Because of the good corporate performance throughout across the sectors the
overall growth in terms of the market capitalization has increased which in turn results
in wealth creation for investors.
In budget 2004, P. Chidambaram has introduced S.T.T. (Securities Transaction
Tax) which created havoc amongst stock broker community, because S.T.T. affected
Online trading is being adapted by more and more people each day.
Youngsters have started trading in large numbers too. The society as a whole is
moving towards technology in this digital revolution age. Women in corporate world or
housewives have started earning through this way of smart trading sitting at home or
in their offices. Thus, in this changing technological scenario, e-trading clicks in
people’s mind along with e-shopping, e-governance. Globalization has brought about a
change in consumers who want ease and comfort in trading everywhere they move.
When In such economic environment, people prefer to trade offline, wherein
their profits remain un-booked as per their wish. Mr. Chidambaram, who had given an
excellent budget in 1991, which brought a change in economy, is once again the
Finance Minister. It will have different effect on the incomes of people belonging to
different income groups and hence will affect the stock markets too.
B. K. School of Business Management 45
The income from the main business gets lost in the stock markets. These affect
the society in the sense that people have given their lives loosing in stock markets.
This is an adverse implication of stock market as a whole.
As this is online trading, one has to be constantly in touch of the latest
developments in the technological field. If the competitor has a better portal due to
developments in software, then there is a chance of loosing market share. Recently,
applet-based software is used which is enabled by Java to get the basic portal. Even,
the speed of execution and internet connection used by the company affects the
customers. An internet version of 6.0 is a must for online trading. So, one has to be
continuously upgraded with new technological developments in the market.
• 8 decades of experience in
• Largest chain of retail share
shops in India
• Volume based differentiated
• User friendly website.
• Dedicated and responsive
• Problems due to Network crash
• Unawareness among investors.
• Low customer satisfaction.
• To tap the untapped market
• To capture the Market lost to its
• To focus on developing a
superior and powerful portal
• To spread awareness of its
• To make people aware of stock
market field by means of FIRST
• Competitor develops a superior
• Prolonged depression and high
volatility in the market
• New Entrants & local brokers
B. K. School of Business Management 46
CPA (CUTOMER PROFITABILITY ANALYSIS)
Share khan classifies its customers according to their volume in trade into the
PLATINUM AND GOLD CUSTOMERS
Share khan pays exclusive attention to its speed trade plus and speed trade
customers and considers them as platinum (most valuable) customers as they yield
high volume to the company and earn them high income in terms of brokerage. These
are the only customers who are provided BSE Online Terminal. It specially cares for its
speed trade customers in terms of rendering quick response to attend to their queries
and complaints, because these are the customers who once if satisfied properly would
word and recommend the company and its service to other investors also.
Share khan recognizes its classic account holders as its iron customers as
these are the retail customers who are very small players and yield income to the
company in terms of small brokerage. Share khan always believed in a policy to be
responsive to customers’ queries and complaints.
B. K. School of Business Management 47
Speed Trade Plus
8. OUR EXPERIENCE
When we started our summer training, we knew very little about the stock
market and its nitty-gritty. And now when we are leaving the company we are confident
about our knowledge. Although nobody can claim complete expertise but there is a
sea change at least from our point of view. We have learnt what are the various
indices and their significance in market. We have also learnt the impact of sensex and
nifty on overall stock market. We have learnt about various fundamentals and
technical aspects which affect the stock prices in short run and long run.
Apart from this our specific task is to sell the online trading accounts. During this
venture we came across many people who came from different walks of life. We learnt
how to deal with them, how to persuade them and guide them in trading.
Selling an online trading account requires special focus on targeting the
customers. Each and every person do not trade / invest in the stock market. Actually
what we had to do was to identify the prospect and then convince them. Wasting time
on the customer who does not know anything about stock market is completely
We were 3 of us working as a trainee executive for 2 months and were
assigned a target of 15 accounts individually. Out of the target assigned of 30
accounts, we achieved 24 accounts in total. We came to know that our conversion
ratio was around 80%.
Each of us initially met roundabout 10 to 15 people everyday. Out of these we
found 2 to 3 persons who took actual interest in the product. With regular follow-ups
the conversion ratio turned out to be only 1 customer in 4 to 5 days.
As we met more and more people, we came to know more about how to talk to
them, how much time be given to each person we met. Even, by solving the customer
queries, our own understanding was enhanced.
While selling our product in the market, we also came to know more about our
competitor’s product like, icicidirect.com, India bulls and their strategy of marketing
and the consumer’s preference towards the competitor’s product.
We did cold calling in these two months and created our own database through
it. In the second month, we got leads from our Tele-caller at Sharekhan which are
generated from Websites like moneycontrol.com, rediffmail.com, indiatimes.com.
B. K. School of Business Management 48
Share khan also gives advertisement in leading English dailies and on channels like
CNBC where the customer care toll free no. is displayed.
We met people in different locations at Ashram road, C.G. road, Mithakhali 6
roads, S.G. Highway, Paldi, Maninagar, Judges Bungalow road, Vatva, Gandhinagar,
Shahibag, Jodhpur, Sabarmati, Naranpura, Navrangpura, Gurukul etc.
It include Advertising Agencies, Chartered Accountants, Travel agencies,
Exporters, Education consultants, Samsung as well as other household appliance
showrooms. We met the Customer Relationship Managers, Assistant Managers, Sales
Managers, Accountant officers and even the Directors of some companies.
We needed to report daily in our company in the DSR (Daily Sales Report) the
information about the people we met. This DSR included: Name of the customer, Ph.
Number, Time, Period, Status, Follow up and Reasons. Even, we were required to fill
up a Deal-Sheet for HNIs that is the High-Network Individuals (the individuals who
trade in higher volumes) that we met on a particular day. We opened up stalls at
places like New Cloth Market, Gurukul road, Maninagar.
Once, a customer filled up the form, we had to call him/her after7 working days
to check if he has received the login ID and password from us (Bombay office of
Sharekhan). After that, we were required to show the customer how to make a
transaction and how to get access to the terminal. Also, other queries which the
customer faced had to be solved by us. So, it was all a very good learning experience
What we faced was the scorching heat of the city, be in a one area at one time
and just the opposite area in other time as per customer’s appointment. How to speak
to consumers, solving their queries, building a rapport with them was all up to us. We
created our own databases which we feel is an achievement. Also, getting into the
offices with the “salespeople not allowed” board was an achievement. The feeling after
meeting a customer once and in the final meeting, and closing the deal gave us a
sense of fulfillment. There were 59 signatures in the account opening form and
entertaining our customers while filling-up the form was again a challenge.
At Sharekhan, the atmosphere was perfectly cordial. There were senior trainees
always to solve the difficulties we faced in approaching a customer, filling up the form,
demonstrating the site, or solving their queries. We were supposed to be formally
dressed and required to report twice daily.
We faced some bad and resentful experiences like being sent out of offices
without being listened. Even, we waited for hours for a customer and went to the
customer again in case if a signature is left in the form or in occurrence of any proof
problems. This was again a learning to increase our tolerance and be more careful
while filling up the form.
B. K. School of Business Management 49
To Share khan:
After acquiring a customer he or she requires special attention
which can be done by assigning that particular customer to relationship
executive. The task of serving the customer should not left to sales executives,
but a relationship executive should given the responsibility to solve the
customer query. It is more difficult to retain a customer than to acquire one.
2. Effective promotional tools:
Sales promotion schemes should be such to attract the prospective
customers. Proper advertising may be done in order to create awareness and
good schemes to attract the customers may be offered.
3. Customer convenience:
Suggestions are not available in the basic portal. The terminal speed
is low and the Login ID, TPIN and phone ID are not changeable. Company may
provide these facilities as well.
In order to attract customers, Sharekhan should provide online
pledging system. This will enhance its sales, as customer will not have to move
cash to the company every time he/she wants to trade.
5. Sales force:
Company does recruit trainees, but it does lack a professional sales
force, which remains with it on a permanent basis. For this, the company may
offer salary on a fixed basis instead of variable one that it offers now.
6. Online demonstration:
Sharekhan should provide online demonstration on its website so that
customer gets visual idea about Sharekhan portal.
B. K. School of Business Management 50
“Share khan value line, dalalstreet, Flashnews,”
B. K. School of Business Management 51