final report alak 25

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COMPARITIVE ANALYSIS OF RELIGARE SECURITIES LIMITED WITH ITS COMPETITORS

CHAPTER 1

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INTRODUCTION

Dematerialization

Before the introduction of the Depositories Act 1996, everyone used to hold

shares in the physical form. There were many risks associated with holding physical

certificates. These shares could get torn, duplicated or even stolen. Moreover,

transfer of shares from one person to another was not only a very long process but

would also attract a lot of charges. A revolution came in Capital Market with the

introduction of this act. This refers Dematerialization as the process of converting

securities from physical form to electronic form.

Basically, dematerialization refers to the absolute or relative reduction in the

quantity of materials required to serve various functions. In common terms,

dematerialization means doing more with less. According to the financial terms,

dematerialization is the substitution of paper-form securities into book-entry

securities. Dematerialized securities are the securities, which are not on paper, and a

certificate to that effect never exists. They exist in the form of entries. These entries

are in the book of depositories. Shares are held in the dematerialized form instead of

possessing it physically. This system works through a depository who is registered

with SEBI.

Dematerialization is the process wherein, there is no physical scrip in

existence as neither the individual who owns the shares nor the depository keeps

scrip. The depository maintains the electronic ledger of the securities under its

control. The owner of the securities bases the depository model on the deposit of

securities with a certified depository. Subsequently, an entry is made in the name of

the said owner, manifesting his ownership of the securities upon which the person

depositing the beneficial owner in respect of said securities.

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Process Overview

An investor (client) intending to dematerialize his/her securities need to have

a demat account with a DP. The client has to give the certificates to the DP. The DP,

after intimating the Depository electronically, sends the securities to the concerned

Registrar and Transfer agent (R&T Agent).

The depository informs the R&T agent electronically about the request for

dematerialization. The R&T, upon finding the certificate and the request in order,

registers the depository as the holder of the securities and confirms to the depository

electronically. It then authorizes the credit to the relevant client account with the DP.

Activities related to demat accounts are carried out at two levels. At bank level,

there is Depository Cell at Mumbai, which undertakes centralized transaction

processing and follows the rules and guidelines directed by SEBI. Branches and

Sales Teams are at field level that has to market the product and interact with the

investors.

Branches have to provide the relevant forms to the clients according to the

needs. They have the responsibility of preliminary verification of the instructions

submitted by the clients and promptly entering them in the system forwarding them

to the depository cell for execution as per the related guidelines. Branches also have

to regularly follow-up with the clients for all the necessary operational formalities

related to collection of various forms, documents, acknowledgements, reports, bills,

etc. Branches should co-ordinate with the with the Depository cell for timely

execution of the instruments and any other operational matters pertaining to its

demat accounts clients.

Demat account being primarily a securities account, does not involve any

monetary transactions except the charges for services rendered which are collected

separately. It is also not involved in the actual process of trading of securities,

except that it takes care of delivery part of the trading. Data pertaining to the Demat

account trading operations should be kept separate from that pertaining to other

banking operations.

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The phenomena of dematerialization of securities issued by large firms is

mostly undertaken via Central Securities Depository, a national or regional

institution holding the notary function, which itself entrusts banks and investment

firms to act as intermediaries between issuers and investors for the custody of these

securities. Therefore, dematerialized securities are often referred as Intermediate

Securities.

Advantages Of Dematerialization

1. There is saving in time and cost on account.

2. The threat of loss of certificates or fraudulent interception of certificates in

transit that causes anxiety to the investors is eliminated.

3. It enables processing of share trading and transfers electronically without

involving share certificates and transfer deeds, thus eliminating the

paperwork involved in scrip-based trading and share transfer system.

4. Transfer of dematerialized securities is immediate.

5. There is no need to fill a transfer form transfer of shares and affix share

transfer stamps.

6. The investor is also relieved of problems like bad delivery, fake certificates,

shares under litigation, signature difference of transferor and the like.

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CHAPTER 2

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OBJECTIVES OF THE STUDY

In todays competitive scenario of security business, where customers play a

vital role for the security companies, it is essential for them to invest more in share

market and its factors that basically determine the satisfaction level of customers

who have demat account in brokerage firm.

Primary Objectives: -

To have an in-depth knowledge about the share market and its factors:

1. To know about various products in different categories offered by Religare

Securities Limited.

2. To study about the dematerialization in brokerage firms.

3. To know the customer satisfaction of firms as compared with Religare

Securities Limited and identify the factors which define them.

Secondary Objectives: -

1. To have an overview of Share Market and its functioning.

2. To have knowledge about different brokerage firms which are active in NCR

region and giving an edge to Religare Securities Limited.

3. To create awareness about Religare Securities Limited.

4. To convert theoretical knowledge into practical knowledge.

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CHAPTER 3

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REVIEW OF LITERATURE

Analysis of customer expectations towards share brokers: A study by

K K Verma and Prakash Tiwari.

Investment is one of the key components for growth and development of any

country. There are various ways of investment by the individual like buying

securities or other monetary or paper assets in the money market or capital market,

or in fairly liquid real assets such as gold as an investment, real estate etc. Types of

financial investments include shares and other equity investment and bonds.

Growth Of Indian Stock Market: A case of NSE by Raj Kumar and

Hari Om Gupta

This paper provides historical background of stock market in India and also

analyzes the growth pattern of NSE. The study covers the period of twelve years

spreads over from 1995 to 2007. It has been found that all the segments of NSE

have registered splendid growth in terms of turn over. The derivative segment of

NSE has made it one of the largest stock exchanges in the world. So far as the

trading in securities is concerned it is not broad based. The trading is concerned to

few securities and a large portion of the securities are experiencing low liquidity.

Share Trading on the Web: A comprehensive review of design

specification across the globe by Robert Hudson, Kevin Keasey and Kevin

Littler in the year 2000.

In this study they had given the rapid increase over the past couple of years,

of shares dealing services available on the web. This paper describes the finding of

web-based share trading firms. The purpose of the research is to highlight the key

features of online trading across the globe and to identify best of breed examples

of the feature. The research is based on the latest available literature and a review of

the majority of the web sites across the globe.

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CHAPTER 4

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INTRODUCTION TO CONCEPT

Demat Account

The term Demat, refers to Dematerialized account. For individual Indian

citizens to trade in listed stocks or debentures, the Securities Exchange Board of

India (SEBI) requires investor to maintain a Demat account. In a Demat account,

shares and securities are held in electronic form instead of taking actual possession

of certificates. For opening a Demat account one has to register with an investment

broker (or sub-broker). The Demat account number, which is quoted for all

transactions to enable electronic settlements of trades, is likely to take place. Access

to Demat account requires an Internet password and a transaction password. For

initiating and conforming transfers or purchases of securities also password is

required. Purchases and sales of securities on the Demat account are automatically

made once transactions are executed and completed.

Moreover the Demat account reduces brokerage charges, makes pledging ofshares easier, enables quick ownership of securities on settlement resulting in

increased liquidity, avoids confusion in the ownership title of securities, and

provides easy receipt of public issue allotments. It also helps avoid bad deliveries

caused by signature mismatch, postal delays and loss of certificates in transit. It

eliminates risk associated with forgery and loss due to fire or theft. Demat account

holders can also avoid filling up of transfer deeds, and obtain quick receipt of such

benefits as stock splits and bonuses.

All the process of book entry is done electronically and there is no

involvement of paper work is. Physical form is extinguished and shares or securities

are held in electronic mode. Before the introduction of Depository system in 1996,

the process of sales, purchase and transfer of shares was a huge problem and the

safety perspective was almost nil.

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Essentials for opening a Demat account are as follows: -

i. Registration Form.

ii. Self-attested photographs.

iii. PAN Card.

iv. Proof of residence passport, voters ID card, driving license etc.

v. Proof of identity passport, voters ID card, driving license PAN card etc.

vi. Bank account proof- bank statement.

The benefits of having a Demat account are enumerated as follows: -

a. It is a very safe and convenient way of holding securities.

b. Immediate transfer of securities is possible.

c. No stamp duty on transfer.

d. Paper work is reduced very much.

e. Investments in equity and debt instruments can be kept into a single account.

f. There is an automatic credit system of shares arising out of bonus, split,

consolidation, merger etc, into the Demat account.

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There are four major charges usually levied on a Demat account: Accountopening fee, Annual maintenance fee, Custodian fee and Transaction fee.

Account Opening Fee

There may or may not be an account-opening fee. It depends upon the

company policies. Private banks such as ICICI Bank, HDFC Bank and UTI Bank do

not have one. However, players such as Religare Securities Ltd., Share Khan, and

Globe Capital do so.

Annual Maintenance Fee

This is also known as Folio management charge and is generally taken in

advance.

Custodian Fee

This fee is charged monthly and depends on the number of securities

(International Securities Identification Numbers - ISIN) held in the account. It

generally ranges between Re. 0.5 to Re 1 per ISIN per month.

Transaction Fee

The transaction fee is charged for crediting/debiting securities to and from

the account on a monthly basis. Some players charge flat transaction fee, where as

some charge variable based on the type of transaction.

There are few disadvantages also of having a Demat account: -

a. Role of key market players such as Stockbrokers, need to be supervised as

they have the capability of manipulating the market.

b. Trading in securities may become uncontrolled.

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Investment

Investment basically means sacrifice of some money value at present with

the expectations to gain in the future. All investment activities are based on one or

another factual basis and these are done with the ultimate aim of having gain in the

future, yet different investors have different objectives in making investment. The

investment activity undertaken by the investors results in the creation of a portfolio,

which possesses a number of features depending upon the objectives and style of

taking investment decisions.

Dimensions Of Investment: -

Element Of Sacrifice

As soon as person makes a commitment of investing money either in buying

shares, or a price of land or plant, etc., it entails an element of sacrificing current

consumption of money value.

Element Of Futurity

Every investment is done with the aim of holding it for a certain time period.

Some investors hold it for a few days whereas others hold it for months or years.

The holding period is generally classified into three short-term, medium-term, and

long-term.

Element Of Risk

Since every investment activity has an element of the futurity and the future

is always full of uncertainties, it introduces an element of risk in any investment

activity. By risk, it is meant the chance of having an adverse or low return as

compared to the investors expectations.

Expectation Of Gain

Investments are not done for charity. All the three elements become the basis

of expecting gains from the invested money. Generally, the gains expected by the

investors are nothing but the compensation for waiting; lose in purchasing power

and risk premium corresponding to level of risk

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Objectives Of Investment: -

Safety

Safety means protection against loss, since money invested is nothing but

hard earned money saved by the investors to get it back in the future, hence, one

always wants full safety of the invested money.

Regularity Of Income

A few investors invest their savings with the objective to have a regular

income to meet their day-to-day requirements.

Capital Gains

Today more and more investors are attracted to invest their savings in the

stock market just because they expect an appreciation in the capital invested by

them. High capital appreciation is sometimes achieved in the stock prices but at the

same time the element of risk is also high.

Tax Savings

The premium paid for various policies in India qualifies for tax Rebate. This

is achieved by investing in tax-free bonds.

Liquidity

The element of liquidity depends upon the marketability or buy-

back/redemption option. An instrument is marketable only if there are a large

number of buyers and sellers who are ready to deal in it every time.

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Risk Associated With Investment

Risk means probability of having adverse or low returns as compared to theexpected returns. All investment activities are subject to risk, even the so-called safe

investments like Treasury Bills, Government Securities and Post office deposits.

There are various types of risks:

1. Risk Due To Inflation

Inflation causes loss of purchasing power, due to which real gains from the

investment are very low as compared to the monetary gains. The prices of shares as

well as debentures get affected due to this. As a result of rising inflation the returns

expected by the investors tend to increase and they discount future earnings at a

higher discount rate, which pulls the prices downside.

2. Interest Rate Risk

Interest rate in an economy tends to fluctuate either on account of regularity

framework or due to market forces. In general, interest rises and then it pushes up

investors expected rate of return from investment, as a result of which prevailing

share prices become unattractive.

3. Political Risk

Performance of industries and the stock market depends upon the kind of

political scenario prevailing in the country. Political uncertainty has adverse effect

on share prices.

4. Market Risk

Prices of securities (shares, stocks, and debentures) depend much upon the

activities of operators/speculators in the market. In the past when UTI used to

account for a major portion of the daily traded volume in the sock market the

buying and selling activities of the brokers on behalf of UTI used to create a

significant effect on the share prices.

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5. Changing Government Policies

The effect of changing government policies can clearly be observed by

looking at the movement of share prices during the budget announcements by the

finance minister every year.

6. Natural Calamities

In the past when Gujarat was hit by plague and cyclone, the ripples of these

were immediately observed in the stock market in the shape of declining share

prices. Prices of almost all shares declined irrespective of their fundamental

soundness.

7. War-like Situation/Internal Peace

Whenever there is an internal disturbance in the economy it immediately

gets discounted in the share prices.

8. Business Risk

Business risk gets created due to the operating of a company/business. A

company might not be able to sell its products due to imperfections in its operatingactivities, due to which it might incur losses, which certainly has an adverse effect

on share prices of such company.

9. Financial Risk

Financial risk is due to wrong financial planning. A company have high

degree of debt, certainly has a high financial leverage, which has an adverse effect

on the earnings of the company. Hence, companies with high financial leverage are

considered as high risky and vice-versa.

10. Disputes

Share prices of few companies get affected adversely as and when there is a

situation of industrial dispute, labor-management unrest, lockout or strike. However

these risks can be minimized through proper diversification or well-planned

investment activities.

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CHAPTER 5

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BROKERAGE INDUSTRY

Understanding the Industry

Major reforms initiative that were taken in the early 2000s, led Brokerage

Industry in India to experience a rapid growth and diversity. At present industry is

not only offering brokerage business, but also a wide range of financial services.

These developments have resulted in huge advancements in business and also

growing market share of large sized brokerage houses has led to rapid growth in the

enterprise value. Presently there are about 45 equity brokerage firms that are listed

in the Indian Stock Exchanges. Brokerage industry continues to grow on rapidly.

Most of the traditional restrictions against banking activities are made to beeliminated and the barriers among them are disappearing.

Basic functions of brokerage firms are the execution of buy and sell orders

for clients. Earlier these firms have offered the investigation of the quality and the

possibilities of investing in a variety of investment products. Still brokerage firms

are accustomed to offer information about possible investments, that also free of

charge. This activity of bringing free of charge stock investment reports is one of

the main tools that are utilized by brokerage houses to compete against other firms

and for investors it continues to be an important service.

While brokerage houses profitability was severely impacted in FY08-09,

bigger challenge faced by them was to protect their capital from erosion in the

adverse capital market movement. Steep market correction in January 2008 found

many brokerage houses unprepared and left many of them with margin shortfall on

their clients. Some of the brokerage houses with limited financial flexibility also

had their trading terminals shut down or put up in a square up mode due to margin

shortfall at Exchange Houses. Brokerage houses have tightened their exposure

norms and monitoring following the market fall. In ICRAs view, regular stress

testing analysis will help brokerage houses in maintaining adequate financial

resources to withstand any default or delay in payment by clients.

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Even as the market turmoil seems to have eased out somewhat and

brokerage turnover has witnessed an upward movement in FY08-09, ICRA expects

the market volatility to continue. Accordingly, ICRA maintains a neutral outlook for

brokerage houses in the short to medium term as pressure on overall profitability arelikely to persist. In short term, ICRA would be focusing increasingly on rated

companys ability to maintain adequate capital and liquidity to absorb any

advertises on broking and lending business and adherence to stringent risk

management systems. Over the medium to long term, companys ability of

stabilizing the earning profile, improving upon the profitability, maintaining

adequate liquidity & capital and effectiveness of risk management systems would be

key rating drivers.

Strengths

a. There is a huge market potential in India as it moves towards financial sector

reforms with larger inclusion of retail segment as well as creation of new

market as regulators have allowed trading in new classes like currency

futures, interest rate derivatives, SME equities etc.

b. There is an expected low leverage at industry level with many brokerage

houses strengthening their net worth over the past few years by limiting

external fund requirement.

c. Adequate capitalization levels, at least for larger players, coupled with low

leverage provides cushion to absorb losses in the short-term weak operating

environment.

Challenges

a. Protection of brokerage yield in a highly competitive as well as fragmented

brokerage industry.

b. Achievement of a critical scale of operations for the sustainment of

profitability even in longer dull phases.

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c. There is a limited financial flexibility as banks enjoy capital market

exposure limits while mutual fund houses act very selectively in taking

exposure to brokerage houses.

d. Continuously upgrading the risk management systems and monitoring

policies to mitigate associated risks, especially during periods of extreme

volatility.

e. While moving towards value added services like wealth management,

portfolio management, research etc. intense competition is expected from

brokerage houses.

f. Diversifying earning profile to reduce concentration risk on the brokerage

business.

g. Maintaining flexible cost structure for protecting profitability in a market

downturn.

ICRA expects brokerage yield to remain under pressure with increasing

competition and changed dynamics with a few of the players offering a flat fee

structure. The average broking yields have declined in the past few years. However,

the fall going forward, is not expected to be as steep and ICRA does not expect the

average broking yields to go further below.

ICRA expects the operating expenses of brokerage houses to remain

relatively high as a proportion of their revenues, because of the setup of several new

branches, expansion in new business lines and higher expense on STT due tochange in regulation. However, ICRA expects some improvement in expenses with

many brokerage houses consolidating their branch network and focusing more on

the franchise model, rationalizing the employee expenses, re-negotiating lease

rentals and employing various other cost cutting measures. Brokerage houses are

also expected to incur lower interest expense during this Financial Year with the

decline in interest rates. With subdued earning and relatively high operating

expenses, ICRA expects a moderate profitability for most of the brokerage houses in

short to medium term.

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Adverse Market Movements

Recent market turmoil has exposed the brokerage houses to the market andcredit risk associated with their business. While their revenue profile was impacted

with the decline in industry turnover, the bigger challenge was to protect their

capital during adverse market movements. Such market volatility as witnessed in

the past is no rarity and brokerage houses need to considerably revamp their risk

management systems in order to avoid any margin shortfall on broking clients. In

ICRAs view, online real time monitoring of clients status and stringent policy

based exposure limits would be critical in mitigating market risk in a volatile

market. Further, strict squaring off policy needs to be followed by the companies

irrespective of their relationships with the clients. Relaxations given to high net

worth clients may create threat to the capital of brokerage houses.

The risk is even more intense for those brokerage houses focused largely on

small set of high net worth clients as compared to those that have relatively small

exposure to a well-diversified client base. ICRA knows that while the broking

companies can have an adequate margin cover in the form of stocks as collateral, it

may be difficult to realize the total value in case of illiquid stocks with high impact

cost. Many brokerage houses had tightened their exposure norms and monitoring

process following the market fall in January 2008, and accordingly they were able

to mitigate the associated risks during market correction to an extent.

Even as the market turmoil seems to have eased out somewhat and

brokerage houses turnover has witnessed an upward movement in FY09-10, market

volatility may still continue. Accordingly, ICRA maintains a neutral outlook for

brokerage houses in the short to medium term as pressure on overall profitability are

likely to persist. From the long term perspective, companys ability of stabilizing the

earning profile, improving upon the profitability, maintaining adequate liquidity &

capital and effectiveness of risk management systems would be key factor for

ratings. The net profitability of the brokerage houses was impacted with many

players reporting large provisions and wire-offs on doubtful debtors. However, the

impact was felt more by less diversified companies.

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Figure 1: Equity Brokerage Turnover

Source: NSE and BSE website

The domestic brokerage volume has reported a growth of 66% in Q1FY09-

10 by a sequential quarter-to-quarter basis aided by increased share prices, which

eases global concerns and a stable central government. In fact, this was only second

to the highest volume ever in the last few years. The growth driver was not the

derivative segment but the cash segment, which accounted as 27% of the actual

turnover. However, under the prevailing uncertain conditions in global market, that

could jeopardize Indian brokerage houses as well, ICRA expects high volatility to

be continued for a short while, both in terms of share prices and also in trading

turnover.

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Share Market

Every company needs long-term as well as short-term capital. Long-term

capital is required essentially for investment in fixed assets such as land, building,

plant and machinery, vehicles etc. It also includes core working capital and certain

kinds of R&D, pre operating expenses incidental to setting up a business, which are

required to be deployed or incurred for the production or rendering of goods and

services. Short-term capital or working on the other hand, is required essentially for

financing the requirements of the day-to-day operations of the business, such as raw

materials, work-in-progress, finished goods, etc. Year 2008 was the most eventful

year for the capital market. This was sparked by the supreme crisis and their ripple

effects.

The term Stock Market means the place where the actual trading of stocks

takes place. Trading in stock market means an investor can buy from or sell to

another investor instead of any particular issuing entity. The companies apply for

the membership of the specific stock market. The companies are permitted to get

into the stock market after successful completion of their Initial Public Offerings

(IPO). Once a company is registered in a stock market, it means the stocks of the

same are then available for transaction. The market regulator fixes the listing price

of the shares of the company. In stock markets, the shares of the listed companies

are traded at steady intervals.

It is a market in which outstanding securities of the corporate houses and

government are traded in. As per the rules, all the transactions in securities must be

executed on a recognized stock exchange. Stock Exchange can be defined as a

regulated marketplace, in which listed securities are bought and sold through theintervention of members of stock exchange, by following an open system of two

way quotation, the settlement of trades is done according to the bye-laws of the

stock exchange. All the trades executed on the floor of the stock exchange become

legal and valid and have no default-risk, as the stock exchange assumes the role of

the counter party.

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Globalization Effect

The phenomenon called Globalization has had some impact on the various

stock markets worldwide at present. The stock markets across the world have grown

in keeping with the process known as Globalization. The advent of Information

Technology has changed the way business is being executed throughout the world.

The stock markets across the world have also incorporated IT into their business

efficiently. The computers have contributed to the rise of bringing more avenues of

bringing up capital, that could be used for a variety of purposes like increasing the

size of the company as well as making new investments. IT has also helped the

various stock markets to conduct business with more clarity and in a smoother

manner.

Role in the development of Nation

It is no exaggeration to say, that in a modern industrialist society, which

recognizes the rights of private ownership of capital, stock exchange is not simply a

convenience they are essential. In fact, they are market which exist to facilitate

purchase and sale on securities of companies and the securities or bonds issued by

the government in the course of its borrowing operation. As our country moved

towards liberalization, this tendency is certain to be strengthened.

The task facing the stock exchange is to devise the means to reach down the

masses, to draw the savings of the man in the street into productive investments, to

create conditions in which many millions of little investors in cities, towns and

villages will find it possible to make use of the facilities, which have so far beenlimited to the privileged few.

At present, there is no relation of buying and selling of securities to a

physical location. The term, stock market loosely stands for the entire system in

which financial securities or financial instruments are traded, including the people

and institutions involved in these transactions, the organizations issuing or intending

to issue the securities and the systems that enable the trading processes. In short, it

implies the entire infrastructure required for transacting in securities, including the

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set of regulatory bodies to ensure that the transactions are carried out in a fair and

transparent manner. These exchange do not work of its own, rather these are run by

some persons and with the help of some persons and institutions. All these are

known as functionaries on stock exchange. These are as follows: -

1. Stockbrokers

Stockbrokers 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. Stockbrokers

are commission broker, floor broker, arbitrageur etc.

2. Sub-broker

A sub-broker acts as an agent of Stockbroker. He is not a

member of a stock exchange. He assists the investors in buying, selling or

dealing in securities through stockbroker. The broker or 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 regulations.

3. Market Makers

Market maker is a designated specialist in the specified

securities. They may both bid and offer at the same time. A market maker

has to abide by byelaws, rules and regulations of the concerned stock

exchange. He is exempt from the margin requirements.

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 advice, direct or

undertake the management or administration of securities or funds on

behalf of their clients.

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Listing Of Securities

Listing means admission of the securities to dealings on a recognized stock

exchange. The securities may be of any public limited company, central or state

government, and other financial institutions/corporations, municipalities, etc. the

exchange has a separate Listing Department to grant approval for listing of

securities of companies in accordance with the provisions of the SEBI. The

objectives of listings are mainly to: -

1. Provide liquidity to securities.

2. Mobilize savings for economic development.

3. Protect interest of investors by ensuring full disclosures.

The movements of the prices in a market or section of a market are captured

in price indices called stock market indices, of which there are many examples, the

BSE (Bombay Stock Exchange), NSE (National Stock Exchange), CSE (Calcutta

Stock Exchange), etc. Such indices are usually market capitalization weighted, with

the weights reflecting the contribution of the stock to the index. The constituents of

the index are reviewed frequently to include/exclude stocks in order to reflect the

changing business environment. The principal aim of investing should be to

maximize diversification, minimize taxes from too frequent trading, and ride the

general trend of the stock market.

The stock price in the secondary market is determined completely by the

fluctuations in demand and supply of the particular stocks. However, the stock

prices of different types of shares are separate from each other. However, the

investors can keep track of the changes in the prices through the various trading

screens. Various stock markets have separate rates of their own. The stock market

rates are the prices of transactions in the stock markets. There are primarily three

different stock market rates or prices the opening price, the closing price and the

listing price. The opening price is the one at which trading starts for the day. The

closing price of a stock is the one at which the trading stops for the particular day.

The closing price also serves as the opening price for the next trading day.

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Bombay Stock Exchange

Bombay Stock Exchange is the oldest stock exchange in Asia located in

Dalal Street, Mumbai in India. BSE was established in 1875 as the Native Share

and Stock brokers Association. It earned a format status under the Securities and

Exchange Board of India (SEBI) in 1956. BSE deals with trading in derivatives,

equity and other debt instruments. BSE is managed professionally by Board of

Directors, which comprises of eminent professionals, representatives of Trading

Members and the Managing Director. The Board exercises complete control and

formulates larger policy issues. The Managing Director and its school of

professional as a management team manage the day-to-day operation of BSE.

The framework of BSE has been designed to safeguard market integrity and

to operate with transparency. It provides an efficient market for the trading in equity,

debt instruments and derivatives. Its online trading system, popularly known as

BOLT, is a proprietary system. The BOLT network was established nationwide in

1997. The surveillance and clearing & settlement functions of the exchange are ISO

9001:2000 certified. In terms of organization structure, the board formulates larger

policy issues and exercises overall control. It has SENSEX as its key index.

National Stock Exchange

The National Stock Exchange of India Limited (NSE), is a Mumbai-based

stock exchange. It is the largest stock exchange in terms of daily turnover and

number of trades, for both equities and derivative trading. NSE has a market

capitalization of around Rs 47,01,923 crore (31

st

march 2010) and is expected tobecome the biggest stock exchange in India in terms of market capitalization also.

BSE and NSE are the two most significant stock exchanges in India, and between

them are responsible for the vast majority of share transactions. Its key index is

NIFTY, an index of fifty major stocks weighted by market capitalization. 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. NSE was setup with the following

objectives: -

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1. Establishing nationwide trading facility for all types of securities.

2. Ensuring equal access to investors all over the country through anappropriate telecommunication network.

3. Providing fair, efficient and transparent securities market using electronic

trading system.

4. Meeting International benchmarks and standards.

NSE brings an integrated stock market network across the nation. Investors

can trade at the same price from anywhere in the country since inter-market

operations are streamlined, coupled with the countrywide access to the securities.

Delays in communication, late payments and the malpractices prevailing in the

traditional trading mechanism can be done away with greater operational efficiency

and informational transparency in the stock market operations.

Ahmadabad Stock Exchange(1894)

Following the success of the stock exchange at Bombay, an informal

association named as Ahmadabad Share & Stock Brokers Association was

established in the year 1894. It was also a voluntary non-profit making organization

like BSE. The business in this exchange used to be mainly in the shares and stocks

of cotton and the cotton textile industry.

Culcutta Stock Exchange (1908)

In West Bengal, coal mines were converted into companies and transactions

in the shares and stock of these companies gained momentum to facilitate the trade

of these shares. CSE was formed as a joint stock company. It was different from

earlier two exchanges as those were a non-profit making organizations and it was a

company.

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Market Mechanism (Buying And Selling Procedure At A Stock Exchange)

Market Mechanism is the system of buying and selling the

securities/derivatives in the stock exchange. An efficient market mechanism always

provides for the smooth functioning of the stock exchange and helps in the speedy

settlement of trades to the satisfaction of all the parties. It has components like

Investors, Brokers, Stock Exchange Officials Clearing House, Bye-laws and Rules

etc. All these companies working in consonance help in achieving the objective of a

stock exchange. To buy or sell the securities on the stock exchange the following

sequential activities take place: -

Placing An Order

Once a decision to buy or sell has been done by the client he will place an

order to his broker. The order can be of different types such as Market order, Limit

order, Stop Loss order, Time order, Spread order and more.

Execution Of Order

The broker executes the order on the floor of the stock exchange as per the

order specification of the client. Previously transactions use to take place through

manual trading, in which members used to shoot their quotation for buying or

selling the shares. As soon as a negotiation used to be completed between two

members order used to get converted in a trade that is called as execution of the

order.

Reporting Of Transactions

Once an order has been executed it becomes transaction but it get a legal andvalid mark only when it is reported to the stock exchange authorities. Previously,

when trading was done manually, the brokers had the obligation to report in writing

all the transactions, duly verified by the counter broker to the stock exchange. At

present transactions are done on an online system, therefore, there is no need to

report the transactions to the stock exchange as the exchange has the database of all

the trades in its system.

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Confirmation Of Transactions

After the execution and reporting it is necessary to give a confirmation to theclient by issuing a contract note. Issuance of contract note makes the claim of broker

and client against each other a legal and valid claim. The contract note shall contain

the details of the trade, like type of securities, quantity, market rate, brokerage, other

charges, tax, settlement details and all other relevant information.

Exchange Between Client And Broker

A broker executes the transactions on behalf of his clients, but the stock

exchange considers this as the obligation of the broker to settle the transaction on

the settlement date, therefore, a broker is responsible to carry out the settlement of

the transactions executed by him. To meet his obligation at the clearing house of the

exchange, the broker takes money/shares from his clients before the Pay-In-Day.

Clearing Function

By clearing function we mean exchange of money and shares between

brokers. Practically, brokers do not exchange the delivery or money value, instead

these are exchanged through the intervention of the Clearing House.

Exchange Between Broker And Client

After the payout from the clearing house the broker receives shares for his

all the purchases and payment for the securities sold. The broker delivers the

securities to those clients for whom he has made the purchase and makes the

payment to the clients for whom securities were sold. After this, the transaction gets

completed. Nowadays, physical delivery of securities is not done in majority of the

cases, because we have a system of depository.

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Stock Trading

The term stock trading signifies the buying and selling of securities. This

process is done after they have been brought out through an Initial Public Offering.

Before stock trading takes place, a particular security needs to be listed in the

relevant exchange. Stock trading could also be denoted to the dealing of the smaller

parts of a larger loan and ownership interest in business enterprises. But, secondary

markets need to have higher levels of liquidity, so that transaction could be carried

on properly. There are various benefits of trading in the secondary markets. The

biggest advantage is that the investors can recover their investments to a certain

extent, provided their economic status undergoes a change. This is different from

the conventional lending and partnership agreements. In such cases the investors

may refrain from making long-term investments. Even if they invest for a longer

period of time, they would charge higher rates of interest for it. In the secondary

markets the investors are provided the luxury of being able to sell their interests in

the respective investments. This is specifically applicable if the particular

investment has been fragmented in comparatively smaller parts. The investors are

provided such luxuries in case of the securitized loans, equity interests like bonds or

stocks that could be traded.

Traditionally stock trading is done through stockbrokers, personally or

through telephones. As a number of people trading in stock market increase

enormously in last few years, some issues like location constrains, busy phone lines,

miss communication etc. start growing in stockbroker offices. Information

technology helps stockbrokers in solving these problems with Online Stock Trading.

Online Stock Market Trading is an Internet based stock trading facility in which

investors can trade shares through a website without any manual intervention from

stockbroker. In this case online stock trading companies facilitate as the stockbroker

for the investors. They are registered with one or more stock exchanges. Mostly

online trading websites in India trades in BSE and NSE. There are two different

type of trading environments available for online equity trading. Through these two

different types of environments an investor can deal the equities into different

market situations like cash market and derivatives.

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Installable Software Based Stock Trading Terminals

This trading environment requires software to be installed on investors

computer. This required the stockbroker provides software. This software requires

high-speed Internet connection. High volume intraday equity traders use this kind of

trading terminal.

Advantages:

1. Orders are directly send to stock exchanges rather than stockbroker. This

makes order execution very fast.

2. It provides almost each and every information, which is required for a trader

on a single screen including stock market charts, live data, alerts, stock

market news, etc.

Disadvantages:

1. Location Constrains One cannot trade if he/she is not on the computer

terminal where the software is being installed.

2. Requires high-speed Internet connection.

3. These trading terminals are not easily available for low volume share

traders.

Web Based Trading Application

This kind of trading environment doesnt require any additional software

installation. They are like other Internet websites which investor can access from

around the world through normal Internet connection.

Advantages:

1. Real time stock trading without calling or visiting brokers office.

2. Display real time market watch, historical datas, graphs etc.

3. Investment in IPOs, mutual funds, and Bonds.

4. Place offline orders for buying or selling stocks.

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Disadvantages:

1. Website performance sometime the website is too slow or

not enough user friendly.

2. Little long learning curve especially for people who dont

know much about computer and Internet.

Technology was used to carry the trading platform from the trading hall of stock

exchanges to the premises of brokers. NSE carried the trading platform further to

the PCs at the residence of investors through the Internet and to handheld devices

through WAP for convenience of mobile investors. This made a huge difference in

terms of equal access to investors in a geographically vast country like India. A

message relating to the order activity is broadcast to the respective member. The

order confirmation message is immediately displayed on the PC of the broker.

Figure 2: Sample Screen Of Share Trading

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CHAPTER 6

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Parent Company

(Religare Enterprise Limited)

Introduction

Religare Enterprise Ltd. (REL), incorporated in 1984 and promoted by

RANBAXY group, is the holding company of 11 subsidiaries. It is among the

leading integrated financial services group in the country today. Religare is a

diversified financial services group of India offering a multitude of investment

options. Each of its subsidiaries is engaged in a wide spectrum of financial products

and services targeted at retail, high net worth individuals, corporate and institutional

clients. The services offered by the group include share broking, financing loans

against shares, IPO financing, distribution of Mutual Funds, Insurance Broking,

Commodity Broking, Wealth Management, Advisory Services, Private Equity,

Merchant Banking and trading in Arts and Anti-crafts. The major revenue drivers

for the company are its retail equity broking arm, Religare Securities and Religare

Finvest, which finances loans against shares.

The diverse bouquet of financial services that Religare offers can be broadlyclubbed across three key verticals Retail, Institutional and Wealth spectrums. The

services extend from Asset management, Life Insurance, Wealth management to

equity broking, commodity broking, investment banking, lending services, private

equity and venture capital. Religare has also ventured into the alternative

investments sphere through its holistic arts initiative and Film Fund. With a view to

expand, diversify and introduce offerings benchmarked against global best

practices, Religare operates in the life insurance space under AEGON Religare

Life Insurance Company Limited, and wealth management under the brand name

Religare Macquarie Private Wealth. Religare has its presence in 1837 locations

across 498 cities and towns. It also operates from nine international locations

following its acquisition of Londons Brokerage & Investment Firm, Hichens,

Hrrison & Co. plc.

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Religare is a global financial services group with the presence across Asia,

Africa, Middle East, Europe and America. In India the group offers a wide array of

products and services ranging from insurance, asset management, broking &

lending solution, investment banking and wealth management. The group has alsopioneered the concept of investments in alternative asset classes such as arts and

films. Religare serves over a million clients, including corporate and institutions,

high net-worth families and individuals, and retail investors.

Figure 3 : Subsidiary Details

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Religare Enterprise Limited is part of a family of companies that fall under

the broader Religare brand, which includes other global businesses such as

diagnostics, aviation and travel, wellness retail, and IT products and solutions.

Various risk factors are there with respect to the market and there can be noassurance that the objectives of Scheme will be achieved.

As with any investment in securities, the NAV of the units issued under the

Scheme may go up or down depending upon the factors and forces affecting the

securities market. Trading in the units of the Scheme on the exchange may be halted

because of market conditions or for other reasons. The investors are always advised

to refer to the Scheme Information Document for the full text of Disclaimer Clause

of NSE.

Some facts about REL

Religare is an integrated financial services institution offering a wide

range of financial products and services to retail investors, high net worth

individuals and corporate and institutional clients including equity and

commodity broking, online trading, wealth advisory services, investment

banking and insurance broking.

Religare has grown rapidly from what was largely an equity trading

company into a diversified financial services company operating through its

11 subsidiaries.

As on March 31st, 2010, Religare has operations at 1837 locations

across 498 cities and towns and a large management team-leading group of

over 10000 employees.

It recently acquired Hichens, Harrison & Co., one of the oldest

broking firm in London, for a sum of GBP 55.5 million.

Acquisition to boost the institutional and investment banking

operations of Religare and extend its geographical reach to London, South

Africa, Argentina, Brazil, UAE, Qatar, Singapore and Indonesia.

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Figure 4: Organization Structure

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Promoter Groups-

a. Fortis Healthcare Limited

b. Super Religare Laboratories Limited

c. Religare Wellness Limited

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Figure5: Group Share

RSL RCL RFL RWMSL REL RCML RIBL

Religare was founded with the vision of providing integrated financial care

driven by the relationship of trust. The bouquet of services offered by Religare

includes Broking (stocks and commodities), Depository Participant Service, and

Advisory on mutual fund investments and Portfolio Management services. Religare

is a pioneer in the concept of partnership to reach multiple locations in order to

effectively service its large base of individual clients. Besides the reach of Religare,

the clients of the company greatly benefit by its strong research capability, which

encompasses fundamentals as well as technical knowledge.

Subsidiaries Of Religare Enterprise Limited -

Religare Securities Limited:

1. Equity Broking.

2. Online Investment Portal.

3. Portfolio Management Services.

4. Depository Services.

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Religare Finvest Limited:

1. Lending and Distribution Services.

2. Proposed Custodial Business.

Religare Insurance Broking limited

1. Life Insurance.

2. General Insurance.

3. Reinsurance.

Religare Commodities Limited:

1. Commodity Broking.

Religare Capital Markets Limited:

1. Investment Banking.

2. Proposed Institutional Broking.

Religare Arts Initiative Limited:

1. Business Of Arts.

Religare Realty Limited:

1. In House Real Estate Management Company.

Religare Venture Capital Limited:

1. Private Equity and Investment Manager.

Religare Hichens Harrison:

1. Corporate Broking.

2. Institutional Broking.

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Figure 6: Religare Enterprises Tree

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CHAPTER 7

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RELIGARE SECURITIES LIMITED

Religare Securities Limited (RSL) is a wholly owned subsidiary of Religare

Enterprises Limited, a company promoted by late Dr. Parvinder Singh, Ex-CMD of

Ranbaxy Laboratories Ltd. The primary focus of Religare Securities Ltd. Is to cater

the services in Capital Market Operations to Institutional Investors. The company is

a member of National Stock Exchange (NSE). The growing list of financial

institutions with whom RSL is empanelled as approved Broker is a reflection of the

high levels of services maintained by the company.

As on date the company is linked with UTI, IDBI, IFCI, SBI, Bank Of India,

Punjab National Bank, ICICI, Oriental Insurance, UTI-Offshore, Punjab and Sindh

Bank, IDBI Principal, ICICI Prudential and JM Mutual Fund.

Major activities and offerings of the company include equity broking, both

online and offline, Depository Participant Services, Portfolio Management Services

and Institutional Brokerage. It is a member of NSE and BSE, and also a SEBI

approved Portfolio Manager. It has a strong institutional research team which covers

over 185 companies in 16 sectors.

Business under Religare Securities Ltd. Include: -

1. Retail Equity Broking.

2. Priority Client Equity Services.

3. Online Investment Portal.

4. Institutional Equity Broking.

5. Portfolio Management Services.

6. Depository Services.

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Religare Securities Ltd.(RSL) is a leading Equity and Securities firm in

India. The company currently handles sizable volumes traded on NSE and in the

realm of online trading and investments it currently holds a reasonable share of the

market. RSL has been constantly innovating in terms of product and services and tooffer such incisive services to specific user segments. Religare has a very credible

Research and Analysis division, which not only caters to the need of our

Institutional clientele, but also gives their valuable inputs to investments dealers.

Religare is one of the leading Depository service providers in the country.

Unique features and benefits of trading through Religare:

1. Trade Rewards Trade Rewards is a unique offering from Religare that

gives you dual benefits of hassle free investment experience online and an

opportunity to earn while you invest with Religare Securities Limited..

2. Zero brokerage - Break the shackles. Get freedom from brokerage and

avail zero brokerage on your trades through Religare Securities Limited.

3. Exposure up to 20 times on your margin Allowing you the freedom to

trade without hassles throughout the day without having to worry about your

cash margin. You can get exposure (on cash segment) as high as 20 times for

intraday trades. Of course conditions apply on above two.

4. Internet on Cash Margin Even while you are waiting to make your next

trade or online investment, your unutilized cash does not lie idle with us.

You earn interest on your unutilized cash margin.

Mission

To become Indias first multinational providing complete financial services

solutions across the globe.

Vision

To provide an integrated financial care driven by the relationship of trust and

confidence.

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Four Leaf Clover of Religare represents four basic features of the company.

These features work as the four pillars in the success of the Religare Enterprises

Limited. The four features are as follows: -

1. Trust.

2. Hope.

3. Care.

4. Good Fortune.

DIRECTORS OF RELIGARE SECURITIES LIMITED

Chairman: Mr. Harpal Singh

Managing Director: Mr. Sunil Godhwani

Director: Mr. Vinay Kumar Kaul

Director: Mr. Malvinder Mohan Singh

Director: Mr. Shivinder Mohan Singh

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Business Heads / Functional Heads

1. Mr. Chandan Sinha

President Insurance Broking

2. Mrs. Sangeeta Purushottam

Head Institutional Business

3. Mr. Ashu Madan

National Head - Retail Equity

4. Mr. S Amarnath

Business Director-Strategic Initiatives

5. Mr. Amit Sarup

Head Wealth Management

6. Mr. Jayant Manglik

Head Commodities

7. Mr. Chandan Sinha

President Insurance Broking

8. Mr. Nitin Jain

National Head P F S

9. Mr. Mukesh Manglik

Head Corporate Affairs

10. Mr. Gurpreet Sidana

Head Internet Trading

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11. Mr. Bikram S Yadav

Head Legal & Compliance

12. Mr. Varun Mehta

VPHuman Resource

Products And Services

Equity And Trading

Race andRally are the two products offered by Religare Securities Limited,

which comes under equities and derivatives. While Rally deals with offline

facilities, Race provides for complete online package and facility. There is

difference between both offline and online modes of trading. The difference lies on

account of its schemes, platforms and facilities provided. Initially the clients used to

go for offline modes of trading, but now with increasing use of internet online mode

has become the preference.

Types Of Account

1. R-ACE (Basic)It's the basic online trading account provided by Religare.

Investor can trade and access their account information online and over the

phone as well. This account comes with a browser based online trading

platform and no additional software installation needed. This account also

provides Lifetime free DP account with no annual maintenance charges.

2. R-ACE Lite (Advanced) It's the advanced account option for the investor

with Religare. This trading account provides the entire feature of R-ACE

(Basic) account. In addition it also provides real-time streaming stock quotes

and alerts. This trading platform is also browser based and no software

installation is needed.

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3. R-ACE Pro (Professional) As the name indicates this account is for high

volume traders. Along with the features from above 2 accounts, this account

also comes with a Training Terminal, software which needs to install o your

computer. This terminal directly connects the investor to stock market and

having all industry standard treading terminal features including technical

charting (intra-day and EOD), multiple watch list, advanced hot-key

functions for faster trading, derivative chains, futures and options calculator.

Brokerage and Account Opening Fees -

Religare offers three kinds of accounts as above. Below are detail about fees

and activation charges for each account:

1. R-ACE

Account activation charges rs. 299/-

Minimum margin of Rs. 5000/- required.

2. R-ACE Lite

Account activation charges Rs. 499/-

Minimum margin of Rs. 5000/- required.

3. R-ACE Pro

Account activation charges Rs. 999/-

Minimum margin of Rs. 10,000/- required.

4. All the account comes with free annual maintenance charge.

5. All account comes with free DP account.

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6. Brokerages at Religare

On the basis of volume and frequency of trading, Religare provide differentoptions for brokerages. On the broader way they divided into three categories:

Classic Account

Intraday brokerages vary from 0.3% to 0.5%.

Delivery brokerages vary from 0.30% to 0.50%.

Derivatives brokerages vary from 0.3% to 0.5%.

Freedom Account

In this payment scheme, investor has to pay a fix amount in advance for

monthly (Rs. 500/-), Quarterly (Rs. 1400), half-yearly (Rs. 2500) or Annual

Subscription (Rs 4000). This one time payment enable account holder to trade for

Rs. 3,00,000 intraday and derivatives trading and Rs. 40,000 of delivery based

trading for zero brokerage.

Trump Account

Trump account has two payment options. Trump Plus and trump Super plan:

i. Trump Plus has annual subscription fees of Rs 2,500. Brokerages on

Delivery Trades of 0.25% and Brokerage o Intraday trades and F&O

Trades of 0.025%.

ii. Trump Super has annual subscription fees of Rs. 15,000. Brokerage

on Delivery Trades of 0.15% and Brokerage on Intraday Trades and

F&O Trades of 0.015%.

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CHAPTER 8

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Major Competitors

It is part of my project to analyze the various competitors' that the firm has,

and evaluate their offerings to the individual investors. This will help us understand

what processes and strategies competitors' have adopted to attract and retain

investors and satisfy their investments needs.

To achieve this end I have given the details of the following competitors' of

RELIGARE SECURITIES LIMITED, who have a presence in the Retail brokingarena and who can be considered as potential threat to the market share of

RELIGARE SECURITIES LIMITED.

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IndiabullsTM

Indiabulls Group is one of the top business house in the country with

business interests in Real Estate, Infrastructure, Financial Services, Retail,

Multiplex and Power sectors. Indiabulls Group companies are listed in Indian and

overseas financial markets. The Net worth of the Group exceeds USD 2 billion.

Indiabulls has been conferred the status of a Business Super brand by The Brand

Council, Super brands India.

Indiabulls Financial Services is an integrated financial services powerhouse

providing Consumer Finance, Housing Finance, Commercial Loans, Life Insurance,

Asset Management and Advisory services. Indiabulls Financial Services Ltd is

amongst 68 companies constituting MSCI Morgan Stanley India index. Indiabulls

Financial is also part of CLSA's model portfolio of 30 Best Companies in Asia.

Indiabulls financial Services signed a joint venture agreement with Sogecap, the

insurance arm of Societe General (SocGen) for its upcoming life insurance venture.

Indiabulls Financial Services in partnership with MMTC Limited, the largest

commodity trading company in India, is setting up India's 4 th Multi-Commodities

Exchange.

Indiabulls Securities Limited is India's capital markets company with All-

India Presence and an extensive client base. Indiabulls Securities is the first and

only brokerage house in India to be assigned the highest rating BQ -1 by CRISIL.

Indiabulls Securities Ltd is listed on NSE, BSE and Luxemburg stock exchange.

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PRODUCTS

The company through various types of brokerage accounts provides product

and services related to purchase and sale of securities listed in NSE and BSE. It also

provides depository services, equity research services, mutual fund, IPO distribution

to its clients. The company provides these services through on-line and off-line

distribution channel.

1. POWER Indiabulls

Power Indiabulls (PIB) is an online trading platform which brings you the

power of a broker's terminal on your desktop. It is an in-house developed internet

enabled trading solution that supports securities and derivatives trading with NSE

and BSE. PIB is designed for the high volume traders that provide access to

multiple market segments through the ease of a single terminal.

Designed by the technology team of Indiabulls, PIB comes with several

enhanced features, which makes it the best desktop trading application in the

country today. You can create market watches where you can view live broadcast

of stocks both in capital as well as F&O segment. Stock prices get updated

automatically every second without any mutual intervention. PIB provides you with

extensive real time reports to evaluate the performance of your portfolio.

FEATURES

1. Integrated market watch for securities and derivatives

2. Live Streaming Quotes

3. Fast Order Entry

4. Tic by Tic Live Charts

5. Technical Analysis

6. Live News and Alerts

7. Extensive Reports for Real-time accounting

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BENEFITS

1. priority access to Relationship Managers who are dedicated to support

your trading and investing needs.

2. Get access to Indiabulls Equity Analysis of more than 500 listed

companies.

3. Get access to Research Reports.

4. Enjoy competitive commissions and get the service and support you

need at a fair price.

2. Indiabulls Signatures Account

With Indiabulls Signature account you will always remain on top of your

investments. It provides you the platform to trade in Equity and Derivatives. With

an unmatched service and nationwide presence, the Indiabulls Signature account

comes bundled with a variety of exclusive features. These features are as follows: -

i. Ease of Trading With Indiabulls Signature account you have the

flexibility to place your orders either by logging on the website, calling

at the branch or walking in the branch.

ii. Dedicated Service Branch and Relationship Manager You can get it

touch with your Relationship Manager and Service Branch for all your

trading related requirement.

iii. Power Indiabulls (PIB) You can trade smarter and faster using the

Power indiabulls application. Access the broad spectrum of sophisticated

trading tools and get an edge in the stock markets.

iv. Online Payment Gateways use our online payment gateways facility

and get instant credit in your Trading Account. We currently provide

online gateway payment facility with four major banks HDFC,

ICICI , AXIS and IDBI.

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v. IPOs Indiabulls provides you the flexibility to apply in ongoing IPOs

through either online or offline channels. For applying online, you do not

need to fill tedious forms and write cheques. You can apply conveniently

in IPOs from the comfort of your home/office through our Website/PIB.For applying offline, you can contact your Relationship Manager/Service

Branch.

vi. Portfolio Tracker You can track your investments online through our

portfolio tracker functionality. You can conveniently track the daily

movement, national/booked profits and losses in your portfolio.

vii.Equity Analysis Report A qualified and dedicated team of equityanalysts at Indiabulls publishes various research reports. You can view

these reports to gain insight into the companies of your interest.

viii. News Room The News Room provides real-time news from stock-

markets, corporate sector, economy and other segments that have a

bearing on the market sentiment.

Brokerages and Fees -

1. Account Opening Fees Rs 1200/- (One time non-refundable) as below:

250/- Equity Trading Account opening charge

200/- Demat Account opening charge

750/- Software charges

Advantages of Indiabulls Equity Trading Account

1. Brokerage is less compare to other online trading companies.

2. Provide trading terminal 'powerbulls', a java based software. It's very fast in

term of speed and execution.

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ICICI DIRECT

ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank.

Along with stock trading and trading n derivatives in BSE and NSE, it also provides

facility to invest in IPOs, Mutual Funds and Bonds.

Types Of Accounting

ICICIDirect offers 3 different online trading platforms to its customers:

1. Share Trading Account

Share Trading Account by ICICIDirect is mainly for buying and selling of

stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin

Plus Trading, Spot Trding, Buy Today Sell Tomorrow and Call and Trade on phone.

They also provide installable application terminal based application for high volume

trader.

2. Wise Investment Account

Along with MF and IPO investing in BSE and NSE, Wise Investment

account also provide options to invest in Mutual Funds and Bonds online. Online

Mutual funds investment allows investor to invest on-line in around 19 Mutual Fund

companies. ICIC Direct offers various options while investing in Mutual Funds like

Purchase mutual Fund, Redemption and switch between different schemes,.

3. Active Trade Account

Active trader account gives more personalized investment options to the

investors. It allows investor to use online and offline stock trading. It also provides

with independent market expertise and support through a dedicated Relationship

Manager from ICICI. Active Trader also provides commodity trading.

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Brokerages and fees

1. Account Opening Fees : Rs 975/- (non-refundable)

2. Brokerage : ICICIDirect.com brokerage varies on volume of trade and

inclusive of demats transaction charges, service taxes and courier charges for

contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to

0.425% for squared off trades and 0.4% to 0.75% on delivery based trades.

Advantages of ICICIDirect

1. 3-in-1 account integrates your banking, broking and demat accounts. All

accounts are from ICICI and very well integrated. This feature makes ICICI

the most interesting player in online trading facility. There is absolutely no

mutual interfere require. This is truly online trading environment.

2. Unlike most of the online trading companies in India which requires

transferring money to the broker's pool or towards deposits, at ICICI Direct

you can manage your own demat and bank accounts through

ICICIDirect.com. Money from selling stock is available in ICICI bank

account as soon as the ICICI Direct receive it.

3. Trading is available in both NSE and BSE.

Disadvantages of ICICIDirect

1. Getting access to ICICIDirect.com website during market session can be

frustrating.

2. ICICI Direct brokerage is high and not negotiable.

3. Facility for linking account of ICICI Bank only.

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Share Khan \

ShareKhan is online stock trading company of SSKI Group, provider of

India-based investment banking and corporate finance service. Share Khan is one of

the largest stock broking houses in the country. S.S. Kantilal Ishwalal Securities

Limited (SSKI) has been among India's leading broking houses for more than a

country.

SahreKhan's equity related services include trade execution on BSE, NSE,

Derivatives, commodities, depository services, online trading and investmentadvice. Trading is available in BSE and NSE. Along with Sharekhan.com website,

ShareKhan has around 510 offices (share shops) in 170 cities around the country.

Share Khan has one of the best state of art web portal providing fundamental

and statistical information across equity, mutual funds and IPOs. You can surf across

5,500 companies for in-depth information, details about than 1,500 mutual fund

schemes and IPO data. You can also access other market related details such as

board meetings, result announcements, FII transactions, buying/selling by mutual

funds and much more.

Types of Account

1. ShareKhan Classic Account

Allow investor to buy and sell stocks online along with the following

features like multiple watch lists, Integrated Banking, demat and digital contracts,

Real-time portfolio tracking with price alerts and instants credit and transfer.

a) Online trading account for investing in Equities and Derivatives.

b) Free trading through Phone (Dial-n-Trade)

i. Two dedicated numbers for placing your orders with your cell phone

or landline.

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ii. Automatic funds transfer with phone banking (for Citibank and

HDFC bank customers)

iii. Simple and Secure Interactive Voice Response based system for

authentication

iv. Get the trusted, professional advice of our telebrokers

After hours order placement facility between 8:00 AM 1nd 9:30 AM

c) Integration of: Online trading + Bank + Demat account

d) Instant cash transfer facility against purchase & sale of shares

e) Investments and trade confirmations by e-mail

f) Single screen interface for cash and derivatives

2. ShareKhan SpeedTrade Account

This account for active traders who trade frequently during the day's trading

session. Following are few popular features of SpeedTrade account.

a) Single screen interface for cash and derivatives

b) Real-time streaming quotes with Instant order Execution & Confirmation

c) Hot keys similar to a traditional broker terminal

d) Alerts and reminders

e) Back-up facility to place trades on Direct phone lines

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Brokerage:

Some stock trading companies charge direct percentage while others chargea fixed amount per Rs 100. Sharekhan charges 0.5% for inter day shares and 0.1%

for intra day or you could say Sharekhan charges 50 paise per Rs 100.

Advantages of Sharekhan:

1. Online trading is very user friendly and one doesn't need any software to

access.

2. They provides good quality of services like daily SMS alerts, mail alerts,

stock recommendations etc.

3. Share khan has ability to transfer funds from most banks. Unlike ICICI

Direct, HDFC Sec, etc., so investor nor really needs to open an account with

a particular bank as it can establish link with most modern banks.

Disadvantages of Sharekhan:

1. They charge minimum brokerage of 10 paisa per stock would not let you

trade stocks below 20 rs. (If you trade, you will loose majority of your

money in brokerage).

2. Lots of hidden rules and charges.

3. They do not provide facility to book limit order trades during after-hours.

4. Classic account holders cannot trade commodities.

5. Cannot purchase mutual online.

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Table 1: Comparative Analysis Of Brokerage Firms

Features Religare India Bulls ShareKhan ICICI Direct

Opening Charges 299,

499,

999

1200 750,

1000

975

Scheme Charges 500,

2500,

Depend upon

Brokerage

Depend upon

Brokerage

1500,

5000,

Maintenance

Charges

250 Nil 300 500

Intraday 0.03% to

0.05%

0.05% 0.10% 0.125% to

0.375%

Delivery 0.155 to

0.50 %

0.50% 0.30% to

0.48%

0.40% to

0.75%

Live Terminals Yes Yes Yes Yes

Research Advice Yes Yes Yes Yes

Min Margin 5000 5000 5000 5000

Interest On

Margin Money

Yes No No Yes

Associate Banks UTI, IDBI,

SBI, BOI,

PNB,

Punjab And

Sindh Bank

HDFC, ICICI,

Axis Bank,

IDBI

CITI Bank,

HDFC

ICICI

Multiple Demat No No No No

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COMPARITIVE ANA

final report alak 25

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