2. Content
Sr.
No.
Topics Page No.
1 Introduction about organization
2 Industry profile
3 Introduction to Topic
4 Literature Review
5
Organization in detail
o General information
o Organization structure
6 SWOT Analysis
7 Technology
8 At Edelweiss
9 Learning outcome
10 Conclusion
11 Bibliography
3. Acknowledgement
I take the opportunity to express my gratitude to all of them who in some or other way helped me
to accomplish this challenging project in Edelweiss Broking Limited, Jayanagar. No amount of
written expression is sufficient to show my sense of gratitude to them.
I am extremely thankful and pay my gratitude to my company guide Mr. S. K. Parthasarathy and my
faculty guide Mr. Partho Ganguly for their everlasting support and guidance on the ground of which
I have acquired a new field of knowledge and valuable guidance and support on completion of this
project in its present form.
A special appreciative “Thank you” in accorded to all staff of Edelweiss Broking Limited, Jayanagar
for their positive support.
I also acknowledge with a deep sense of reverence, my gratitude towards my parents and members
of my family, who has always supported me morally as well as economically.
At last but not at all the least, deepest gratitude goes to all of my friends who directly or indirectly
helped me to complete this project report.
4. Preface
“A good broker systemmust be able to cope with an extremely complex and dynamic
environment.”
The microstructure of the stock market in which brokers work is highly dynamic and volatile. Many
stocks are available to be bought and sold, each exhibiting its own patterns and characteristics that
are highly unpredictable. With so many options and considerations that need to be taken into
account, it is an extremely difficult task for a broker to investigate aspects of the stock market and
consistently provide effective advice to their clients.
Thus, brokers perform their day-to-day tasks with the aid of a broker system. Such a systemshould
provide tools for interacting with exchanges and performing analysis. As a consequence, these
broker systems are quite large and complicated by themselves.
This research aims to analysis Stock broker on the basis of their services, products, growth, and
their competitiveness. Because Stockbrokers are one of the main participants in stock exchanges
worldwide, they often act as an agent for their clients, making trades on their behalf. They also act
as advisors, providing suggestions to their clients on what stocks to buy and sell
5. Abstract
There is growing competition between brokerage firms in post reform India. For investor it is
always difficult to decide which brokerage firm to choose.
Research was carried out to find which brokerage house people prefer and to figure out what
people prefer while investing in stock market.
This study suggests that people are reluctant while investing in stock and commodity market due to
lack of knowledge.
Main purpose of investment is returns and liquidity, commodity market is less preferred by
investors due to lack of awareness. The major findings of this study are that people are interested
to invest in stock market but they lack knowledge.
Through this report we were also able to understand, what are our Company’s positive and strong
points, on the basis of which we come to know what can be the basis of pitching to a potential
client.
6. Introduction to Organisation
Edelweiss is one of the leading financial services company in India. Its current businesses include
investment banking, securities and retail broking and investment management. The core inspiring
thought of ideas creating wealth and values protecting it is translated into an approach that is led
by entrepreneurship and creativity and protected by intellectual rigor, research and analysis. At
Edelweiss you can build a personal relationship with our investment professionals. We see investing
from your perspective, and offer recommendations based on your needs and preferences. To all
the investors - From access to top research to investment guidance and portfolio planning, we offer
it all!
Edelweiss is one of India’s leading diversified financial services Group. Edelweiss offers a large range
of products and services spanning across asset classes and consumer segments.
Its businesses are broadly divided into Credit including Retail Finance and Debt Capital Markets,
Commodities, Financial Markets, Asset Management and Life Insurance.
The group’s research driven approach and proven history of innovation has enabled it to foster
strong relationships across corporate, institutional and individual clients. The Life Insurance, Retail
Finance including Housing Finance, Mutual Fund and Retail Broking businesses – both online and
offline formats, have paved the way for Edelweiss to cater to the large retail client segment.
Edelweiss’ presence now covers 240 offices in 125 cities including eight international offices with
5,555 employees catering to over 572,000 clients across various businesses in retail and wholesale
segments.
7. Industry Profile
The emergence of stock market can be traced back to 1830. In Bombay, business passed in the
shares of banks like the commercial bank, the chartered mercantile bank, the chartered bank, the
oriental bank and the old bank of Bombay and shares of cotton presses. In Calcutta, Englishman
reported the quotations of 4%, 5%, and 6% loans of East India Company as well as the shares of the
bank of Bengal in 1836. This list was a further broadened in 1839 when the Calcutta newspaper
printed the quotations of banks like union bank and Agra bank. It also quoted the prices of business
ventures like the Bengal bonded warehouse, the Docking Company and the storm tug company.
Between 1840 and 1850, only half a dozen brokers existed for the limited business. But during the
share mania of 1860-65, the number of brokers increased considerably. By 1860, the number of
brokers was about 60 and during the exciting period of the American Civil war, their number
increased to about 200 to 250. The end of American Civil war brought disillusionment and many
failures and the brokers decreased in number and prosperity. It was in those troublesome times
between 1868 and 1875 that brokers organized an informal association and finally as recited in the
Indenture constituting the “Articles of Association of the Exchange”. On or about 9th day of July,
1875, a few native brokers doing brokerage business in shares and stocks resolved upon forming in
Bombay an association for protecting the character, status and interest of native share and stock
brokers and providing a hall or building for the use of the members of such association.
As a meeting held in the broker’ Hall on the 5th day of February, 1887, it was resolved to execute a
formal deal of association and to constitute the first managing committee and to appoint the first
trustees. Accordingly, the Articles of Association of the Exchange and the Stock Exchange was
formally established in Bombay on 3rd day of December, 1887. The Association is now known as
“The Stock Exchange”.
The entrance fee for new member was Re.1 and there were 318 members on the list, when the
exchange was constituted. The numbers of members increased to 333 in 1896, 362 in 1916and 478
in 1920 and the entrance fee was raised to Rs.5 in 1877, Rs.1000 in 1896, Rs.2500 in 1916 and Rs.
48,000 in 1920. At present there are 23 recognized stock exchanges with about 6000 stock
brokers. Organization structure of stock exchange varies.
14 stock exchanges are organized as public limited companies, 6 as companies limited by guarantee
and 3 are non-profit voluntary organization. Of the total of 23, only 9 stock exchanges have been
permanent recognition. Others have to seek recognition on annual basis.
These exchange do not work of its own, rather, these are run by some persons and with the help of
some persons and institution. All these are down as functionaries on stock exchange. These are
1. Stockbrokers
2. sub-broker
3. market makers
4. Portfolio consultants etc.
1.) Stockbrokers
Stock brokers are the members of stock exchanges. These are the persons who buy, sell or deal in
securities. A certificate of registration from SEBI is mandatory to act as a broker. SEBI can impose
certain conditions while granting the certificate of registrations. It is obligatory for the person to
abide by the rules, regulations and the buy-law. Stock brokers are commission broker, floor broker,
arbitrageur etc.
8. 2.) Sub-broker
A sub-broker acts as agent of stock broker. He is not a member of a stock exchange. He assists the
investors in buying, selling or dealing in securities through stockbroker. The broker and sub-broker
should enter into an agreement in which obligations of both should be specified. Sub-broker must
be registered SEBI for a dealing in securities. For getting registered with SEBI, he must fulfill certain
rules and regulation.
3.) Market Makers
Market maker is a designated specialist in the specified securities. They make both bid and offer at
the same time. A market maker has to abide by bye-laws, rules regulations of the concerned stock
exchange. He is exempt from the margin requirements. As per the listing requirements, a company
where the paid-up capital is Rs. 3 crore but not more than Rs. 5 crore and having a commercial
operation for less than 2 years should appoint a market maker at the time of issue of securities.
4.) Portfolio consultants
A combination of securities such as stocks, bonds and money market instruments is collectively
called as portfolio. Whereas the portfolio consultants are the persons, firms or companies who
advise, direct or undertake the management or administration of securities or funds on behalf of
their clients.
9. Introduction to Topic
In most industrialized countries, a substantial part of financial wealth is not managed directly by
savers, but through a financial intermediary, which implies the existence of an agency contract
between the investor (the principal) and a broker or portfolio manager (the agent). Therefore,
delegated brokerage management is arguably one of the most important agency relationships
intervening in the economy, with a possible impact on financial market and economic
developments at a macro level.
In most of the metros, people like to put their money in stock options instead of dumping it in the
bank-lockers. Now, this trend pick pace in small but fast developing cities as well.
As the per-capita-income of the city is on the higher side, so it is quite obvious that they want to
invest their money in profitable ventures. On the other hand, a number of brokerage houses make
sure the hassle free investment in stocks. Asset management firms allow investors to estimate both
the expected risks and returns, as measured statistically. There are mainly two types 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.
History of broking house in India:-
Stock markets refer to a market place where investors can buy and sell stocks. The price at which
each buying and selling transaction takes is determined by the market forces (i.e. demand and
supply for a particular stock).
In earlier times, buyers and sellers used to assemble at Stock Exchanges to make a transaction but
now with the dawn of IT, most of the operations are done electronically and the stock markets
have become almost paperless. Now, investors do not have to gather at the Exchanges, and can
trade freely from their home or office over the phone or through Internet.
A broker is a person or firm that facilitates trades between customers. A broker acts as a go
between and, in doing so, does not assume any risk for the trade.
The broker does, however, charge a commission. A broking firm acts as an intermediary between
NSE and Client.
What is NSE & BSE?
1. NSE (National Stock Exchange):-
The National Stock Exchange (NSE) is a stock exchange located at Delhi, India. It is the 9th largest
stock exchange in the world by market capitalization and largest in India by daily turnover and
number of trades, for both equities and derivative trading. NSE has a market capitalization of
around US$1.59 trillion and over 1,552 listings as of December 2010. Though a number of other
exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges
in India, and between them are responsible for the vast majority of share transactions. The NSE's
10. key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of
fifty major stocks weighted by market capitalisation.
NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and
other financial intermediaries in India but its ownership and management operate as separate
entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a
stake in the NSE As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities
across India NSE is the third largest Stock Exchange in the world in terms of the number of trades in
equities. It is the second fastest growing stock exchange in the world with a recorded growth of
16.6%.
Markets:-
Currently, NSE has the following major segments of the capital market:
Equity
Futures and Options
Retail Debt Market
Wholesale Debt Market
Currency futures
Mutual Fund
Stock Lending & Borrowing
2. BSE (Bombay Stock Exchange):-
The Bombay Stock Exchange (BSE) is a stock exchange located on Dalal Street, Mumbai and is the
oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE
was US$1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and
the 8th largest in the world. The BSE has the largest number of listed companies in the world.
As of December 2010, there are over 5,034 listed Indian companies and over 7700 scraps on the
stock exchange, the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX, also
called "BSE 30", is a widely used market index in India and Asia. Though many other exchanges
exist, BSE and the National Stock Exchange of India account for the majority of the equity trading in
India. While both have similar total market capitalization (about USD 1.6 trillion), share volume in
NSE is typically five times that of BSE.
BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on
development of new indices. SENSEX is significantly correlated with the stock indices of other
emerging markets.
11. Literature Review
1. Dr. Jayanta Kumar Seal explore equity trading in India was basically a floor-based activity in the
BSE. Traditionally, stock trading was done through stock brokers, personally or through telephones.
As the no. of people trading in stock market increased enormously in last few years, a no. of stock
brokers comes in the field, thus increasing further competition. Due to this, there come new
innovations in trading. In this scenario, the existing players are left with two options-either to
change their product offerings or to perish.
2. Ravinder Kumar & Nidhi Walia found Indian investors are more conservative; they do not adopt
any change easily. Till now just few investors can be recognized who are using technology for
online stock trading. Traditional traders still prefer to choose broker as a stock trading mechanism
because they are more loyal to their broker. Online trading empowers educated investors to make
their own decisions with close watch on market sensitivity by browsing through various sites.
3. Ms. Nidhi Walia explores that with IT fueling economy, internet is adopted as effective tool in
catalyzing the business activities. Latest developments in information technology have altogether
changed business done traditionally. As financial system is becoming more complex it has become
need of hour, where investor should comprehend the data and understand recent intricacies of
online trading. In Indian context, e-trading is relatively new concept, which has yet to gain some
significant meaning. In the past, investor had no option to get market information except to
contact local broker. But internet trading in stock trading is becoming medium of exchange
whereby investor can order stock exchange on simple mouse click sitting at his place. Keeping in
view current market requirement an attempt has been made in this research paper to analyze
current status of online trading in Indian scenario.
4. Mr. Ajay Kumar through this research finds which brokerage house people prefer and to figure out
what people prefer while investing in stock market. This study suggests that people are reluctant
while investing in stock and commodity market due to lack of knowledge. Main purpose of
investment is returns and liquidity, commodity market is less preferred by investors due to lack of
awareness. The major findings of this study are that people are interested to invest in stock market
but they lack knowledge.
12. About the Organisation
Whether it’s retiring early, saving for children’s education, paying off a loan or to live a secured and
satisfied life everyone has dreams they can achieve by investing their savings. Definition of
investing is the purchase of a financial product or other item of value with an expectation of
favorable future returns. However, the question that arises is that, should one leave his money
tucked away in the bank or plough it into the stock market where the potential for higher returns is
greater but the chances of losing money is higher? Deciding where to invest depends on one`s
attitude towards risk (one`s capacity to take risk and one`s tolerance towards risk) and the
investment horizon and non-availability of guaranteed-return investment products. In such a
scenario, investing in equity, which offers returns that are higher than the inflation rate, help to
build wealth and to improve the standard of living.
India is a developing economy. It’s 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 and downs which is a nature of
share trading. We are living in an interlinked world. With the growing volume of trade; it has
become a necessity that people are aware of the intricacies of the web world.
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.
Recently, the crisis in the financial market resulted in global inflation. The share market was a clear
indicator of the prevailing prices.
Share trading is a way of 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 plays by many others have made them earn in crores.
Where the American NASDAQ is in the commanding position, Hongkong, etc. are some of the Asian
exchanges being quoted repeatedly when it comes to news about the share market. SENSEX is not
far behind. Indian bourses are also often quoted.
Electronic trading or online trading eliminates the need for physical trading floors. Brokers can
trade from their offices, using fully automated screen based processes. Their workstations are
connected to a stock exchange’s central computer via satellite using Very Small Aperture Terminus
(VSATs). The orders placed by brokers reach the exchange’s central computer and are matched
electronically.
Stock exchange
A stock exchange , share market or bourse is a corporation or mutual organization which
provides facilities for stock brokers and traders , to trade company stocks and other securities.
Stock exchanges also provide facilities for the issue redemption, as well as, other financial
instruments and capital events including the payment of income and dividends . The securities
traded on a stock exchange include: shares issued by companies , unit trusts and other pooled
investment products and bonds .To be able to trade a security on a certain stock exchange, it has
to be listed . Usually there is a central Location at least for recordkeeping, but trade is less and
13. less linked to such a physical place, as modern markets are electronic networks, which gives
them advantages of speed and cost of transactions. Trade on an exchange is by definition done in
the primary market and subsequent trading is done in the secondary market. Supply and demand in
stock markets is driven by various factors which, as in free markets, affect the price of stocks(see
stock valuation).There is usually no compulsion to issue stock via the stock exchange itself, nor
must stock be subsequently traded on the exchange. Such trading is said to be off exchange or
over-the-counter. This is the usually way that bonds are traded. Increasingly more and more stock
exchanges are part of a global market for securities.
A. The role of the stock exchange
Raising capital for businesses
The stock exchange provides companies with the facility to raise capital for expansion
through selling shares to the investing public.
Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational allocation
of resources because funds, which could have been consumed, or kept in idle deposits with
banks are mobilized and redirected to promote business activity with benefits for several
economic growth and higher productivity levels.
Facilitate company growth
Companies view acquisitions as an opportunity to expand product lines, increase
distribution channels, hedge against volatility, increase its market share, or acquire other
necessary business assets. A takeover bid or a merger agreement through the stock
market is one of the simplest and most common ways to company growing by
acquisition or fusion.
Redistribution of wealth
By giving a wide spectrum of people a chance to buy shares and therefore become part-
owners (shareholders) of profitable enterprises the stock market helps to reduce large
income inequalities. Both casual and professional stock investors through stock price rise
and dividends get a chance to share in the profits of promising business that were set up by
other people.
Corporate governance-
By having a wide and varied scope of owners , companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders
and the more stringent rules for public corporations by public stock exchange and the
government . Consequently , it is alleged that public companies (companies that are owned by
shareholders who are members of the general public and trade shares on public exchange) tend to
have better management records than privately-held companies (those companies where shares
are not publicly traded ,often owned by the company founders and / or their families and heirs , or
otherwise by a small group of investors) . However, some well-documented cases are known
where it is alleged that there has been considerable slippage in corporate governance on the part
of some public companies.
Creates investment opportunities for small investors
As opposed to their businesses that require huge capital outlay, investing in shares is open to both
the large and small stock investors because a person buys the number of shares they can afford.
Therefore the Stock Exchange provides an extra source of income to small savers.
Government raises capital for development projects.
14. Governments at various levels may decide to borrow money in order to finance infrastructure
projects such as sewage and water treatment works or housing estates by selling another category
of securities known as bonds .These bonds can be raised through the Stock Exchange whereby
members of the public buy them , thus loaning money to the government . The issuance of such
municipal bonds can obviate the need to directly tax the citizens in order to finance development,
although by securing such bonds with the full faith and credit of the government instead of with
collateral, the result is that the government must tax the citizens or otherwise raise additional
funds to make any regular coupon payments and refund the principal when the bonds mature.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices
rise tend to rise or remain stable when companies and the economy in general show signs of
stability and growth .An economic recession, depression, or financial crisis could eventually lead to
a stock market crash. Therefore the movement of the general trend in the economy .The listing
requirements is the set of conditions imposed by a given stock exchange upon companies that want
to be listed on that exchange .Such conditions sometimes include minimum number of shares
outstanding, minimum market capitalization, and minimum annual income.
Edelweiss is one of the leading financial services company in India. Its current businesses include
investment banking, securities and retail broking and investment management. The core inspiring
thought of ideas creating wealth and values protecting it is translated into an approach that is led
by entrepreneurship and creativity and protected by intellectual rigor, research and analysis. At
Edelweiss you can build a personal relationship with our investment professionals. We see investing
from your perspective, and offer recommendations based on your needs and preferences. To all
the investors - From access to top research to investment guidance and portfolio planning, we offer
it all!
Chairman, CEO and Founder of Edelweiss. Mr. Rajesh Shah has previously worked for ICICI (now
ICICI Bank, India’s largest private sector financial conglomerate) where he handled a World Bank
aided program for export- oriented projects. He was subsequently with Prime Securities as Head of
Research. Mr. Shah’s relentless focus is on organization building and human capital development.
He has been featured in a variety of publications, including The Far Eastern Economic Review,
Business India, Business World and The Economic Times. Mr. Shah earned an MBA from the Indian
Institute of Management, Ahmedabad and a Bachelor’s degree in Science from the University of
Bombay.
Its Current Businesses Include:
Investment Banking,
Securities Broking, and
Investment Management.
Edelweiss also provides a wide range of services to:
Corporations,
Institutional Investors
High Net-Worth Individuals
15. Services offered by the company:
Investment Banking.
Institutional investment.
Asset management.
Wealth management.
Private client brokerage.
Insurance brokerage.
Wholesale financing.
Various Products Offered by the Company:
Products: Stocks, Derivatives, IPO, MF, Strategies
Trading Accounts with different features: Trader, Investor
Brokerage Plans: To suit needs of every client
Model Portfolio based on comprehensive analysis of your investment objectives
Advanced Data tools
Customized investment Strategies
Manage all asset classes under My Portfolio
Financial Research on your fingertips
16. Organisation Structure
Organisation Structure (Sales)
Managing Director
SalesTrading Credit
ESOP Demat InsuranceCommodityMutual Fund
General Manager
(Sales)
Asst. General
Manager
Financial Planner
HNI/ ESOP
Sales Manager
RelationshipManager
(Demat)
Sr. Relationship
Manager
17. SWOT Analysis
Strengths:-
Large Workforce
Diversity in Experience
Young and Energetic
Ownership of New Technology
Weakness:-
Limited Facilities
Poor coordination
Low Productivity
Lack of Competency and Skill
Unrealistic Contract Duration
Labor Problem
Opportunities:-
Utilization of Latest Construction Technology Method
Association with Large Projects Like Real Estate
Geographical Focus
Threats:-
Defects in Design
Changes in Specification
Slow Verification
Late Issue of Instruction
Delay of Work Approval
Proceeding Pending
Any Failure will affect company
Loss of Key people
18. Technology
Informationtechnologyfocusesonthe developmentof electronicnetworksthat exchange information.
Because all financial transactionsinvolve the exchange of information,the increasingpopularityof online
finance coincidedwithadvancesininformationtechnology.Financial institutionswere atthe forefrontin
creatingthe global informationeconomyasitexiststoday.Finance todayreliesoninformationtechnology.
History
In the 1960s, the NewYorkStock Exchange shorteneditstradingdaysbecause the volumeof tradeswastoo
highto processmanually.The developmentof informationtechnologiessuchascomputersandlocal
networksinthe 1970s brought fastand affordable informationaccesstothe finance industry.Increasingly
affordable computersencouragedthe developmentof numeroussmall financialfirmsthathandled
electronicdataprocessing.Atthe same time,the speedandreliabilityof informationtechnologysupported
the creationof nationwide financial services,includingelectroniccheckandcreditcard processing.
The Internet
The open,publicnature of the Internet threatensthe closedinformationnetworksdevelopedbythe
financial industryinthe late 20thcentury.Asa resultof thisconflict,banksare at the forefrontof both
informationsharingandinformationsecuritytechnology.Onlinecommercialtransactions beganin1995,
and by1998 the Internetwasprocessingmore than$50 billionworthof transactions.Inthe 21stcentury,
the annual worthof Internettransactionsishigherandrequiresmore networks,more computersandmore
securityprograms.Financial institutionscannotcompete withoutabroadbutsecure informationnetwork,
so informationtechnologyisessential totheirsuccess.
Global Financing
Informationtechnologyallowsfinance tofunctiononaglobal level."Financial marketscanbe thoughtof as
the firstorganized,global informationmarketsoperatingthroughnetworkedcomputers,"Winnsays.
Withoutinformationtechnology,financial marketscouldn'treacttoglobal developmentsandfinance
companiescouldn'tconsistentlyacquire informationat the same time as theircompetitors.Forexample,the
Internetallowscontinuousaccesstocreditscoresandcreditratingsto all lenders,insurance companiesand
businessesthatneedfinanciallyresponsiblecustomers.
Social Media
The informationtechnologythatrunssocial mediaonthe Internetprovidesfinancial institutionswith
valuable informationontheircustomers.Byencouragingonline communitiesassociatedwiththeirproducts,
finance companiesnotonlyacquire information butalsoencourage brandloyalty.Forexample,websites
such as TradeKingallowonline stocktraderstodiscusstheirpicksandadvise newcomers.Sociallydriven
informationtechnologyallowsfinance companiestocontactthe youngerdemographicsthatwill be their
future customers.
Information technology has many uses in finance. From trading financial instruments to keeping
records of personal budgets to reporting the earnings of a business, computer technology is used
by financial companies daily. Information technology allows the rapid calculation of financial
statistics, as well as electronic transfers of money.
19. Trading
Financial tradingisenhancedwithinformationtechnology.Somecomputersystemseventrade forthe
users.A systemisprogrammedto enterbuyandsell orderswhenthe price of a stock or bondreachesa
certainlevel,andautomaticallyclosesthe orderwhenthe targetprice orthe stop-lossisreached.
Computerbasedtradingisuseful whenatraderhasa systemthatallowsprofitabletradinganddoesnot
wantto entereach orderindividually.Informationtechnologyprovidesinstantinformationforstock
tradersto make decisions,andallowsthemtoenterordersthatare immediatelyexecuted.
Reporting
Financial reportsare also improvedwithinformationtechnology.The languageknownasXBRL,or
ExtensibleBusinessReportingLanguage,isusedtostandardize the financialinformationinpublic
companies'annual reports.Traderscanquicklysortthroughrecords inthisformat.Theycan easilyfind
the statistical datatheyneedtodetermine whichcompaniestoinvestin.Accordingtothe California
State UniversityatFullerton,XBRLisbasedonXML, the extensible markuplanguageusedtotransfer
informationoverthe Internet.
Function
Financial datacan be easilytransferredwithinformationtechnology.Insteadof usingchecksand
checkingaccounts,informationtechnologycancleara transactioninstantly.A debitorcreditcard
purchase israpidlycomparedwiththe user'saccount balance,allowingabankto decide whetherto
allowa transaction.Informationtechnologyallowstransactionsduringweekendsandholidays,when
there isno staff workingatthe bank.
Convenience
Personal finance issimplifiedusinginformationtechnology. Banksprovidedataoncheckingandsavings
depositsandwithdrawalsinstandardizedformats.A customercandownloadaccounttransactionsand
store theminrecords ona home computer.Personal finance software includesadditional features,such
as charts and reportsthat showhome userswhattheyare spendingmoneyonandwhere theirfundsare
comingfrom.
Budgeting and Bookkeeping
Informationtechnologyisalsohelpful forcompaniesthatare consideringfinancial transactions.
Computersystemscalculate anddisplaythe interestandprincipal of aloan,and estimate the returnson
investmentwhenthe companyborrowsmoneytoexpanditsoperations.Companiescansecurely
transferdata online,andthe computersystemrecordsall transfers,whichsimplifiesbookkeeping.
20. At Edelweiss
At EDELIISS, initially I was imparted process and product knowledge. I was given sufficient time to
know about the products and also about sales and distribution channel. I had to work with the sales
representatives and think of ways of improving the sales and distribution channel and
implementing them. The main aim was to increase sales and for this, different ways were tried and
implemented. I was provided with database and had to make calls from the data. Company activity
was also one of the major sources for generating business. I also had to visit to the clients place for
documentation of Loan against Debentures. Main objective was to know the need of the customer
and how to fulfill that in the best way.
The project dealt with various fields like:
Demat
ESOP
This experience helped me to understand the basic functioning of the EDELWEISS as a Broking
House and I came to know the products of Edelweiss. The Training Sessions Ire held by different
persons. I Ire assigned targets to sell the ESOP funding facility and Demat A/c of EdelIiss. The
training for ESOP and Demat was conducted by Mr. S. K. Parthasarathy. These training gave me an
insight into the products that Edelweiss deals in. The best learning experience was that I started
from the very basics of getting to that position and not from the position itself. This helped me get
useful insight and understanding of various financial products, the market details about them and
the benefits provided by them to the customers.
The task was divided in 4 phases:
1. Product knowledge: This included the theoretical knowledge about the field and products which
needed to be marketed.
2. Pitching in retail sector: This included the implementation of the knowledge imparted to us and
the test of our marketing skills. Initially I Ire accompanied by other sales executive so that I can
learn how to deal with the customers and understand their need. This also enhanced our
interpersonal skills and confidence level.
3. Implementation in retail sector and pitching in corporate: By the start of this phase I were
confident enough about the pitching and fulfilling the needs of the customer in the retail sector.
This also included of the ways I should pitch the corporate.
4. Implementation at corporate levels: This included the implementation of the all the knowledge
and ways learnt for the pitching and extracting business out of the corporate.
With the end of 5 weeks every phase was completed and it gave us the real experience of retail as
well as corporate world.
21. Demat Account:-
The term Demat, in India, refers to a dematerialized account for individual Indian citizens to trade
in listed stocks or debentures, required for investors by The Securities Exchange Board of India
(SEBI). In a demat account, shares and securities are held electronically instead of the investor
taking physical possession of certificates. A Demat Account is opened by the investor while
registering with an investment broker (or sub broker). The Demat account number is quoted for all
transactions to enable electronic settlements of trades to take place.
Access to the Demat account requires an internet password and a transaction password as well as
initiating and confirming transfers or purchases of securities. Purchases and sales of securities on
the Demat account are automatically made once transactions are executed and completed.
Objective of Demat System:-
India has adopted this system of electronic bookkeeping, eliminating the need for paper when
shares or securities are held in electronic form. Before the introduction of the depository system by
the Depository Act, 1996, the process of sale, purchase and transfer of shares was difficult and
there was a high risk of loss.
Basics of Stock Market:-
Investing in equity involves purchasing shares of a company listed on a stock exchange. You can
acquire these shares in two ways - either through the Primary Market, i.e., when a company makes
an offer to issue its equity for the first time (this is called Initial Public Offering (IPO)) or through the
secondary market, i.e. via a stock exchange. When you trade in equity through a stock exchange,
you have to make use of the services of a brokerage firm, which acts as your agent whenever you
buy or sell.
Equity is considered a high risk-high return investment avenue. This is because there is scope for
considerable appreciation or loss of the capital that you invest, depending on various factors such
as the performance of the company that you have invested in, general market conditions, the state
of the economy, etc. However, it forms an integral part of any well-balanced portfolio, since it is at
one end of the risk-return spectrum.
Equity is a must for any well-balanced portfolio. So, irrespective of whether you are a high net
worth investor or a small retail investor and irrespective of whether you have a large or timid
appetite for risk, you must hold some portion of your assets in equity. This is because it is the only
instrument that has the ability to truly deliver a high return, when held over a long period of time.
However, the amount of equity that you hold in your portfolio is a very subjective decision and will
depend upon various factors. These include your investment objectives, time horizon and risk
appetite. But as a general guideline, there’s a rule of thumb that states that to decide upon the
proportion of your assets that should go into equities, reduce your age from 100 and that’s the
proportion of your money which should be put in equities. The remaining can be invested in fixed
income securities.
22. Selection of Stock
Every investor must do some homework before investing money in equities…
While recommendations and tips received from your broker, a friend, etc. may be the
starting point of your selection, let it not be the only reason that makes you purchase a
particular stock, even if these tips have come from ‘market experts’. Short list the shares
that you want to buy on the basis of your investment objective, risk profile and the stock’s
fundamentals.
If you feel that the price of a stock is high, don’t purchase it. Buy stocks that you believe still
have scope for appreciation.
Don’t try to time your purchases. That could turn you into a speculator instead of an
investor.
Lastly, once you have purchased shares, if the business prospects of the company change to
its detriment, get rid of the stock. Don’t hesitate to liquidate your portfolio before your
target time horizon if circumstances lead you to believe that it’s necessary.
Stock Pricing
There are various factors that determine the value of a stock. Understanding these will help you to
pay a price that reflects the true value of a stock.
Demand and Supply:
In the short term, the basic economic theory of demand and supply determines a stock’s worth. So,
when the demand for a stock exceeds its supply (that is, there are more buyers than sellers), its
price tends to rise. And, when supply overtakes demand (that is, sellers exceed buyers), the stock
loses value. However, these are short-term market trends, which tend to get evened out over a
period of time. In the medium to long-term, a stock is driven by the company’s fundamental
strength i.e. business potential, past performance, competence and credibility of its promoters and
management, etc.
Growth potential:
Investors are willing to pay a premium for stocks of companies that have the potential to increase
their revenues and net profits. The greater this growth potential, the higher the premium given to
the stock. If a company proves that it is capable of sustaining growth, the market will continue to
give it high valuations. And, that’s likely to be the major driver for stock valuations.
Fundamentals: A company’s growth outlook is linked to its business prospects and how well its
management is capitalizing on the existing opportunities. The quality of a company’s management
is crucial. So, pay attention to the management practices of a company and its level of corporate
governance.
Profit Maximization
Buy low and sell high is the ultimate guide to successful stock investing. It is also the reverse of
23. what many investors do, although they don’t intend to. They tend to buy high and sell low because
they use price, and in particular, the price movement, as their only signal to buy or sell.
Investors are tempted to buy stocks that have shot up and are basking in the media spotlight just to
get a part of the action. They jump at a stock that is already trading at a premium that’s how they
buy high. Ironically, if a stock has had a good run up it may be time to sell, not buy (sell high).
On the flip side, when a stock price is falling, most investors may want to sell in a panic, although
the company has not lost any intrinsic value and still remains a sound investment that’s how they
sell low. In fact, when a stock’s price has fallen, it’s a great time to buy (buy low), if your research
on the company suggests that it is a good long term buy.
Experienced traders can make money jumping in and out of a stock that’s caught the public’s
attention, but it’s not a game for the inexperienced and it can definitely not be called ‘investing’, in
the true sense of the word. There are risks involved and tax consequences that apply to such
trading, along with other issues, which means that most investors should leave this tricky activity to
short-term traders.
Asset Allocation
Asset allocation means diversifying your money among different types of investment categories,
such as stocks, bonds and cash. The goal is to help reduce risk and enhance returns.
This strategy can work because different categories behave differently, Stocks, for instance, offer
potential for both growth and income, while bonds typically offer stability and income. The benefits
of different asset categories can be combined into a portfolio with a level of risk you find
acceptable.
Establishing a well-diversified portfolio may allow you to avoid the risks associated with putting all
your eggs in one basket.
Right allocation for an investor:-
Asset allocation decisions involve tradeoffs among 3 important variables:
Investors’ time frame
Their risk tolerance
Their personal circumstances
24. Competitors of Edelweiss
TRADING PORTAL
Online trading refers to buying and selling of the shares/stocks/contracts/bonds with the use of
internet. In this shares are not issued in physical form rather they are transferred in the
dematerialized form in the Demat account directly.
DEMAT ACCOUNT
In India, a Demat account, the abbreviation for dematerialized account, is a type of banking account
which dematerializes paper-based physical stock shares. The dematerialized account is used to
avoid holding physical shares: the shares are bought and sold through a broker. This account is
popular in India. The Securities and Exchange Board of India (SEBI) mandates a Demat account for
share trading above 500 shares. As of April 2006, it became mandatory that any person holding a
Demat account should posses a Permanent Account Number (PAN).
Benefitsofopening a Demat account
Demat account has become a necessity for all categories of investors for the following reasons/
benefits:
SEBI has made it compulsory for trades in almost all scrip’s to be settled in Demat mode.
Although, trades up to 500 shares can be settled in physical form, physical settlement is
virtually not taking place for the apprehension of bad delivery on account of mismatch of
signatures, forgery of signatures, fake certificates, etc.
It is a safe and convenient way to hold securities compared to holding securities in physical
form.
No stamp duty is levied on transfer of securities held in Demat form.
Instantaneous transfer of securities enhances liquidity.
It eliminates delays, thefts, interceptions and subsequent misuse of certificates.
Change of name, address, registration of power of attorney, deletion of deceased's name,
etc. - can be effected across companies by one single instruction to the DP.
Each share is a market lot for the purpose of transactions - so no odd lot problem.
Any number of securities can be transferred/delivered with one delivery order. Therefore,
paperwork and signing of multiple transfer forms is done away with. It facilitates taking
advances against securities on low margin/low interest.
DEMAT ACCOUNT
There are many broking houses doing business in India and they charge a brokerage on every
transaction made online or offline. (Buying and Selling are treated as separate transaction).
Reliance Money’s advantage over others is that it’s charging the lowest brokerage in the market
which is just 1 paisa on every executive trade irrespective of the volume traded. Reliance Money,
the brokerage and distribution arm of Reliance ADA Group, aims to tap investors in the smaller
towns and cities through a flat fee structure. The current leaders in the retail broking segment like
ICICI Direct, India Infoline and Indiabulls offer a ‘pay per use’ model where the customer pays a
percentage of the amount transacted by him. Reliance Money’s brokerage rates are quite
competitive.
The new wonder is Reliance Money's pre-paid card for stock market brokerage. Reliance Money,
the financial services division of Anil Dhirubhai Ambani Group-promoted Reliance Capital, is
25. bringing to the market pre-paid cards in denominations of Rs500, Rs1000, Rs 2500, Rs 5000,Rs
10000.
These cards would offer brokerage at one-third of the rate being charged by institutional and
individual brokerage houses. Sample this. For a pre-paid card worth Rs500, an investor can trade up
to Rs2 lakh in both non delivery and delivery option.
The Rs1000 worth pre-paid card, total trading limit would reach Rs 1 crore, of which Rs 90lakhs is
for the non delivery segment and Rs10 lakh for delivery-based activities.
For Rs2500 pre-paid card, total trading limit is fixed at Rs3 crores, of which Rs2.70crore is for the
non delivery option and Rs 30 lakhs for delivery option.
For the Rs 5000 pre-paid card, the total trading limit is Rs 7 crores, out of which Rs 6.30crore is for
non delivery option and Rs 70 lakhs for delivery option.
For the Rs.10000 pre paid card, the total trading limit is Rs 20crore, out of which Rs 18 crores is for
non delivery option and Rs 2 crores for delivery option.
Reliance Money offers most competitive brokerage rates - 0.01paise for intraday trades and
0.05paise for delivery trades.
Target low level of retail penetration in India - less than 3 per cent of household financing savings
makes it into equity markets
Reliance Money consumers can trade in equities, commodities and offshore Investments , IPO’s,
Mutual Funds, Insurance, Money transfer and Money Changing - all through single window, both
off-line and online.
26. Pros:-
1. Sure money returns
People can benefit from better returns from an active stock trading that just buying and
holding the investment.
2. Popularity
Before choosing one or another trading stock, you must be popular with it. Try to find as
much information as you can in order to understand each of them. Then, choose.
3. A variety of choices
There is a variety of stocks people may choose between but the most important is how to
make the best choice. Try to find stocks that have moving prices.
Cons:-
1. Leverage
Leverage means a flaw of stock trading. The flaw for this trading is lower than compared
with future trading or with Forex.
2. The costs
While the price cannot be compared to other types of trading, the stock trading virtually
becomes impossible for those people who don’t get some money before they can start
investing.
3. Rule on short selling
The traders have to wait for a quite long time before the stock price ticks up and they’ll get
a chance to short selling it. This way, the profits of a trader will be limited. The Forex trading
does not have such a policy.
But, remember that all of the trading systems like Forex, Stock or Future also have their
advantages and disadvantages.
Conclusion: So if you are a wise trader, then it’s just up to you to think about these aspects. It
would be better if you can estimate it properly before choosing any of those systems.
Online trading benefits:-
1) fees and commissions are much lower in comparison with traditional ways of trading;
2) an opportunity to act on price movement immediately;
3) direct access to information on real time prices and charts;
4) absence of broker gives any trader an opportunity to take his/her own decisions without hurry;
5) completing or denying a trade can be performed within a few seconds so it's easier to manage
your investments and shorten your losses.
27. Learning Outcome
Main purpose of investment is returns and liquidity, commodity market is less preferred by
investors due to lack of awareness. The major findings of this study are that people are interested
to invest in stock market but they lack knowledge.
Through this report I am also able to understand, what the Company’s positive are and strong
points, on the basis of which I come to know what can be the basis of pitching to a potential client.
I have also understood the importance of having a Demat account and the method of taking Loan
against debentures. All the procedures of documentations required for both the purpose – Demat
Account and Loan against Debentures. This period of internship also allowed me to meet HNI
clients which were a great experience.
This internship provided me with exposure to equity share trading which has been an intriguing
learning experience. Also I came to know about the different companies whose shares are traded.
This will help me in the long run.
On the whole, the internship has proved to be a great exposure and rich source of learning which
will not only be useful just for the purpose of academics but also in my everyday life.
28. Conclusion
Stock markets refer to a market place where investors can buy and sell stocks. The price at which
each buying and selling transaction takes is determined by the market forces (i.e. demand and
supply for a particular stock).
The term Demat, in India, refers to a dematerialized account for individual Indian citizens to trade
in listed stocks or debentures, required for investors by The Securities Exchange Board of India
(SEBI). In a demat account, shares and securities are held electronically instead of the investor
taking physical possession of certificates. A Demat Account is opened by the investor while
registering with an investment broker (or sub broker). The Demat account number is quoted for all
transactions to enable electronic settlements of trades to take place.
Edelweiss Broking Ltd. as a company has been successful since it moved into retail. On a positive
note the company always focuses on long term goals and more focus on customer satisfaction that
helped Edelweiss to grow in market.
In the last few years the earnings per share of Edelweiss Broking Ltd has shown very good growth
due to aggressive and passionate sales trading team, they are able to seamlessly execute complex
trades, across the entire spectrum of trading strategies. Their more concentration towards
customer satisfaction and they are doing it brilliantly.
Edelweiss Broking Ltd. has been performing well when compared with some of its competitors.
Some of the products and services offered by Edelweiss are quite unique which gives them an
upper edge over other competitors. And this is the reasoned why they are successful in broking
market. They came to know what customer wants and how can they satisfy them
There are many pros and cons and customer now understand importance of share trading through
which they can earn money by doing easy task whether it is online or off line.
