BACKGROUND OF STUDY:
Stock market refers to a market place where investors can buy and sell stocks.
The price at which each buying & selling transaction takes is determined by the
market force (that is demand & supply for a particular stock).
A Stock market is a public market for the trading of company stock & derivatives
at an agreed price; these are securities listed on a stock exchange as well as those only
The size of the world stock market was estimated at about $62.8 trillion USD at
the end of November 2013.
The stock market is one of the most important sources for companies to raise
money. This allows business to be publicity traded or raise additional capital for
expansion by selling shares if ownership of the company in a public market.
Infact, the stock market is often considered the primary indicator of a country’s
economic strength & development. Rising share prices, for instance tend to be
associated with increased business investment and vice versa.
STOCK EXCHANGE :-
A stock exchange is an entity which provides
"trading" facilities for stock brokers and traders,
t o trade stocks and other securities.
Stock Exchanges are an organized market place,
either corporation or Mutual organization, where
members of t he organization gather to trade
company stocks or other securities.
Stock exchanges also provide facilities for the
issue and redemption of
Securities as well as other financial instruments and capital events including the
PAYMENT OF INCOMES & DIVIDENDS:-
The securities traded on a stock exchange include shares issued by
Companies, unit trusts, derivatives, pooled investment products and bonds . To be
able to trade a security on a certain stock exchange, it has to be listed there.
Usually there is a central location at l east f or record keeping, but trade is less
and less linked to such a physical place, as modern markets are electronic networks,
which gives those advantages of speed and cost of transactions. Trade on an
exchange is by members only. The initial offering of stocks and bonds to investors
is by definition done in the primary market and subsequent trading is done in the
A stock exchange is often the most important component of a stock market.
Supply and demand in stock markets is driven by various factors which, as in all free
markets, affect t he price of stocks.
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 usual way that derivatives and bonds are
traded. I ncreasingly, stock exchange .There is usually no compulsion to issue stock
via t he stock exchange s are part of a global market.
Market Trend Analysis of a Company:
Analysis in terms of finance helps to find out the basic and critical factors affecting
the economy of company, market and nation. It can be practiced at major through two
methods: Fundamental and Technical.
Fundamental Analysis: Fundamental analysis is the examination of the underlying
forces that affect the interests of the economy, industry, and company. It tries to
forecast the future movement of the capital market using signals from the economy,
industry, and company. The presumption behind fundamental analysis is that a
thriving economy fosters industrial growth which leads to development of companies.
Fundamental analysis can be done by studying three prospects of capital market:
a. Economic Analysis
b. Industry Analysis
c. Company Analysis
Fundamental analysis is influenced by the other psychological factors such as
perception, sentiment and so on, of investors. The proxy for the measure of this
psychological factor is the past share price of company itself. Thus, an investor can
not fully depend upon fundamental analysis for the decision of money investment and
hence technical tools are used for better information and assurance of type of
Technical Analysis: A study of past share price behavior to predict the future trend is
termed as technical analysis. Technical analysis is frequently used as a supplement to
fundamental analysis. Technical analysis is based on the economic premise that forces
of demand and supply determine the pattern of market price and the volume of trading
in a share. Tools for technical analysis are listed here below:
a. Charts [Line, Bar, Candlestick, Point and figure chart]
b. Dow Theory
c. Elliot Wave Theory
d. Flow of Funds
e. Market Structure
f. Market Indicators
OBJECTIVE OF THE STUDY:-
Every study is conducted within for some specific purpose or to solve some
problem. When any research is conducted it has some primary objective that helps to
solved main problem whereas secondary objective helps to solve peripheral problem.
The primary objective & secondary objective of there are:-
investing in equity market in various sectors
To find out in which investment option people invest most.
To find out how investor are motivated for investing in equity market.
To study the general investment criteria of people.
To know the people time horizon for investing in equity market & to know the
rate of return expected by them.
To study the interest of people for future investment in equity market.
To assess the customer satisfaction level for investing in equity market.
To classify the different sector on the basis of investors behavior regarding
investing in equity market.
Ii is a way to systematically process in which necessary data & information are
collected. After the decision about the purpose & type of report to be prepared the
source for collection of data are dedicated.
“Research is careful inquiry or examination to discover new information &
relationship & to expand & to vary existing knowledge.”
Research always starts with question or any problem & finds answer of problem by
using scientific method; It gives complete knowledge about any problem or question.
For this project the data has been collected both the source. That is:-
Primary data are the data which are collected from primary source of
Organization where the data is generated. Primary data is collected for first time
by investigator agencies which have not been used or collected previously. Under
these sources I have collected data’s through questioner’s method.
Secondary data on the other hand are collected from secondary source. That is from
a data of Ventura securities Ltd. This has been collected previously and use
previously. The data may be a published or unpublished source. Under this method
information has been collected from the following ways:-
I have also used the secondary data for the study like some company resources
like brochure, websites etc.
LIMITATION OF THE STUDY:-
Following limitations were encountered while preparing this project:
Limited Data: - This project is done based on the data collected by the source of
secondary medium. This method is however not much helpful as it fails to provide the
essential facts and findings necessary for exact interpretation and analysis. There were
limitations for primary data collection because of inaccessibility and confidentiality of
documents of company.
Limited period: - This project is based on the data available of limited period of time
e.g. not more than that of one financial period of company. This is certainly not
helpful to make this project report accurate in terms of various comaprisions and
Limited area: - Also it was difficult to collect the data regarding the competitors and
their financial information. Moreover, the topic chosen is very wide in terms of actual
completion as there are various methods available for carrying out the analysis of a
company. Whereas, data and area for the projects are available which make the
situation contra dictionary and limits the scope.
Type of data used: - This project is completely based on secondary data collected
from various sources like internet, magazines, newspapers, and books etc.
operations in 1994 as
a stock broking
house. On its journey
from then to now,
Ventura has seen the
mature and investors'
more diverse. It has
kept up with the times
and today, it offers a
whole range of
Ventura operating at a
25,000 sq ft head
office at Vikhroli, Mumbai which houses its corporate office and all operations
Ventura registration office is strategically situated in the Central Business District of
Ventura have set up branches in select metros and have business partners across the
length and breadth of the country
We have been appointed as a national level distributor for all mutual funds
We have been enlisted as a corporate agency for life insurance
COMPANY NAME VENTURA SECURITIES LTD.
DIRECTORS OF THE
MAJETHIA, JUZER GABAJIWALA
COPORATE OFFICE KAILASH INDUSTRIAL
COMPLEX, PARK SITE,OFF LBS
15- SIR P.M. ROAD,
TELEPHONE NO 022 6754 7042
EMAIL mfcustomercare@ventura 1.com
We are a corporate member of both the BSE and the NSE. This enables us to trade in
equities, derivatives, currency products and offer depository services
Ventura Commodities Pvt. Ltd., an associate company, is a trading member of MCX
We have in-house, customized and ready to use software to enable seamless processes
and flawless execution
We adhere to a well-defined risk management system and settlement mechanism
thereby enabling fully compliant operations
Sajid Malik, Director is a member of the Institute of Chartered Accountants of
India. He has more than fifteen years of varied experience in corporate advisory
structured finance and private equity transaction. He has an international exposure to
developed markets in Europe, US and the Far East and has been personally involved
in international equity offerings and cross border acquisitions. He is the CEO of
Genesys International Limited, a company focused on outsourcing of GIS and
engineering design services. He is a non-executive director of Ventura Securities
Hemant Majethia, Director is a member of the Institute of Chartered Accountants
of India. He has more than fifteen years of experience in capital markets
intermediation, equity research. Mr. Majethia is the CEO of Ventura Securities
Limited and is responsible for the day to day operations and is responsible for creating
an all India network of sub-brokers and creating the distribution strength of Ventura
Securities Limited. He has been instrumental in establishing broking centres and
branches for Ventura Securities Limited across the country. It was his vision to create
an all India network of brokers’ relationship and build the distribution strength of
Juzer Gabajiwala, Director is a member of the Institute of Chartered Accountants
of India and The Institute of Company Secretaries of India. He has more than fifteen
years experience in the field of finance and investment, having exposure to the
industrial segment prior to entering the capital markets. Mr. Gabajiwala is responsible
for setting up the entire Mutual Fund distribution business at Ventura and a network
for PAN India operation. Mr. Gabajiwala is also responsible for setting up the wealth
management business and the NRI desk.
Value Added Services:-
Online platforms: - is online equity trading engine. Trade at lightning
speed, enjoy a unique investing experience.
Mutual Funds - Invest across various investment plans and also get a detailed online
Commodities - Browser and exe-based online trading software for clients as well as
network partners to facilitate seamless execution on MCX and NCDEX.
www.ventura1.com: A comprehensive website providing a plethora of information for
a cross section of investors; providing product / market information and tools to
access data in a user friendly manner.
Customer web access: Through a common login, clients have access to a host of
services such as portfolio details; digital contracts; transaction statement; tax report
Newsletters: Daily / weekly / monthly newsletters covering equities / mutual funds /
commodities. These are also available on the web.
Building and valuing true partnerships:-
When it comes to our business partners, we see our success reflected in their
progress. We have facilitated them all the way with technology and marketing
strategies and in turn have been rewarded with their performance and loyalty.
Think and it's there' approach:-
We envisage all our clients' diverse needs - ranging from financial planning to
wealth management - well in advance and provide them with resources, tools and
solutions to fulfil them.
Change for the better has become a way of life at Ventura. Innovations have always
been customer centric which has been amply reflected in the up gradation of
systems to facilitate our network partners.
Our dedicated and well trained people represent the pillar of strength and success at
Ventura. Each of our members has internalized our mission and is constantly
striving to build on it.
SMS updates: Regular updates on market happenings and trading /
investments calls, trade confirmations.
Research reports: Detailed fundamental analysis on companies / industries at
Baatein bazaar ke Ventura se: An interactive chat room available to our
network partners during trading hours for instant access to news on a real time
In-house training / seminars: Product training / investor conferences covering
diverse topics like technical analysis / industry overview / overall financial
To build relationship & strive towards customer delight, through
constant innovation on a strong foundation of dedicated and trained
HISTORICAL & INFORMATIVE DATA
The Stock Market
“A stock market is a public market for trading of company stock and derivatives at an
agreed price; these are securities listed on a stock exchange as well as those only
The size of the world stock market was estimated at about $36.6 trillion US at
beginning of October 2008. The total world derivatives market has been estimated at
about $791 trillion face or nominal value, 11 times the size of the entire world
economy. The value of the derivatives market, because it is stated in terms of notional
values, cannot be directly compared to a stock or a fixed income security, which
traditionally refers to an actual value. Moreover, the vast majority of derivatives
‘cancel’ each other out (i.e. a derivative ‘bet on the event occurring is offset by a
comparable derivative ‘bet’ on the event not occurring.). Many such relatively illiquid
securities are valued as marked to model, rather than an actual market price.
The stocks are listed and traded on stock exchanges which are entities of a corporation
or mutual organization specialized in the business of bringing buyers and sellers of
the organizations to a listing of stocks and securities together. The stock market in the
United States is NYSE while in Canada; it is the Toronto Stock Exchange. Major
European examples of stock exchanges include the London Stock Exchange, Paris
Bourse, and the Deutsche Borse. Asian examples include the Tokyo Stock Exchange,
the Hong Kong Stock Exchange, and Bombay Stock Exchange. In Latin America,
there are such exchanges as the BM&F Bovespa and the BMV.
Participants in the stock market range from small individual stock investors to large
hedge fund traders, who can be based anywhere. Their orders usually end up with a
professional at a stock exchange, who executes the order.
Some exchanges are physical locations where transactions are carried out on a trading
floor, by a method known as open outcry. This type of auction is used in stock
exchanges and commodity exchanges where traders may enter “verbal” bids and offer
simultaneously. The other type pf stock exchange is a virtual kind, composed of a
network of computers where trades are made electronically via traders.
Actual traders are based on an auction market model where a potential buyer bids a
specific price for a stock and a potential seller asks a specific price for the stock.
(Buying or selling at market means you will accept any ask price or bid price for the
stock, respectively.) When the bid and ask prices match, a sale takes place, on a first-
come-first-served basis if there are multiple bidders or askers at a given price.
The purpose of a stock exchange is to facilitate the exchange of securities between
buyers and sellers, thus providing a marketplace (virtual or real). The exchange
provides real-time trading information on the listed securities, facilitating price
History of Stock Markets
Historian Fernand Braudel suggests that in Cairo in the 11th century Muslim and
Jewish merchants had already set up ever form of trade association and had
knowledge of every method of credit and payment, disproving the belief that these
were invented later by Italians. In the 12th century in France the courratiers de change
were concerned with managing and regulating the debts of agricultural communities
on behalf of the banks. In the late 13th century Bruges commodity traders gathered
inside the house of a man called van der beruse, and in 1309 they became the “Brugse
Beruse”, institutionalizing what had been, until then an informal meeting. The idea
quickly spread around Flanders and neighboring countries and “Beurzen” soon
opened in Ghent and Amsterdam.
In the middle of the 13th century Venetian bankers began to trading government
securities. In1351, the Venetian government outlawed spreading rumors intended to
lower the price of government funds, bankers in Pisa, Verona, Genoa, and Florence
also began trading in government securities during the 14th century. This was only
possible because these were independent city states not ruled by a duke but a council
of influential citizens. The Dutch later started joint stock companies, which let
shareholders invest in business ventures and get a share of their profits – or losses. In
1602, the Dutch East India Company issued shares on the Amsterdam Stock
Exchange. It was the first company to issue stocks and bonds.
Stock Market in India
The first organized stock market in India was started in Bombay when the Native
Share Stock Brokers’ Association known as Bombay Stock Exchange (BSE) was
formed by the brokers in Bombay. BSE was Asia’s oldest stock exchange. In 1894,
the Ahemdabad Stock Exchange was started to facilitate dealings in shares of textile
mills there. The Calcultta Stock Exchange was started in 1908 to provide a market for
shares of plantations and jute mills. The Second World War saw great speculative
activity in the country and the number of stock exchange rose from 7 in 1939 to 21 in
1945. Besides, these organized exchanges, there were a number of unorganized and
unrecognized exchanges known as Kerb markets which functioned under a set of
usages and conventions and did not have any set of rules which could enforced in
courts of law. There were also illegal “Dabba” markets in which stocks and shares
were also bought and sold.
Under the Securities Contracts (Regulation) Act of 1956, the Government of India has
so far recognized 23 stock exchanges. Bombay is the premier exchange in the
country. With the setting up of National Stock Exchange, all regional stock exchanges
have lost relevance.Importance of Stock Market
The stock market is one of the most important sources for companies to raise money.
This allows businesses to be publicly traded, or raise additional capital for expansion
by selling shares of ownership of the company in a public market. The liquidity that
an exchange provides affords investors the ability to quickly and easily sell securities.
This ia an attractive feature of investing in stocks, compared to other less liquid
investments such as real estate.
History has shown that the price of shares and other assets is an important part of the
dynamics of economic activity, and can influence or be an indicator of social mood.
An economy where the stock market is on the rise considered to be an up and coming
economy. Rising share prices, for instance, tend to be associated with increased
business investment and vice versa. Share prices also affect the wealth of households
and their consumption. Therefore, central banks tend to keep an eye on the control
and behavior of the stock market and, in general, on the smooth operation of financial
Exchanges also act as the clearinghouse for each transaction, meaning that they
collect and deliver the shares, and guarantee payment to the seller of a security. This
eliminates the risk to an individual buyer or seller that the counterparty could default
on the transactions.
The smooth functioning of all these activities facilitates economic growth in that
lower costs and enterprise risks promote the production of goods and services as well
as employment. In this way the financial system contributes to increased prosperity.
An important aspect of modern financial markets, however, including the stock
markets, is absolute discretion. Business Transaction in Stock Market
A typical investment transaction in a stock exchange will consist of four stages:
Placing an order with a broker: A client places his order with a stock broker who
alone is entitled to transact business in a stock exchange either to buy or to sell the
shares of a company at fixed prices or at best market prices.
Execution of the order: The broker or his authorized clerk will execute the order and
the same will appear in the Stock Exchange Daily Official List which will include the
number and price of shares which exchanged hands.
Reporting the deal to the client: As soon as the deal is transacted, the brokers send
a contract note to the client giving details of the security bought or sold, the price, the
broker’s commission, etc.
Settlement of transaction: there are two methods of settlement of transactions. In the
case of ready delivery (or cash) transactions, payment has to be made immediately on
the transfer of the securities for within a period of one to seven days. In the case of
forward delivery, there is a system of carry-over i.e. post-ponement of delivery or
payment involving a payment by one to another. This system of carry-over provides
great scope for speculation in the forward market.
OVERVIEW OF CAPITAL MARKET IN INDIA
Capital market is the market for long-term funds, just as the money market is the
market for short-term funds. It refers to all facilities and the institutional arrangements
for borrowing and lending term funds (medium-term and long-term funds).The supply
of funds for the capital market comes largely from individual savers, corporate
savings, banks, insurance companies, specialized financing agencies and the
The Indian Capital Market is broadly divided into the Gilt-edged Market and the
Industrial Securities Market. The Gilt-edged market refers to the market for
government and semi-government securities, backed by Reserve Bank of India. The
Industrial Securities Market refers to the market for shares and debentures of old and
new companies. Two other segments : DFIs (Development Financial Institutions) and
FIs (Financial Intermediaries) also compose the capital market of India.
Further categorization is pictured here below:
Capital Markets of India –Stock Exchanges in India
“In terms of the legal structure, the stock exchange which are recognized under the
securities contracts (regulation) Act in India, could be separated into two broad
groups- 20 stock exchanges which are set up as companies, either limited by
guarantees or by shares, and 2 stock exchanges which are functioning as Associations
CAPITAL MARKET IN
New Issue Market
Old Issues Market
IFCI ICICI UTIIDBI
of persons (AOP) viz. BSE & NSE. The 20 stock exchange which are available in
India are as follows:
Banglore, Bhubhaneshwar, Kolkata, Cochin, Delhi, Hyderabad, Coimbatore, Uttar
Pradesh, Ludhiana, Madras, Magadha, Vadodra, Guwahati, Pune, OTCEI,
Ahmedabad, Bse, Madhya Pradesh. Of these, the stock exchanges of Ahmedabad,
Banglore, Kolkata, Delhi, Hyderabad, Madhya Pradesh, Madras, Guwahati were
given permanent recognition by central government of India at the time of setting up
these stock exchanges. Apart from the NSE, all stock exchanges whether established
as corporate bodies or Association of Persons (AOP’s) are non-profit organizations.”
(report of committee on corporatization and demutualization of stock exchanges.)
Of these 23 stock exchanges in the country, 20 are regional stock exchanges and the
remaining three with All India jurisdiction are NSE and BSE . Separate modules are
covered with regards to the structure and functioning and systems/procedure followed
in NSE and BSE.
Security and Exchange Board of India (SEBI)
It is a board (autonomous body) created by the government of India in 1988 and given
statutory form in 1992 with SEBI acts 1992. Its head office is in Mumbai, and other
offices in Chennai, Kolkata and Delhi. SEBI is the regulator of securities markets in
In 1998, the Securities and Exchange Board of India (SEBI) was established by the
government of India thought an executive resolution, and subsequently upgraded as a
fully autonomous body (a statutory board) in the year 1992 with the passing of the
Securities and Exchange Board of India act (SEBI Act) on 30th January 1992. In place
of government control, a statutory and autonomous regulatory board with defined
responsibilities, to cover both development and regulation of market, independent
powers has been set up. Paradoxically this is a positive outcome of the securities scam
The basic objectives of the board were defined as:
To protect the interests of investors in securities;
To promote the development of securities market;
To regulate the securities market and;
For matters connected therewith or incidental thereto.
SEBI has introduced:
Comprehensive regulatory measures
Prescribed registration norms
The code obligations
Code of conduct for different intermediaries like, bankers to issue, merchant
bankers, brokers and sub-brokers, registrars, portfolio managers, credit rating
agencies, underwriters and others
It had frames bye-laws
Risk identification and risk management systems for clearing houses of stock
exchanges, surveillance system etc.
All this has made dealing in securities both safe and transparent to the end investor.
Another significant event is the approval of trading in stock indices (like S&P CNX
Nifty & SENSEX) in 2000 a market index is a convenient and effective product
because of the following reasons:
It acts as a barometer for market behavior
It is used to benchmark portfolio performance
It is used in benchmark instruments like index futures and index options
It can be used for passive fund management as in case of index funds.
Over the Counter Exchange of India (OCTEI)
OTCEI was incorporated in October 1990 as a section 25 company under the
companies Act 1956 and is recognized as a stock exchange under section 4 of the
securities contracts regulation act,1956. The object of the OCTEI is “ To provide an
alternate market for the securities of smaller companies, public-sector companies,
closely-held companies desirous listing etc. It has been promoted jointly by UTI,
ICICI, IDBI,SBI Capital Markets Ltd, IFCI, GIC and Canbank Financial Services
The exchange was set up with a multi-tier securities exchange model to aid
enterprising promoters in raising finance for new project in cost effective manner to
provide investors with a transparent and efficient mode of trading. OTCEI is intended
to provide easy marketability and better liquidity of securities to an investor. Besides,
it also facilitate transfer of shares listed here.
Modeled along the lines of NASDAQ market, OTCEI introduces many novel
concepts to the Indian Capital Market such as screen based nation wide trading,
sponsorship of companies, markets making and scrip less trading. As a measure of
success of these efforts , the exchange today has 115 listings and has assisted in
providing capital for enterprises that has gone to build successful brand for
themselves like VIP, Sonara tiles & Brilliant mineral water etc.
Bombay Stock Exchange (BSE)
The BSE is the oldest stock exchange in Asia with rich heritage. Popularly known as
BSE, it was established as “The native share and stock brokers’ association” in1875.
It is the first stock exchange in country to obtain permanent recognition in 1956 from
the government of India under the securities contracts (regulation) act, 1956. the
exchanges pivotal and pre-eminent role in the development of Indian capital market is
widely recognized and its index, SENSEX, is tracked worldwide. Earlier an
association of persons (AOP), the exchange is now a demutualized and corporatized
entity incorporated under the provisions of the companies act, 1956, pursuant to BSE
(corporatization and demutualization) scheme, 2005notified by Securities and
Exchange Board of India, SEBI. Bombay stock exchange limited received its
Certificate of Incorporation on 8th August, 2005 and Certificate of Commencement on
12th August, 2005. The “DUE DATE” for taking over the business and operations of
the BSE was fixed for 19th August, 2005, under the scheme. The exchange has
succeeded the business and operations of BSE ongoing concern basis and its
recognition as an exchange has been continued by SEBI.
The exchange has a nation-wide reach with the presence of 417 cities and town of
India. The systems and processes of the exchange are designed to safeguard the
market integrity and enhance transparency in operations. During the year 2004-2005,
the trading volumes on the exchange showed robust growth.
Regional Stock Exchanges
With the automation of all stock exchanges and the expansion of trading terminals of
BSE and NSE across the country, investors have an easy access to the securities
market. The nationwide reach of two stock exchange has affected the market structure
in two ways:
First, the business of other stock exchanges has declines significantly, as investors
have preferred to trade in BSE and NSE as they provide deeper marketsa.
Secondly, with the declining of trading volumes in other stock exchanges, the issuers
feel that hardly any purpose is served by remaining listed in the regional stock
exchange, which was introduced in the days of manual trading and open octroi system
to encourage mobilization of resources and development of equity cult across the
country, has thus lost its relevance in the days of automated trading. It is therefore
widely felt that the concept of regional stock exchange needs to be abolished, similar
recommendations have been made the committee on delisting of shares and the
committee on demutualization of stock exchanges set up by SEBI.
Interconnected Stock Exchange of India (ICSE)
Inter-connected stock exchanges of India limited (ICSE) has been promoted by 14
regional stock exchanges to provide cost-effective trading linkage/connectivity to all
members of the participating exchanges, with the objective of widening the market for
the securities listed on these exchanges, inter-connectivity of stock exchanges is a
mechanism to enable a trader or dealer (trading member directly enrolled by ICSE) to
deal with another trader or dealer through his own local trader work station located in
his office. ICSE is a national-level stock exchange and provides trading, clearing,
settlement, risk management and surveillance support to its traders and dealers. ICSE
aims to address the needs of small companies and retail investors with the guiding
principle of optimizing the existing infrastructure and harnessing the potential of
regional markets, so as to transform these into a liquid and vibrant market through the
use of state-of-the-art technology and networking.
The mission of ICSE is to Endeavor to consolidate the small, fragmented and less
liquid markets into a national-level, liquid market by using the state-of-the-art
infrastructure and support systems. Their objective is to create a single trading
national level solution with access to multiple markets for providing high cost-
effective service to millions of investors across the country. To create a liquid and
vibrant national market for all listed companies in general and small capital
companies in particular. Optimally utilize the existing infrastructure and other
resources of participating stock exchanges, which are under-utilized now. Provide a
level playing field to small traders and dealers by offering an opportunity to
participate in a national market having investment-oriented business. Reduce
transaction cost; provide clearing and settlement facilities to the traders and dealers
across the country at their doorstep in a decentralized mode. Spreads demat trading
across the country.
# Thus, the above was the review of other capital markets in INDIA.
NATIONAL STOCK EXCHANGE OF INDIA
The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock
exchange. It is largest stock exchange in India in terms of daily turnover and number
of trades, both for equities and derivatives trading. NSE has a market capitalization of
around Rs. 47.01.923 crore(7 August 2009) and is expected to become the biggest
stock exchange in India in terms of market capitalization by 2009 end. 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 key index is the S&P CNX Nifty,
known as the Nifty, an index of fifty major stocks weighted by market capitalization.
NSE us 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.
In October 2007, the equity market capitalization of the companies listed on the NSE
was US$ 1.46 trillion, making it the second largest stock exchange in South Asia.
NSE is the third largest stock exchange 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
The National Stock Exchange of India 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. In April 1993, it was recognized as a stock exchange under
the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities)
segment of the NSE commenced operations in November 1994, while operations in
the Derivatives segment commenced in June 2000.
NSE has remained in the forefront of modernization of India’s capital and financial
markets, and its pioneering efforts include:
Being the first national, anonymous, electronic limit order book (LOB)
exchange to trade securities in India. Since the success of the NSE, existent
market and new market structures have followed the NSE model.
Setting up the first clearing Corporation “National Securities Clearing
Corporation Ltd.” in India. NSCCL was a landmark in providing innovation
on all spot equity market (and later, derivative market) trades in India.
Co-promoting and setting up of National Securities Depository Limited, first
depository in India.
Setting up of S&P CNX Nifty.
NSE pioneered commencement of Internet Trading in February 2000, which
led to the wide popularization of the NSE in the broker community.
Being th first exchange that, in 1996, proposed exchange traded derivatives,
particularly on an equity index, in India. After four years of policy and
regulatory debate and formulation, the NSE was permitted to start trading
Being the first and the only exchange to trade GOLD ETFs (exchange traded
funds) in India.
NSE has also launched the NSE-CNBC-TV18 media centre in association
It is the one of the most important stock exchanges in the world.
Currently, NSE has the following major segments of the capital market:
Futures and Options
Retail Debt Market
Wholesale Debt Market
Equities: NSE started trading in the equities segment (capital market segment) on
November 3, 1994 and within a short span of 1 year became the largest exchange in
India in terms of volumes transacted. Trading volumes in the equity segment have
grown rapidly with average daily turnover increasing from Rs. 17 crores during 1994-
95 to Rs. ,253 crores during 2005-2005. During the year 2008-2009, NSE reported a
turnover of Rs. 1,569,556 crores in the equities segment.During the year 2009-10,
NSE reported a turnover of Rs.3,812,032 crores in the equities segment.The equity
segment provides you with an insight into the equities segment of NSE and also
provides real-time quotes and statistics of the equities market.
Futures and Options: The derivatives trading on NSE commenced on June 12, 2000
with futures trading on S&P CNX Nifty index. Subsequently, the product base has
been increased to include trading in futures and options on S&P CNX Nifty index,
CNX IT index, Bank Nifty index and single securities (188 stocks as stipulated
bySEBI) and futures on interest rate. This segment has been considerable growth
since inception.In the global market, NSE ranks first(1st) in the world in terms of
number of contracts traded in the single stock futures, second (2nd) in Asia in terms of
number of contracts in the single stock futures, second (2nd) in Asia in terms of
number of contracts traded in equity derivatives instrument.
Retail Debt Market: With the view to encourage wider participation of all classes of
investors across the country (including retail investors) in government securites, the
government, RBI and SEBI have introduced trading in government securities for retail
investors. Trading in this retail debt market segment (RDM) on NSE has been
introduced w.e.f. January 16, 2003. Trading shall take place in the existing capital
market segment of the exchange.
Wholesale Debt Market: The wholesale market segment deals in fixed income
securities and is fast gaining ground in an environment that has largely focused on
equities. The wholesale debt market (WDM) segment of the exchange commenced
operations on June 30, 1994. This provided the first formal screen-based trading
facilities for a variety of debt instruments including government securities, treasury
bills and bonds issued by public sector undertakings/corporate/banks like floating rate
bonds state government loans units of mutual funds and securitized debt by banks,
financial institution, corporate bodies, trusts and others.
NSE became the first stock exchange to get approval for interest rate futures as
recommended by SEBI-RBI committee, on 31st August 2009. a future contract based
on 7% 10 year GOI bond (NOTIONAL) was launched with quarterly maturities.
The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges. It 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.
The National Stock Exchange (NSE) operates a nation-wide, electronic market,
offering trading in Capital Market, Derivatives Market and Currency Derivatives
segments including equities, equities based derivatives, Currency futures and options,
equity based ETFs, Gold ETF and Retail Government Securities. Today NSE network
stretches to more than 1,500 locations in the country and supports more than 2, 30,000
With more than 10 asset classes in offering, NSE has taken many initiatives to
strengthen the securities industry and provides several new products like Mini Nifty,
Long Dated Options and Mutual Fund Service System. Responding to market needs,
NSE has introduced services like DMA, FIX capabilities, co-location facility and
mobile trading to cater to the evolving need of the market and various categories of
NSE has made its global presence felt with cross-listing arrangements, including
license agreements covering benchmark indexes for U.S. and Indian equities with
CME Group and has also signed a Memorandum of Understanding (MOU) with
Singapore Exchange (SGX) to cooperate in the development of a market for India-
linked products and services to be listed on SGX. The two exchanges also will look
into a bilateral securities trading link to enable investors in one country to seamlessly
trade on the other country’s exchange.
NSE is committed to operate a market ecosystem which is transparent and at the same
time offers high levels of safety, integrity and corporate governance, providing ever
growing trading & investment opportunities for investors.
NSE has also set up an index services firm known as India index services and
products limited (IISL) and has launched several stock indices including the
An Index is used to give information about the price movements of products in the
financial, commodities or any other markets. Financial indexes are constructed to
measure price movements of stocks, bonds, T-bills and other forms of investments.
Stock market indexes are meant to capture the overall behaviour of equity markets. A
stock market index is created by selecting a group of stocks that are representative of
the whole market or a specified sector or segment of the market. An Index is
calculated with reference to a base period and a base index value.
Stock market indexes are useful for a variety of reasons. Some of them are:
They provide a historical comparison of returns on money invested in the
stock market against other forms of investments such as gold or debt.
They can be used as a standard against which to compare the performance of
an equity fund.
It is a lead indicator of the performance of the overall economy or a sector of
Stock indexes reflect highly up to date information
Modern financial applications such as Index Funds, Index Futures, Index
Options play an important role in financial investments and risk management
Major Indices of NSE
S&P CNX NIFTY
CNX NIFTY JUNIOR
CNX 100(=S&P CNX NIFTY +CNX NIFTY JUNIOR)
S&P CNX DEFTY
NIFTY MIDCAP 50
CNX midcap introduced on 18 July 2005 replacing CNX midcap 200.
S&P CNX NIFTY
S&P CNX Nifty is a well diversified 50 stock index accounting for 23 sectors of the
economy. It is used for a variety of purposes such as benchmarking fund portfolios,
index based derivatives and index funds.
S&P CNX Nifty is owned and managed by India Index Services and Products
Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first
specialized company focused upon the index as a core product. IISL has Marketing
and licensing agreement with Standard & Poor's (S&P), who are world leaders in
The total traded value for the last six months of all Nifty stocks is
approximately 48% of the traded value of all stocks on the NSE
Nifty stocks represent about 56% of the Free Float Market Capitalization as on
Sep 30, 2010.
Impact cost of the S&P CNX Nifty for a portfolio size of Rs.50 lakhs is
S&P CNX Nifty is professionally maintained and is ideal for derivatives
CNX NIFTY JUNIOR
The next rung of liquid securities after S&P CNX Nifty is the CNX Nifty Junior. It
may be useful to think of the S&P CNX Nifty and the CNX Nifty Junior as making up
the 100 most liquid stocks in India.
As with the S&P CNX Nifty, stocks in the CNX Nifty Junior are filtered for liquidity,
so they are the most liquid of the stocks excluded from the S&P CNX Nifty. The
maintenance of the S&P CNX Nifty and the CNX Nifty Junior are synchronized so
that the two indices will always be disjoint sets; i.e. a stock will never appear in both
indices at the same time. Hence it is always meaningful to pool the S&P CNX Nifty
and the CNX Nifty Junior into a composite 100 stock index or portfolio.
CNX Nifty Junior represents about 11 % of the Free Float Market
Capitalization as on Sep 30, 2010.
The traded value for the last six months of all Junior Nifty stocks is
approximately 14% of the traded value of all stocks on the NSE
Impact cost for CNX Nifty Junior for a portfolio size of Rs.25 lakhs is 0.09%.
CNX 100 is a diversified 100 stock index accounting for 35 sector of the economy.
CNX 100 is owned and managed by India Index Services & Products Ltd. (IISL).
Which is a joint venture between CRISIL & NSE. IISL is India’s first specialized
company focused upon the index as a core products. IISL has a licensing & marketing
agreement with Standard & Poor’s (S&P), who are leader’s in index services.
CNX 100 represents about 67% of the Free Float market capitalization as on
Sep 30, 2010.
The average traded value for the last six months of all CNX100 stocks is
approximately 61 % of the traded value of all stocks on the NSE.
S&P CNX 500
The S&P CNX 500 is India’s first broad based benchmark of the Indian capital
market. The S&P CNX 500 represents about 90% of the Free Float Market
Capitalization and about 87% of the total turnover on the NSE as on Sept 30, 2010.
The S&P CNX 500 companies are disaggregated into 72 industry indices viz. S&P
CNX Industry Indices. Industry weightages in the index reflect the industry
weightages in the market. For e.g. if the banking sector has a 5% weightage in the
universe of stocks traded on NSE, banking stocks in the index would also have an
approx. representation of 5% in the index.
S&P CNX DEFTY
Almost every institutional investor and off-shore fund enterprise with an equity
exposure in India would like to have an instrument for measuring returns on their
equity investment in dollar terms. To facilitate this, a new index the S&P CNX Defty-
Dollar Denominated S&P CNX Nifty has been developed. S&P CNX Defty is S&P
CNX Nifty, measured in dollars.
Performance indicator to foreign institutional investors, off-shore funds, etc.
Provides an effective tool for hedging Indian equity exposure.
Impact cost of the S&P CNX Nifty for a portfolio size of Rs.50 Lakhs is
Provides fund managers an instrument for measuring returns on their equity
investment in dollar terms.
Calculation of S&P CNX Defty
Computations are done using the S&P CNX Nifty index calculated on the NEAT
trading system of NSE and INR-USD exchange rate that is based on the real time
polled data feed.
Calculation of closing value of S&P CNX Defty
Closing value of S&P CNX Defty is computed by considering average of INR-USD
polled data values (exchange rate) of last 30 minutes of the market.
Specifications of S&P CNX Defty
Base date: 03 November 1995
Base S&P CNX Defty Index Value: 1000
S&P CNX Nifty Value as on Base date: 1000
Exchange rate as on base date: 34.65
Adjustment factor as on Base date:1.00
The medium capitalised segment of the stock market is being increasingly perceived
as an attractive investment segment with high growth potential. The primary objective
of the CNX Midcap Index is to capture the movement and be a benchmark of the
midcap segment of the market.
Method of Computation
CNX Midcap is computed using free float market capitalization* weighted method
w.e.f. February 26, 2010, wherein the level of the index reflects the free float market
value of all the stocks in the index relative to a particular base period. The method
also takes into account constituent changes in the index and importantly corporate
actions such as stock splits, rights, etc without affecting the index value.
Base Date and Value
The CNX Midcap Index has a base date of Jan 1, 2003 and a base value of 1000
Criteria for Selection of Constituent Stocks
The constituents and the criteria for the selection judge the effectiveness of the index.
Selection of the index set is based on the following criteria :
All the stocks, which constitute more than 5% market capitalization of the
universe (after sorting the securities in descending order of market
capitalization), shall be excluded in order to reduce the skewness in the
weightages of the stocks in the universe.
After step (a), the weightages of the remaining stocks in the universe is
After step (b), the cumulative weightage is calculated.
After step (c) companies which form part of the cumulative percentage in
ascending order unto first 75 percent (i.e. upto to 74.99 percent) of the revised
universe shall be ignored.
After, step (d), all the constituents of S&P CNX Nifty shall be ignored.
From the universe of companies remaining after step (e) i.e. 75th
percent and above, first 100 companies in terms of highest market
capitalization, shall constitute the CNX Midcap Index subject to fulfillment of
the criteria mentioned below.
All constituents of the CNX Midcap Index must have a minimum listing
record of 6 months. In addition, all candidates for the Index are also evaluated
for trading interest, in terms of volumes and trading frequency.
All companies in the CNX Midcap Index have a minimum track record of
three years of operations with a positive net worth.
A company which comes out with a IPO will be eligible for inclusion in the
index, if it fulfills the normal eligibility criteria for the index for a 3 month
period instead of a 6 month period.
*CNX Midcap Index was computed using market capitalization weighted
method from the launch date till February 25, 2010.
NIFTY MIDCAP 50
The medium capitalized segment of the stock market is being increasingly perceived
as an attractive investment segment with high growth potential. The primary objective
of the Nifty Midcap 50 Index is to capture the movement of the midcap segment of
the market. It can also be used for index-based derivatives trading.
Method of computation
Nifty Midcap 50 is computed using free float market capitalisation weighted method,
wherein the level of the index reflects the total market value of all the stocks in the
index relative to a particular base period. The method also takes into account
constituent changes in the index and importantly corporate actions such as stock
splits, rights, etc without affecting the index value.
Base Date and Value
The Nifty Midcap 50 Index has a base date of Jan 1, 2004 and a base value of 1000.
Criteria for Selection of Constituent Stocks
The constituents and the criteria for the selection judge the effectiveness of the index.
Selection of the index set is, inter alia, based on the following criteria:
Stocks with average market capitalization ranging from Rs.1000 Crore to
Rs.5000 Crore at the time of selection.
Stocks which are not part of the derivatives segment are excluded.
Stocks which are forming part of the S&P CNX NIFTY index are excluded.
Nifty Midcap 50 stocks represent about 6 % of the free float market
capitalization as on September 30, 2010.
The traded volume for the last six months of all Nifty Midcap 50 stocks is
approximately 10% of the traded volume of all stocks on the NSE.
# Nifty Midcap 50 Index was computed using market capitalization weighted method
from the launch date till February 25, 2010
CNX IT Index
CNX Bank Index
CNX FMCG Index
CNX PSE Index
CNX MNC Index
CNX Service Sector Index
S&P CNX Industry Indices
CNX Energy Index
CNX Pharma Index
CNX Infrastructure Index
CNX PSU BANK Index
CNX Realty Index
S&P CNX Nifty Shariah / S&P CNX 500 Shariah
S&P ESG India Index
Listing means admission of securities of an issuer to trading privileges on a stock
exchange through a formal agreement. The prime objective of admission to dealings
on the exchange is to provide liquidity and marketability to securities, as also to
provide a mechanism for effective management of trading.
Listing on NSE provides qualifying companies with the broadest access to investors,
to greatest market depth and liquidity, cost-effective access to capital, the highest
visibility, the fairest pricing and investor benefits. NSE trading terminals are now
situated in various cities and towns across the length and breadth of India.
Securities listed on the exchanges are required to fulfill the eligibility criteria for
listing. Various types of securities of a company are traded under a unique symbol
and different series.
NSE plays an important role in helping an Indian economy’s access equity capital, by
providing a liquid and well-regulated market. NSE had about 1319 companies listed
presenting the length, breadth and diversity of the Indian economy which includes
from hi-tech to heavy industry, software, refinery, public sector units, infrastructure,
and financial services. Listing on NSE raises a company’s profile among investors in
India and abroad. Trade data is distributed worldwide through various news-vending
agencies. More importantly, each and every NSE listed company is required to satisfy
stringent financial, public distribution and management requirements. High listing
standards foster investor confidence and also bring credibility into the markets.
NSE lists securities in its capital market (equities) segment and its wholesale debt
The exchange has laid down criteria for listing of new issues by companies. IPO’s by
knowledge based issuers, companies listed on other exchanges, and companies
formed by amalgamation/ restructuring, etc. in conformity with the securities
contracts(regulation) rules, 1957 and directions of the central government and the
securities and exchange board of India (SEBI).
Following are the certain listing criteria in NSE:
The company should have the minimum paid-up capital and market
Project appraisal by the concerned authority.
Company/Promoter’s track record, etc.
The issuers of securities are requires to adhere to provisions of the securities
contracts (regulation) Act, 1956, the securities and exchange board of India
They are also required to follow rules, circulars, notifications, guideline, etc.
prescribed there under.
Listing Procedure and Documentation
An issuer has to take various steps prior to making an application for listing its
securities on the NSE. These steps are essential to ensure the compliance of certain
requirements by the issuer before listing its securities on the NSE. The various steps
to be taken include:
Approval of Memorandum and Articles of Association
Approval of draft prospectus
Submission of application
Fulfilling listing conditions and requirements
In case the company fulfills the criteria, the following information and
documentations are required for further processing:
1. A brief note on the promoters and management
2. Company profile
3. Copies of annual report for last 3 years
4. Copies of the draft offer document
5. Memorandum & Articles of Association
The main entry norms for companies making a public issue (IPO or FPO) are
summarized as under following norms:
Entry Form I (EN I)
The company shall meet the following requirements:
Net tangible assets of atleast Rs.3 crores for full 3 years.
Distributable profits in atleast three years.
Net worth of atleast Rs. 1 Crore in three years.
If change in name, atleast 50% revenue for proceeding 1 year should be from
the new activity.
The issue size does not exceed 5 times the pre-issue worth
To provide sufficient flexibility and also to ensure that genuine companies do
not suffer on account of rigidity of the parameters.
SEBI has provided two other alternative routes to company not satisfying any of the
above conditions, for accessing the primary market, as under:
Entry Norm II (EN II)
Issue shall be through book building issue route, with atleast 50% to be
mandatory allotted to the qualified institutional buyers (QIBs).
The minimum post-issue face value capital shall beRs. 10 crore or there shall
be a compulsory market-making for atleast 2 years.
Entry Norm III(EN III):
The “project” is appraised and participated to the extent of 15% by FII’s/
scheduled commercial banks of which atleast 10% comes from the
The minimum post-issue face value capital shall be Rs. 10 crore or there shall
be a compulsory market-making for atleast 2 years.
In addition to satisfying the aforesaid eligibility norms, the company shall also
satisfy the criteria of having atleast 1000 prospective allotees in its issue.
Benefits of Listing on NSE
The benefits of listing on NSE are enumerated as below:
NSE provides a trading platform that extends across the length and breadth of
the country listing on NSE thus, enables to reach and service investors across
NSE being the largest stock exchange in terms of trading volumes, the
securities trade at low impact cost and are highly liquid. This in turn reduces
the cost of cost of trading to the investor.
The trading system of the NSE provides un-parallel level of trade and post-
trade information. The best 5 buy and sell orders are displayed on the trading
system and the total number of securities available for buying and selling is
also displayed/this helps the investors to know the depth of the market.
Further, corporate announcements, results, corporate actions etc. Are also on
the trading system. Thus, reducing the scope for price manipulation or misuse.
The facility of making initial public offers (IPO’s), using NSE’s network and
software, results in significant reduction in cost and time of issues.
NSE’s website www.nseindia.com provides a link to the web-sites of the
companies that are listed on the NSE, so that visitors interested in any
company can visit that company’s web-site from the NSE site.Listed
companies are provided with monthly trade statistics for the securities of the
company listed on the exchange.
FINDINGS & ANALYSIS
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
April 1995 Establishment of NSCCL, the first Clearing Corporation
June 1995 Introduction of centralised insurance cover for all trading
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 Setting up of National Securities Depository Limited, first
depository in India, co-promoted by NSE
November 1996 Best IT Usage award by Computer Society of India
December 1996 Commencement of trading/settlement in dematerialised
December 1996 Dataquest award for Top IT User
December 1996 Launch of CNX NiftyJunior
February 1997 Regional clearing facilitygoes live
November 1997 Best IT Usage award by Computer Society of India
May 1998 Promotion of joint venture, India Index Services & Products
May 1998 Launch of NSE's Web-site: www.nse.co.in
July 1998 Launch of NSE's Certification Programme 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'
November 2000 Launch of Broker Plaza by Dotex International, a joint venture
between NSE.IT Ltd. and i-flex SolutionsLtd.
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)
May 2002 NSE wins the Wharton-Infosys Business Transformation Award in
the Organization-wide Transformation category
October 2002 Launch of NSE Government Securities Index
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 listedcompanies
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 derivativeson NiftyJunior & CNX 100
October 2007 NSE launches derivativeson NiftyMidcap 50
January 2008 Introduction of Mini Nifty derivative contracts on 1st January
March 2008 Introduction of long term option contracts on S&P CNX Nifty
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 listingagreement
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 disseminationof 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
Market Trend and Analysis
Business Growth in Capital Market Segment
2012-13 1666 250 1683 13,605 27,08,279 10,833 62,39,035
2011-12 1646 249 1807 14,377 28,10,893 11,289 60,96,518
2010-11 1574 255 1607 15,507 35,77,412 14,048 67,02,616
2009-10 1,470 244 1,968 16,816 4,138,024 16,959 6,009,173
2008-09 1,432 243 1,327 13,651 2,752,023 11,325 2,896,194
2007-08 1,381 251 1,264 11,727 3,551,038 14,148 4,858,122
2006-07 1,228 249 1,191 7,846 1,945,285 7,812 3,367,350
NUMBER OF LISTED COMPANY TREND
Companies Listed: As compared to previous years, there is significant
growth in number of companies listed in the capital market segment of NSE.
No. of Securities Traded: With the increase, in companies listed, despite
other factors influencing the market transactions, number of securities traded
in also have increased with the time.
No. of Trades: From the financial year 2006-2007 to that of 2012-2013
number of trades have increased the double in amount signaling a positive
Total Turnover: Total turnover have increased four times from FY 2006-07
to FY 2012-13.
Market Capitalization: The amount of market capitalization has doubled in
FY 2009-10 as compared to that of FY 2006-2007.
Index Future Turnover: The amount in crores on the Index Future Options
of Derivative segment of NSE has shown significant growth from FY 2006-07
to that of FY 2014-15.
Stock Futures Turnover: Whereas, the Stock Future Turnover has shown
growth of 1.23 times from FY 2006-07 to that of FY 2014-15.
Index Options Turnover: The Index Options Turnover has shown 17.89
times growth from FY 2006-07 to FY 2014-15.
Stock Options Turnover: Whereas, Stock Options Turnover ahs shown
growth of 4.56 times from FY 2006-07 to FY 2014-15.
Total Turnover: The growth rate when evaluated from FY 2006-07 to FY
2014-15 shows a positive growth of 3.18 times.
Average Daily Turnover: The Average Daily Turnover on Derivative
Segment of NSE has shown growth of 3.75 times from FY 2006-07 to 2014-15.
TREND OF S&P BSE SENSEX
Period : Year 2008 to Year 2014
Year Open High Low Close
2008 20,325.27 21,206.77 7,697.39 9,647.31
2009 9,720.55 17,530.94 8,047.17 17,464.81
2010 17,473.45 21,108.64 15,651.99 20,509.09
2011 20,621.61 20,664.80 15,135.86 15,454.92
2012 15,534.67 19,612.18 15,358.02 19,426.71
2013 19,513.45 21,483.74 17,448.71 21,170.68
2014 21,222.19 25,725.12 19,963.12 25,413.78
TREND OF SENSEX
In 2008, sensex was 20325.27 but it reduced to 9720.55 in 2009 than after it was
17473.45, 20621.61, 15534.67, 19513.45, & 21222.19 in 2010, 2011, 2012, 2013, &
2014, it is seen that, it was increasing way..
Business Growth in Retail Debt Segment
Month/Year No. of Trades Traded Quantity Traded Value (Lakhs)
2010-2011 2 20 0.02
2009-2010 5 50 0.06
2008-2009 0 0 0.00
2007-2008 0 0 0.00
2006-2007 4 12,120 13.69
1 2 3 4 5 6 7
No. of Trades: Retail Debt Segment of NSE has seen many ups and down in
its history. By analyzing the available record, we can clearly see that FY 2006-
07 has been proven best trading year. However, apart from this data, FY 2003-
04 involved greatest number of trades i.e. 912. Whereas, in FY 2007-08 and
FY 2008-09 there is not even a single trade shown. In FY 2009-10 it has again
recovered its position and maintained to perform 5 no. of trades.
Traded Quantity: Again, FY 2006-2007 involves higher amount of traded
quantity. While FY 2010-11 again show some declination in trade number and
quantity as well.
Traded Value: In FY 2003-04 the Traded Value was 464.41 lakhs which was
highest amount till date. In FY 2005-06, FY 2007-08 and FY 2008-08 Retail
Debt Segment has seen no trade and hence zero traded value. However, In FY
2006-07, it has recovered its position by 13.69 lakhs. In FY 2009-2010, it
again seem to recover back from zero to 0.06 lakhs but showed declination in
FY 2010-2011 by showing only two trades and 0.02 lakhs traded value.
Business Growth in Wholesale Debt Segment
2010-2011 3543592 207 17625 480186.55 2319.74 27.24
2009-2010 3165929 239 24069 563815.95 2359.06 23.42
2008-2009 2848315 238 16129 335951.52 1411.56 20.83
2007-2008 2123346 248 16179 282317.02 1138.38 17.45
2006-2007 1784801 244 19575 219106.47 897.98 11.19
No. of Trades: Wholesale Debt segment has seen declination in number of
trades from FY 2006-07 to that of FY 2010-2011. However, it had regained its
amount in FY 2009-2010 by 4,494 new entries as compared to 3,446
declination in FY 2008-09.
Net Traded Value: In FY 2009-2010, Whole Debt Segment of NSE has
shown highest Net Traded value with significant increase in number of trades.
Average Daily Value: Despite declination in number of trades from FY 2006-
07 to FY 2008-09, the Average Daily Value has increased on opposite for
positive factor. And is highest in FY 2009-2010.
Average Trade Size: Average Trade Size has increased with consistent rate
from FY 2006-07 to that of FY 2010-11.
Market Capitalization: Despite less number of trades and lesser Net Traded
value from FY 2009-10, the FY 2010-11 has shown highest Market
capitalization over the period.
NSE has been promoted by leading financial instituitions, baks, insurance companies
and other financial intermediaries as follows:
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
General Insurance Corporation of India
National Insurance Company Limited
The New India Assurance Company Limited
The Oriental Insurance Company Limited
United India Insurance Company Limited
Punjab National Bank
Oriental Bank of Commerce
Union Bank of India
Infrastructure Development Finance Company Limited
The National Stock Exchange (NSE) is India’s leading stock exchange covering
various cities and towns across the country. NSE provides a modern, fully automated
screen-based trading system with national reach. The exchange has bought about un-
parallel transparency, speed and efficiency, safety and market integrity. NSE’s trading
volumes in the equity segment have grown rapidly with the average daily turnover
increasing from Rs. 17 crores during 1994-1995 to Rs. 6,523 crores during 2005-06.
During the year 2005-06, NSE reported a turnover of Rs. 1,569,556 crores in the
NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-
the-art information technology to provide an efficient and transparent trading, clearing
and settlement mechanism, and had witnessed several innovations in products and
services via demutualization of stock exchange governance; screen based trading,
compression of settlement cycles, dematerialization and electronic transfer of
securities, lending and borrowing securities, professionalizing of trading members
fine-tuned risk management systems, emergence of clearing corporations to assume
counterparty risks, market debt and derivative instruments and intensive use of
In Conclusion, NSE successfully utilized technology as a tool for obtaining complete
transformation of India’s security industry. As of today, around a decade after
inception, every aspect of the equity spot and derivatives market India is now up to
‘International Standards’ or ahead of them.
NSE has completed 16 years of its operations on 30 June 2010. The exchange is
credited with technology innovation, speeding up of the process for dematerialization,
introduction of effective risk containment measures and the introduction of
derivatives trading. It is a dominant stock exchange accounting for 66 per cent of the
traded volume in the cash segment and 99 per cent of the traded volume in the
derivatives segment. The NSE has emerged as a technology-driven stock exchange. It
has rightly positioned itself as “the exchange with difference”. In order to maintain its
leading position among exchanges, it increases the number of users by trying to meet
their growing and ever-changing needs through innovative efforts. Its aim is to
continuously upgrade technology systems and trading practices.
Major Defects in Trading in Indian Stock Exchanges:-There are certain serious
defects while working of our stock exchanges, particularly the major exchanges such
as Bombay Stock Exchange (BSE):
1. Lack of Integration: There are a large number of stock exchanges in the
country, though BSE dominates them with over 70 per cent of all transactions
in the country. There is nothing wrong in this, because in other countries too
there are small exchanges, with one dominating (New York SE in USA and
London SE in England). But the real problem in India is that there is no proper
integration between all the stock exchanges with too much variation in prices
of shares in different markets.
2. Specified and Non-specified shares: Indian stock exchanges follow the
peculiar practice of classifying listed shares into ‘specified’ group and
‘unspecified’ group. The shares in the specified group are provided certain
special facilities like settlement period, carry forward and clearing to promote
speculation. At present, market liquidity is limited to thee speculative shares
only, whereas investors would prefer liquidity for all shares, across a broad
front. The only advantage of this artificial classification is that it is highly
profitable to the stock exchange brokers through brokerage fees on the high
volume of speculative business generated in these shares.
3. Margins: The margins levied by Indian SEs on speculative transactions are
wholly of discretionary character, varying from share to share and from day to
day, ranging from zero to 40 per cent. Despite a whole array of daily, carry
forward and ad hoc margins, numerous defaults take place in several SEss
whenever the market crashed. In other words, the imposition of margins has
failed to curb excessive speculation in SEs.
4. The system of settlement and carry forward: It is responsible for high price
fluctuations and high risk exposure to market participants. It is often
responsible for excessive speculation.
The carry forward system is unjustifiable and unhealthy. It is exclusively
aimed at helping the spurious speculators. The liquidity provided by
speculators who are not interested in paying or taking delivery on the
settlement day cannot be genuine liquidity. Above all, the carry forward
system is a powerful factor behind absurdly high levels of speculation in our
stock exchanges and is of no help to genuine investors who are always
interested in the earliest possible settlement of transactions.
5. Investors’ interest: The trading activity in our exchanges has been designed
and evolved to benefit only the brokers and the intersects of the genuine
investors are generally ignored. The investors’ confidence in the market
machinery is weak, as most of them have a suspicion that they are always
cheated on price by the brokers.
6. Weakness of SE management: The management organization and structure
of Indian SEs, in general, is weak and deficient. The Government Body of a
stock exchange does not have either the concern or the will to introduce
necessary reforms in trading.
Data is gathered from
Magazines, Newspapers and Other Secondary data resources.
Indian Economy: S. Chand Publications [Ruddar Datt & K.P.M. Sundharam]
The Indian Financial System: Pearson education [Bharti V. Pathak]
Financial Management: McGraw Hill Companies [M.Y. Khan & P.K. Jain]
Investment Analysis and Portfolio Management: Pearson education [M.
Rangnathan and R. Madhumathi]
SUMMER INTERNSHIP PROJECT
I am …………………………………………….., pursuing Post Graduate Diploma In
Management in Regional College OfManagement. I am doing summer internship project
on “RESEARCH ON INDIANSTOCK MARKET”. Therefore I have prepared a
questionnaire as follows. Soliciting your opinion on the following aspects. Your help is
Please provide your e-mail Id :
Please provide your contact number (if possible):
A- Service B- Business C- Student D- Other
1. Have you undergone any training in equity from NSE, BSE or Broking
Firms before starting trading in equity?
2. Are you investing in Equity market?
A-Yes B- No (If “Yes” then where …………………………………….
3. Which type of trading you prefer?
4. What percentage of your investment is invested in equity
market from your total investment?
A-Less than 25% B-25-50% C-51-75% D-More than 75%
5. From how long you are investing in equity market?
A-Less than 1 year B-1 to 2 year C-2 to 3 years D-More than 3
6. Why do you invest in equity market?
A- For quick short term gain B- For high long term gain
7. What attracts you towards equity market?
A- High return B- Speculation C- Dividend D- Liquidity of invested
8. How much is your total investment annually?
A-< 5000 B-5000 – 10000 C-10000 – 25000 D-25000 – 50000
9. Generally you are prefer for Intraday or Delivery?
A- Intraday B- Delivery
10. In which sector you invest most?
A- Insurance B-Share C- Banking D- Others
11. Which broker do you prefer for equity ?
A-ICICI securities B-Share khan C-Ventura securities D-Kotak
12. What differentiates your company form other?
A-Brokerage B-Research report C-Extra facilities
D-Account opening charges E-Other
13. How do you rate these equity trading companies?
A…………… B…………… C………….. D………….
A- ICICI securities
B- Share khan
C- Ventura securities
D- Kotak securities