A

Project Report

On

ANALYSIS OF INVESTOR IN THE STOCK

MAREKT AND D-MAT SERVICES AT

SHAREKHAN LTD. UDAIPUR

For the partial fulfillment of

BACHELOR OF BUSINESS MANAGEMENT

Session : 2010 – 2011

Submitted By: Submitted To:Suman Kataria Dr. Rajni AroraB.N.P.G. Girls College, BBM CoordinatorUdaipur

1

PREFACE

It is well evident that work experience is an indispensable part of every this practical

profession course. In the same manner practical training in any every individual who is

undergoing financial course without the practical exposure one cannot consider himself

as a qualified manager, during the training period the student learns through his own

experience, the real situation of corporate and to put theoretical knowledge into practice.

This experience is very valuable for the student & plays a leading and important role in

the career life of the student. Hence to fulfill this requirement, the I completed my

training is SHAREKHAN LTD.

When I entered in organization, I felt like stepping into altogether a new world. At

first everybody seems strange and unheard but as the time passes, one understanding the

concept & the working of the organization and their by develop professional relationship.

Initially it is felt as if classroom study was irrelevant and it is use less in my concern’s

working but gradually it is realized that all the basic fundamental concept studied are

linked in one other ways to the organization but how & what can be done with the

fundamentals depends upon the intellectual & applicability of the individual it is just the

matter to modify the theory so to apply it is to given practical solution sincerely believe

that there is no better place to learn training.

My topic of study as “ANALYSIS OF INVESTOR IN STOCK MARKET &D-

MAT SERVICES AT SHAREKHAN LTD.”

2

ACKNOWLEDGMENT

I express my sincere thanks to my project guide, Mr. Vivek Khaturia Designation

Assistance Sales Manager Deptt. Finance, for guiding me right from the inception till

the successful completion of the project. I sincerely acknowledge him for extending their

valuable guidance, support for literature, critical reviews of project and the report and

above all the moral support he had provided to me with all stages of this project.

I would also like to thank to Dr. G.P.Bisaria (Director of B.N.P.G. Girls College gudie

Dr. Rajni Arora) for their help and cooperation throughout the project.

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EXEUTIVE SUMMARY

I worked as a management trainee under a sales executive. Where they had assigned me

sales profile . They provided me leads of those people who visits share khan website. My

work is to call those people and convert their call in sales. In which first I have to explain

about the share khan then tell them about the product of share khan in which they can

invest their money. There are lots of products and portfolio for short term, midterm and

long term for the investment and for this first they have to open D-mat account and

trading account. There are two schemes for the D-mate account.

First one is retail or fast trade. This scheme is for normal client. In this there is opening

chare that is 750rs. And one is margin check that is 5000rs. And this is refundable they

can withdrawal the money after the opening of account.

Seconds one is prepaid account in this they have to give advance brokerage like 2000,

6000, 18000, 30000, 60000, 100000; this amount is valid for one year and in this there is

no opening charges for D-mat and trading account and the share khan also provides trade

tiger of share khan it’s a software basis to open their account in share khan and then we

have to follow their deadliness. Then we have to update their status in LMS.

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CONTENT

S.NO. TOPIC PAGE NO.

1. INTRODUCTION OF STOCK MARKET 6

2. INTRODUCTION OF SHAREKHAN LTD 14

3. PRODUCTS DETAILS OF SHARKHAN LTD 19

4. THEORITICAL FRAMEWORK OF INVESTMENT AND

D-MATERIALIZATION OF SHARES

24

5. OPTIONS AVALIABLE FOR INVESTMENT 28

5.1 FIXED DEPOSITS 29

5.2 NATIONAL SAVING CERTIFICATES 29

5.3 LIFE INSURANCES 29

5.4 PUBLIC PROVIDENT FUND 30

5.5 REAL ESTATES 30

5.6 SHARE MARKET 30

5.7 DERIVATIVES 31

5.8 COMMODITY MARKET 32

5.9 INITIAL PUBLIC OFFER 32

5.10 MUTUAL FUNDS 32

5.11 SECURITIES MARKET 33

5.12 EQUITY INVERSTMENTS 33

5.13 PORTFOLIO 33

5.14 DEBT INVESTMENT 33

6 RESEARCH METHODOLOGY 36

7 ANALYSIS AND INTERPRETATION 41

8 CONCLUSION & SUGGESTIONS 52

9 BIBLIOGRAPHY 56

10 ANNEXURE 57

5

INDUSTRY

PROFILE

6

History of Indian Stock Market

India has a well-established securities market with a long history of organized trading.

The earliest recorded capital market dealing in India has transactions in loan stocks of the

East India Company towards the end of 18th Century. By 1830, a wide range of bank and

cotton mill securities were being trade in Mumbai and Calcutta. The Enactment of the

Companies Act, 1850 which introduced the concept of limited liability ot India, served to

stimulate activity in the securities markets.

Trading in securities is taken place in India right from the close of the 18 th

century. The first stock exchange in India was set up in 1875 in Bombay known as Native

stock Exchange. This was the first stock exchange set up in Aisa as the Tokyo stock

exchange was set up in 1878. The first Stock exchange in the world was set up about two

hundred years ago in London.

The stock exchanges were placed under the exclusive regulation of the

Government through proclamation in 1950 of the constitution of India. Under the

securities through proclamation in 1950 of the Constitution of India. Under the securities

contracts (Regulation) Act., 1956 only those stock exchanges recognized by the

Government were permitted and the Government was vested with wide pores of

supervision and control exchanges. Soon after the implementation of this Act, the

Government recongnized the exchanges at Bombay, Calcutta, Ahmedabad, Delhi,

Madras, Hyderabad and Indore.

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Meaning and stock Exchange

The stock exchange is an organized market for purchase and sale of listed industrial and

financial securities. The securities traded on stock exchanges include shares and

Debentures of public limited Companies.

Accordingly to the Securities Contract (Regulation) Act 1956, Stock exchange is

and association, organization or body of individuals. Whether incorporated or not,

established for the purpose of assisting, regulation and controlling business in buying

selling and dealing securities.

The growth in the Stock Exchange of the country is spectacular and can be

attributed to increase in number of instrument offered, listed companies and tight credit

policy of banks as a result of which Indian corporate sector has been relying upon capital

markets for raising funds for their needs.

Definition

What the term Stock Exchange implies is evident from the following features

of an exchange

S Security provided for investors.

T Tax benefits, planning and exemptions.

O Optimum return on investment.

C Cautious approach.

K Knowledge of market.

E Eligibility for accruals.

X Xchange of securities transacted.

C Cycolpedia of listed companies.

H High yield.

A Authentic Information.

N New Entrepreneurs encouraged.

G Guidance of investors and companies.

E. Equity cult.

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Regulation & Need of Stock exchange:

The need to regulate stock exchanges was felt in 1921 first when atlay committee

recommended Bombay Stock Exchange Securities Contract Control Act Passed in 1925.

Ltater on, Securities contract (Regulation) Act was made in 1956 and securities Contract

(Regulation) Rule in 1957. Certain powers now vest with SEBI 30 th January 1992, on

promulgation of SEBI, Act, 1992.

The Securities Contracts, (Regulation) Act, 1956 was enacted to prevent

undesirable transactions in securities by regulation the business of dealing terein, by

prohibitions options and by providing for certain , by prohibiting matters. The provisions

and rules enable smooth functions of the stock Exchange. The Act, empowers the Stock

Exchange to regulate the functioning of Exchanges through their bye- laws such as

1- Maintains of a clearing house for all business transacted at the Exchange.

2- Determination and declaration of market rates.

3- Regulation of blank transfers and carries over business.

4- Regulation of jobbing business.

5- Limitation of business done by members.

6- Fixation of margins, brokerage, fine fee, etc.

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Importance of Stock Exchanges

The main function of the Stock Exchange is to act as a medium by which securities can

be converted into case and vice-versa. Stock Exchange has a set mechanism the price of

securities on the basis and supply of securities. The importance of the stock exchange is

as follows:-

1- Providing regular market to the securities.

2- Encouraging investment habits in general public.

3- Providing liquidity to the securities.

4- Providing a mechanism for continue our evolution.

5- Encouraging capital formation.

6- Acting as an intermediary between buyers and sellers.

7- Providing stability in the prices of securities.

8- Publishing regularly stock price quotation.

9- Providing facility of a trading hall for the member to transact business.

Role of Stock Exchange in the Capital Market

Capital market provides long term capital to the industrial sector for the

expenditure on land, plant and machinery, building etc. which are permanent and used for

production. The long term finance is met by the market.

Capital Market is of two types

1- Primary Capital Market.

2- Secondary Capital Market.

In simple term primary capital market is called the market of new issues and

secondary capital market is called the market of exiting issues.

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PRIMARY AND SECONDARY MARKETS

Also termed as new market is concerned with primary issue of securities by

enterprises for their establishment. Expansion, modernization and reorganization etc.

Primary market is related to the generation of capital through new issue of shares,

debentures and bonds, where investors may directly apply for the allotment of securities.

The operation of primary market includes (1) new issue by existing or new company. (2)

right issue and (3) issue of debentures and bonds. Primary market is considered to be the

easiest way through funds may be collected for corporate sector.

The SEBI has issued certain procedural guideline for the simplification and

standardization of liberation economic policy, the primary market has shown a

tremendous growth in the last few years.

SECONDARY MARKET

It is that market where securities are regularly bought and sold. The primary

market is related with the issue whereas the secondary market relates to the trading of

such securities The secondary market provides liquidity to the investor. Trading in

secondary market is governed by the bye laws and regulation of the stack exchange

concerned. After the securities are listed on a recognized market these can be freely

transferred through its members. The trading operation are carried for a fixed number of

number of hour in a trading hall called trading ring. The stock exchange provides

necessary information to the investor. The SEBI has issued various guideline to regulate

and control the operations of secondary markets there are different type of secondary

markets operating in the country.

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1. Recognized Stock Exchange

Recognized Stock Exchange means a stock exchange which for the time being has

been recognized by the central government under section 4 of the securities contract

(Regulation) Act 1956. According to SEBI directions all operations in securities must be

transacted only through recognized stock exchange in the country.

National Stock Exchange (NSE)

The National Stock Exchange of India Limited has genesis in the report of the

High Powered Study Group on Establishment of New Stock Exchanges, which

recommended promotion of the National Stock Exchange by financial institutions 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.

On its recognition as a stock exchange under the securities contracts (Regulation)

Act 1956, in April 1993, NSE commenced operations in the wholesale Debt Market

(WDM) segment is June 1994. The Capital Market (Equities) segment commenced

operations in November 1994 and operations in Derivatives segment commenced in June

2000.

Bombay Stock Exchange (BSE)

The Stock Exchange, Mumbai Popularly Known as “BSE” was established in

1875. It is a voluntary non-profit making Association of Persons (AOP) and is currently

engaged in the process itself into demutualised and corporate entity. It has evolved over

the years into its present status as the premier stock exchange in the country. It is the first

stock exchanges in the country to have obtained permanent recognition in 1956 from the

Govt. of India under the securities contracts (Regulation) Act 1956.

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Over the Counter Exchange of India

OTCEL can be defined as an exchange without a specified trading floor. It does

not have the market place physically and the market is spread across the country through

counter. All the counters are connected through a computer network and transactions

takes place through satellite communication.

Over the counter Exchange of India (OTCEI) was promoted as a non profit

making Organization and has been registered as a limited company under section 25 of

the Companies Act. 1956. OTCEI is a company limited by shares but because of its status

under section 25 of companies Act 1956, it does not use the work limited with its name.

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COMPANY

PROFILE

14

INTRODUCTION TO SSKI:

SSKI group also comprises institution broking and corporate Finance. While the

institutional broking division caters to the largest domestic and foreign institutional

investors, telecom and media. SSKI holds a sizeable portion of the market in each of

these segments.

SHARE KHAN BACKGROUND:

Share khan is one of the leading retail brokerage firms in the country. It is the retail

broking arm of the Mumbai-based SSKI group which has over eight decades of

experience in the stock broking business. Share khan offers its customers a wide range of

equity related services including trade execution on BSE, NSE, Derivatives, depository

services, online trading, investment advice etc.

With more than 150 share shops in 80 cities, and India’s premier portal,

www.sharekhan.com, we reach out to customers like no else. Sharekhan offers you trade

execution facilities on the BSE and the NSE for cash as well as derivatives, depository

services and most importantly, investment advice tempered by 80 years of research and

broking experience.

The firm’s online trading and investment site-www.sharekhan.com was launched

on Feb 8, 2010. The site gives access to superior content and transaction facility to retail

customer across the country. Region approx-2000 online share trading accounts per

Month are opened. Share Khan’s ground network includes over 300 centers in 140 cities

in India, of which 63 are fully owned branches.

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With a legacy of more than 80 years in the stock markets, the SSKI ground,

ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is

one of the leading players in institutional broking and corporate fiancé activates. SSKI

holds a sizeable portion of the market in each of these segments SSKI’s institutional

broking arm accounts for 7% of the market for Foreign institutional portfolio investment

and 5% of all Domestic institutional portfolio investment in the country. It has 60

institutional clients spread over India, For East, UK and US. Foreign Institutional

Investors generate about 65% of the organizations revenue, with a daily turnover of over

US$ 2 million. The Corporate Finance section has a list of very prestigious clients and

has many firsts to its credit, in terms of the size of deal, sector tapped etc. The group has

placed over US$ 1 billion in private equity deals. Some of the clients include BPL

cellular Holding, Gujarat Pipava, Essar, Hutchison, Planet Asia and shopper’s Stop.

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FINANCIAL PERFORMANCE OF SHARE KHAN:

Share khan is India’s leading retail financial services company. They have over 588 share

shops across 213 cities in India. While their size and strong balance sheet allow them to

provide customer with varied products and services at very attractive prices, their over

750 client relationship Mangers are dedicated to serving customer unique needs.

Share khan is lead by a highly regarded management team that has invested crores

rupees into a world class infrastructure that provides clients with real time service & 24/7

access to all information and products. Their flagship share khan Professional Network

offers real-time prices, detailed data and news, intelligent analytics, and electronic trading

capabilities, right at your fingertips. This powerful technology complemented by their als.

Share khan client relationship Mangers are available to the customers to help with

their financial planning and investment needs. To provide the highest possible quality of

service, Share khan provides full access to all our products and services through multi-

channels.

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BENEFITS OF INVESTING WITH SHARE KHAN:

ACCESSIBILITY

Share Khan provides ADVICE, EDUCATION, TOOLS AND EXCUTION

services for investors. These services are accessible through centers across the

country (Over 250 locations in 123 cities), Over the internet (through the website

www.sharekhan.com) as well as over the Voice Tool.

CONVENIENCE

AN investor can call on Dial-n-Trade number (1-600-22-7050) to get investment

advice and execute you transactions.

ADVANTAGES

1. Secure Order by Voice Tool Dial-n-Trade.

2. Automated Portfolio to keep track of the value of your actual purchases.

3. 24 x 7 Voice Tool access to your trading account.

4. Personalized Price and Account Alerts delivered instantly to your Cell

Phone &

E-mail address.

5. Special Personal Inbox for order and trade confirmations.

6. On-line Customer Service via Web Chat.

7. Anytime Ordering

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PRODUCTS

DETAILS OF

SHAREKHAN

LTD.

19

PRODUCT DETAILS OF SHARE KHAN:

Share khan offers the following products:-

CLASSIC ACCOUNT:

This account allows the client to trade through our website and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who do not trade too frequently.

FEATURES:

Online trading account for investing in Equity and Derivatives.

Both NSE & BSE online and Trading through website live terminal

Both Cash & F&O

No brokerage commitment required

Integration of On-line trading, Saving Bank and Demat Account.

Instant cash transfer facility against purchase & sales of shares.

Competitive transaction charges.

Instant order and trade confirmation by E-mail.

Streaming Quotes. (Cash & Derivatives).

Personalized market watch.

Single screen interface for cash and derivative and more.

Provision to enter price trigger and view the same online in market watch.

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SPEEDTRADE:-

SPEEDTRADE is an internet-based software application that enables anyone to

buy and sell in an instant. It is ideal for active traders and jobbers who transact frequently

during day’s session to capitalize on intra-day price movement.

FEATURES:-

Instant order Execution and Confirmation.

Single Screen trading terminal (NSE AND BSE BOTH)

Real-time streaming quotes, tic-by-tic charts.

Market summary (cost traded scrip, highest value etc.)

Hot keys similar to brokers terminal.

Alerts and reminders.

Back-up facility to place trades on direct phone lines.

DIAL-N-TRADE-

Along with enabling access for their trade online, the CLASSIC and

SPEEDTRADE ACCOUNT also gives their customers Dial-n-trade services. With this

service, all the customers need to do is dial to their dedicated phone lines 1-800-22-7050.

IPO On-line

The customers can apply all the forthcoming IPO online hassle-free.

CHARGES

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TABLE-1

Charge Classic Account Speed Trade Account

Special rate of Account

Opening

Rs. 750/- Rs. 1000/-

Monthly Commitment Rs. NIL Rs. 500/-

Rate of Brokerages Intraday-0.10%

Delivery-0.50%

Intraday- 0.10%

Delivery-0.50%

SOURCE:www.sharekhan.com

Refundable in case the brokerage is more than Rs. 500/-=p.m. Or quarterly generated

brokerage to be 1500/- **Taxes as per govt.

For speed Trade the monthly refcurring fee of Rs.500 per month is very nominal

considering the benefits of the product. This access charges will be debited to all the new

customers signed up after Sep 15 2004. And at the end of the month if the client has

contributed more than Rs. 500 as brokerage the access charge of Rs. 500 will be credited.

Back to the clients account. Please not- this credit of Rs. 500 will be refunded only to

customers who have contributed more than Rs. 500 as brokerage during the month.

DEPOSITORY CHARGES:

Account Opening Charges Rs. 750

Special rate of Account Opening Rs. 750/-

Rs. 300 Per annum from second year

onwards

BROKERAGE CHARGED

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0.10% Plus Taxes for Each leg of Intra-day trade

0.50% Plus Taxes for trades resulting in delivery.

EXPOSURE: 4 to 6.6 TIMES (ON MARGIN MONEY)

TIE UPS: Tie up with six banks i.e. HDFC Bank Ltd, Oriental Bank of Commerce, IDBI

Bank Ltd., Citi Bank, United Bank of India and UTI Bank for online money transfer.

DOCUMENT REQUIRED

As per KYC guide lines there needs to be photo identity and Address proof of the

customer. The required documents are mentioned below:

Identity Proof Residence/Address Proof

Passport Passport (valid)

Pan Card Voter’s ID

Driving License Driving License (Valid)

Voter’s D Bank Statement (latest)

MAPIN UIN Card Telephone Bill (latest)

Electricity Bill (latest)

Ration Card

Flat Maintenance Bill (latest)

Insurance Policy (latest)

Leave-Licnese Purchase

Agreement (latest)

2 Photographs

1 Cheque of Rs. 500 in Favour of S.S. Kantilal Ishwarlal Securities Pvt. Ltd. (For

classic Account), Or

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1 Cheque of Rs. 1000/- in Favour S.S. Kantilal Ishwarlal Securities Pvt. Ltd. (For

classic Account),

THEORITICAL

FRAMEWORK

OF

INVESTMENT

&

D-MATERIALIZATION

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INVESTMENT

What is Investment?

Invest is a term with several closely related meanings in fiancé and economics. It

refers to the accumulation of some kind of assest in hopes of getting future return from it.

In theoretical economics, investment means the purchase (and thus the

production) of capital goods-goods which are not consumed but instead used in

future production.

Examples: Including Building a railroad, or a factory, clearing land, or putting oneself

through college.

In finance, investments means buying monetary or paper asset, for example equity

investment or real stat investment may than provide a future income and increase

in value.

Investment is spending on capital goods by firms and government, which will allow

increased production of consumer goods and services in future time periods. Be careful

25

not to consfuse the economist’s definition of investment with another interpretation-that

investment involves putting funds into financial assets such as stocks and shares.

TYPES OF INVESTORS

Investors- who do good amount of homework about the industry and company they

want to invest in & usually with medium to long term horizon.

Speculators- Bet on future movement in the price of an asset. Who try to make big bucks

in a short time?

Momentum Traders- Intra-day traders.

HEDGERS:- Manage the risk associated with price of asset.

D-MAT PROCESS

6

2

26

NSDL DP

REGISTRAR

5 4 1 7

3

The process is as follows:-

Surrendering of certificate to DO for D-MAT

NSDL is informed by the DP through electronic connectivity

Original share certificate are submitted to the registrar by DP

The request for D-MAT from NSDL to the registrar.

Registrar credit an equivalent number and inform to NSDL.]

NSDL update its own account and informed to the DP.

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INVESTOR

DP credit it in the account to the investor and informed to the investor.

OPTIONS

AVAILABLE

FOR

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INVESTMENT

OPTIONS AVAILABLE FOR INVESTMENT:

1- FIXED DEPOSITS:

Fixed deposits remain the most popular instrument for financial

savings in India. They are the middle path investments with adequate returns and

sufficient liquidity. There are basically three avenues for parking savings in the

form of fixed deposits. The most common are bank deposits. For nationalized

banks, the yield is generally low with a maximum interest of 10 to 10.5% per

annum for a period of three years or more.

2- NATIONAL SAVING CERTIFICATES (NTSCs):-

National Savings Certificates (NSC) is an assured return scheme,

armed with powerful tax rebates under Section 88 of the Income Tax Act, 1961.

Interest is payable at 8 per cnet, compounded half-yearly for a duration of 6 years.

29

NSC combines growth in money with reductions in tax liability as per the

provisions of the Income Tax Act, 1961. The scheme offers a coupon of 8 per

cent, compounded semi-annually. SO, Rs 1000 invested in NSCs become Rs

1,586.87 on maturity after 6 years.

3- LIFE INSURANCESL

Life insurance is a contract that pledges payment of an amount to the person

assured or his nominee on the happening of the event isured against. The contract

also provides for the payment of premium periodically to the corporation by the

policyholder. Life insurance is university acknowledged to be an institution,

which eliminates ‘risk’, substituting certainty for uncertainty and comes to the

timely aid of the family in the unfortunate event of death of the breadwinner

4- PUBLIC PROVIDENT FUND (PPF):-

The Public Provident Fund (PPF) is probably the most popular of all the tax

saving scheme. PPF is a savings cum tax saving instrument. It also serves as a

retirement planning tool for many of those who do not have any structured

pension plan conversing them. Under Section 88 of the Income Tax Act, you can

invest up to Rs. 70000 of your income to claim a rebate of upto 30 per cent

depending upon the rate of rebate applicable in your case. The PPF account may

be opened at any branch of the State Bank of India (SBI) and its subsidiaries, a

few branches of the other nationalized banks, and all head post offices. The

minium deposit is Rs 500 Minimum deposit required in a PPF account in Rs. 500

in a financial year Maximum deposit limit it Rs. 70000 in a financial year.

Maximum number of deposits is twelve In a financial year. The account matures

for closure after 15 years.

5- REAL ESTATES:

Real estate is a legal term (in some jurisdictions ) that encompasses land along

with anything permanently affixed to the land, such as buildings. Fixtures include

buildings, fences and things attached to buildings, such as plumbing, heating, and

light fixtures. Property that is not affixed is regarded as personal property. Fox

30

example, furniture and draperies are items of personal property. Within the real

estate sector, foreign investment is now permitted in construction and project

development related to both residential and commercial development related to

both residential and commercial development in.

6- SHARE MARKET:

The capital of the company is divided into the number of equal parts known as

shares and holders of these shares are called shareholders or owner of the

company and company provide part of profit to shareholder out of net profit is

known as dividend and at the time of loss the shareholders have to bear the loss

also.

TYPES OF SHARES:-

EQUITY SHARES:

Equity Shares is the owners capital in the company. The holders of these shares

are the real owners of the company. They have control over the working of the company.

Equity shareholders are paid dividend after paying it to the preference shareholders.

PREFERENCE SHARES:

These shares have certain preferences as compared to other types of shares. These

shares are given two preferences. First is for payment of dividend and second is for

repayment of capital at the time of liquidation of company.

DEBENTURES:

Debenture is a document under the company’s seal which provides for the

payment of principal sum and interest thereon at regular intervals. A debenture holder is a

creditor of the company. A fixed rate of interest is paid on debentures irrespective of

profit or loss. Debentures are payable in priority over share capital. Debenture holders

have no right over the management of company.

7. DERIVATIVES:

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Derivatives are the instrument and Derivative contract is a financial instrument

whose payoff structure is derived from the value of the underlying asset.

There are 3 types of Derivative contracts

FORWARD CONTRACT: It is an agreement entered today under which one

party agrees to buy and the other agrees to sell on a specified future date at an

agreed price.

FUTURE CONTRACT: It is a standardized contract between two parties where

one party commits to sell and the other commits to buy, a specified quantify of a

specified assets at an agreed price on a given date in the future.

OPTION CONTRACT: It is a contract between two parties under which the

buyer of the option buys the right and not the obligation to buy or sell, a

standardized quantity of financial instrument at or before a pre determined date at

a price which is decided in advance. Options are of two types- Calls and puts

options:

Calls give the buyer the right but not the obligation to buy a given quantify of the

underlying asset, at a given price on or before a given future date.

Puts given the buyer the right, but not the obligation to sell a given quantity of

underlying asset at a given price on or before a given future date.

8. COMMODITIES MARKET:

Commodity markets are markets where raw or primary products are exchanged.

These raw commodities are traded on regulated exchanges, in which they are

bought and sold in standardized contracts. A commodity has value, which

represents a quantity of human labor. The fact that it has value implies

straightaway that people try to economies its use. A commodity also has a use

value, and exchange value and a price.

9. INITIAL PUBLIC OFFER (IPO)

An initial public offering (IPO) is the first sale of a corporation common shares to

public investors. The main purpose of an IPO is to raise capital for the

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corporation. The first sale of stock by a private company to the public, IPO’s are

often issued by smaller, younger companies seeking capital to expand but can also

be done by large privately owned companies looking to become publicly traded.

10. MUTUAL FUNDS:

A mutual fund is a basket of investment brought from the money of investors and

managed by a set of experts. It raises money from the investors regularly by

coming out with new schemes which carry a particular name depending upon

their investment portfolio. For e.g. DSP FMCG fund will only invest in the shares

and debt of the FMCG companies. The return received by the schemes is

highlighted in the form of a higher NAV.

11. SECURITIES MARKET:

A place or places where securities are bought and sold, the facilities and people

engaged in such transactions, the demand for and availability of securities to be

traded, and the willingness of buyers and sellers to reach agreement on sales.

Securities market include over-the-counter markets the new York Stock Exchange

the Chicago Board of Trade and the American Stock Exchange.

12. EQUITY INVESTMENT:

When we buy a share of a company we become a shareholder in that company.

Shares are also known as equities, Equities have the potential to increase in value

over time. It also provides your portfolio with the growth necessary to reach your

long term investment goals. Research studies have proved that the equities have

outperformed most other forms of investments in the long term.

13. PORTFOLIO:

A Portfolio is a combination of different investment assets mixed and matched for

the purpose of achieving and investor’s goal (s). Items that are considered a part

of your portfolio can include any asset you own from shares, debentures, bonds,

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mutual fund units to items such a gold, art and even real estate etc. However, for

most investors a portfolio has come to signify an investment in financial

instruments like shares, debentures, fixed deposits, and mutual fund units.

14. DEBT INVESTMENT

Investment in the financing of property or of some endeavor, in which the

investor loaning funds does not own the property or endeavor, nor share in its

profits. If property is pledged, or mortgaged, as security for the loan, the invested

may claim the property to repay the debt if the borrower defaults on payments.

Also see equity investment.

TRADING PROCEDURE

Now the question arises how the trading takes place

Types of Order

Order Entry & Unique code

Unique order number

Time stamping of Orders

Trade Number

Posted to back office of the Broker/Sub-broker

Issue of Contract Note/Sales Purchase Note

1- Execution of Order

Orders got executed on finding the right match.

Matching Priority:

Best buy order-with highest price

Best sell order- with lowest price

The unmatched orders are queued in the system by price time priority basis.

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2- Flow of Trading

3- How trades are settled?

Trades are settled on a T+2 basis

Netting of trades

Securities pay-in

Funds Pay-in

Securities Pay-out

Funds Pay out

Auction for shortages

4- Settlement Calendar

Activity Day

Trading T

Funds Pay-in T+2

Securities Pay-in T+2

Funds Pay-out T+2

Securities Pay-out T+2

Auction for Shortage T+3

Auction Pay-in/Pay-out T+5

5- Formalities Before Trading

Identify Broker/Sub-Broker

Client Registration

Client Agreement

Risk Disclosure document

Allotment of Unique Client Code

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Margin Payment

Demat Account

RESEARCH

METHODOLOGY

36

RESEARCH METHODOLOGY

Research methodology is the way to systematically solve the problem Research is

common parlance to refer to a search for knowledge.

Research comprises defining problem formulation hypothesis or suggesting solution,

collecting, organizing or evaluating data and reaching conclusion and at last carefully

testing conclusion to determine whether fit the formulated hypothesis.

Research is a careful investigation or enquiries for new facts in any branch of knowledge.

Researchers are basically systematic enquiry with customer’s critical examination with

objective to search new facts or interpret know facts in light.

R - Rational way of thinking

E - expert and exhaustive treatment

S - search for solution

E - Exactness

A - Analytical

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R - Relationship of facts

C - Careful recording

H - Honestly and Hard-work

TITLE OF THE RESEARCH

“ANALYSIS OF INVESTOR IN THE STOCK MARKET AND DMAT SERVICES AT

SHAREKHAN LTD”

DURATION OF THE PROJECT

45 DAYS

OBJECTIVE OF THE STUDY

To provide details about the various products and plans offered to customers in

the market.

To evaluate their product and investing decision of investors in the stock market.

To analyse the D-mat services provided by SHAREKHAN CO.LTD.

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To recongnize area of improvement

TO define the area and reason of SHAREKHAN CO.LTD. having an edge over

other.

TYPE OF RESEARCH

Exploratory research based on primary Data collected through Questionnaires

from the clients of Sharekhan.

Sample size & Method of Selecting Sample

Sample size consists of 50 clients of Sharekhan. The method of selecting sample

in Non-probability sampling.

SCOPE OF THE STUDY

The research consists of study of products of various brokerage houses in the city

of Udaipur. A detail analysis of the brokerage houses, their products, their

services.

To conduct a customer survey so as to define the various needs and requirement

of investors with the objective to facilitate them with the facilities and services.

LIMITATIONS OF STUDY

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The limitations of the study are the following

1. Data Constraint:

Sometimes people are not giving accurate information:

The project relies on the data provided by clients of sharekhan where they reveal

the positive aspect of their plans and policies but some loopholes remain

uncovered.

The primary data is based on the data provided by the client and the prospective

client where they may avoid providing their exact view.

2. Time Constraint:

The number of other brokerage house is very large so it is not possible to cover all

the brokerage houses to evaluate actual competition. Thus the project is limited to

Sharekhan Ltd.

3. Margin money is necessary in our company for open a Demat A/c.

4. Market is so much volatile so investors are not interested to invest in the share

market.

5. Many people don’t aware from SHAREKHAN CO. LTD.

6. It is very difficult to make understand people the concept of demat Accounts.

7. As I am new to this share market it becomes difficult to solve the queries of

customers.

8. Cost constraint.

9. As I have to do marketing work it becomes difficult to roam in hot weather.

40

TARGET/TASKS

The Target for summer intership program is SHAREKHAN CO. LTD. Is

convincing people to invest of STOCK MARKET through our company.

Convince people to open DEMAT accounts inspire them to trade with our

company.

Overall Target- To open 10 DEMATS accounts within 45 days.

Target Achieved- I have opened 8 DEMAT accounts.

ANALYSIS

&

INTERPRETATION

41

Financial Performance of Share Khan:

Share Khan is India’s leading retail financial services company. They have over 588

share across 213 cities in India. While their size and storng balance sheet allow them to

provide customers with varied products and services at very attractive prices, their over

750 Client Relationship Managers are dedicated to serving customers unique needs.

Share khan is lead by a highly regarded management team that has invested crores of

rupees into a world class infrastructure that provides clients with real time service & 24/7

access to all information and products. Their flagship Share Khan Professional Network

offers real time prices, detailed data and news, intelligent analytics and electronic trading

capabilities, right at your fingertips. This powerful technology complemented by their

als.

Share Khan client Relationship Managers are available to the customers to help with their

financial planning and investment needs. To provide the highest possible quality of

service, Share khan provides full access to all our products and services through multi-

channels.

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ANALYSIS IS AS FOLLOWS

When the investors were asked, for how long they are investing in the stock market. The

datas collected were as follows:

No. of years No. of investors in %Less than 1 year 101-3 years 204-6 years 60More than 6 years 10

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When the investors were asked, which type of trading do they normally prefer.

The datas collected were as follows:

Types of trading No. of investors in %Intraday 42Delivery 36Both 22

44

When the investors were asked, how much brokerage they are paying

The dates collected were as follows:

Brokerage Charged No. of investors in %0.3-.30 paisa 38.02-.20 paisa 23.01-.10 paisa 31More than 0.30 paisa 08

45

When investors were asked about their satisfaction in working with Sharekhan

Ltd.

Satisfied or Not No. of Investors in %Yes 73No 27

46

When the investors were asked Are they satisfied with the investment which they

received with sharekhan

Satisfied or Not No. of Investors in %Yes 65No 35

47

When the investors were asked about the area where the co could not meet the

client’s expectation level. The following results were depicted.

Attributes RankBrokerage fees 3Services 1Research & Advices 1Complaints handing 2Product basket 1

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Interpretation

From the very start Stock Market has been an area of interest for the mass,

the investons and for the analyst. It has been a source of earning and profit for large while

some have also experienced its sour taste.

Stock Market has shown various colours to the investors all over the world and

has drawn the attention of many people. It has been one of the reasons for inflation. But

this inflation has not been a loner; It is also backed by increased in purchasing power and

disposable income.

The investors in the stock market have increased and so has completion. A rise in

the number of investors has drawn the attention of the brokerage houses and has lead to

rise in competition and so has increased the number of brokerage houses.

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A brokerage house is one with help the investors invest their funds and gain profit

and in return charge brokerage and interest for the funds provided by them. A brokerage

house also provides facilities like account opening, transfer of shares, dematerialization

of shares, provides funds for the trading and so on Different companies have different

policies for providing funds.Few provide 2 Times of your investment while some up to

10 Time.

Every brokerage house has a survey team that helps the dealers and the team

suggests investment and guides them in investing their funds appropriately and gain

profit. The research team provides suggestions to the dealers and the dealers on the basis

of these investment tips help investment of funds.

All the brokerage houses have tie up with different banks to facilitate deposit and

withdrawal of fund. There exist a large number of brokerage houses and offer different

products and plans.

I strongly believe that a well functioning securities market is conductive sustained

economic growth. There have a number of studies, starting from world Bank and IMF to

various scholars, which have established robust relationship not only one way, but also

the both ways, between the development in the securities market and the economic

growth. An important study by Ross Levine and Sara Zervos (1996) finds that the stock

market development is highly significant statistically in forecasting future growth of per

capita GDP.

This happens, as market gets disciplined / developed/ efficient, it avoids the

allocation of scarce savings to low yielding enterprises and forces the enterprises to focus

on their performance which is being continuously evaluated through share prices in the

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market and which faces the threat of takeover. Thus securities market converts a given

stock of investible resource to a larger flow of goods and services.

The securities market fosters economics growth to the extent that it

a) Augments the quantities of real savings and capital formation from any given

level of national income.

b) Increases net capital inflow from abroad.

c) Raises the productivity of investment by improving allocation investible funds.

d)Reduces the cost of capital.

The securities market provides a bridge between ultimate savers and

ultimate investors and creates the opportunity to put the ravings of the cautious at the

disposal of the enterprising thus promising to raise the total level of investment and hence

of growth. The indivisibility or lumpiness of many potentially profitable but large

investments reinforces this argument. These are commonly beyond the financing capacity

of any single economic unit but may be supported if the investor can gather and combine

the savings of many Moreover, the availability of yield bearing securities makes present

consumption more expensive relative to future consumption and, therefore, people might

be induced to consume less today. The composition of savings may also change with

fewer saving being held in the form of idle money or unproductive durable assets simply

because more divisible and liquid are available.

The securities market facilitates the internationalization of an economy by linking

it with the rest of the world this linkage assists through the inflow of capital in the form

of portfolio investment. Moreover a strong domestic corporate to raise capital in the

international market. This implies that the domestic economy is opened up to

international competitive pressures, which help to raise efficiency. It is also very likely

that existence of a domestic securities market will deter capital outflow by providing

attractive investment that causes investment alternatives to be compared with one another

produces allocation improvement over a system of segregated investment opportunities.

They provide a convenient market place to which investors and issues of securities go

and thereby avoid the need to search a suitable counterpart. The market provides

standardized products and thereby cuts the information costs associated with individual

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instruments. The market institutions specialize costs associated with individual

instruments. The market institutions specialize and operate on large scale, which cuts

costs through the use of tested procedures and routines. There are also other

developmental benefits associated with the existence of a securities market.

First the securities market provides a fast-rate breeding ground for the skilled and

judgment Second an active securities market serves as on engine of general financial

development and may, in particular, accelerate the integration of informal financial

traditional assets such as gold and stocks of produce or, indirectly, may provide portfolio

assets for unit trusts, pension funds and similar FIS that raise savings from the traditional

assets for unit trusts pension funds and similar F/s that raise saving from the traditional

sector Third the existence of securities market enhances the scope, and provides

institutional mechanisms, for the operation of monetary and financial policy.

CONCLUSION52

AND

SUGGESTION

CONCLUSION:

Indian economy globalizes and the capital market has been linked to the international

financial market. Foreign individuals and institutional investors are now encouraged to

participate into it. So, there is a need for raising the Indian Capital market in to the

international standards in terms of efficiency and transparency. One such measure is the

passing out of the Depository Act in the year 19960 Dematerialization of securities is one

of the major steps aimed at improving and modernizing the capital market and enhancing

53

the levels of investor’s protection measures which aims at eliminating the bad deliveries

and forgery of shares and expediting transfer of shares.

This study is giving an overview about the security market as is evident from the title of

work. It has given insight into the functioning and components of primary and secondary

market. It made clear the meaning of stock exchange which provides a platform to enlist

the company’s securities and facilitate the buying and selling of various securities like

shares, debenture, bonds, and government securities etc.

As has been discussed at the outset of concluding the work, that to cater to the growing

demands of globalization the trading in securities has been made more grandparent and

easy through the introduction of Depository Act in 1996 and the dealing in securities

have been made convenient through the dematerialization of securities. The regulatory

body SEBI has introduced revised procedures so as to combine the latest procedure of

securities dealing giving impetus on the investor protection.

After taking feedback from customer I knew that SHAREKHAN LTD is popular product

in the market and everyone knows the benefits of online share trading. They want to open

D-MAT account and take advantage of online and offline share trading.

This PROJECT has given us real practical experience of the market. During these 45

days we have meet to different people. I have prepared the questionnaire that has helped

us to know the market trends and customer preference related to D-Mat a/c and

commodity section. I have assessed their queries and grievances. We have also learnt

about how to deal with customers and solve their queries and how to convince theme by

the presenting the products of the company.

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I thing that performance can be improved by the adopting some strategy of the marketing

like and know the customer satisfaction related to our company products.

SUGGESTIONS

1. The Sharekhan Ltd. Should reduce its brokerage charges.

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As there are large no. of competitors in the market having low brokerage charges,

SHAREKHAN LTD. Should go for reduction for reduction its brokerage charges.

2. The Sharekhan Ltd. Should formulate separate complaint handing deptt. For

handing the complaints of the customers.

3. The sharekhan ltd. Should add some new facilities in addition to its current

facilities like interim fundings etc.

4. As the market is moving to the bull side, the Sharekhan Ltd. Should create the

awareness to the potential investors by tele callings etc.

5. Sharekhan Ltd. Should improve its service quality by providing quick and prompt

services.

6. As most of the market is uncaptured and the investors are unaware of Sharekhan

Ltd. The co. should opt the strategy of aggressive advertisement through

telecallings, pamphlet distribution & make public aware about benefits of

investing with Sharekhan Ltd.

Bibliography

MAGAZINES:

Business world

Business Today

Journals of SHAREKHAN LTD.

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NEWSPAPERS:

Business Line.

Economic Times.

WEBSTIES:

www.google.com

www.sharekhan.com

ANNEXURE-I

QUESTIONNAIRE

Q.1 Your Trading accounts is in which company?

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i) Since when are you trading in the share market?

Less than 1 yr 1-3 yr 4-6 More than 6

Yrs

2) What type of trading do you prefer?

Intraday Delivery Both

3) What is the brokerage charged?

0.3-.30 Paisa .02-.20 Paisa 1-.10 Paisa

More than 0.3 paisa

4) What interests you in share Market?

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5) How often do you gain from it?

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6) What are the reasons for operating with the stated company?

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7) Are you satisfied with the services?

Yes No

8) Are you satisfied with the investment tips?

Yes No

9) What is the margin allowed and what are the services that you expect?

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10) Is there any difference in the service provided by local broker and corporate body? If yes then please specify?

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11) Have you switched from one firm to another? If yes then reasons and which company have you switched to?

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12) what are the different attributes that client looks forward for a brokerage house?

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13) What were the areas where the MOST could not meet the client’s expectation level?

Attributes RanksBrokerage feesServicesResearch & advicesComplaints handlingProducts Basket

Remarks:-

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