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My project

  1. 1. 1
  2. 2. CONTENTS1. ACKNOWLEDGEMENT 72. INTRODUCTION 6 Introduction to stock exchange Introduction of the company 2
  3. 3. 3. COMPANY PROFILE 8 4. Comparison between different competitor 23 5. REVIEW OF LITERATURE 57 6. RESEARCH METHODOLOGY 60  Objective of study  Type of research  Sample design  Size of sample  Sources of data collection 7. COMPARATIVE ANALYSIS 66 8. FINDING & ANALYSIS 72 9. SUGGESTIONS 80 10. LIMITATIONS 81 11. CONCLUSION 82 12. APPENDIX(Questionnaire) 83 13. BIBLIOGRAPHY 85 PREFACEThe microstructure of the stock market in which brokers work ishighly dynamic and volatile. Many stocks are available to be 3
  4. 4. bought and sold, each exhibiting its own patterns andcharacteristics that are highly unpredictable. With so manyoptions and considerations that need to be taken into account, itis an extremely arduous task for a broker to investigate aspects ofthe stock market and consistently provide effective advice to theirclients.Thus, brokers perform their day-to-day tasks with the aid of abroker system. Such a system should provide tools for interactingwith exchanges and performing analysis. As a consequence, thesebroker systems are quite large and complicated by themselves.This research aims is to analysis Stock broker on the basis of theirservices, products, growth, and their subsidiaries. BecauseStockbrokers are one of the main participants in stock exchangesworldwide, they often act as an agent for their clients, makingtrades on their behalf. They also act as advisors, providingsuggestions to their clients on what stocks to buy and sell. ABSTRACT 4
  5. 5. To maintain and cope up with the growing competition from the various sharebrokers , Sharekhan needs to find potential customer and also target the newinvestors.The project is being done to know the investment decision of people in sharemarket . the basic purpose was to do analysis of the various share brokercompanies. This will help to know that service provided by the company isgood enough and are they really want to join the sharekhan. the wholeprocedure is to know the customer perception about the investment decisionand what kind of product and service customer are looking for. This will helpin providing the service according to the customer willingness. The project willhelp in exploring the area where there is the feasibility of acquiring more newinvestors. It would also help in knowing the various competitors of theindustry and exploring the areas through which competitive advantage couldbe obtained. 5
  6. 6. EXECUTIVE SUMMARYThere is growing competition between brokerage firms in postreform India. For investor it is always difficult to decide whichbrokerage firm to choose.Research was carried out to find which brokerage house peopleprefer and to figure out what people prefer while investing instock market.This study suggest that people are reluctant while investing instock and commodity market due to lack of knowledgeMain purpose of investment is returns and liquidity, commoditymarket is less preferred by investors due to lack of awareness. Themajor findings of this study are that people are interested toinvest in stock market but they lack knowledge.Through this report we were also able to understand, what are ourCompany’s (Sharekhan Ltd.) positive and strong points, on thebasis of which we come to know what can be the basis of pitchingto a potential client. We also gave suggestions to the company,what improvement can be done to our product. 6
  7. 7. Chapter 1 INTRODUCTIONIn most industrialized countries, a substantial part of financialwealth is not managed directly by savers, but through a financialintermediary, which implies the existence of an agency contractbetween the investor (the principal) and a broker or portfoliomanager (the agent). Therefore, delegated brokeragemanagement is arguably one of the most important agencyrelationships intervening in the economy, with a possible impacton financial market and economic developments at a macro level. In most of the metros, people like to put their money instock options instead of dumping it in the bank-lockers. Now, thistrend pick pace in small but fast developing cities like Chandigarh,Gurgaon, Jaipur etc. My research is based on the residents ofChandigarh and its nearby areas. As the per-capita-income of the city is on the higher side, soit is quite obvious that they want to invest their money inprofitable ventures. On the other hand, a number of brokeragehouses make sure the hassle free investment in stocks. Asset 7
  8. 8. management firms allow investors to estimate both the expectedrisks and returns, as measured statistically. There are mainly twotypes of Portfolio management strategies. 1. Passive Portfolio Strategy 2. Active Portfolio Strategy 1. Passive Portfolio Strategy: A strategy that involves minimal expectation input, and instead relies on diversification to match the performance of some market index. A passive strategy assumes that the marketplace will reflect all available information in the price paid for securities 2. Active Portfolio Strategy: A strategy that uses available information and forecasting techniques to seek a better performance than a portfolio that is simply diversified broadly. 8
  9. 9. INTRODUCTION OF THE COMPANYSharekhan is one of the leading retail brokerage of Citi Venturewhich is running successfully since 1922 in the country. Earlier itwas the retail broking arm of the Mumbai-based SSKI Group,which has over eight decades of experience in the stock brokingbusiness. Sharekhan offers its customers a wide range of equityrelated services including trade execution on BSE, NSE,Derivatives, depository services, online trading, investment adviceetc.Earlier with a legacy of more than 80 years in the stock markets,the SSKI group ventured into institutional broking and corporatefinance 18 years ago. SSKI is one of the leading players ininstitutional broking and corporate finance activities. SSKI holds asizeable portion of the market in each of these segments. SSKI’sinstitutional broking arm accounts for 7% of the market forForeign Institutional portfolio investment and 5% of all DomesticInstitutional portfolio investment in the country. It has 60institutional clients spread over India, Far East, UK and US. Foreign 9
  10. 10. Institutional Investors generate about 65% of the organization’srevenue, with a daily turnover of over US$ 2 million. The content-rich and research oriented portal has stood outamong its contemporaries because of its steadfast dedication tooffering customers best-of-breed technology and superior marketinformation. The objective has been to let customers makeinformed decisions and to simplify the process of investing instocks. SSKI GroupCompanies- • SSKI Investor Services Ltd (Share khan) • S.S. Kantilal Ishwarlal Securities • SSKI Corporate Finance • I dream Productions • Palm spring estates Pvt Ltd. • Fin flow Investment Pvt Ltd. 10
  11. 11. • I dream Production UK Pvt Ltd. • Share khan Commodities Pvt Ltd. • Archfund Properties Pvt Ltd. • Kalsri Trading & Investment Ltd.SSKI – CorporateStructure – 11
  12. 12. SSKI – Corporate Structure SSKI Securities Pvt. Ltd. Owns 56% Morakhia Family & Owns 50.5% of Associates of 100% SSKI INVESTOR SERVICES PVT. LTD. Retail broking arm of the group Shareholding pattern: SSKI CORPORATE FINANCE PVT. LTD. 55.5% Morakhia family (promoters) Investment Banking arm of the group 18.5% HSBC Private Equity India Shareholding pattern: Fund Ltd 50.5% SSKI Securities Pvt. Ltd. 18.5% First Carlyle Ventures, 49.5 % Morakhia family Mauritius 7.5% Intel Pacific Inc. WORK STRUCTURE OF SHAREKHANSharekhan has always believed in investing in technology to buildits business. The company has used some of the best-knownnames in the IT industry, like Sun Microsystems, Oracle, Microsoft, 12
  13. 13. Cambridge Technologies, Nexgenix, Vignette, Verisign FinancialTechnologies India Ltd, Spider Software Pvt Ltd. to build its tradingengine and content. The Citi Venture holds a majority stake in thecompany. HSBC, Intel & Carlyle are the other investors.On April 17, 2002 Sharekhan launched Speed Trade and TradeTiger, are net-based executable application that emulates thebroker terminals along with host of other information relevant tothe Day Traders. This was for the first time that a net-basedtrading station of this caliber was offered to the traders. In the lastsix months SpeedTrade has become a de facto standard for theDay Trading community over the net.Sharekhan’s ground network includes over 1800+ Shares hops in600 cities in India till april25 2011.The firm’s online trading and investment site - was launched on Feb 8, 2000. The site givesaccess to superior content and transaction facility to retailcustomers across the country. Known for its jargon-free, investorfriendly language and high quality research, the site has aregistered base of over 3 Lacs customers. The number of tradingmembers currently stands at over 7 Lacs. While online tradingcurrently accounts for just over 5 per cent of the daily trading in 13
  14. 14. stocks in India, Sharekhan alone accounts for 27 per cent of thevolumes traded online.The Corporate Finance section has a list of very prestigious clientsand has many ‘firsts’ to its credit, in terms of the size of deal,sector tapped etc. The group has placed over US$ 5 billion inprivate equity deals. Some of the clients include BPL CellularHolding, Gujarat Pipavav, Essar, Hutchison, Planetasia, andShopper’s Stop.Finally, Sharekhan shifted hands and Citi venture get holds on it. 14
  15. 15. REASONS TO CHOOSE SHAREKHAN LIMITEDExperienceSSKI has more than eight decades of trust and credibility in theIndian stock market. In the Asia Money brokers poll held recently,SSKI won the Indias best broking house for 2004 award. Eversince it launched Sharekhan as its retail broking division inFebruary 2000, it has been providing institutional-level researchand broking services to individual investors.TechnologyWith their online trading account one can buy and sell shares in aninstant from any PC with an internet connection. Customers getaccess to the powerful online trading tools that will help them totake complete control over their investment in shares.AccessibilitySharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTIONservices for investors. These services are accessible through manycenters across the country (Over 650 locations in 150 cities), overthe Internet (through the website as well asover the Voice Tool. 15
  16. 16. KnowledgeIn a business where the right information at the right time cantranslate into direct profits, investors get access to a wide range ofinformation on the content-rich portal, will also get a useful set of knowledge-based tools thatwill empower them to take informed decisions.ConvenienceOne can call Sharekhan’s Dial-N-Trade number to get investmentadvice and execute his/her transactions. They have a dedicatedcall-center to provide this service via a Toll Free Number 1800-22-7500 & 39707500 from anywhere in India.Customer ServiceIts customer service team assist their customer for any help thatthey need relating to transactions, billing, demat and otherqueries. Their customer service can be contacted via a toll-freenumber, email or live chat on AdviceSharekhan has dedicated research teams of more than 30 peoplefor fundamental and technical research. Their analysts constantlytrack the pulse of the market and provide timely investment 16
  17. 17. advice to customer in the form of daily research emails, onlinechat, printed reports etc. 17
  18. 18. Benefits• Free Depository A/c• Instant Cash Tranfer• Multiple Bank Option.• Secure Order by Voice Tool Dial-n-Trade.• Automated Portfolio to keep track of the value of your actual purchases.• 24x7 Voice Tool acess to your trading account.• Personalised Price and Account Alerts delivered instantly to your Mobile Phone & E-mail address.• Live Chat facility with Relationship Manager on Yahoo Messenger• Special Personal Inbox for order and trade confirmations.• On-line Customer Service via Web Chat.• Enjoy Automated Portfolio.• Buy or sell even single share• Anytime Ordering. 18
  19. 19. Chapter 2 Product offer by the companySharekhan offers the following products:-CLASSIC ACCOUNTThis is a User Friendly Product which allows the client to tradethrough website and is suitable for the retailinvestors who is risk-averse and hence prefers to invest in stocksor who do not trade too frequently.Features• Online trading account for investing in Equity and Derivatives via• Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.• Integration of On-line trading, Saving Bank and Demat Account.• Instant cash transfer facility against purchase & sale of shares. 19
  20. 20. • Competitive transaction charges.• Instant order and trade confirmation by E-mail.• Streaming Quotes (Cash & Derivatives).• Personalized market watch.• Single screen interface for Cash and derivatives and more.• Provision to enter price trigger and view the same online in market watch.SPEEDTRADESPEEDTRADE is an internet-based software application thatenables you to buy and sell in an instant.It is ideal for activetraders and jobbers who transact frequently during day’s sessionto capitalize on intra-day price movement.Features• Instant order Execution and Confirmation.• Single screen trading terminal for NSE Cash, NSE F&O & BSE.• Technical Studies.• Multiple Charting.• Real-time streaming quotes, tic-by-tic charts.• Market summary (Cost traded scrip, highest clue etc.)• Hot keys similar to broker’s terminal. 20
  21. 21. • Alerts and reminders.• Back-up facility to place trades on Direct Phone lines.• Live market debts.DIAL-N-TRADEAlong with enabling access for trade online, the CLASSIC andSPEEDTRADE ACCOUNT also gives Dial-n-trade services. With thisservice, one can dial sharekhan’s dedicated phone lines 1-800-22-7500, 3970-7500.Beside this, Relationship Managers are always available on OfficePhone and Mobile to resolve customer queries.ShareMobileSharekhan had introduced ShareMobile, A mobile based softwarewhere one can watch Stock Prices, Intra Day Charts, Reasearch &Advice and Trading Calls live on the Mobile.PREPAID ACCOUNTCustomers pay Advance Brokerage on trading Account and enjoyuninterrupted trading in their Account. Beside this, great discountare also available (up to 50%) on brokerage. 21
  22. 22. Prepaid Classic Account : - Rs. 2000Prepaid Speed trade Account : - Rs. 6000IPO ON-LINECustomers can apply to all the forthcoming IPOs online. This isquite hassle-free, paperless and time saving. Simply allocate fundto IPO Account, Apply for the IPO and Sit Back & Relax.Mutual Fund OnlineInvestors can apply to Mutual Funds of Reliance, FranklinTempleton Investments, ICICI Prudential, SBI, Birla, Sundaram,HDFC, DSP Merrill Lynch, PRINCIPAL and TATA with Sharekhan.Zero Balance ICICI Saving AccountSharekhan had tied-up with ICICI bank for Zero Balance Accountfor Sharekhan’s Clients. Now their customers can have a ZeroBalance Saving Account with ICICI Bank after your demat Accountcreation with Sharekhan.CHARGE STRUCTURECharge Classic Account Speed Trade AccountAccount Opening Rs. NIL Rs. NILMonthly Rs. NIL Rs. NILCommitmentBrokerage Intra-day – 0.05 % Intra-day - 0.05% 22 Delivery - 0.50 % Delivery - 0.50%
  23. 23. Fee Structure for General Individuals: -* Taxes as per govt.Depository Services –Share khan is a depository participant with the National SecuritiesDepository Limited and Central Depository Services (India) Limited fortrading and settlement of dematerialized shares. Share khan performsclearing services for all securities transactions through its accounts. We offerdepository services to create a seamless transaction platform – execute tradesthrough Share khan Securities and settle these transactions through the Indiabulls Depository Services. Share khan Depository Services is part of ourvalue added services for our clients that create multiple interfaces with theclient and provide for a solution that takes care of all your needsDepository ChargesAccount Opening Charges Rs. NILAnnual Maintenance Charges Rs. NIL first year. Rs. 300/= p.a. from second calendar year onward 23
  24. 24. EXPOSURE: 4 TO 6.7 TIMES (ON MARGIN MONEY) Share khan equity analysis –Building and maintaining your ideal portfolio demands objective,dependable information. Share khan Equity Analysis helps satisfy that needby rating stocks based on carefully selected, fact-based measures. Andbecause were not focused on investment banking, we dont have the sameconflicts of interest as traditional brokerage firms. This objectivity is onlyone important difference in our ratings. • Type of categories-Evergreen:- These stocks are steady compound, churning out steadygrowth rates year on year. They are typically significant players in theirmarkets, with sound strategies that will help them achieve and sustainmarket dominance in the long run. They have strong brands, managementcredentials and a consistent track record of achieving super normalshareholder returns. We expect stocks in this category to compound atbetween 18-20% per annum for the next five to ten years.Apple Green:- These are stocks that have the potential to be steadycompound and are attempting to move upwards, to turn Evergreen. They 24
  25. 25. rank a shade below the Evergreen companies, only because their potential inthe five to ten years time is still not very clear, although they might grow atrates faster than that of the Evergreen stocks in the next year or two. Theycould grow at 25-30% per annum over the next two to three years.Emerging Star:- These are typically young companies, often in nichebusinesses, that have the potential to grow and dominant their niches. Evenbetter, they might turn out to be real giants, if their niches explode into full-blown markets in their own rights. These stocks are potential ten-baggers butyou need to be patient.Ugly Duckling:- These are companies that are trading below their fairvalue or at values which are at a significant discount to that of their peergroup, due to a combination of circumstances. But things are now starting tohappen in these companies or in their markets that are likely to cause a re-evaluation of their prospects. These stocks could double in two to threeyears time.Vultures Pick:- These are companies with valuable assets or brands thathave been trashed to ridiculously low prices. Buy a Vultures Pick and waitfor a predator who finds its assets undervalued to come along. This could bea long wait but the returns could be startlingly high.Cannonball:- These are companies with valuable assets or brands that havebeen trashed to ridiculously low prices. Buy a Vultures Pick and wait for apredator who finds its assets undervalued to come along. This could be along wait but the returns could be startlingly high. 25
  26. 26. Chapter-4Comparison between DifferentCompetitors 26
  27. 27. The major players in online trading -••• 27
  28. 28. ••• HDFCsec.comCompany Background- 28
  29. 29. • Share khan is the retail broking arm of SSKI Securities Pvt Ltd. SSKI owns56% in share khan; balance ownership is HSBC, First Carlyle, and Intel Pacific• In to broking since 82 years• Focused on providing equity solutions to every segment• Largest ground network of 4800+ Branded Share shops in 600+ CitiesOnline Account Types-•Classic Account / Applet: Investor in equities•Speed Trade: Trader in equities & derivativesPricing for Retail Customers- 29
  30. 30. 1. Speed Trade-•Account Opening: Rs 1000 (Refundable against brokerage in Month + 1)•Demat 1st Yr: Incl in Account Opening•Initial Margin: NIL•Min Margin Retainable: NIL •Brokerage: Trading 0.10% each side + All Taxes Delivery 0.50% each side + All Taxes (Negotiable based on volume) •Account Access Charges: Monthly Rs 500, adjustable qtrly against brokerage of Rs 9000/- for qtr No access charges for gold customers (Above 1 lac brokerage p.a) 2. Classic A/C-Account opening: 750 (lifetime)Demat 1st year: free a/c openingInitial margin: NILMinimum margin: NILBrokerage:Trading 0.10% each side + All TaxesDelivery 0.50% each side + All Taxes 30
  31. 31. (Negotiable based on volume ) 31
  32. 32. Company Background-India infoline was founded in 1995 and was positioned as a research firmIn 2000 e-broking was started under the brand name of 5 32
  33. 33. Apart from offering online trading in stock market the company offersMutual funds online.It also acts as a distributor of various financial services i.e GOI securities,Company Fixed Deposits, Insurance.Limited ground network, present in 20 CitiesOnline Account Types-•Investor Terminal: Investors / Students•Trader Terminal: Day Traders / HNI’sPRICING FOR RETAIL CLIENTS-1. Investor Terminal 33
  34. 34. •Account Opening: Rs 500•Demat 1st Yr: Rs 250•Initial Margin : Rs 2500(Compulsory)•Min Margin Retainable: Rs 1000•Brokerage: Trading 0.10% each side + ST Delivery 0.50% each side + STPRICING FOR HNI CLIENTS- 34
  35. 35. 2. Trader Terminal-•Account Opening: Rs 500•Demat 1st Yr: Rs 250•Initial Margin: Rs 5000(Compulsory)•Min Margin Retainable: Rs 1000•Brokerage: Trading 0.10% each side + ST Delivery 0.50% each side + ST(Negotiable to 0.05% each side & 0.25%)•Account Access Charges 35
  36. 36. Monthly Rs 800, adjustable against BrokerageYearly Rs 8000, adjustable against brokerage 5 Types of accounts Investor Terminal Trader Terminal Account Opening : Rs 500 Account Opening : Rs 500 Demat 1st Yr : Rs 250 Demat 1st Yr : Rs 250 Initial Margin : Rs Initial Margin : Rs 2500(Compulsory) 5000(Compulsory) Min Margin Retainable : Rs Min Margin Retainable : Rs 1000 1000 Brokerage : Brokerage : Trading 0.10% each side + ST Trading 0.10% each side + ST Delivery 0.50% each side + ST Delivery 0.50% each side + ST ( Negotiable to 0.05% each side & 0.25%) 36
  37. 37. Deal Clinchers v/s 5 Paisa• Company BackgroundNot having a very positive image, relatively new in the broking arena,limited network•DowntimeRecent past 5 paisa Trader Terminal (T.T) is experiencing high frequencydowntime between 3 – 3:30 p.m due to server load (as their T.T is featureheavy compared to Speetrade charting)• Manual Accounting The 5 paisa accounting system is manual; online fund transferthrough bank is not credited instantly. Limit is provided EOD for shares sold from DP, or call Similarly limit released for shares sold under BTST is manual Delay in receiving pay-out of clear funds from trading to BankAccount. 37
  38. 38. •Min Account BalanceConcept of Min Rs 1,000 to be maintained in form of cash / securities tokeep account active. This can be withdrawn only on closure of account. Sharekhan v/s 5 Low brokerage .1%-.5% Trading 0.10% Delivery 0.50% .05%-.25% Research reports No research report RM facility (relationship mgt) No guidance No need to specify whether Specify while buying whether intraday or delivery intraday or delivery 38
  39. 39. Company BackgroundKotakstreet is the retail arm of kotak securities. Kotak SecuritiesLimited is a joint venture between Kotak Mahindra Bank andGoldman Sachs 39
  40. 40. Online Account Types•Twin Advantage / Green Channel: 2 DP’s, Limit against shares•Free Way: Flat Rs 999 Cover Charge p.m, 0.03% per transaction•High Trader: 6 Times Exposure Cash & Derivatives, Auto sq off 2:55•Cash Expressway: Spot payment, additional 0.5% chargesFor Kotak Fast Lane / Keat Lite / Keat Desktop are trading interfaces.Keat Desktop with advanced tools comes at a charge of Rs 500 p.m,Non-refundablePRICING OF KOTAK•Account Opening: Rs 500•Demat: Rs 22.5 p.m•Initial Margin: Rs 5000(Compulsory)•Min Margin Retainable: Rs 1000 40
  41. 41. •Brokerage Slab wise: Higher the volume, lower the brokerage. Evenolder customers (on 0.25% & 0.40%) have been moved to the slab wisestructure wef 1/4/2004 Slab structure of Kotak Delivery Vol p m Brokerage * < 1 lakhs 0.65% 1 lakhs - 5 lakhs 0.60% Square Vol off p m < 10 lakhs 0.10% Both Sides 10lakhs - 25 lakhs 0.08% Both Sides 41
  42. 42. 25lakhs – 2 Cr 0.06% Both Sides 2 Cr - 5 Cr 0.05% Both Sides > 5 Cr 0.04% Both SidesBrokerage is inclusive of All Taxes** Min Brokerage of Rs 0.01 per share Derivatives Vol off p m Brokerage< 2 Cr 0.07% Both Sides2 Cr - 5.5 Cr 0.05% Both Sides5.5 Cr - 10 Cr 0.04% Both Sides> 10 Cr 0.03% Both SidesBrokerage is inclusive of All Taxes5 lakhs -10 lakhs 0.50%10 lakhs -20 lakhs 0.40%20 lakhs -60 lakhs 0.30% 42
  43. 43. 60 lakhs – 2 Cr 0.25%>2 Cr 0.20%DP Charges ExtraBrokerage is inclusive of All Taxes • Min Brokerage of Rs 0.05 per share Deal Clinchers v/s Kotakstreet•Rigid Account Opening TermsNo Flexibility of A/c opening charges (Rs 500) + Compulsory margin Rs5000/-Account opening free with Rs 10,000 Margin OR competitor Contract Note.•No Customization of commercial TermsNo Flexibility in Leverage – Dependent on Type of Account ( 4 to 6 timesonly)No flexibility in Brokerage, driven by slab structure 43
  44. 44. •Many Other Charges Rs 22.5 p.m towards DP AMC charges DP incoming charges extra, 0.02% Rs 1,000 as retainable Margin to keep account active Rs 25 per call after 20 calls for the month•Restricted Access to Terminal Like productKEAT Desktop restricted distribution on payment of Rs 500, Non refundable 44
  45. 45. KOTAK Securities Twin Free Way High Trader CashAdvantage / Expressway Green Channel2 DP’s, Limit Flat Rs 999 6 Times Spot payment,against shares Cover Charge Exposure additional p.m, 0.03% per Cash & 0.5% charges transaction Derivatives, Auto sq off 2:55 45
  46. 46. Sharekhan v/s Kotak securitiesNo minimum balance to Minimum balance ofbe maintained 5000 to be maintained10-50, 05-25 More brokerage = 10 ps – 50 psNo slab wise brokerage Slab wise brokerage 46
  47. 47. Company BackgroundIndia Bulls is a retail financial services company present in 70 locationsCovering 62 cities. It offers a full range of financial services andProducts ranging from Equities to Insurance. 450 + RelationshipManagers who act as personal financial advisors Online Account Type•Signature Account: Plain Vanilla Account with focus on Equity Analysis.The equity analysis is a paid service even for A/c holders 47
  48. 48. •Power India bulls: Account with sophisticated trading tools, lowcommissions and priority access to R.M Pricing of IB AccountsSignature Account•Account Opening: Rs 250•Demat: Rs 200 if POA is signed, No AMC for this DP•Initial Margin: NIL•Brokerage: Negotiable Power India Bulls•Account Opening: Rs 750•Demat: Rs 200 if POA is signed, No AMC for this DP 48
  49. 49. •Initial Margin: NIL•Brokerage: Negotiable PAID ResearchSCHEME FACILITYWebBased-1-Month-500: View & Print on websiteWebBased-1-Year-6000 View & Print on websitePrintReport-1-Month-750: View & Print on website + 10Reports DeliveredPrintReport-1-Year-9000: View & Print on website + 10 ReportsDelivered 49
  50. 50. Deal Clinchers v/s India Bulls•POA for Clients DMAT•Paid Research ServicesAccess to an research even for an IB trading account holder is charged a minof Rs 500 a month•Margin Funding hoaxThe interest on funding starts on leveraged delivery trades from T+1 dayitself @21% p.a, on a daily basis•The role of Relationship ManagerEach RM is looked upon as a revenue generator and he gets a % on businessgenerated from client. This can lead to over leveraged (Interest) & highfrequency(Brokerage) trading, which may not be in the best interest of theclient. 50
  51. 51. INDIA BULLS Types of accounts Signature Account Power IndiabullsAccount Opening : Rs 250 Account Opening : Rs 750Demat: Rs 200 if POA is Demat: Rs 200 if POA issigned, No AMC for this DP signed, No AMC for this DPInitial Margin : NIL Initial Margin : NILBrokerage : Negotiable Brokerage : Negotiable 51
  52. 52. SHAREKHAN v/s INDIA BULLSDirect transfer (t+2) Pool level conceptNo transaction charges Rs. 18 per transactionDaily research reports No research reportsMonthly Magazine No magazineNo hidden costs Hidden costsNSE + BSE live terminal No NSE + BSE live terminalfacility side by side facility side by sideOnline IPO only with share No Online IPO facilitykhan 52
  53. 53. Company BackgroundICICI Web Trade Limited (IWTL) maintains IWTL is anAffiliate of ICICI Bank Limited and the Website is owned by ICICI BankLimited 53
  54. 54. Account Types•ICICI Direct e-invest Account: Plain Vanilla Account with focus on 3 in1 advantages. Differentiated in services within the account1.Cash on spot2.MarginPlusPremium Trading interface of ICICIDirect Link is given to DBC partners andHNI’s•Account Opening: Rs 750•Schemes: For short periods Rs 750 is refundable against brokerageGenerated in a qtr. These schemes are introduced 3-4 times a year. 54
  55. 55. •Demat: NIL, 1st year charges included in Account Opening Plus a facilityto open additional 4 DP’s without 1st yr AMC•Initial Margin: Nil•Brokerage: All brokerage is inclusive of stamp duty and exclusive of othertaxes.Delivery Vol per qtr Brokerage * < 10 lakhs 0.75%10 lakhs - 25 lakhs 0.70%25 lakhs -50 lakhs 0.55%50 lakhs – 1 Cr 0.45% 1 Cr – 2 Cr 0.35% 55
  56. 56. 2 Cr – 5 Cr 0.30% > 5 Cr 0.25%Deal Clinchers v/s ICICIDirect•Poor online InterfaceSlow website interface with no real-time quotes creates a dissatisfactionamong high frequency traders•Margin trading restrictionThe margin trading system is available up to 2:45 p.m, with outstanding netpositions under margin segment automatically squared off at any timebetween 2:45 – 3:30 p.m. Thus no control of square off price.•Morning Trades IssueBeing one of the websites with largest no of after hour orders which arepushed 1st thing in the morning, creates a choking of orders to the 56
  57. 57. exchange, causes delay of confirmations for new order placed during theearly morning trades•Restriction of BTSTThe sale of shares purchased is restricted to T+1 day and is not permitted onT+2 Day.•No leverage for Delivery tradesDelivery is restricted to the total money allocated into the trading account.•No flexibility on leverage on Intra-day tradesThe leverage of 4 times is available for intra- day trades.•Restriction of Bank AccountThe choice of bank is restricted to ICICI Bank.•Higher Brokerage rates with slabs 57
  58. 58. The delivery brokerage is pegged at 0.75% and trading at 0.10% each side,this makes is very unviable for customers dealing in large volumes. Althoughprogressively the delivery and trading brokerage reduce as volumes go up. Sharekhan v/s ICICI Low brokerage .1%-.5% High brokerage .1%-.75% .05%-.25% Research reports No research report RM facility (relationship mgt) No guidance Live terminal provided No live terminal provided No need to specify whether Specify while buying whether intraday or delivery intraday or delivery 58
  59. 59. HDFC Securities Introduction • Promoted by the HDFC Bank, HDFC and Chase Capital Capital Partners and their associates. • Pioneers in setting up Dial-a-share services with the largest team of Tele-brokers Online Account TypeHDFC Online Trading A/c: Plain Vanilla Account with focus on 3in 1 advantage 59
  60. 60. Pricing of HDFC Account•Account Opening: Rs 750•Demat: NIL, 1st year charges included in Account Opening•Initial Margin: Rs 5000/- for non HDFC Bank customers (AQB)•Brokerage: Trading 0.15%* each side + ST Delivery 0.50%** each side + ST * Rs 25 Min Brokerage per transaction 60
  61. 61. * Rs 8 Min Brokerage per transactionDeal Clinchers v/s HDFC Securities•Poor online InterfaceApart from having no product to cater to Day-Traders, the hdfcsec.comwebsite is plagued with downtime. The same is currently being revamped.•Lack of focus on BrokingThe core business of HDFC is Housing Finance and that of HDFC Bank isbanking. Broking as a business is a small part of the portfolio of financialservices and hence the commitment to resources is limited.•No LeverageNo leverage is available to clients even for Intra-Day trades, effectively allclients are on cash and carry system.•No flexibility in commercial terms 61
  62. 62. The delivery brokerage is pegged at 0.5% and trading at 0.15% each side,this makes it unviable for customers dealing in large volumes. SHAREKHAN v/s HDFC Securities Research Report No research report Live terminal provided No live terminal NOTE:- Due to legal allegation on HDFC the new Demat accounts has been banned. 62
  63. 63. REVIEW OF LITERATUREAccording to SEBI, Professional Rating of market intermediaries,as a concept, is a matter of debate and discussions. The need forrating is felt not only from the point of view of greater disclosurerequirements for investor’s interests, considering the importantrole such intermediaries play, being an interface betweeninvestors and exchanges but also from the point of view ofmeasuring the adequacy of systems and controls to meet internalas well as external compliance requirements.So that need for Intermediaries Rating services (Brokers), In viewof the developments that are taking place in the capital markets,the need to constantly upgrade and improve systems andprocedures in operation as well as skill sets has gainedconsiderable importance. Besides compliance with regulatoryrequirements both in letter and spirit has assumed significance so 63
  64. 64. as to mitigate risk and ensure adequate protection of investors’interest.And Rating objectives / benefits are rated entity would be in aposition to brand its image and capitalize the same for generatingmore business. In a nutshell, the product may accrue significantbenefits to all stakeholders including the investors, stock brokersthemselves, the regulator and others who will benefit from thetransparency and the consequential focus on efficiency.According to SEBI and Intermediaries Regulation and SupervisionDepartment, different factors are consider for rating processOrganization structure, Policy on Investors interest, RiskManagement Policy and System, Organization process andprocedures, Management policy on compliance, Financials,History/Background, Firm’s positioning.According to Michal Parness, FounderInvestors don’t Make Money in the Stock Market. One reasonthe institutions make so much money is that they are trading. 64
  65. 65. They make money every time you buy or sell. They make moneywhether you win or lose. That means that when you’re investing,you’re basically just sitting there. You’re not going anywhere.You’re not making money as an investor.Trading the Trend: The Only Way to Make Money in the MarketIf you don’t know this already, “Trend Trading” means tradingtrends based on human emotions. Not lagging indicators. Notcomplex statistical analysis and not Ph.D. level mathematicalequations. With trend trading, you look for market movement.That could mean stocks that are going to move up or down duringthe course of a day (intraday). You’ll play the gaps up and down,often several days a week.The “Trend trading” means being aware and taking advantage oftrends like the run-ups that happen around earning sessions.These are trends that have worked time and time again in themarket. They consistently yield results. 65
  66. 66. Chapter 4 RESEARCH METHODOLOGY Objective Of ResearchEach research study has its own specific purpose. It is like todiscover to Question through the application of scientificprocedure. But the main aim of our research to find out the truththat is hidden and which has not been discovered as yet. Ourresearch study has two objectives:- 66
  67. 67. PRIMARY OBJECTIVE: -How Sharekhan Ltd is best servicesproviders as a stock broker in the Tri-city region.SECONDARY OBJECTIVE: -1. To know about the awareness towards stock brokers and share market.2. To study about the competitive position of Sharekhan Ltd in Competitive Market.3. To study about the effectiveness & efficiency of Sharekhan Ltd in relation to its competitors4. To study about whether people are satisfied with Sharekhan Services & Management System or not5. To study about the difficulties faced by persons while Trading in Sharekhan.6. To study about the need of improvement in existing Trading system. 67
  68. 68. TYPES OF RESEARCHOn the basis of theoretical study a research has many types. All ofthese are distributed on the nature of research. Some of these arelike1. Descriptive and Analytical2. Qualitative and Quantitative3. Conceptual and empirical4. Applied and fundamental5. One time researchOur research is based on Descriptive, Qualitative and Quantitativeresearch.Descriptive Research:- Descriptive research includes surveys andfact finding enquires of different kinds. The major purpose ofdescriptive research is description of the state of affairs as it exists 68
  69. 69. at present. Researcher has no control over the variables of thistype of research.Qualitative Research:- In our research we need comparisonbetween different stock brokers. So this based on all qualitativedata. In short, Qualitative research is especially important in thebehavioral sciences where the aim is to discover the underlinemotives of human behavior. Through such research we cananalyses various factors which motivate to people to behave in aparticular manner or which make people like or dislike a particularthing.Quantitative research:- Quantitative research is based on themeasurement of quantity or amount. It is applicable tophenomena that can be expressed in terms of quantity. So we canuse it in our research for collection of all the numerical data. 69
  70. 70. SAMPLE DESIGN“A sample design is a definite plan for obtaining a sample from agiven population. It refers to the technique or the procedure theresearcher would adopt in selecting item for the sample”Generally Sample designs are two types1. PROBABILITY RESEARCH DESIGN2. NON PROBABILITY RESEARCH DESIGNWe used the probability research design.SAMPLING UNITSSampling unit may be a geographical one, such as state, district,village etc. The researcher will have to decide one or more of suchunits that he has to select for his study.In my research study Chandigarh as a sampling unit. 70
  71. 71. SIZE OF SAMPLE“This refers to the number of items to be selected from theuniverse to constitute a sample”In our research sample size is 100.But we also study the 5 stock broker companies related to security& commodity market like India-infoline, ICICI direct, HDFCsecurities, Karvy consultant ltd. for the appropriate collection ofthe information.SOURES OF DATA COLLECTIONWhile deciding about the method of data collection to be used forthe study the researcher should keep to types of data.1. Primary2. Secondary Data. 71
  72. 72. We use in our research primary data, as well as secondary data.Primary means collected a fresh, and the first time data andsecondary means which are already available like annual report,magazines etc.Survey Method: - Survey refers to the method of securinginformation concerning phenomena under study from all orselected number of respondents of the concerned area. In asurvey the investigator examines those phenomena which exist inthe universe independent of his action. We used the SchedulingMethod.Scheduling: - In this method the enumerators along withschedules, go to respondents, put to them the questions fromthe Performa in the order the questions are listed and recordedthe replies in the space meant for the same in the Performa. 72
  73. 73. Chapter 5 COMPARATIVEANALYSISAfter the whole study, we find out the following results: Results on the Basis of chargesThere are the two type of the transaction:-1. Intra-day based2. Delivery based 73
  74. 74. All the figures are in paisa/100 rupees.Comment:- According to the survey HDFC securities chargemaximum brokerage as compare to others whereas India InfolineLtd. charge only 0.20 paisa on maximum investment. 74
  75. 75. Results On the basis of Account opening chargesHDFC securities ltd:- Account opening charges w.e.f. April 2005are as follows:- Rs.749, if the customer has an existing relationshipwith HDFCSharekhan ltd:- There is no ACCOUNT OPENING CHARGES butrequire margin money of Rs 5000 for trading purposes.ICICI direct:- A one-time charge of Rs. 750 at the time of accountopening will be charged. You may later upgrade your Investaccount to an ICICI share trading account when youdesire to trade in equity.India Infoline:- There is a nominal charge of Rs. 500 only towardsstamp duty, legal and processing fees for opening the account.This includes the registration and account opening charges. Bankand Depository Participant (DP) account opening charges, ifapplicable, are payable separately. 75
  76. 76. KARVY consultants ltd:- Account Opening Charges Are 452 Butnow SEBI banned on opening of new demat account of Karvy.Indiabulls:- Account opening charges are Rs. 900. There is no AMCand no margin money is required.Comment:- India Bulls charge maximum account opening chargesbut there are no such charges in Sharekhan pvt. Ltd. 76
  77. 77. Results on the basis of customer preferences1. According to survey 70 % peoples are satisfied with SharekhanLtd because of their RM’s facility and power of Sharekhan Ltdsoftware.2. According to survey, Sharekhan Ltd open new branches forindividually handle to their customer, but in ICICI direct, HDFCsecurity there is no separate offices for this .So people preferSharekhan Ltd. Results On The Basis Of FacilitiesBasis of Sharekha Karv India ICICI Indiabull HDFdifference n Ltd. y Infolin direc s C e tShare Yes Yes Yes Yes Yes YestradingCommodit Yes Yes Yes Yes Yes Yesy trading 77
  78. 78. d-mat Yes No Yes Yes Yes NoopeningrightsKarvy and HDFC securities are not providing complete range oftrading facilities. Chapter 6 FINDINGS & ANALYSISQ.1 what are your investment plan ? 78
  79. 79. Explanation:- according to our analysis there are morequantity of people who have invested in mutual fund ascomparing to the other investment plan. 31% people haveinvested in mutual fund and 18% have invested in gold ,31% have invested in fixed deposit, 11% have invested inreal estate, 6% have invested in equities, and 1% peoplehave invested in our all investment plans. Q.2. Have you invested money in any company ? 79
  80. 80. Explanation:- according to are analysis 90% have investedtheir money in the company .and there are only 10 percentpeople who have not invested . this indicates that there aremore growing quantity of investor and people more areengaged in investing their money in the share market.Q.3- In which company you have invested ? 80
  81. 81. Explanation:- this analysis shows that there are more investor ofsharekhan as compare to other companies. Which indicates thatpeople are more conscious about investing their money insharekhan ltd. And the result is that sharekhan provides betterservices as comparing to other companies. 81
  82. 82. Q.3- what percent of income you invest ?Explanation:- people have invested more in less than 40%of their salary in share market . And there are 76% peoplewho have instead in less than 40% of the salary. 82
  83. 83. Q.3- when do you want to refund your maoney ?Explanation:- when we talk about refund of the moneypeople who want to refund their money within 5 year aremore as comparing to other year. There are 46% peoplewho want to refund within 5 year, 38% people want torefund after 10 year, 9% after 15 year and 5% after 20 yearand there are 2 % people who want to refund in other year. 83
  84. 84. Q.5 why do you invest ?Explanation:- In our analysis we find that people are moreconscious in securing their family . the more importantpurpose of investment is family security. There are 74% 84
  85. 85. people have selected family security in their purpose ofinvestment, 11% have selected education, 5% pension plan,4% children marriage, 1 percent have selected all motive oftheir investment.Q.6- which kind of service do you like the most ? 85
  86. 86. Explanation:- In our analysis people are more consciousin doing online trading as comparing to offline trading. 86%people want to do online trading , 11% people want to dooffline trading, 3% people love to doing both kind ofservice.Q.7- On which company trust more ? 86
  87. 87. Explanation:- in this part our analysis shows that peoplehave trust on sharekhan ltd. More than other companies.41% people have trust on sharekhan which is more thanother companies. 87
  88. 88. FINDINGS According to the survey most of the customers of “Sharekhan Ltd” says that it is pocket friendly. Coming to faith 70% say Sharekhan Ltd is better than others stock brokers due to customers satisfaction. Lack of promotional activities undertaken by Sharekhan securities Ltd. in Chandigarh Region. Main purposes of investments are returns & liquidity. Investors take risk as well as returns into their mind while making the investment. Businessmen are more interested in the stock market than the others. Commodity market is less preferred by the investors. People want to invest their money in the security market but they haven’t the proper knowledge. People are not aware of hedging in stock market. People pay more emphasis on brokerage than service provided by brokerage houses. 88
  89. 89. SUGGESTIONS Commitment should be equalized for every person. Provide the facility of free demonstrations for all. Improvement in the opening of De-mat & contract notice procedure is required. There should be a limited number of clients under the relationship manger. So that he can handle new as well as old customer properly. Some promotional activities are required for the awareness of the customer. People at young age should be encouraged to invest in stock market. Seminars should be held for providing information to prospective and present customers. 89
  90. 90. LIMITATION Size of the research may not be substantial. There was lack of time on the part of respondents. The survey was carried through questionnaire and the questions were based on perception. There may be biasness in information by market participant. Complete data was not available due to company privacy and secrecy. 90
  91. 91. CONCLUSIONOn the basis of the study it is found that Sharekhan Ltd is betterservices provider than the other stockbrokers because of theirtimely research and personalized advice on what stocks to buy andsell. Sharekhan Ltd. provide the facility of Trade tiger as well asrelationship manager facility for encouragement and protect theinterest of the investors. It also provides the information throughthe internet and mobile alerts that what IPO’s are coming in themarket and it also provides its research on the future prospect ofthe IPO.Study also concludes that people are not much aware ofcommodity market and while it’s going to be biggest market inIndia. 91
  92. 92. The company should also organize seminars and similar activitiesto enhance the knowledge of prospective and existing customers,so that they feel more comfortable while investing in the stockmarket. APPENDIX QUESTIONNAIREName- Age- (a)-20-25 (b)-25-30 (c)-30-40 (d)40-aboveGender- (a) Male [ ] (b) Female [ ] Address-_________________________________Profession- (a) service [ ] (b) business [ ] (c) job [ ] (d) house wife [ ]Income-annual a) 1 lack b) 1-2 lack c) 3-4 lack d) 4-5 lack e) 5 lack and above================================================================================== 1-What are your investment plan ? a- Mutual fund b - Gold 92
  93. 93. c- fixed deposit c- Real Estate2-Have you invested money in any company?a- Yes b- No3- In which company you have invested?a- Sharekhan b- Indiabullsc-- ICICI direct d- Others...........4-What percentage of Income you invest ?a- 50% b- 55%c-- 40% d- 60%5-Why do you invest ?a- Education b- Family securityc-- Pension plan d- Marriage6- When do you want to refund your money ?a- After 5 years b- After 10 years 93
  94. 94. c-- After 15 years d- After 20 years7-Does the the companies profile matter for the investment decisions ?a- Yes b- No8-Have you ever heard about online trading service?a- Yes b- No9- Which kind of trading service do you like?a- Online b- offline10- Which company’s trading service do you like the most?a- Sharekhan b- Indiabullsc-- d- Others...............11- Which company provides better transparency in service?a- Sharekhan b- Indiabullsc-- ICICI d- Others...................12- Which company provides you better information for investing decision?a- Sharekhan b- Indiabulls 94
  95. 95. c-- ICICI direct d- Others............ 13- On which company trust more? a- Sharekhan b- Indiabulls c-- ICICI direct d- Others..............Thank you signature_____________ BIBLIOGRAPHYBooks:RESEARCH METHODOLOGMagazines:VALUELINE (SHAREKHAN MONTHLY RESEARCH MAGAZINE) 95