1. Chapter-1: Introduction
 INTRODUCTION
 NEED FOR THE STUDY
 OBJECTIVE OF THE STUDY
 METHODLOGY
 LIMITATIONS
Chapter-2: Overview of company
Industrial profile:
 INTRODUCTION
 INDUSTRY SCENARIO
 FUTURE FOCUES
 GOVERNMENT POLICY
 MAJOR PLAYER
 ARTICLES RELATING TO NSE
Company profile:
 GENERAL PROFILE
 FUCTIONAL PROFIL
Chapter-3: Theoretical framework
Chapter-4: Data analysis & Interpretations
Chapter-5: Summary suggestions
 FINDINGS
 BIBLIOGRAPHY
 GLOSSARY
1

2. Chapter-1: Introduction
 Introduction
 Need for the study
 Objectives of the study
 Methodology
 Limitation
2

3. INTRODUCTION OF THE STUDY
India is a developing economy. Its prospering in all spheres. Share
Market is a compelling determinant of the economy and the financial situation of a
country. Ever since the liberalization, privatization and globalization, the foreign
investment in our country is booming. Share Market is a clear indicator of the developing
trend prevailing in our country. Statistics reveal that the trade volume has been increasing
continuously, coupled with the ups & downs which is a nature of share trading. We are
living in an interlinked world. With growing volume of trade, it has become a necessity
that people are aware of the intricacies of the web world.
Technology has changed the landscape of the stock markets. They now don‘t require a
trading floor & can render services to the investors across the country from a single
location. Before screen based trading was introduced Regional Stock Exchanges were
playing a very important role in the Capital Market as they were local investors. Now
they all developed screen based trading, which is connecting floors with other stock
Exchanges.
When you place an order to buy or sell stock, you might not think about where or how
your broker will execute the trade. But where and how your order is executed can have
an impact on the overall costs of the transaction, including the price you pay for the
stock. Here‘s what you should know about trade execution.
SENSEX the benchmark indicator of share trading has more than tripled ever since on-
line share trading commenced. It has become imperative to be a participant of this mode
of trading.
Meaning of Online Trading
―Change is the law of nature‖. There were times when man was a wanderer or a
normal. He himself had to go place to place in search of food, water and now everything
is available at your doorstep just at the click of the mouse. The growth of information
technology has affected almost all sectors of life. Internet has enabled us to get every
information at our doorstep. When Internet has affected all sectors he could ―stock
3

4. markets‖ the most important player of the economy, has remained far behind. Like all
other sectors Internet has set its feet in the stock markets also.
Share trading is a way for faster earning and losing money. In the recent years, a volatile
market could be witnessed. In the desire to earn money in a quick manner, more and
more people have ventured out into share trading. Lack of awareness of many investors
has made them loose lakhs of money in the Stock Market. Wise play by many others has
made them earn in crores.
At such a time, it would be interesting to know the attitude of the players and the
conditions in the market. A survey about investors and the share market in such a time
would be educative to tomorrow‘s investors. It could also lead to improvements in the
conditions prevailing in Reliance Money that would facilitate increase in the share
trading.
In developing countries like India, there is a great set back in mobilization process due to
various reasons. The attitude of the public, their affiliation to traditional investments in
land and property, bullion and hoarding and above all the risk of uncertainty are some of
the reasons. The fiscal commission (1949-50) recognized the fact that in India there is an
acute shortage of long term capital for industrial ventures. But it was not until 1954- 55
that the central board of directors of the reserve bank permitted established business
houses to raise their new capital by issue of debentures at comparatively high rate of
interest.
Since the capital market is a place where the private savings are kept for a very
long period, it is highly necessary to protect the interests of these investors, if the capital
market has to grow. To safe guard the investor‘s interest, government has enacted laws
such as:
A) The Securities Act, 1938 (together with The Life Insurance Corporation
Act, 1956).
B) The capital issues (Control and Regulation Act, 1943).
C) The Banking Companies Act, 1949.
D) The Provident Fund Act and the rules 1957.
4

5. E) The Indian Companies Act, 1956.
F) The Deposit Insurance Scheme, 1960.
G) The Monopolies and Restrictive Trade Practices Act, 1969.
A new era in capital markets in India has ushered in July 1991 with the starting of a
process of financial and economic deregulation beginning with the devaluation of rupee
by about 20%. In July 1991 the industrial policy was totally reshaped to dispense with
licensing of all industries except the 18 scheduled industrial groups. Further removal of
MRTP limit on assets of companies, dilution of FERA (Foreign Exchange Regulation
Act), and foreign trade liberalization etc., were some of the other reforms. Fiscal policy
was rationalized to reduce the central budget deficit and public sector under takings were
freed from government controls by professionalizing their management, giving greater
autonomy to them and by disinvestments of their shares in favor of the public. Greater
role is visualized for the private sector in the future investment growth.
5

6. NEED FOR THE STUDY
Stock Exchange is integral part of the capital market. It is the most perfect type of
market for Security whether of Government or Semi- Government bodies or other public
bodies which are also for shares and debentures issued by joint stock
enterprises, knowing about the latest and future development in the stock exchange
trading system. To know how the online trading process helps investors and brokers,
latest and future development in the Stock Exchange Online Trading System, is useful for
immediate settlement.
The capital markets perform an important function in mobilization of resources;
liquidity of the stock markets is an important factor effecting growth. Many profitable
projects require long term finance; however investors do not relinquish their savings for a
long time. Capital market is a group of interrelated markets in which capital is raised in
financial form, is lent and borrowed (or) raised in a varying time periods (such as short
term and long term).in a developing economy, the business of capital market is the
movement of capital to the point of highest yield, a liquid stock market ensures a quick
exit without incurring heavy losses (or) costs. Stock market is a vehicle through which
long term finance is characterized for the various needs of industry, commerce,
government and local authorities. Thus development of efficient financial markets is
necessary for creating conducive climate for investment and economic growth.
The company offers the products and financial services space with offerings
ranging from Equity research, Equities and derivatives trading, Commodities trading,
Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, Go bonds
and other small savings instruments to loan products and Investment banking.
Steel City Securities Limited was incorporated on 22nd February 1995
and raised equity of Rs.105 lakh on 24th June 1995 and obtained the membership of the
largest and prestigious National Stock Exchange of H-Limited (NSE) and Bombay Stock
Exchange (BSE) in 2000, in its capital market segment. The first VSAT for its trading
workstation (TWS) at Hyderabad was installed in 1995 and the second at Visakhapatnam
in April 1996.
6

7. OBJECTIVES OF THE STUDY
 To study overview of steel city security.
 To know the online & offline screen based trading system adopted by steel city
securities and about its communication facilities.
 To know about the latest and future development in the stock exchange trading
system.
 To analyze the collected data.
 To suggest the suitable measures for improving performance of the organization.
7

8. METHODOLOGY OF THE STUDY
The methodology implemented for the on-line trading process is logging and to the
NEAT screen by filling the user id ,trading member id , pass word and new pass word
after logging on the title bar ,ticker widow, toolbar market watch , inquiry window ,
order/trade window and message window is displayed by placing the orders .quoting the
price and the quantity of the share.
Primary data:
Primary data was taken from studied the factor that is affecting the scrip movement by
watching daily trade and collected the primary data.
Secondary data:
Secondary data are already published data collected for some purpose other than the one
confronting. The researcher at a given point of time. The secondary data can be gathered
from various sources like books, journals, research agencies .etc
For this project secondary information is collected from the various sources like
―business line‖ and ―economic time‖ and the NSE and BSE websites in the internet.
The information regarding the online trading is collected from
Watching the online trading live
Collecting information from the head of each department and from the staff
working in these department
Referring the capital market module work book published by national stock
exchange of India LTD.
Interacting with the operators as the computer terminals and the clients trading in
steel city securities pvt ltd.
Participating in mark trading conducted by national stock exchange of India ltd
8

9. LIMITATIONS OF THE STUDY
1. Some information is not available due to confidentiality. Due to that, the analysis
may not be comprehensive.
2. There are many constraints in studying the complex and complicated National
stock exchange. Although the personal of steel city securities arev very
cooperative and helpful, they are bound by their own rules and regulations.
3. It is very difficult to take complete grip of the stock markets information and
functioning during the one month of the study.
4. It is complex process to evaluate the overall market.
5. Difficult to calculate valuation concepts and understand the accounting policies.
9

10. CHAPTER – II :INDUSTRY PROFILE
INTRODUCTION
INDUSTRY SCENARIO
FUTURE FOCUES
GOVERNMENT POLICY
MAJOR PLAYER
ARTICLES RELATING TO NSE
COMPANY PROFILE
 GENERAL PROFILE
 FUCTIONAL PROFIL
10

11. INTRODUCTION
Stock Exchanges in India
Stock profile represents the secondary market where existing securities shares and
debentures are traded. Stock exchange provides an organized mechanism for purchase
and sales of securities. By the end of 2005, there were 23 stock exchanges in our country.
The investors want liquidity for their investments. Stock exchange provides a place
where securities of different companies can be purchased and sold.
History of Stock Exchanges
Houses of exchanges arose in Europe during the 15th century. Trading was
carried on exchanges in terms of securities which represented goods. Antwerp, Layton,
Amsterdam and London become celebrated all over Europe for their dealings in stock
exchanges. Particularly the London stock exchange can be considered as the modern type
of stock market. It had more than 500 members in 1802. During, that time, the list of
securities traded had considerably expanded and a vast majority of them were
international in contact with the home issues. In 1987 the brokers organized themselves
into the New York exchange board with a definite constitution. There were many changes
and reorganizations and amalgamations till 1969, during the ―The New York stock
exchange was formed with a maximum membership limited to 1100. The origin of stock
exchanges in India is traceable in the latter half of the 19th century. At that time, capital
market dealings were limited to loan stock transactions of the East India Company. By
1930, stock market took a turn with the emergency of sonic corporate stock and
development of textile mills that resulted due to the American civil war which gave
Indian businessmen a global chance of quick profiteering by increasing exports of cotton
to America and Europe at exorbitant prices. The trade boom lead to the establishment if
stock exchanges at Bombay, Ahmadabad and Calcutta.
Despite the fact that unorganized stock market existed in Calcutta since 1830, the
first organized stock exchange was set up at Bombay in 1877 under the name of ―Native
Stock and Share Brokers Associations‖. The next stock exchange which emerged in the
country was Ahmadabad share and Stock brokers Association which was founded in
1894. The thirds stock exchange was set up at Calcutta in the year 1908. Though some
11

12. stock exchanges were setup before independence but there was no all India Legislation to
regulate their working. To rectify this situation and to regulate the working of stock
exchanges in the country, the securities contract (Regulation) Act was passed in 1956.
At present, there are 23 recognize stock exchanges in the country. Further over
the counter exchanges and National Stock Exchange have also started functioning in our
country.
NATIONAL STOCK EXCHANGE OF INDIA: of India
Since its inception in 1992, National Stock Exchange of India has been at the vanguard of
change in the Indian securities market. This period has seen remarkable changes in
markets, from how capital is raised and traded, to how transactions are cleared and
settled. The market has grown in scope and scale in a way that could not have been
imagined at the time. Average daily trading volumes have jumped from ` 17 crore in
1994-95 when NSE started its Cash Market segment to ` 16,959 crore in 2009-10.
Similarly, market capitalization of listed companies went up from ` 363,350 crore at the
end of March 1995 to ` 6,009,173 crore at end March 2010.
Indian equity markets are today among the most deep and vibrant markets in the world.
NSE offers a wide range of products for multiple markets, including equity shares,
Exchange Traded Funds (ETF) , Mutual Funds, Debt instruments, Index futures and
options, Stock futures and options, Currency futures and Interest rate futures. Our
Exchange has more than 1,400 companies listed in the Capital Market and more than
92% of these companies are actively traded. The debt market has 4,140 securities
available for trading. Index futures and options trade on four different indices and on 190
stocks in stock futures and options as on 31st March , 2010. Currency futures contracts
are traded in four currency pairs. Interest Rate Futures (IRF) contracts based on 10
year7% Notional GOI Bond are also available for trading.
Incorporation and management
NSE was incorporated in November 1992, and received recognition as a stock exchange
under the Securities Contracts (Regulation) Act, 1956 in April 1993. It is managed by
professionals who do not directly or indirectly trade on the Exchange. The trading rights
12

13. are with trading members who offer their services to the investors. The Board of NSE
comprises of senior executives from promoter institutions and eminent professionals,
without having any representation from trading members. While the Board deals with the
broad policy issues, the Executive Committees (ECs),which include trading members,
formed under the Articles of Association and the Rules of NSE for different market
segments, set out rules and parameters to manage the day-to-day affairs of the Exchange.
The day-to-day management of the Exchange is delegated to the Managing Director who
is supported by a team of professional staff. Therefore, though the role of trading
members at NSE is to the extent of providing only trading services to the investors, the
Exchange involves trading members in the process of consultation and participation in
vital inputs towards decision making.
The Capital Market (CM) segment offers a fully automated screen based trading system,
known as the National Exchange for Automated Trading (NEAT) system. This operates
on a price/timepriority basis and enables members from across the country to trade with
enormous ease and efficiency. Various types of securities e.g. equity shares, warrants,
debentures etc. are traded on this system. The average daily turnover in the CM Segment
of the Exchange during 2009-10 was 16,959 crore. (US $3,757 million).
Futures & Options (F&O)
segment of NSE provides trading in derivatives instruments like Index Futures, Index
Options, Stock Options, Stock Futures. The futures and options segment of NSE has
made a mark for itself globally. In the Futures and Options segment, trading in S&P CNX
Nifty Index, CNX IT index, Bank Nifty Index, Nifty Midcap 50 index and single stocks
are available. Trading in Mini Nifty Futures & Options and Long term Options on S&P
CNX Nifty are also available. The average daily turnover in the F&O Segment of the
Exchange during 2009-10 was ` 72,392 crore (US $ 16,097 million).
Contract Note
The buying and selling brokers prepare notes after their mutual consent next day.
Settlement
The spot dealing are settled there in full. The settlement for ready delivery and
forward contacts is one with a different procedure.
13

14. STOCK MARKET INTERMEDIATES
Client Brokers
They do simple brokering between buyers and sellers and earn only brokerage for
their services for their services from the clients.
Floor Brokers
They are authorized clerks and sub brokers who enter the trading floor and
execute orders for the clients or for members.
Jobbers and Market Makers
They are members who are ready to buy and sell simultaneously in selected
scrip‘s, offering bid and offer rates for the brokers and sub brokers on the trading floor
and earning profit through the margin between buying and selling rates. Markets makers
undertake this work compulsorily for some companies and bank finance is available to
them.
Arbitrageurs
They are members who do inter market deals for a profit through differences in
prices as between markets.
TYPES OF SPECULATORS
There are different types of speculators who are active on stock exchanges in India.
They are known as
Bull
Bear
Stag
Lame Duck
Bull
A bull of Tejiwala is an operator who expects prices to rise in future and sells
securities in the future. A bull tends to throw his victims up in the air
Bear
A bear of Mandiwala speculator expects prices to fall in future and sells securities
at present with a view to purchase them at lower prices in future. Just as bear presses their
victim down to the ground.
14

15. Stag
A Stag is a cautious speculator in the stock exchange. He applies for shares in
new companies and expects to sell them at premium if he gets an allotment. He sells the
shares before being called to pay the allotment money.
Lame Duck
When a bear finds it difficult to fulfill his commitment, he is called struggling like
a lame duck.
THE IMPORTANT STOCK EXCHANGES IN INDIA ARE
Bombay Stock Exchange (BSE)
National Stock Exchange (NSE)
BOMBAY STOCK EXCHANGE (BSE)
Bombay Stock Exchange (BSE) is the first organized stock exchange set up at
Bombay in 1857. In the premier of apex stock exchange in India as it is distinguished not
only by its size but also it has been recognized permanently where recognition of other
stock exchanges is renewed in every 5 years. It is the oldest stock market.
Earlier BSE was organized as voluntarily non-profit making association of
brokers to regulate and protect their interest. After the Security Contracts (Regulation)
Act was passed in 1956, BSE was the first Recognized Stock Exchange on a permanent
basis in 1957. Its business is no longer confined to Mumbai alone. At the end of 1995,
there were 100 other cities in which it had set up business.
The number of companies listed in the stock exchanges is more than 8,000 out of
which those listed in BSE are 6851. The capital listed in Bombay Stock Exchange
accounts for about 40% of the overall capital listed in all the stock exchanges whereas, its
share of the market capitalization amounts to around 9%. In BSE the total number of
companies‘ listed and total number of stocks issued is higher than any other stock
exchanges. BSE switched over to electronic trading system in January 1995 called
―Bombay Online Trading‖ (BOLT) system and this become fully operational in May
1995.
The BSE has allowed the expansion of online trading system to its members in
other cities having terminals since August 1995. The daily turnover in BSE varies from
Rs.400-800 crores. Brokers trading in NSE follow BSE to know the market.
15

16. SENSEX
The index in BSE is Sensex. It stands for Sensitivity index. Senses consist of 30
selected top companies of BSE based on the capitalization or on the performance weight
age of the scrip‘s. SENSEX is not only scientifically designed but also based on globally
accepted construction and overview methodology. First complied in 1986, SENSEX is a
basket of 30 constituent stocks responding a sample of large, liquid and representative
companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is
widely reported in both domestic and international markets through print as well as
electronic media.
NATIONAL STOCK EXCHANGE (NSE)
IDBI and other National Level Financial Institutions in
Mumbai were responsible for setting the National Stock Exchange in
November 1992, with a paid up equity capital of Rs.25 crores. The
Government in the same year recognized it and the exchange started operations in
wholesale debt market in June 1994.
The volume of daily trade in NSE is around Rs. 1,500/- to Rs.2, 000/- crores. The
market capitalization of listed companies in NSE is Rs.2.52 lakh crores. There are more
than 1,000 permitted securities for trading in NSE.
SEBI’S ROLE IN A STOCK EXCHANGE
It was set up under the SEBI Act 1992 to protect the interests of investors in
securities and to promote the development of and regulate the securities market.
SEBI‘S Power in relation to stock exchange:
 It may call periodical return from stock exchange.
 It has the power to prescribe the maintenance of certain documents by the stock
exchange.
 It can compel a public company to list its shares.
 In certain areas it can license dealers in securities.
 It can amend bye-laws of stock exchange.
 It has a power to approve bye-laws of stock exchange.
16

17. STEPS TO BE FOLLWOED BY AN INVESTOR TO TRADE ON NSE SCRIPS
1. The client should
open a DEMAT
Account
2. Open a trading
account
3. The client will be
provided with a
Trading ID
4. He becomes a client
 Professional
 Retail
 Institutional
5. Then client can trade on
NSE scrip’s on
automated screen
17

18. Steps are:
1. He should open a de-mat account.
2. He has to open a trading account to trade in the particular brokerage company.
3. Then he will be given a trading number to trade on NSE scripts in the particular.
4. Brokerage Company.
5. Then he becomes a client to the particular brokerage company
Clients in the brokerage companies
Clients are of three types, those are
1. Professional Clients
2. Retail Clients
3. Institutional Clients
Professional Clients
The Client involves in the speculation activities. He buys and sells shares on daily basis.
His brokerage charges will be low.
Institutional Clients
Here the broker trades on NSE on behalf of the institution. Then the client can trade on
the NSE Scripts on ―Automated Screen‖.
How to Trade
He can buy and sells shares through ―NEAT‖ National Exchange Automated Trading)
It adopts the order driven market against the quote driven market.
NSE TRADING SYSTEM
Trading
NSE introduced for the first time in India, fully automated screen based trading. It
uses a modern, fully computerized trading system designed to offer investors across the
length and breadth of the country a safe and easy way to invest.
The NSE trading system called ―National Exchange for Automated Trading‖ (NEAT) is a
fully automated screen based trading system, which adopts the principle of an order
driven market.
18

19. Market Timings
Trading on the equities takes place on all days of the week (except Saturdays and
Sundays and holidays declared by the Exchange in advance). The market timings of the
equities segment are:
Normal Market Open : 09:00AM
Normal Market Close : 15:30 PM
The closing session is held between l5:50 am and 16:00 pm.
Limited Physical Market Open : 09:00 am
Trading market start : 09:15AM
Limited Physical Market Close : 15:30 pm
Market Segments
The Exchange operates the following sub segments in the equities segment
1. Rolling Settlement.
2. Limited Physical Market.
3. Institutional Segment.
4. Trade for Trade Segment
1. Rolling Settlement
In a rolling settlement, each trading day is considered as a trading period and trades
executed during the day are settled based on the net obligations fore the day.
At NSE trades in rolling settlement are settled on a T+2 basis i.e., on the 2nd working day.
For arriving at the settlement day all intervening holidays, which include bank holidays,
NSE holidays, Saturdays and Sundays are excluded. Typically trades taking place on
Monday are settled on Wednesday, Tuesday‘s trades settled on Thursday and so on.
2. Limited Physical Market
Pursuant to the directive of SEBI to provide an exit route for small investors
holding physical shares in securities mandated for compulsory dematerialized settlement,
the exchange has provided a facility for such trading in physical shares not exceeding 500
shares. This market segment is referred to as ―Limited Physical Market‖ (small window).
The limited Physical Market was introduced on June 7, 1999.
19

20. 3. Institutional Segment
The Reserve Bank of India had vide a press release on October 21, 1999, clarified
that Inter Foreign institutional Investor (Inter-FIT) transactions do not require prior
approval or post-facto confirmation of the Reserve Bank of India, since such transactions
do not effect the percentage of overall holding in Indian Companies (Inter FIT
transactions are how ever nor permitted in securities where the FII holdings have already
crossed the overall limit due to any reason). To facilitate execution of such inter
Institutional deals in companies where the cut-off limit of FIT investment has been
reached, the exchange introduced a JICW market segment on December 27, 1999.
The Securities where FIT investors and FIT holdings has reached the cut off limit as
specified by RBI (2% lower than the ceiling specified by RBI) from time to time would
be available for trading in this market type for exclusive selling by FIT clients. The cut
off limits for companies with 24% ceiling is 22%, for companies with 30% ceiling, is
28% and for companies with 40% ceiling is 38%. Similarly, the cut off limit for public
sector banks (including State Bank of India) is 18% whose ceiling is 20%. The list of
securities eligible / become ineligible for trading in this market type would be notified to
members from time to time.
4. Trade for Trade Segment
Trading in this segment is available only for the securities which have not established
connectivity with both the depositors as per SEBI directive. The list of these securities is
notified by SEBI from Lime to time. On account of surveillance action.
The Organization
The National Stock Exchange of India Limited has genesis in the report of the
High Powered Study Group on Establishment of New Stock Exchanges, which
recommended promotion of a National Stock Exchange by financial institutions (FIs) to
provide access to investors from all across the country on an equal footing. Based on the
recommendations, NSE was promoted by leading Financial Institutions at the behest of
the Government of India and was incorporated in November 1992 as a tax-paying
company unlike other stock exchanges in the country.
20

21. On its recognition as a stock exchange under the Securities Contracts (Regulation)
Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market
(WDM) segment in June 1994. The Capital Market (Equities) segment commenced
operations in November 1994 and operations in Derivatives segment commenced in June
2000.
Corporate Structure
NSE is one of the first de-metalized stock exchanges in the country, where the
ownership and management of the Exchange is completely divorced from the right to
trade on it. Though the impetus for its establishment came from policy makers in the
country, it has been set up as a public limited company, owned by the leading
institutional investors in the country.
From day one, NSE has adopted the form of a demutualised exchange - the
ownership, management and trading is in the hands of three different sets of people. NSE
is owned by a set of leading financial institutions, banks, insurance companies and other
financial intermediaries and is managed by professionals, who do not directly or
indirectly trade on the Exchange. This has completely eliminated any conflict of interest
and helped NSE in aggressively pursuing policies and practices within a public interest
framework.
The NSE model however, does not preclude, but in fact accommodates
involvement, support and contribution of trading members in a variety of ways. Its Board
comprises of senior executives from promoter institutions, eminent professionals in the
fields of law, economics, accountancy, finance, taxation, and etc, public representatives,
nominees of SEBI and one full time executive of the Exchange.
Number of listed companies
On the capital market segment, equity shares of 685 companies are listed and 572
companies are permitted to trade as of October 31, 1999. On the wholesale debt market
segment, 797 securities are listed and 517 securities are permitted to trade as of October
31, 1999. Of the 797 securities listed, 369 are Government Securities/T-Bills and the
balance account for other securities.
21

22. NSE Indices
The indices used by NSE are known under the following names:
S. No. Old Name New Name
1. NIFTY S&P CNX NIFTY
2. DEFTY S&P CNX DEFTY
3. CRISIL 500 EQUITY INDEXs S&P CNX 500 EQUITY INDEX
4. NIFTY JUNIOR CNX NIFTY JUNIOR
5. CRISIL MIDCAP 200 CNX MIDCAP 200 INDEX
6. CRISIL PSE CNX PSE INDEX
7. CRISIL IBG CNX IBG INDEX
8. CRISIL MNC CNX MNC INDEX
Promoters
NSE has been promoted by leading financial institutions, banks, insurance companies
and other financial intermediaries:
 Industrial Development Bank of India Limited
 Industrial Finance Corporation of India Limited
 Life Insurance Corporation of India
 State Bank of India
 ICICI Bank Limited
 IL & FS Trust Company Limited
 Stock Holding Corporation of India Limited
 SBI Capital Markets Limited
 Bank of Baroda
 Canara Bank
 General Insurance Corporation of India
 National Insurance Company Limited
 The New India Assurance Company Limited
 The Oriental Insurance Company Limited
22

23.  United India Insurance Company Limited
 Punjab National Bank
 Oriental Bank of Commerce
 Indian Bank
 Union Bank of India
 Infrastructure Development Finance Company Ltd.
NSE Family:
NSCCL NCCL NSETECH
IISL DotEx Intl. Ltd. NSE.IT
NSCCL
National Securities Clearing Corporation Ltd. (NSCCL), a wholly-owned
subsidiary of NSE, was set up in August 1995. It was the first clearing corporation in the
country to provide notations/settlement guarantee that revolutionized the entire concept
of settlement system in India. It commenced clearing operations in April 1996. It has
been set up to bring and sustain confidence in clearing and settlement of securities; to
promote and maintain short and consistent settlement cycles.
NSDL
Prior to trading in a dematerialized environment, settlement of trades required
moving the securities physically from the seller to the ultimate buyer, through the seller‘s
broker and buyer‘s broker, which involved lot of time and the risk of delay somewhere
23

24. along the chain. To obviate these problems, NSE to promote dematerialization of
securities joined hands with LTI and IDBI to set up the first depository in India called the
―National Securities Depository Limited‖ (NSDL). The depository system gained quick
acceptance and in a very short span of time it was able to achieve the objective of
eradicating the paper from the trading and settlement of securities.
NSE InfoTech Services Ltd
Information Technology has been the backbone of conceptualization, formation,
running and the success of National Stock Exchange of India Limited (NSE). NSE has
been at the forefront in spearheading technological changes in the securities market. It
was important to give a special thrust and focus on Information Technology to retain the
primacy in the market. Towards this a wholly owned subsidiary NSE InfoTech Services
Limited (NSETECH) was incorporated to cater to the needs of NSE and all its group
companies exclusively.
NSE.IT
NSE.IT Limited, a 100% technology subsidiary of NSE, was incorporated in
October 1999. It provides the securities industry with technology that ensures
transparency and efficiency in the trading, clearing and risk management systems.
Additionally, NSE.IT provides consultancy services in the areas of data warehousing,
internet and business continuity plans. Amongst various products launched by NSE.IT
are NEAT XS, a Computer-To-Computer Link (CTCL) order routing system, NEAT XS,
an internet trading system and Probes, professional broker‘s back office system.
SCSL
India Index Services and Products Limited (SCSL), a joint venture of CRISIL and
NSE, was set up in May 1998 to provide indices and index services. It has a licensing and
marketing agreement with Standard and Poor‘s (S&P), the world‘s leading provider of
investible equity indices, for co-branding equity indices. SCSL is India‘s first specialized
company focusing upon the index as a core product. It provides a broad range of services,
products and professional index services. It maintains over 90 equity indices comprising
broad—based benchmark indices, sect oral indices and customized indices.
24

25. NCDEX
NSE joined hand with other financial institutions in India viz., ICICI Bank,
NABARD, LIC, PNB, CRISIL, Canara Bank and IIFCO to promote the National
Commodity & Derivatives Exchange (NCDEX which provides for a world class
commodity exchange platform for Market Participants to trade in wide spectrum of
commodity derivatives. Currently NCDEX facilitates trading of 41 agro based
commodities, 2 precious metals, 6 base metal, 2 energy products and 3 polymers.
CAPITAL MARKET (EQUITIES) SEGMENT
Settlement Guarantee Fund Mar 31, 2006 Rs. 4,055.18 crores
Investor Protection Fund May 31, 2007 Rs. 196.74 crores
Number of securities available for trading May 31, 2007 1,526
Record number of trades Feb 28, 2007 47,78,407
Record daily turnover (qt) Jan 05, 2005 6,765 lakhs
Record daily turnover (value) Mar 31, 2006 Rs.17,315.06 crores
Record market capitalization May 29, 2007 Rs.39,14,386 crores
Record value of S&P CNX Nifty Index Jun 04, 2007 4362.95
Record value of CNX Nifty Junior Index Jun 20, 2007 8397.05
Record Pay-in/Pay-out (Rolling Settlement):
Funds Pay-in/Pay-out (N2006077) May 02, 2006* Rs. 4,110.52 crores
Securities Pay-in/Pay-out (Value)(N2006077) May 02, 2006* Rs. 7,293.25 crores
Securities Pay-in/Pay-out(Quantity) May 15, 2006* 2,443.71 lakhs
(N2006086)
*Settlement Date
Settlement Guarantee Fund Mar 31, 2006 Rs. 13,032.36 crores
Investor Protection Fund May 31, 2007 Rs. 44.56 crores
Record daily turnover (value) Apr 27, 2006 Rs. 60,433.75 crores
Record number of trades May 31, 2007 916,645
WHOLESALE DEBT SEGMENT
Number of securities available for trading May 31, 2007 3,277
Record daily turnover (value) Aug 25, 2003 Rs.13,911.57 crores
25

26. Different types of NSE logos:
Technology in NSE:
Across the globe, developments in information, communication and network
technologies have created paradigm shifts in the securities market operations.
Technology has enabled organizations to build new sources of competitive advantage,
bring about innovations in products and services, and to provide for new business
opportunities. Stock exchanges all over the world have realized the potential of IT and
have moved over to electronic trading systems, which are cheaper, have wider reach and
provide a better mechanism for trade and post trade execution.
NSE believes that technology will continue to provide the necessary impetus for
the organization to retain its competitive edge and ensure timeliness and satisfaction in
customer service. In recognition of the fact that technology will continue to redefine the
shape of the securities industry, NSE stresses on innovation and sustained investment in
technology to remain ahead of competition. NSE's IT set-up is the largest by any
company in India. It uses satellite communication technology to energize participation
from around 320 cities spread all over the country. In the recent past, capacity
enhancement measures were taken up in regard to the trading systems so as to effectively
meet the requirements of increased users and associated trading loads. With up gradation
of trading hardware, NSE can handle up to 6 million trades per day in Capital Market
segment. In order to capitalize on in-house expertise in technology, NSE set up a separate
26

27. company, NSE.IT, in October 1999. This is expected to provide a platform for taking up
new IT assignments both within and outside India and attaining global exposure.
NEAT is a state-of-the-art client server based application. At the server end, all
trading information is stored in an in-memory database to achieve minimum response
time and maximum system availability for users. The trading server software runs on a
fault tolerant STRATUS main frame computer while the client software runs under
Windows on PCs.
The telecommunications network uses X.25 protocol and is the backbone of the
automated trading system. Each trading member trades on the NSE with other members
through a PC located in the trading member's office, anywhere in India. The trading
members on the various market segments such as CM / F&O , WDM are linked to the
central computer at the NSE through dedicated 64Kbps leased lines and VSAT terminals.
The Exchange uses powerful RISC -based UNIX servers, procured from Digital and HP
for the back office processing. The latest software platforms like ORACLE 7 RDBMS,
GUPTA - SQL/ORACLE FORMS 4.5 Front - Ends, etc. have been used for the
Exchange applications. The Exchange currently manages its data centre operations,
system and database administration, design and development of in-house systems and
design and implementation of telecommunication solutions.
NSE is one of the largest interactive VSAT based stock exchanges in the world.
Today it supports more than 3000 VSATs. The NSE- network is the largest private wide
area network in the country and the first extended C- Band VSAT network in the world.
Currently more than 9000 users are trading on the real time-online NSE application.
There are over 15 large computer systems which include non-stop fault-tolerant
computers and high end UNIX servers, operational under one roof to support the NSE
applications. This coupled with the nationwide VSAT network makes NSE the country's
largest Information Technology user.
In an ongoing effort to improve NSE's infrastructure, a corporate network has
been implemented, connecting all the offices at Mumbai, Delhi, Calcutta and Chennai.
This corporate network enables speedy inter-office communications and data and voice
connectivity between offices
In keeping with the current trend, NSE has gone online on the Internet. Apart from
having a 2mbps link to VSNL and our own domain for internal browsing and e-mail
27

28. purposes, we have also set up our own Web site. Currently, NSE is displaying its live
stock quotes on the web site (www.nseindia.com) which are updated online.
Industry scenario:
Milestones of NSE
 November 1992 Incorporation
 April 1993 Recognition as a stock exchange
 May 1993 Formulation of business plan
 June 1994 Wholesale Debt Market segment goes live
 November 1994 Capital Market (Equities) segment goes live
 March 1995 Establishment of Investor Grievance Cell
28

29.  April 1995 Establishment of NSCCL, the first Clearing Corporation
 June 1995 Introduction of centralized insurance cover for all trading members
 July 1995 Establishment of Investor Protection Fund
 October 1995 Became largest stock exchange in the country
 April 1996 Commencement of clearing and settlement by NSCCL
 April 1996 Launch of S&P CNX Nifty
 June 1996 Establishment of Settlement Guarantee Fund
 November 1996 Best IT Usage award by Computer Society of India
 December 1996 Commencement of trading/settlement in dematerialized securities
 December 1996 Dataquest award for Top IT User
 December 1996 Launch of CNX Nifty Junior
 February 1997 Regional clearing facility goes live
 November 1997 Best IT Usage award by Computer Society of India
 May 1998 Promotion of joint venture, India Index Services & Products Limited
(SCSL)
 May 1998 Launch of NSE's Web-site: www.nse.co.in
 July 1998 Launch of NSE's Certification Programmed in Financial Market
 August 1998 CYBER CORPORATE OF THE YEAR 1998 award
 February 1999 Launch of Automated Lending and Borrowing Mechanism
 April 1999 CHIP Web Award by CHIP magazine
 October 1999 Setting up of NSE.IT
 January 2000 Launch of NSE Research Initiative
 February 2000 Commencement of Internet Trading
 June 2000 Commencement of Derivatives Trading (Index Futures)
 September 2000 Launch of 'Zero Coupon Yield Curve'
 December 2000 Commencement of WAP trading
 June 2001 Commencement of trading in Index Options
 July 2001 Commencement of trading in Options on Individual Securities
 November 2001 Commencement of trading in Futures on Individual Securities
 December 2001 Launch of NSE VaR for Government Securities
 January 2002 Launch of Exchange Traded Funds (ETFs)
 October 2002 Launch of NSE Government Securities Index
29

30.  January 2003 Commencement of trading in Retail Debt Market
 June 2003 Launch of Interest Rate Futures
 August 2003 Launch of Futures & options in CNXIT Index
 June 2004 Launch of STP Interoperability
 August 2004 Launch of NSE‘s electronic interface for listed companies
 March 2005 ‗India Innovation Award‘ by EMPI Business School, New Delhi
 June 2005 Launch of Futures & options in BANK Nifty Index
 December 2006 'Derivative Exchange of the Year', by Asia Risk magazine
 January 2007 Launch of NSE – CNBC TV 18 media centre
 March 2007 NSE, CRISIL announce launch of IndiaBondWatch.com
 June 2007 NSE launches derivatives on Nifty Junior & CNX 100
 October 2007 NSE launches derivatives on Nifty Midcap 50
 January 2008 Introduction of Mini Nifty derivative contracts on 1st January 2008
 March 2008 Introduction of long term option contracts on S&P CNX Nifty Index
 April 2008 Launch of India VIX
 April 2008 Launch of Securities Lending & Borrowing Scheme
 August 2008 Launch of Currency Derivatives
 August 2009 Launch of Interest Rate Futures
 November 2009 Launch of Mutual Fund Service System
 December 2009 Commencement of settlement of corporate bonds
 February 2010 Launch of Currency Futures on additional currency pairs
 March 2010 NSE- CME Group & NSE - SGX product cross listing agreement
 April 2010 Financial Derivative Exchange of the Year Award' by Asian Banker
 July 19, 2010 Commencement of trading of S&P CNX Nifty Futures on CME
 July 19, 2010 Real Time dissemination of India VIX.
 July 28, 2010 LOI signed with London Stock Exchange Group
 October 12, 2010 Introduction of Call auction in Pre-open session
 October 28, 2010 Introduction of European Style Stock Options
 October 29, 2010 Introduction of Currency Options on USD INR
 November 9, 2010 Launch of mobile trading for all investors
 December 29, 2010 NSCCL Rated ―CCR AAA‖ for third consecutive year
 January 05, 2011 NSE receives Financial Inclusion Award
30

31. Many more stock exchanges were established during 1980's, namely:
1. Cochin Stock Exchange (1980)
2. Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982)
3. Pune Stock Exchange Limited (1982)
4. Ludhiana Stock Exchange Association Limited (1983)
5. Gauhati Stock Exchange Limited (1984)
6. Kanara Stock Exchange Limited (at Mangalore, 1985)
7. Magadha Stock Exchange Association (at Patna, 1986)
8. Jaipur Stock Exchange Limited (1989)
9. Bhubaneswar Stock Exchange Association Limited (1989)
10. Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989)
11. Vadodara Stock Exchange Limited (at Baroda, 1990)
12. Coimbatore Stock Exchange
d) Government Securities: The government securities market has witnessed significant
transformation in the 1990s. With giving up of the responsibility of allocating resources
from securities market, government stopped expropriating seignior age and started
borrowing at near – market rates. Government securities are now sold at market related
coupon rates through a system of auctions instead of earlier practice of issue of securities
at very low rates just to reduce the cost of borrowing of the government. Major reforms
initiated in the primary market for government securities include auctions system
(uniform price and multiple price method) for primary issuance of T-bills and central
government dated securities, a system of primary dealers and non-competitive bids to
widen investor base and promote retail participation, issuance of securities across
maturities to develop a yield curve from short to long end and provide benchmarks for
rest of the debt market, innovative instruments like, zero coupon bonds, floating rate
bonds, bonds with embedded derivatives, availability of full range (91-day and 382 day)
of T-bills, etc.
e) Articles:
The articles of association of steel city securities limited.
National stock exchange
31

32. f) Major Players:
32

33. COMPANY PROFILE
HISTORICAL BACKGROUND OF THE COMPANY:
Steel City Securities Limited was incorporated on 22nd February 1995 and raised
equity of Rs.105 lakh on 24th June 1995 and obtained the membership of the largest and
prestigious National Stock Exchange of H-Limited (NSE) and Bombay Stock Exchange
(BSE) in 2000, in its capital market segment. The 1st VSAT for its trading workstation
(TWS) at Hyderabad was installed in 1995 and the 2nd at Visakhapatnam in April 1996.
Presently, there are 64 VSATS installed at more than 50 centers in Andhra
Pradesh, Orissa, Tamilnadu and Karnataka. There are 219 computer trading terminals
put together connected to their VSAT at the centers (each VSAT can have 5 TWS
connected). Since its inception the service of this organization is prompt and there is not
a single instance of payout of funds / deliveries delay to any client, from the beginning
the firm is committed to continue the same service in future also. Companies‘ basic
principle is total commitment in service to all clients with all transparency and ensures
that is it their sacred policy not to indulge in own trading, there are no self-motives or
necessity to cancel or delay anything. Every branch is fully equipped and independently
connected to the NSE Hub at Mumbai; every branch is having 2 to 5 trading terminals
connected to VSAT. The company performance has not parallel on NSE.
Steel City Securities Ltd. follows a functional organization system. It provides various
services, which are provided through different departments.
Various Functional Departments
i. Planning
It involves planning of human resources requirements, recruitment, selection, training,
ii. Directing In this company the personnel manager coordinates various managers at
different levels as the personnel functions are concerned. The willing and effective
cooperation of employees for the attainment of organizational goals is possible through
proper directions.
33

34. iii. Controlling:
In SCSL, the controlling is done by the top management, in this aspect they do
auditing training programmes, directing morale surveys, conducting separate interviews
are some of the functions of the top management in controlling.
iv. Recruitment
It is the process of searching for prospective employees and stimulating them to
apply for jobs in the organization. In SCSL, if they want any person, they will give
notification in newspaper in order to stimulate the eligible persons to apply for that job.
v. Employee Relation
The company has recruited required personnel and trained them for operations of
the company at all braches and to maintain cordial relations between the management and
the employees.
vi. Employee Service
All the employees of the company from top to bottom dedicate their sincere
services with co-operation, co-ordination, hard work and team spirit which results in
successful performance of SCSL which helped SCSL to become of the best stock broking
firm in India.
vii. Selection
It is the process of ascertaining the qualifications, experience, skill, knowledge,
etc. of an applicant with a view to appraise his/her suitability to a job. The top
management in this organization shall do the selection. They send the letters of
appointment or rejection to the board of directors.
viii. Placement
It is the process of assigning the selected candidates with most suitable job. In
SCSL, the directors do the selection of the candidates for placement. The placement may
be in the head office or in branches of SCSL which are different places.
ix. Training
The selected candidates will be shown placement in one of the branches of SCSL
and are given proper training. The trainers are the most experienced persons.
x. Promotions and Transfers:
In SCSL, the personnel management provides promotion to the skilled and eligible
34

35. persons. The transfers of persons are more in this company but they will be an increase in
the salary of the persons who are transferred to other branches.
xi. Activities of the organization:
SCSL provides different services. These services are provided through various
departments.
xii. Trading Department:
This area mainly deals with online trading facility which is received through
VSAT into the server and finally into Hub going to the trading system. Interacting with
the clients, admitting the clients or investors or sub-brokers and helping out in opening
the accounts and facilitating them with the direct interaction with the online trading
facility, etc. are the other works done by the Trading Department. The main aspect is
concerned with the involvement of investors or clients or sub brokers to participate in
trading. A particular day‘s trading on the different scripts can be viewed online which is
provided by the NEAT trading software by NSE and the original positions are determined
by the end of the trading day, i.e., at 3.30 p.m. where there itself a back up is saved and
that particular day‘s trading position of each client is determined by the back office
process made by the depository participants. So trading department has a very important
role in a member of NSE like SCSL to provide updated information of a day‘s trading
activities.
TRADING AND SETTLEMENT:
One of the basic services provided by SCSL as member of NSE and NSDL is to
facilitate transfer of securities from one demat accounts to the other on the instruction of
the account holder. In NSDL depository system both transfer and the transferee have to
give instructions to their DPs for delivering and receiving of securities. However, the
transferee can give ‗Standing Instructions (SI)‘ to its DP for receiving in securities.
Transfer of securities from one demat accounts to the other may be done for any of the
following purposes: Transfer due to a transaction done on a person to person basis i.e., an
‗off market‘ trade Transfer arising out of a transaction done on a stock Exchange.
Transfer arising out of a transmission and account closure.
35

36. STOCK MARKET TRADING
The trading on stock exchanges in India used to take place through open outcry
without use so information technology for immediate matching or recording of trades.
This was time consuming and inefficient. This imposed limits on trading volumes and
efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a
nation-wide on-line fully-automated screen based trading system (SBTS) where a
member can punch into the computer quantities of securities and the prices at which he
likes to transact and the transaction is executed as soon as it finds a matching sale or buy
order from a counter party. SBTS electronically matches orders on a strict price/time
priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting
in improved operational efficiency. It allows faster incorporation of price sensitive
information into prevailing prices, thus increasing the informational efficiency of
markets. It enables market participants, irrespective of their geographical locations, to
trade with one another simultaneously, improving the depth and liquidity of the market. It
provides full anonymity by accepting orders, big or small, from members without
revealing their identity, thus providing equal access to everybody. It also provides a
perfect audit trail, which helps to resolve disputes by logging in the trade execution
process in entirety. This sucked liquidity from other exchanges and in the very first year
of its operation, NSE became the leading stock exchange in the country, impacting the
fortunes of other exchanges and forcing them to adopt SBTS also. Today India can boast
that almost 100% trading take place through electronic order matching.
I. NEAT System
The NEAT system supports an order driven market, wherein orders match on the basis
of time and price priority. All quantity fields are in units and prices are quoted in Indian
Rupees. The regular lot size and tick size for various securities traded is notified by the
Exchange from time to time.
II. Market Types
The Capital Market system has four types of market.
A. Normal Market
Normal market consists of various book types wherein orders are segregated as
Regular Lot Orders, Special Term Orders, Negotiated Trade Orders and Stop Loss
36

37. Orders depending on their order attributes.
B. Odd Lot Market
The odd lot market facility is used for the Limited Physical Market.
C. Ret debt Market
The RETDEBT market facility on the NEAT system of capital market segment
is used for transactions in Retail Debt Market session. Trading in Retail Detail Market
takes place in the same manner as in equities (capital market) segment.
D. Auction Market
In the Auction market, auctions are initiated by the Exchange on behalf of
trading members for settlement related reasons.
E. Accounts Department
The function of accounts department is to maintain a record of all pay in, pay
out; cash received for demat account opening, account closing, and transaction charges
for operating the account. Records of expenses incurred and incomes earned from
business are also maintained basing on which every year an Annual Report is prepared.
F. Deliveries Department
Deliveries department acts as an Intermediary between stock exchange and clients and
so proper knowledge is needed without which the results may be hazardous.
Proper records of all inward and outward stocks should be maintained failing which
there may be improper deliveries leading to penalties and disagreement with clients. In
the secondary market operations when shares and securities are bought or sold, the
change of hands of the possession of these shares or securities from seller to the buyer
will discharge the delivery obligation of the seller. In case of BSE, the clearing house is
BOISL and in case of NSE, NSCCL is extended to the responsibility of settling the
delivery obligations of sellers and buyers dealt Ina given settlement period.
G. Rolling Settlement for Demat Securities for both BSE and NSE:-
i. Introduction to Dematerialized Rolling Segment
a. Trading of dematerialized securities is available both on NSE and BSE.
b. At NSE, dematerialized securities are traded in two separate segments called ‗AE
Segment‘ and ‗BE Segment‘ which are in addition to the segment for trading in
securities in the Normal Segment (account period settlement) where compulsory
37

38. dematerialized trading is only allowed. In case of AE segment, dematerialized
securities are traded only in market lots, whereas in BE segment these can be
traded in multiples of one share.
c. At BSE, dematerialized securities are traded in a separate segment called Demat
Rolling Segment and normal segment (account period settlement) where
compulsory dematerialized trading is only allowed. In Demat Rolling Segment,
the trades are settled on T+5 bases.
ii. Rolling Settlement Cycle
Trading in rolling settlement is quite similar to trading in normal settlement except that
the normal segment follows weekly account period settlement and rolling settlement
follows T+5 Settlement. For example, all trades executed on a particular day (T), netted
intra day, will be settled on the following fifth (T+5) working day. The trades done on a
day cannot be netted off against those done on the earlier day. Trades executed on
Monday will normally be settled on next Monday (T+5). Both Pay-in and pay-out will be
on the same day. The difference between a rolling settlement and weekly account period
settlement can be illustrated by the following figure:
T + 5 Rolling Settlement Weekly Account Period
38

39. STRUCTURE OF THE ORGANISATION:
The total control of the organization is under the Chairman who is also the
Managing Director. Under him there are three Executive Directors for surveillance &
operations and also a Sleeping Director.
Mr.G.Sree Ram Murthy is the Chairman cum Managing Director, Mr.G.RajaGopal
Reddy the Executive Director looks after the market development and opening of new
franchisees. He also looks after requirements of new and existing branches.
Mr.K.Satyanarayana the Executive Director, surveillance has an inspection team under
him for the purpose of vigilance in all branches and franchisees.
Mr.Satish Kumar Arya is the Director Operations. He controls the trading limits,
margins etc. All office related matters are dealt by him. He is also responsible for
meeting the requirements and following the rules set by the stock exchanges.
Mr.G.S.R.Prasad is the fourth Director who does not play any role in the day to day
working of the company.
General Manager (Operations) is Mr.Murali is responsible for De-Mat with
NSDL / CDSL. General Manager is Mr.V.Srinivas who looks after the Networking,
Software, Hardware and trading related requirements and VSAT connectivity. Finance
and accounts were looked after by Mr.Ramu who is a Chartered Accountant.
Mr. Samba Murthy is responsible for the trading and registration of new clients.
He is the Trading Manager. Mr. Krishna Naga Bhutan is the Marketing Manager. He is
also responsible for conduction various awareness seminars. The legal section deals with
the investor‘s problems and legal issues with the company. Even without relation to the
company they render legal services
39

40. ORGANISATIONAL STRUCTURE
40

41. The different branches and franchisees of the company report directly to the Head
Office in Visakhapatnam and any activity taken up by these should be brought to the
notice of the Head Office. Every branch has a Branch Manager, Accountant, Trading
Manager and Trading Operator. The company has various functional departments for its
smooth functioning.
Steel City Securities Ltd. follows a functional organization system. It provides
various services, which are provided through different departments.
BOARD OF DIRECTORS OF STEEL CITY SECURITIES LIMITED
Sri G.Sree Rama Murthy Chairman and Managing Director
Sri G.RajaGopal Reddy Executive Director
Sri K.Satyanarayana Executive Director (S)
Sri Satish Kumar Arya Director Operations
Sri G.Satya Rama Prasad Directors
The various service departments in SCSL are:
Systems Departments
Inspection Department
Personal Department
Accounts
Deliveries
Depository Participant
Research and Development
41

42. ACTIVITIES OF STEEL CITY
STEEL CITY SECURITIES LIMITED
TRADING FACILITIES SETTLEMENT OF TRADES
FUNDS SECURITIES
PAY IN PAY OUT
PAY IN PAY OUT
PAY OUT
SECURITIES BOUGHT BY LOSS
CLIENTS
FUNDS
INTERNAL FUNDS NSE
PAY OUT TO CLIENTS
42

43. STEPS TAKEN BEFORE THE REGISTRATION OF THE CLIENT:
1. Registration of the Client:
The customer has to fill in the registration form and provide details of his
Qualifications, Date of Birth etc. He has to furnish his photographs and proof of Identity
through PAN Card, Driving License or Voter Identity Card.
2. Introduction of the Client:
The customer has to be introduced by one of the existing clients of the company
who voucher for the honesty and integrity of the former.
3. Background of the Client:
A detailed background check of the client is necessary. Only after a thorough
checks of his place of origin, his business etc. the client is registered.
4. Strengths / Weaknesses of the Client:
The client‘s financial position is also monitored. Only customers who have a
sound financial position are registered for trading.
5. Previous record of business:
The previous record of the business of the client is checked to see the fairness in
his dealings and promptness in settling the outstanding debts.
6. Undertaking / Agreement:
An undertaking is taken from the client to the effect that the deals have been done
on behalf of him by Steel City Securities Ltd on his instruction and is liable to the profits
/ losses thereof.
7. Storing previous transactions:
All transactions of the client are stored for legality purpose. According to the
guidelines of SEBI, the transactions of the past five-year have to be maintained.
43

44. COMPANY POLICY:
The basic policy of SCSL is not to indulge in own trading. The basic principle of
SCSL is total commitment in service to all clients. The service of SCSL is prompt and
hence there are not delays in payout of funds or deliveries to any client. SCSL collects
pay in T+1 and its payout in T+3 days. Through SCSL, trade in NSE per day is 200
crores whereas; trade in BSE per day is 4 crores.
Capital:
The base capital is set up a trade center is 1 crore, SCSL raised equity of Rs.105
lakhs during its incorporation. Earlier, SCSL paid Rs.75 lakhs as base capital to NSE
when it was set up. Every trade corporation has to maintain a reserve of some amount
with NSE. At present, SCSL has 7.5 crores as margin with NSE.
Working Staff:
There is 100 to 150 staff employed in SCSL. The staff draws a salary basing on
the cadre they are employed. The salaries in SCSL vary from Rs.2000 to Rs.20000 per
month basing on the cadre of the employee.
Employee Recruitment:
In SCSL, the top managements select the candidate and the letter of appointment
or rejection is sent to the Board of Directors. The Directors do the placement in SCSL.
The placement can either be in the Head Office or in any other branches of SCSL.
Planning:
It involves planning of Human Resource Department i.e. recruitment, selection,
training etc. it also involves forecasting of personnel changing values, attitudes and
behavior of employees.
Directing:
In this company, the personnel manager co-ordinates various managers at different
levels as the personnel functions are concerned. The wilting and effective co-operation
44

45. of employees for the attainment of organization goals is possible through proper
direction.
Controlling:
In SCSL, the top management does the controlling. In this aspect, they do auditing
training programmers; directing moral surveys are some of the functions of the top
management.
Recruitment:
It is the process of searching for prospective employees and simulating them to
apply for jobs in the organization. In SCSL, if they want any person, they will give
notification in newspaper in order to simulate eligible persons to apply for that job.
Employee Relation:
The employee relation at all levels remains cordial. Training, Promotion and
Transfers are done in SCSL to motivate and increase the morale of the staff. All the
employees in SCSL from top to bottom perform their services with sincerity, hard work,
dedication and with team spirit due to which SCSL is considered as one of the best stock
trading firm in India.
Selection, Placement and Training:
The top management shall do the selections. Placement is in the head office and in
the branches of SCSL, which are in different places. Selected candidates are placed in
one of the branches of SCSL and gives proper training.
Functions of the SCSL:
SCSL provides mock trading to its clients and members.
SCSL provides complete automated system both in trading and settlement process.
SCSL enables clients to trade both in NSE and BSE.
SCSL converts the paper shares into electronic shares through DMAT Process.
SCSL provides market information.
SCSL acts as clearing member for trades taking place through SCSL.
SCSL is a depository participant of NSDL &CDSL and it is a trading and Clearing
member of NSE & BSE.
45

46. Facilities provided to Client in SCSL:
Gross exposure facility given in SCSL is 5 times. But, up to 10 times, it is relaxed
to clients. Turnover facility given in SCSL to clients is 33.33 times. But, the restrictions
are not considered. Minimum of Rs.20, 000 margins money is collected from
professional clients who trade for speculation purpose. For deliver purpose, no margin
money is collected. Due to the total commitment in service to its clients, SCSL is
considered to be one of the best Stock Broking Companies in India.
NSE Branches of SCSL:
Mumbai Gudiwada
Secunderabad Kakinada
Gajuwaka Cuddapah
Vizianagaram Guntur
Tirupathi Prodduttur
Bhimavaram Narsaraopet
Vijayawada Chilakalurpet
Mellor Eluru
Nandyala Ongole
NSE Franchisees:
Rourkela Berhampur (2)
Srikakulam Visakhapatnam
Chennai Kukatpalli
Anantapur Bakaram
Chittor Tenali
Amalapuram Pidiguralla
Madanapalli Hanumakonda
46

47. SECURITIES TRADED IN SCSL:
In SCSL all the shares, scripts, stocks, bonds, debentures, derivatives, government
securities, debt instruments etc. can be traded. But generally, trading is mostly done in
scripts listed in BSE & NSE.
The government securities and the corporate securities can be traded through
NEAT system in NSE. Only trading mechanism available in the debt market was the
telephone market before June 1994 when NSE launched wholesale debt market (WDM)
segment. This provides the only formal platform for trading of a wide range of debt
securities. Though many trades in the gilt‘s takes place through telephone, a longer chunk
of trades get rented through NSE brokers.
Trading in derivatives of securities commenced in June 2002 with the enactment of
enabling legislation in early 2000.
THE TRADING PROCESS:
Steel City Securities Limited provides stock trading services to its clients and
members. It enables the clients to trade in both NSE & BSE. Through the computer
trading terminals in SCSL, the client places an order to buy or sell the shares. After the
trade is confirmed, the client receives the settlement net positions. SCSL collects the
margin, brokerage, service tax & commission from the clients for the trades taking place
in SCSL.
SCSL converts the physical shares into the electronic shares through D-MAT
process. Clearing and settlement of trades, dematerialization of shares, providing market
information to the clients are daily chores in SCSL, apart from trading.
1. DOCUMENTATION:
The trading member or stockbroker shall enter into an agreement in the specified
format provided by NSE with the client before accepting orders on latter‘s behalf. The
said agreement shall be executed on non-judicial stamp paper of adequate value, duly
signed by both the parties on all the pages. This agreement is known as ‗Member
Constraint Agreement‘. Copy of this agreement is to be kept with the trading member
permanently.
47

48. B) MILE STONES
Year wise milestones of our Evolution
Year Activity / Milestone
1995 • The company was incorporated
• Obtained the Membership in National Stock Exchange of India Limited in October
andcommenced equity broking
• Installed 1st VSAT and Started the Operations in Hyderabad in December
1996 • The company has become successful in starting its operations at
Visakhapatnaminstalling the 2nd VSAT in April
• Changed the registered office of company on April 15, 1996
1999 • Foray in distribution of financial products
• Set up 10th centre during the year
2000
• SEBI‘s Approval as Depository Participant of National Securities Depository Limited
• Own In-house back office software developed named ―STEEL PACK‖
2001 • Obtained Membership of BSE by Steel City Capital services Pvt. Limited
• Maintained 3,353 DP client accounts
2002 • SEBI‘s Approval as Depository Participant of Central Depository Services (I)
Limited
• Started the operations of Futures & Options segment in May
• Incorporated Steel City Insurance Agencies Private Limited in August
• Maintained 7,617 DP client accounts
• Set up the 50th Centre
2003 • Commenced distribution of insurance products
•Maintained 22,678 DP client accounts
2004
• Membership of Multi commodity exchange of India Limited and National
Commodity &Derivatives Exchange Limited
• Started the operations of Mutual Funds in February
• Maintained 37,497 DP client accounts
• Set up the 100th Centre
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49. 2005 • Maintaining 46,712 DP client accounts as on date.
• Set up more than 200 centre‘s.
• Applied for Registration of Trademark and obtained T.M.No. 1350172 and also the
said
Trademark is accepted for registration.
• Accredited with ISO 9001:2000 certification with the scope of ―Service Provision
for
Stock/Securities Market Operations, Depository Participant Services, Other Allied and
Customer Support Services‖ from AQA International, LLC, USA, ANAB
Accredation No.
010694, Certificate No. 5825 dated November 1, 2005 valid from November 1, 2005
to
November 1, 2008.
• Commenced the Procedure for empanelment of the company in various Institutions
• Launching internet e-broking portal as www.steelcitynettrade.com
c) Objectives:
The main objects of the Company as contained in our Memorandum of Association are
reproduced below:
1. To carry on Investment business and to purchase, acquire, hold and dispose of or
otherwise invest in shares, debentures stocks, bonds, obligations and securities, issued or
guaranteed by any Company constituted or carrying on business, in India or elsewhere
and debenture stocks, bonds, obligations and securities issued or guaranteed by any
Government, State dominion, sovereign ruler, commissioner public body or authority,
supreme, municipal, local or otherwise whether in India or elsewhere.
2. To carry on business as consultants and advisors in marketing personnel, taxation,
technology, projects setting up, loan syndication, project appraisal, research and
development including rendering of services such as share brokers, sub-brokers, dealers,
underwriters, merchants, bankers, registrars to issue and share transfer agents, portfolio
manager and all allied matters including sponsoring and setting up of mutual fund and
venture capital fund.
49

50. 3. To carry on the business of investment Company and to invest in, acquire, subscribe,
hold, alter, resell and deal in investments in any shares, stocks, bonds, securities,
debentures whether convertible or otherwise issued or to be issued by any public limited
companies or private limited companies registered under the Companies Act, 1956 or any
statutory modification or re-enactment thereof and/or any companies carrying on business
in India and subject to such approval as may be necessary according to the law for the
time being in force, to invest moneys of the Company in shares, debentures and other
securities of any company registered abroad and/or any statutory corporations and to
invest in securities of Central Government and State Governments in India, public bodies
or authorities anywhere and to carry on all and every other business which is generally
carried on by investment companies.
4. To apply for and become in India or abroad member of any Stock Exchange, Securities
& Exchange Board of India, Over The Counter Trading and Exchange of India, National
Stock Exchange and any other similar authority, body or institution as may be established
from time to time and also to carry on and act as stock brokers, C, F & O, mutual funds,
clearing members, margin trading, primary dealers and syndicate members and to do all
incidental acts and things necessary for the attainment of foregoing objects.
D) UNIQUE ACHIEVEMENT:
To be at the top providing the best, prompt, transparent, committed, highest quality of
services to all retail, high net worth, institutional clients at every place in the country all
the time.
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51. E) SWOT ANALYSIS:
Strengths Weaknesses
• Integrated online trading in terms of
brokerage services in equities, derivatives,
commodities and depository services
• Insignificant presence in overseas and
• Presence at 97 Cities/Towns as on date
institutional segment
through 225centres with plans of opening 100
• Awareness about our e-broking portal is
additional centres
yet to be created among masses+
• Strong brokerage and depository services
• Yet to obtain approval of Trademafor
clientelebase created over the past 10 years
developing into brand
of operations
• In-house developed back-office
software, own
• Our first e-broking network, ready economic
communication portal is to launch
shortly.
model of
operations etc.
Opportunities Threats
• Additional centres will increase the clientle •Competition from existing and new
base and in-turn will increase revenue entrants
• Retail sector is expected to grow due to • Downturn or volatility of securities and com
reduction in interest rate and opting for new • Slowdown of Indian and global economy
opportunities inequity and relate instruments
• Change in government and economic
• Rapid penetration of Internet and computers policies including personal taxation may
will be instrumental in increasing e-broking affect our volume and fund mobilization
business
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52. F) FUTURE PLANS:
The Company is one of the early broking companies, which started full services to big &
small retail clients going to their doorstep in Towns, Semi-urban Towns, who utilized the
financial market services fully welcoming the ONLINE services at their own place. The
Opportunities are infinite across the villages, towns, cities and metros and remain
untapped by the existing companies engaged in the similar field and segment. We have
assessed the vast potential in the retail segment due to technology revolution and thus,
focused in rendering our brokerage services in these places by putting up more centres
and also adding more financial products over a period of time since inception.
Immediate Future Plans:
After having already established business operations of over the past 10 years in retail
broking and other ancillary services, we have planned for further expansion in terms of
the following:
100 additional centers to be opened in India and specially at the locations where
the potential exists
Thrust on distribution of financial products by leveraging on high net worth
individual and other brokerage clients to support the overall growth
Adding general insurance products distribution in addition to present life
insurance products
Tapping scope in Commodity Futures market through all the centre‘s situated
across India as many of the present centre‘s are not offering commodities
brokerage services
Launching internet online trading to provide access and reach to all the location in
India and abroad and having interfacing with company depository services
In near future, we have plans to open branches in Singapore, Malaysia, Dubai,
London, New York and to enroll with almost prominent Institutions to provide
institutional broking services.
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53. B) FUCTIONAL PROFILE
a) Production:
A) Equity brokerage services
We are member of NSE and BSE and offer secondary market broking services to our various
retail customers. As on date, we have a registered client base of 36,311 nos. We offer equity
and derivatives broking services through dedicated dealers and managers. All our centers are
connected via VSAT, VPN and CTCL. Brokerage services are provided to active trades, retail
investors and high net worth investors with advisory assistance by our dedicated dealers and
managers located at our centre‘s based on technical, fundamental and market research carried
out by our research team. The retail customer acquisition has seen accelerated growth owing to
wide spread branch and franchisee network of the Company. All our customers are connected
with our network and the network system is depicted below:
a) Exchange Network
We are having accessibility to trade in four different exchanges namely National Stock
Exchange (NSE), Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange
(MCX) and National Commodity & Derivative Exchange (NCDEX). Presently two major
service providers are existing in the country, one is HCL Comment Ltd. and other is Huge
Escorts Ltd (HECL). HCL has got wide range of expandability and reliability
with rugged Technology as per the Indian Climate Conditions. HECL has also got high spread
of Network throughout the country. The present VSAT Network throughout the country is
being operated by Extended-C Band and KU-Band Technology. These two technologies are
most ideal for Stock Broking.
Connectivity: The Exchanges have installed VSAT with the support of HCL Com net and
HUGES at most of our centre‘s. All end users are being connected via Indian satellite to
access NSE/BSE/MCX/NCDEX Trading Servers installed at Mumbai.
Accessibility: In each VSAT location, we have 5 to 7 Terminals to trade in different
Exchanges as per client request. All four exchanges have provided free software like NEAT
(National Exchange for Automated Trading), BOLT (Bombay Online Trading), MCX (Trader
53

54. Workstation) and NCDEX (National Commodity and Derivative Exchange). These Frontend
Trading screens are called as Market watch, through which Client can place orders Between
9.00am to 3.30pm daily in Capital Market, Futures & Options and Commodities segments.
Since Commodity Market has dependency on International Bullion Markets, the Live Market-
Watch is available up to 11.50pm daily. On functional side all four soft ware‘s are user-
friendly to handle the client order requests. Client can also cancel or Modify their order
requests as per their will and market conditions. All four exchanges are working from Monday
to Friday and no Trading activity is done on Saturdays and Sundays. In case of Commodity
segment, the exchange is open for trading from Monday to Friday and on Saturday till 2.00pm.
Maintenance: VSAT downtime has been maintained by the HCL Com net and HUGES. They
have region wise support to attend the downtime immediately within 4 to 6 hours. Inventory of
spares is also maintained at the region level.
b) Virtual Private Network (VPN):
We have facilities for our clients to trade in all three segments (Cash, F&O and Commodity) in
a single VSAT connectivity through CTCL (Computer to Computer Link) software. This
Network is basically for better surveillance and more functional features comparing to the
Exchange provided software. Since Exchanges do not provide any CTCL software, we have
approached CTCL Software Vendors empanelled by the Exchanges. There are many CTCL
Software Vendors available in the Market today. This Network is maintained by the HCL
Comnet from NOIDA (UP). HCL Comnet has their own HUB at NOIDA to provide
Interactive and Broadcast Bandwidth to connect between Central and Remote sites.
Connectivity: We have our Branches and Franchisee locations in entire Andhra Pradesh,
Karnataka and Orissa. In these locations we have installed VSAT with the support of HCL
Comnet. All end users are being connected via Indian Satellite to access CTCL Trading Server
installed at Visakhapatnam.
Accessibility: In each VSAT location we have 3 Terminals to trade in different Exchanges as
per client request. SCSL has bought licensed CTCL software ODIN (Open Dealer Integrated
Network) from Financial Technologies Limited, Mumbai. This Front–end can support Multiple
Market watch screens, through which client can place orders between 9.00am to 3.30pm daily
in Capital Market, Futures & Options and Commodities segments. Since Commodity Market
has dependency on International Bullion Markets, the Live Market- Watch is available up to
54

55. 11.50pm daily. On functional side all four software are user-friendly to handle the client order
requests. Client can also cancel or modify their order requests as per their will and market
conditions. All four exchanges are working from Monday to Friday and no Trading activity is
done on Saturdays and Sundays. In case of Commodity segment, the exchange is open for
trading from Monday to Friday and onSaturday till 2.00pm. Maintenance: VSAT downtime is
maintained by the HCL Comnet. They have region wise support to attend the downtime
immediately within 4 to 6 hours. Inventory of spares is also maintained at the region level.
c) Remote Access Service (RAS)
This is a low-cost solution to encourage our clients to connect to Trading Server
via DIAL-UP (Through local Telephone or Broad Band Lines). This Network is well
supported for the clients within the 20 to 40 km radius. Order confirmation speed is
marginally slow in comparison with VSAT Connectivity.
Connectivity: We have RAS users at many centers. In these locations we have installed
RASROUTERS. All end users are being connected via telephone or Broad Band Lines to
access CTCL Trading Server installed at all our Branches and Franchisee locations.
Accessibility: In each RAS location we have Terminal to trade in different exchange as per
client request‘s
B) FINANCE:
55

56. ACCOUNTS:
The Accounts/ Finance department maintains the accounts in Steel city securities Ltd.
The accounts are prepared in three forms. They are:
 Client-wise net positions,
 Scrip-wise net positions,
Pay-in and Pay-out settlement of funds
C) PERSONAL:
Manpower:
We have experienced and well-qualified personnel, handling greater responsibilities, work
flow, communication, compliance, correspondence, implementation, auditing, maintenance,
documentation etc. As per Exchange guidelines we keep NCFM qualified persons in the
trading operations. We also conduct functional training programs for newly joined employees
before commencement of branch operations. We have developed extensive in-house training
package. The Company has an excellent reward policy by offering performance based
incentives in addition to salary. At present we are having total manpower strength of 343
inclusive of 292 permanent employees and 51 on probation.
RECRUITMENT PROCESS:
It is the process of searching for prospective employees and stimulating them to apply for jobs
in the organization. In SCSL, if they want any person, they will give notification in newspaper
in order to stimulate the eligible persons to apply for that job.
Selection
It is the process of ascertaining the qualifications, experience, skill, knowledge, etc. of
an applicant with a view to appraise his/her suitability to a job. The top management in this
organization shall do the selection. They send the letters of appointment or rejection to the
board of directors.
Placement:
It is the process of assigning the selected candidates with most suitable job. In SCSL, the
directors do the selection of the candidates for placement. The placement may be in the head
office or in branches of SCSL which are different places.
Training:
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57. The selected candidates will be shown placement in one of the branches of SCSL and
are given proper training. The trainers are the most experienced person
D) MARKETING
PRODUCT: shares
PRICE: depend on the stock transaction amount (brokerage cost, service cost)
PLACE: Vishakhapatnam PROMOTION: web sites, populates
57

58. CHAPTER –3: THEORETICAL FRAME WORK
AND
CONCEPTUAL DATA
58

59. THEORETICAL FRAME WORK
STOCK EXCHANGE
The term ―STOCK EXCHANGE‖ implies is evident from the following feature of an
exchange.
S - Securities provider for investor
T - Tax benefits, planning and examples
0 - Optimum return of investments
C - Caution approach
K - Knowledge of Market
E - Eligibility for accruals
X - Exchange of securities transacted
C - Cyclopedia of listed companies
H - High yield
A - Authentic information
N - New entrepreneurs encouraged
G - Guidance to investors and companies
E - Equity cult
59

60. INDIAN STOCK BROKING HOUSES
The Indian capital market has undergone numerous changes in over the years.
Traditionally stock market booms and decline have laid numerous Problems for lay investors.
A close interaction of these problems revealed that these were due to paper based trading and
settlement. The short learning of the markets become manifest in the bad deliveries, delays in
transfers and irregular settlement etc. the remedial measure was dematerialization under the
depository system. With the introduction of de-mat system in 1996 and in effect from January
1998, investors in capital market need to have de-mat ac. and trading ac. stock broking houses
play a vital role in this field. These stock broking houses become depository participant of
NSDL&CDSL arid help lay investors to trade in capital markets without any hassles.
Brokerage:
The maximum brokerage that can be charged by a broker is decided by the stock
exchanges as per the Exchanges regulations. The SEBI (stock brokers and sub brokers),1992
stipulates that sub broker cannot charge from his clients commission which is more than 1.5%
of the value mentioned in the respective purchase (or)sale note.
The trading member can charge:
1. Brokerage charged by member broker.
2. Penalties arising on specific default on behalf of client. (Investor).
3. Service tax as stipulated.
In India, now many stock broking houses have come up. some of the major players are
steel city security Ltd., ICICI, India bulls, MotilalOswal, etc. some companies provide on line
services, some of them are provide only off line services and some are provide both on Line &
off-line. E.g. steel city securities Ltd
Over the years stock markets matured as the platforms for making Investments. Here
we can‘t forget the role played by SEBI (Securities Exchange Board Of India). The regulations
passed by SEBI in monitoring and controlling the trading practices made it comfortable for the
investors. Over the last few decades, the average person‘s interest in the stock market has
grown exponentially. What was once a toy of the rich has now turned into the vehicle of choice
for growing wealth? This demand coupled with advances in trading technology has opened up
the markets so that now a day nearly anybody can own stocks.
60

61. Despite their popularity, however, most people don‘t fully understand stocks. Much is
learned from conversations around the water cooler with others who also don‘t know what
they‘re talking about. Chances are you‘ve already heard people say things Like, ―Bob‘s cousin
made a killing in XYZ Company, and now he‘s got another hot tip...‖ or ―Watch out with
stocks--you can lose your shirt in a matter of days!‖ So much of this misinformation is based
on a get- rich-quick mentality, which was especially prevalent during the amazing dotcom
market in the late 90s. People thought that stocks were the magic answer to instant wealth with
no risk. The ensuing dotcom crash proved that this is not the case. Stocks can (and do) create
massive amounts of wealth, but they aren‘t without risks. The only solution to this is education.
The key to protecting yourself in the stock market is to understand where you are putting your
money.
Prior to SEBI there was not that awareness of the markets, investors used to face so
many problems with brokers. But after the concept of dematerialization of Stocks it was made
easy. As the next step exchanges like BSE (Bombay Stock Exchange) and NSE (National
Stock Exchange) allowed with some criteria ―Online Trading in Equity & Derivative Markets‖.
CAPITAL MARKET
An efficient capital market is a pre-requisite of economic development. An ideal capital
market is one where finance is used as handmaid to serve the needs of industry. The capital
market must facilitate the movement of capital to the point of highest yield.
The main components apart from financial institutions of a capital market are:
 Primary market
 Secondary Market
PRIMARY MARKET
The new issues market where new securities, i.e., shares or bonds that have never been
previously issued are offered represents the primary market. Both the new companies and the
existing ones can raise capital in the primary market. The primary market helps the corporate
enterprises in securing their funds that are generally used for setting up new corporate
enterprises or going in for expansion, diversification, growth or modernization.
Growth and development of Primary market in India
The primary market in India is not fully developed as compared to other countries like
USA, UK, and Germany. But there has been tremendous growth in the sphere of new issue
61