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A STUDY OF CUSTOMER SATISFACTION TOWARDS THE STOCK BROKERING COMPANY : A SPECIAL REFERENCE TO

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DAYANANDA SAGAR BUSINESS SCHOOL PGDM (AICTE)

1. INTRODUCTION TO MARKETING

Marketing is indeed ancient act .It has been practiced in one or

other form since human relation has come to existence. Its emergence as

management discipline however is of relatively recent origin and within this

relatively short period , it has gained a great deal of importance. In fact today

most management thinkers and practitioner¶s world over regard marketing as

important part for business.

Marketing is becoming more attractive at the company ,state,

national and international levels. In the early days , there was no difference

between µselling¶ and µmarketing¶ . With the development of new markets

and new avenues of selling , wide variety of consumer and producer goods

has been designed and developed .Marketing can be said as the oldest

profession. With the introduction of ³Barter Exchange´ market activity

started functioning.

The role of organizations in developing the marketing activity

cannot be ignored. Several institutions are developed in discharging market




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The term consumer behaviour refers to the behaviour that consumer display

in searching for purchasing using evaluation and disposing of products and

services that they expect will satisfy the needs .They study of consumer

behaviour is the study of how individual make decisions to spend their

available resources (time, money, effort) on consumption relined items .It

includes the study of what they buy? Why they buy? And how they often

they use it?

To understand the concept we take a small example of product ³toothpaste´.

Which type of toothpaste¶s do consumer buy (Gel, regular, regular in a tube,

with a pump), which to (remove stains, to brighten or whiten teeth, as a

mouth wash, to attract, romance etc.) where do they buy it (supermarket,

drugstore, convenience stores).

The answer to these questions can be found through consumer

research and provide manufactures with important inputs for the product

scheduling design modification and promotional strategy.

INTRODUCTION TO FINANCIAL MARKET

CAPITAL MARKET :

This deals in shares and debentures. Companies raise the capital through the issue

of shares and debentures. Capital Market provides and opportunity for the

investing public to know the trend of different securities and the conditions




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prevailing in the economy. Capital market is the barometer of the company by

which you are able to study the economic conditions of the country and it enables

the Government to take suitable action. The capital market has two components.

They are :

Primary Market :

A primary market is where new securities are offered to the investing public for the

first time. Hence it is also called new issue market. In the primary market , thegovernment and public sector undertakings as well as corporate units borrow funds

or issue capital in the form of securities, shares bonds etc., The activity here refers

to raising capital of ownership or debit nature.

Secondary Market :

The Secondary Market represents the availability of shares from the stock market

through the brokers. Share are purchased or sold according to the returns or

expectations in the future market. They can buy and sell existing securities, invest

and disinvest or re-channel funds from the company into another or one type of

securities into another the secondary market is an important adjustment of the

primary data.

Financial Institutions :




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Every country needs the service of Financial institutions for accelerating the pace

of development. The institutions not only provide Financial Assistance to

Industries undertakings but also help in creating infrastructure facilities. Financial

Institutions provides means of Mechanism of transferring resources from those

who have excess of income over expenditure to those who can make production

use of the same.

Financial Institutions can be broadly classified into developmental institutions and

investment institutions in former category, there are institutions of All-India stature

namely IDBI, IFCI, ICICI and at state-level stature namely State Finance and

Development Corporations. In the category of investment institutions, these are all

Indian bodies like UTI, LIC , GIC etc., and state level bodies like the state

Industrial Development corporations (SIDC¶s) and State Industrial Investment

Corporation (SIIC¶s) and State Infrastructure Development Corporations.

These Financial Institutions are the main players in the Market, either in the

Primary Market or the Secondary Market. Besides giving loans and advances to

Industrial units, they invest in their debentures and equity shares, provide the seed

capital for new and small entrepreneurs, underwriter stocks, shares , debentures

and various other instruments in the capital market or subscribers to new issues or

buy and sell these instruments in the secondary market.




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Financial Institutions are classified into two major categories as Banking

Institutions and Non-Banking Financial Institutions.

Non-Banking Financial Institutions :

Non-Banking Financial Institutions carry out financing activities but their

resources are not directly obtained from the savers as debt. Instead, these

Institutions mobilize the public savings for rendering other financial services

including investment. All such Institutions are financial intermediaries and when

they are known as Non-Banking Financial Intermediaries (NBFC¶s)or Investment

Institutions.

y UNIT TRUST OF INDIA

y LIFE INSURANCE CORPORATION (LIC)

y GENERAL INSURANCE CORPORATION (GIC)

Apart from these NBFC¶s another part of Indian financial system consists of a

large number of privately owned, decentralized and relatively small-sized financial

intermediaries. Most work in different, miniscule niches and make the marker




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more broad-based and competitive. While some of them restrict themselves to

fund-based business, may others provide financial services of various types. The

entities of the former type are termed as ³Non-Banking Financial Companies

(NBFC¶s). The latter type are called ³Non-Banking Financial Companies

(NBFC¶s).

According to Reserve Bank India (Amendment Act) 1997, a Non-Banking Finance

Company means.

(a) A Financial Institutions which is company.

(b) A Non-Banking Institution which is a company and which has as its

principal business is receiving of deposit under any scheme or arrangements

or in any other manner or leading in any manner.

(c) Such other Non-Banking Institutions or class of such Institution as the Bank

may, with the previous approval of the Central Government specify.

Reserve Bank of India has set in place additional regulatory and supervisory

measures the demand more financial discipline and transparency of decision

making on the part of NBFC¶s. NBFC¶s regulations are being reviewed by the RBI

from time to time keeping in view the emerging situations. Further, one can expect

that some areas of co-operation between the Banks and NDFC¶s may emerge in the

coming era of E-commerce and Internet Banking.




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The Task Force of NDBC¶s appointed by the Government of India submitted its

report in October, 1998, which recommended rationalization of regulations for,

NBFC¶s improvement of the legislative framework for protecting the interests of

depositors and development of NDFC¶s on sound and healthy lines on January 2,

1998 the RBI issued detailed guidelines regarding norms of deposit acceptance.

Prudential norms, etc., for various categories of the NBFC¶s. These were later

reconsidered and revised guidelines were issued on January 31, 1998 ; deposit

entitlement limits were raised in certain cases to minimize hardship without

endangering the interests of depositors.

According to these guidelines an NBFC will have to obtain the minimum

prescribed investment rating before accepting public deposits. The limit of

acceptance of public deposits has been linked to the NOF of NBFC¶s and its rating.

While equipment leasing companies having NOF of Rs. 25.00 lakh and above and

having a credit rating of AAA, AA, A and A ± can accept public deposit of 4

times, 2.5 times, 1.5 times and 0.5 times respectively, of their NOF, a loan

company having NOF of Rs. 25 Lakh and above having credit rating of AAA, AA,

A will be allowed to accept deposit form public up to 2 times, 1 time and 0.5 time

respectively of NOF. Furthermore, NBFC¶s with NOF less than Rs. 25 Lakh have

been prohibited from accepting public deposits with immediate effect.




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Non-bank financial companies (NBFC¶s) also know as a non-bank or a non-

bank bank , are financial institutions that provide banking service without meeting

the legal definition of a bank, i.e. one that does not hold a banking license.

Operations are, regardless of this , still exercised under bank regulation. However

this depends on the jurisdiction, as in some jurisdictions, such as New Zealand, any

company can do the business of banking, and there no banking licenses issued.

Non-bank institutions frequently acts as suppliers of loans and credit facilities,

however they are typically not allowed to take deposits form the general public and

have no find other means of funding their operations such as issuing debt

instruments. In India, most NBFC¶s raise capital through chit Funds.

Activities of NBFC¶s :

y Mutual Funds

y Consumer Loan / Credit Card

y Insurance

y Leasing

y Hire purchase

y Factgoring

y Credit Rating

y Securitization




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y Venture Capital

y Stock Broking

y Primary Leadership

COMPANY PROFILE

SHAREKHAN LIMTIED

Origin and Growth

Sharekhan is a retail broking arm of S.S. kantilal Ishwarlal Investors Services Pvt.

Ltd., An organization with more than 8 decades of trust and credibility in the stock

market,. Sharekhan Ltd (Formally SSKI Investors Services Pvt Ltd.) was promoted

by Mr. Shripal. S Morkharia and Mr. Shreyas. S Morkhia. It is currently India¶s

largest broking house. It is a member of the stock exchange, Mumbai. It is a




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depository participant of the NSDL and CDSL. Its business includes stock broking,

depository services, portfolio management and derivatives.

The company¶s core specialty lies in its retail distribution with a large network of

branches i.e. 510 share shops (retail shops) in 170 cities in India and sub-

brokers/authorized persons. Its strengths lies in its investment research capabilities.

Its research division has several analysts continuously monitoring global, national

and regional political, economic and social situations so as to assess their impact

on the economy in general, the sectors so as to assess their impact on the economy

in general, the sectors and companies they research which helps them if offering

quality research and advice to clients.

The SSKI Group Comprises of Institutional broking and Corporate Finance. The

Institutional broking division caters to domestic and foreign institutional investors,

while the Corporate Finance Division focuses on niche areas such as infrastructure.

Telecom and media. SSKI has been voted as the Top Domestic Brokerage House

in the research category by Euro Money Survey and by Asia Money Survey.

For the derivates segment, to educate the potential investors towards the share

market they provide a study kit named the µDerivative Digest¶. And for potential

investors wanted to start the trading in the share market also provided with the

study kit µFirst Step to investing in the share market¶, gives them a general




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understanding about how the share market operates, and it also gives an idea

regarding the role of share brokers in the Capital Market.

These are the wide-raging services offered by the share khan to its customers. And

most importantly. Share Khan is blessed with well-dedicated sales wings, who are

looking after the various needs of the customers in a committed manner and which

provide the customers with tremendous amount of satisfaction and happiness

about their investment.

Core Services :

Equity and Derivatives trading on BSE and NSE

1. Depository Services

2. Online Trading

3. IPO Services

4. Commodity Trading on MCX and NCDEX

5. Port folio Management services.




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Nature of the Business Carried :

Sharekhan is a broking company. The company offers a complete range of pre

trade, trade and post trade service on the BSE (Bombay Stock Exchange) and the

NSE (National Stock Exchange). Whether the client come in to the company¶s

conventionally located officers and trade in a dedicated ambience or issue

instructions over the phone, our highly trained team and sophisticated equipmentensure smooth transactions and prompt service.

y Investment Advisory Service

y Facilitation Services to Retail Investors, Corporate.

y Depository Services

y Investment options includes :

1. Online trading (Includes equity, derivatives)

2. Commodities trading

3. Mutual Funds

4. Portfolio management Services

Sharekhan Branches are conceptualized to be place where investors can come in

contact with investment opportunities in an atmosphere of convenience and

comfort. Our services are available through our network of 510 Share Shops




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spanning 170 major towns and cities in the country. Professional seeks to educate

clients and end their confusion by custom an Investment Plan according to the

needs of clients and is also today a part of company¶s induction program advising

employees on how to plan their investments.




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VISION, MISSION & QUALITY POLICY

Vision

Sharekhan practices customer centric approach to be leading broking Firm. The

Company Vision is :

1. To be the top most company for providing investment advisory and financial

planning services in India.

2. To be a leading investment intermediary for transaction through both online

and offline medium.

MISSION

To educate and empower the individual investor to make better investment

decisions through quality advice and superior service.

1. Educate and empower

a) Research backed advice, which is easy to understand, retail specific, and

discipline.

b) Total equity solutions for the entire investment process.

c) Relationship management




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2. Superior service

a) Integrity

b) Transparency

c) Professionalism

d) Information ± product, news, operations

e) Hassle free trading

f) Enjoyable experience our goals is to accomplish top most position in both

online and offline medium of trade and also to remain a customer centric

organization.

QUALITY OBJECTIVES

Objectives represent, what needs to be accomplished in order to reach the goals.

y To increase the customer base of investors to invest in all kind of securities.

y Sharekhan has one among the largest network of outlets of the either trading

firms with 180 outlets.

y To retain the existing consumers with research backed advice and

personalized care the needs of the consumer.




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ACHIEVEMENTS OF SHAREKHAN :

y Rated among the top 20 wired companies along with Reliance, HUJl,

Infosys, etc by µBusiness Today¶, January 2004 edition.

y Awarded µTop Domestic Brokerage House¶ four times by Euro money and

Asia money

y Pioneers of online trading in India amongst the top 3 online trading websites

from India. Most preferred financial destination amongst online broking

customers.

y Winners of ³Best Financial Website´ award

y India¶s most preferred brokers within 5 years. ³Awaaz customers Award

2005´.

Future Plans :

2,00,000 plus retail customers being serviced through centralized call centers

/ web solutions.




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y Branches / Semi branches servicing affluent / aggressive traders through

high skill financial advisor.

y 250 independent investment managers/ franchisee servicing 50,000 highly

valued clients

y New initiatives Portfolio management Services and commodities trading

PRODUCT AND SER VICES PROFILE

Classic Account :

This is a product for the retail investor who is risk-averse and hence prefers to

invest in stocks selectively or who does not trade too frequently. There is no

volume commitment on the part of the client. The features of the products are as

follows :

The registration charges are Rs. 750/- that is a one-time payment. With the online

package defaults demat a/c. would be opened with SSKI. For the 1st

year no demat

charges have to be paid. It¶s free.




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The client gets exposure of up to 4 time of the deposit amount. For example if the

client has Rs. 5000/- in his/her account he/she can get the exposure up to Rs.

20,000/-

The brokerage applicable is 0.50% on delivery and 0.1 for intra day trading.

SPEED TRADE

Proposed policy for speed trade / plus ±

The company will be merging speed trade and speed trade plus. There will be a

common exe called speed. Trade which allows customers to trade on both case and

F & O. account opening fee Rs. 1000.

1. Trading Facilities :

Sharekhan as a member of NSE & BSE provides both offline and online

trading facilities nationwide for trading the securities in secondary market to

its clients. The Company¶s wide network of outlets spread across the country

facilities to executive the orders in secondary market.




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2. Derivatives : (Futures and Options)

The company also facilitates the trading system for trading in secondary

market under future and options segment of NSE and BSE. The equity

dealers in the company will be eager to give insights into the new sets

introduction in the Indian Capital market futures and options.

3. Depositor Services :

Sharekhan is a Depository participant of National Securities Depository

Limited and Central Depository and securities Limited. Sharekhan will open

De-mat accounts, which will investors to convert physical certificates of

shares into electronic balances in an account maintained.

4. Margin Financing :

In the present rolling settlement scenario, Sharekhan understand investor

need for additional capital availability for daily purchaser shares. it offers

unique facility avail finance, for purchasing shares at very competitive

interest rates.

5. IPO¶s and Mutual Funds :




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Sharekhan offers the change of investing in the potentially lucrative IPO

market. Sharekhan is a distribution house for all mutual funds. This is the

new scheme introduced by the company and it also offers schemes catering

to investors with varying risk return profiles.

6. Stock lending and Borrowing :

One can place an order of shares with Sharekhan. It is approved

intermediary of the security or lending scheme. These would be sent out the borrowers, these earnings fees for all investor¶s idle shares. Thus Sharekhan

fulfill the investor need for borrowing and lending of shares.

7. Equity Research :

Sharekhan has a highly rated research using involved in macro economicstudies, industry and company specific equity research. The research team¶s

inputs will be available as daily trading calls, quarterly investment picks and

long term investment picks, based on the fundamentals of particular

company and the industry as whole.

8. Internet Trading :




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Investors can also trade their securities through this facility by logging into

company¶s website. The virtual world that Sharekhan offers online trading

services through.




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9. Portfolio Management Services :

Sharekhan securities are a registered portfolio manager with SEBI to

manage portfolios on behalf of clients with discretionary and anon

discretionary rights this service is a provision for those who may not have

the right time to manage their stocks investment or require the service of

company¶s highly specialized professional team.

10. Online Trading :

Share Khan was amongst the pioneers of online trading in India and has launched

Sharekhan.com in February 2000. Since the, they have been at the forefront in

understanding customer needs, analyzing trends and brining innovation in their

offerings. They have online trading products that are customized to the habits and

preferences of investors as well as traders.

Features Of Online Trading Products :

y Live streaming quotes

y Instant order execution and conformation

y Price alerts

y Single Screen for equities and derivatives

y Multiple market watch windows




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y Real-time portfolio tacking

11. Other Services :

a. Free access to investment advice, from Sharekhan research team.

b. Sharekhan ³value line ³ ( A monthly publication)

c. Daily research reports and market review.

d. Daily trading calls based technical analysis

e. Cool trading products. (Daring derivatives and market strategy)

f. Personalized advice.

g. Live management information.

h. Internet based online trading session.

i. Online BSE and NSE executions through BOLT & NEAT terminals.




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ORGANIZATION STRUCTURE

Research ± Based Advice From Sharekhan

Your Investment decisions should not be based on rumours, gut feel or emotions ; but should be taken after a careful study of facts. Most investors who have made

their money in the stock market are those who have been patient, have backed their

investments with logic and have never lost sight of common sense.




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Typically there are two ways of selecting the right stock :

(1) Fundamental / research and

(2) Technical analysis

1. Fundamental Research

This requires you to rate a stock based on its historical performance and

growth parameters. This type of research involves a careful scrutiny of thefinancials of a company.

2. Technical Analysis

This requires you to predict the trend in the market or the price of a company

based on historical price movements, using certain statistical parameters.

Sharekhan offers a selection of stocks based on both fundamental and technical

research techniques with different time frames for both types of calls.

Sharekhan provides news letters and analytical reports to help you decide which

share to select and when to buy or sell them. Account holders get research ± based

investment advice with recommendations to buy shares of companies whose

prospects are good. These recommendations are termed as ³ Stock Ideas´




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Sharekhan customers also get a host of services including timely research reports

(Sharekhan stock Ideas).

TITLE OF THE PROJECT :-

A Study of customer satisfaction towards the stock brokering

company : A special reference to Sharekhan Ltd.




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CAPITAL MARKETING

Concept of Marketing :

Marketing is regarded as an activity involving buying and selling of products and

services. However as a subject of study it has been approached in more than one

way- commodities, institutional, managerial, social and systems approach.

The conceptual backdrop to the study of managerial marketing is provided by the

managerial orientation built up by the firm. Broadly four types of managerialorientation are identified namely, production, sales, promotion and consumer.

In promotional orientation the managerial concern focuses on selling but emphasis

shifts to advertising and sales promotion as means of problem solving. In consumer

orientation the focus is on consumer need satisfaction and profits. The consumer

orientation of management is best reflected in the adoption of the marketing

concept. It means recognition must be made in the light of consumer needs and

wants.




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Modern marketing course all business activities necessary for ascertaining

market demand, planning product availability, effecting transfers of ownership of

products, providing for their physical distribution and facilitating the enter

marketing process.

Marketing is the ongoing or continuous process of defining, anticipating and

creating customer needs and wants, and of organizing all the resources of theenterprise to satisfy customer demand at the desirable profit to the firm and also to

the customer. Marketing is a system of integrated business activities designed to

develop marketing plans and programmes leading to the satisfaction of customer

wants.

Marketing in a free economy is skill of selecting and fulfilling consumer desires so

as to maximize the profitability per unit of capital employed in the enterprise.

Role of Marketing in Economic Development :

The Marketing has widespread wings encompassing a wide range of activities.

Marketing playas a pivotal role in the growth and development of country. The




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development of marketing has always kept pace with the Economic Development

of the county. Both have experienced evolutionary rather than revolutionary

change. Rather we say that marketing is the by-product of Economic

Development.

At the recent stage, marketing has gained a wide recognition because of the

increasing pace of production. To a great extend, economic growth of a country

depends on the performance of marketing activities which stimulates the demand

for goods and services and leads to higher production. Marketing is further

widened. The modern marketing helps to explore the means of expanding and

supplementing them, but not to accept the limitation of resources.

Marketing to a great extend, help in the development of the standard products and

services and increases the standard of all field. Marketing itself being a complex

mechanism, involves a number of functions and sub functions which call for

different specialized persons for employment.

Marketing plays a significant role in developing countries as it is a multiplier, the

increased capital formation is considered a key to economic development. Thus

marketing provides a systematic discipline to economic activity.




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\

Indian Financial System :

The Indian Financial system has established a strong link between savings and

investments by creating a unique mechanism through which varied economic

activates are created, sustained and developed. In this background the Indian

financial system which supplies the necessary financial inputs for the production of

goods and services which in turn promote the well-being and standard of living of the people in the country.

The responsibility of financial system is to mobilize savings in the form of money

and monetary assets and invest them in productive ventures. An efficient

functioning of the financial systems facilitates the free flow of funds to more

productive activities and thus promotes investments.

Thus financial system is a broad and comprehensive term which brings under its

fold the capital market which supports the system.




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Capital Market :

The development of a good capital market in a country is dependent upon the

availability of savings, proper organization of its constituent units and the

entrepreneurship qualities of the people. Before Independence the capital market of

India was ill-developed because of certain defects. But, in recent years, post

independence period experienced the development of the capital market.

A capital market may be defined as an organized mechanism for effective and

efficient transfers of money capital or financial resources from the investing

parties, i.e. individuals or institutional savers to the entrepreneurs (individual or

institutional) engaged in industry or commerce in the business either be in the

private or public sectors of an economy.

A good capital market is an essential pre-requisite for industrial and commercial

development of a country. Capital market is a central co- ordinating and directing

mechanism for free and balanced flow of financial resources into the economic

system operating in the country.




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The capital market in India may be classified into two categories that is organized

and unorganized. The structure of my capital market consists of the sources of

demand for and supply of long term capital. In the organized sector of capital

market, demand for long term capital comes from corporate enterprises, public

sector enterprises, Government and Institutions. The sources of supply of funds

comprise individual investors, corporate and institutional investors, investment

intermediaries, financial institutions, commercial banks and Governments. The

unorganized sector consist of Indigenous bankers and private money lenders, here

the demand comes from agriculturists, private individuals for consumption rather

than production

Components of Capital Market

Primary

Market

Secondary

Market

Financial

Institutions

Capital

Market




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New Issue Markets (or) Primary Markets

The new issue market represents the pr imary market where new securities that is

shares and debentures that have never been previously issued or offered. The prime

function of Primary market is to facilitate the transfer of funds from the willing

investors to the entrepreneurs, setting up new corporate enterprises or going in for

expansion, diversification, growth or modernization. Besides helping corporate

enterprises in securing their funds, the new issue market canalizes the savings of

individuals and others into investment.

Operational Definition of Concepts:

BASIC TERMS :




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y Equity Shares : an equity share, commonly referred to as ordinary

share, also represents the form of fractional ownership in which a shar

y Shareholder, as a fractional owner, undertakes the maximum

entrepreneurial risk associated with a business venture. The holders of

such shares are members of the company and have different types of

voting rights. There are other types of investment instruments in the

capital market such as preference shares, cumulative preference

shares, debenture, bonds, government securities etc.,

y Preferred stock / Preference shares : Owners of this kind of stock

are entitled to a fixed dividend to be paid regularly before the

dividend can be paid on equity shares. they also exercise claims to

assets, in the event of liquidation, senior to the holders of common

stock but junior to the bondholders. Holders of preferred stock

normally do not have voting rights.

y Debentures : Are issued by a company with a fixed rate of interest

attached to it, usually payable half yearly on specific dates and

principal amount repayable on a particular date on redemption of the

debentures.

y Primary market : The primary market refers to new issues of shares

by new companies as well as existing companies. In the primary




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market, securities are offered to the public for subscription for the

purpose of raising capital or fund.

y Secondary market : The Secondary refers to the stock exchange

where securities are traded after being initially offered to the public in

the primary market and / or listed on the stock exchange. As a result

of significant changes in the recent past, particularly computerization,

online trading, dematerialization, screen-based trading, investors are

dealing in a much more healthy and transparent market.

y SEBI : The Sebi is the regulatory authority established by the

Government of India to protect the interests of the investors in

securities and to promote the development of, and to regulate, the

securities market and for matters connected therewith and incidental

thereto.

y Broker / Stock Broker : Is a member of a recognized stock exchange

who is permitted to do traders on the trading system of different stock

exchanges. He is enrolled as a member with the concerned exchange

and is registered with Sebi.




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y Sub Broker : A sub broker is a person who is registered with Sebi as

such and is affiliated to a member of a recognized stock exchange.

The sub broker is authorized by the broker to do trades on.

y Depository : A depository is an organization which hold securities of

investors in electronic form at the request of the investors through a

registered depository participant. It also provides services related to

transactions in securities. At present two depositories, viz National

Securities Depository Limited (NSDL) and Central Depository

Services (I) Limited (CDSL), are registered with Sebi.

y Depository participant : a depository participant (DP) is an agent of

the depository through which it interfaces with the investor. A DP can

offer depository services only after it gets proper registration from

Sebi. Just as banking services can be availed of through a branch,

depository services can be availed of through a DP.

y Dematerialization : The process of transforming security holdings in

physical form to those in electronic form through a DP.

y IPO / Public Issue : Initial public offering (IPO) is when an unlisted

company makes either a fresh issue of securities or an offer for sale of




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its existing securities or both for the first time to the public. This

paves way for listing and trading of the Issuer¶s securities.

y Book Building : a process undertaken by which a demand for the

securities proposed to be issued by corporate body is elicited and built

up, and the price for the securities is assessed on the basis of the bids

obtained for the quantum of securities offered for subscription by the

issuer. This method provides an opportunity to the market to discover

price for securities.

y Firm Allotment : Allotment on firm basis indicates that allotment to

the investor is on firm basis. Any subscriber who has applied in an

IPO is assured that he will get some shares if not all applied for.

y Listed Company : Shares which can be traded on the recognized

stock exchanges are listed shares and such compan9ies are called

listed companies. Once the shares are allotted by new companies, the

same get listed on the stock exchanges and investors can trade

thereafter.

y Delisting of company (its shares) : permanent removal of securities

of a listed company form a stock exchange as a penalizing measure at

the behest of the stock exchange for not making submissions /




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complying with various requirements set out in the listing agreement

within in the time frames prescribed.

y Analyst : A Firm / Company / an individual who is engaged either on

his own behalf or on behalf of any other firm or organization that is

regularly publishing securities recommendations based on research

either through print media and /or electronic media.

y Bull Market : A rising market with abundance of buyer sand

relatively few sellers. In bull phase of the market the share prices

move upwards.

y Bear Market : a weak or falling market characterized by the

dominance of sellers. In bear phase of the market the share prices goes

down.

y Mutual Fund : A mutual fund is set up in the form of trust, which has

sponsor, trustees, asset management company (AMC) and custodian.

The trust is established by a sponsor or more than one sponsor who is

like the promoter of a company. The trustees of the mutual fund holdits property for the benefit of the unit-holders. An asset management

company (AMC) approved by Sebi managers the funds by making

investments in various types of securities.




SHAREKHAN LTD.


y Net Asset value (NAV) : The current market worth of a mutual

fund¶s share. A fund¶s net asset value is calculated by taking the

fund¶s total assets, securities, cash and any accrued earnings,

deducting liabilities, and dividing the remainder by the number of

units outstanding.

y FII (Foreign Institutional Investor ) : An Institutional established

or incorporated outside India which propose to make investment in

India.

y Institutional Investors : Organizations which invest, including

Insurance companies, depository institutions, pension funds,

investment companies, and endowment funds.

INVESTING & TRADING TERMS

y Margins : amount to be deposited with the broker to take an

exposure in the shares. As share trading is risky, a broker has to

collect certain margin from the clients.




SHAREKHAN LTD.


y Offer : the lowest price at which someone is willing to sell a security.

Also referred to as Ask.

y Bid : The highest price at which someone is willing to buy a security.

y Intra-day trading : buy and sell of securities within the same

settlement so that the net obligation is zero. Intra-day trading is done

by speculators. Investors generally do the delivery based traders.

y Intra-day Profit / Loss : the difference between the price of buy and

sell is a profit or a loss. If the selling price is higher then it is intra-day

profit and vice versa.

y Delivery ± based trading : transacting on the stock exchange with a

view to take or give the delivery of shares. Delivery transactions are

generally done for long term / short-term investments.

y Limit order : an order to buy or sell a specified number of shares of a

security when a specified price is reached.




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y Market order : an order to buy or sell a specified number of shares of

a security at the current prevailing price. This type of order gets

executed at the price which is offered by counter party.

y Long position : a position showing a purchase or a greater number of

purchases than sales. A long position can be closed out through the

sale of an equivalent quantity.

y Short Position : a position showing a sell or a greater sell than

purchases. A short position is taken if the investor is of the view that

share prices will go down. A short position can be closed out through

the buy order of the same quantity.

y Contract Note : a note issued by a broker to his client setting out the

details of the trade done on the stock exchange, with all details such as

name of securities, quantity, traded price, brokerage charged, other

charges if levied, net obligation (amount payable or amount receivable

from client). Many brokers issue contract note cum bill.

INDEX BASED CIRCUIT BREAKERS




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y (Nifty / Sensex) : The index ± based market wide circuit breaker

system is applied to curb excessive speculation in the stock market ; it

is applied by the stock exchange authorities when the index sports or

plunges by more than a specified percent. Trading is then suspended

for some time to let the market cool down.

y Securities based price bands / circuit filters : the range within

which the price of a security is permitted to move within a given

period (settlement). Currently there are separate price bands on

different scripts such as 2% , 5%, 10% and 20% depending on the

criteria defined by the stock exchanges. It is to be noted that the

scripts which are available for trading in the derivatives segment do

not attract any price bank.

y Rolling settlement : in a rolling settlement, each trading day is

considered as trading period and trades executed during the day are

settled based on the net obligations for the day. Currently rolling

settlements are settled on a T+2 basis, i.e., on second working day.

y Brokerage : commission payable to the stockbroker for arranging

sale or purchase of securities. The scale of brokerage is officially

fixed by the stock exchange. Brokerage scales fixed in India are the

maximum chargeable commission.




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y Closing Price : The rate declared by the exchange as closing price of

the security at the end of a trading session. The closing price is

calculated by exchange as per predefined formula.

y Depth of Market : the number of shares of a security that can be

bought or sold at the best bid or offer price.

y Haircut : haircut is the arbitrary reduction in the value of security, to

calculate the risk cover. Haircut is applied on the share prices or any

other collateral kept with broker / exchange.

y Marked to market ( M to M) : the process whereby the book value

or collateral value of a security is adjusted to reflect current market

value. Generally M to M losses are considered and profits are not

credited while calculating the value of collateral.

y Settlement (Settlement number) : for administrative convenience, a

stock exchange divides the year into number of settlement periods so

as to enable members to settle their trades. All transactions executed

during the settlement period are settled at the end of the settlement

period.




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y Settlement date / Pay-in or Pay-out day : the date specified by the

exchange for delivery of securities and funds. The day on which the

members of a stock exchange pay or receive the amounts and

securities due to them are called pay-in or pay-out day.

y Securities Transaction Tax (STT) : Securities Transaction Tax is a

tax being levied on all transactions done on the stock exchanges at

rates prescribed by the Central Government from time to time.

Pursuant to the enactment of the Finance (No.2) Act, 2004, the

Government of India notified the Securities Transaction Tax Rules,

2004 and STT came into effect from October 1, 2004.

RESEARCH DESIGN

Introduction :

The Indian capital market has gone through a sea change. From that of business

dominated by few individual players institutional members, as did trading open

outcry and hidden deeds to screen best and transparency, facilitated by

modernization of the trading systems. The establishment of a settlement guarantees




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scheme has removed counter party risk in trading. With the advent of automated

trading brought with it several associated benefits such as transparency in trading

and equal opportunity for market players all over the country. The market ability of

different financial products in the secondary market has gained much importance

with increasing competition between the institutions and also the different

products. Hence an analysis of different financial products in the secondary market

offered by Sharekhan Ltd., is tested upon the criteria of customer focus, Investment

analysis, risk analysis and management ability.

Marketing of Financial Products :

In this new competitive environment and globalize trading practices, the

marketing of financial products assumes greater significance. Today¶s financial

market require new strategies to survive and continue to operate. They have to

adopt new marketing strategies and tactics which enable them to capture the

minimum opportunities with the lowest risks in order to enable them to survive and

meet the tough competition form global players of domestic and foreign origin.

Many of the existing firms could not cope with this new environment. Most of

them sought to strengthen themselves by merges and acquisitions, diversification

or closure of some business lines which are uneconomical. Others have met the

challenges by better management talent adoption of a new organization structure,

strengthen of the information system and technology and drastic changes in their




SHAREKHAN LTD.


marketing strategies. Adoption of all risk management strategies, soundly

formulated business plans, acquiring new innovative talents, SWOT analysis and

correction of weakness and threats choice making full utilization of their strengths

and opportunities.

With the advent of liberalization of economy and several pragmatic measure

undertaken by the government, the capital market has undergone a radical change.

There has been significant increase in the number of investors, Market

capitalization on the stock exchanges has also increased manifold. The main

objective of this study is to analysis the marketability of different financial

products with special reference to the secondary market dealings. This study has

also been under taken in the context of Sharekhan Ltd., in particular to analyze

there different financial product offered by them, to analyze the organizational set-

up policy formulation and implementation and other areas pertaining to on-line

trading of shares in general.

Statement of the problem :

Investment in stock market is gaining more significance in recent years with the

drastic change in the index compared to a decade ago. Stock market investment has

attracted all the other sectors of finance, as a result mutual funds, market based




SHAREKHAN LTD.


insurance scheme (ULIP) has emerged. India ranked in top 10 countries in terms of

the market capitalization of its stock market.

The Indian capital market has witnessed an unprecedented growth in the past

few years, facilitated by modernization of the trading system. The criteria of tough

competition between the different institutions and the various financial products

offered by these concerns has led, to analyze the marketability of the financial

products with special reference to secondary market dealings, in the context of

Sharekhan Limited in particular.

Scope of the Study :

This study has been undertaken to understand the concept and process of

marketing of financial products in the secondary market, to analyze the

perceptions and attitudes of investors regarding different financial products

offered by the Institution. It also covers the changes in investment habits of

investors as impacted by marketing. The general public is not completely

aware about different financial products offered, its profitability, risk

involvement, lock-in period of investment and functioning of stock market.

The study covers the geographical area of Bangalore City.

Need for the Study :




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Investment in stock market has gained more significance in the recent years. The

public are completely aware about the details and process of dealing in securities a

pilot study conducted among investors in Bangalore city has given a direction to

this study by analyzing the marketability of different financial products offered by

the stock market and the profitability of dealing with these financial products.

Hence this study has been undertaken with the following objectives.

Objectives of the Study :

1. To study the nature and scope of marketing of financial products in

the context of Indian Financial systems.

2. To analyze the organizational setup and policy formulation and

implementation in connection with online trading of securities.

3. To know the satisfaction level of the customer towards Sharekhan ltd.

4. To List the finding and offer suggestions for further improvement of

services offered by Sharekhan Pvt. Ltd. in particulars.

Methodology :




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The Methodology of research adopted in non participant direct observation,

personal structured interview with the executives at various levels of the

organization being studied and administering structured questionnaires to the

account holders.

Tools and techniques of data collection :

The primary data has been collected through :

(a) Non-participant observation

(b) Personal structured interview with the help of a specially formulated

interview ± schedule.

The source of secondary data include :

1. Company Profile

2. Articles from the Newspaper

3. Worldwide Web

4. Books and Journals

Sample Design:




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Random sampling is applied for the sample survey of the account holders of

Sharekhan Pvt. Ltd.

The sample size for analyzing the perceptions and attitude of investors in relation

to investment criteria is 25.

The sample size for summarizing the findings of the front office services and back

office service offered by Sharekhan Ltd. is .

The sample size for summarizing the source of information about different

financial products by Sharekhan Ltd. is .

In all about 85 respondents were interviewed.

Limitations of the study:

The objective of this study is to understand the conditions prevailing among the

investing public. Considering the cost involved, time factor and lack of awareness of

efficient data gathering techniques and tools for analysis, all the online-share trading

public may not be covered. It may not be possible to arrive at the exact value of the

findings. All study is limited to the Bangalore only.




SHAREKHAN LTD.


DATA INTREPETATION & ANALYSIS

Analysis of customer satisfaction towards the Stock brokering

company

Table -1

The preference of investors with respect to demat and physical shares

is classified under four age groups.

Age Group Physical Demat Both

18-30 6 23 4

31-45 8 18 6

46-60 8 21 2

>60 5 12 1




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Table -1 shows The highest preference of dematerialized shares is in the age

group of 18-30 and the highest preference for physical shares is in the age group

of 46-60. Overall the investors prefer dematerialized shares to physical shares.

0

5

10

15

20

25

18-30 31-45 46-60 >60

Physical

Dematerialized

Both




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Table 2 Showing Occupation of the Respondents in investing share

market

Table : 2

Occupation No. of Persons Percentage (%)

Business 17 20

Executive 14 17

Professional 12 14

Employed 18 21

Housewife 5 6

Student 16 18

Other 3 4




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An analysis of chart 2 shows Businessman, Executives and Professionals make

up 50% of the total respondents. They have experience and knowledge about the

share market. The number of students, which is around 18%, shows that young

people want to start investing in shares and gain knowledge. Housewives are also

getting into shares as their numbers have started to appear now.

0

5

10

15

20

25




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Table 3 showing opinion about the courtesy of the staff .

Table : 3

Particulars No. of respondents Percentage

Pleasant 39 46

Friendly 36 42

Unpleasant 8 9

Rude 2 3

0

46

42

93

No. of respondents

Pleasant

friendly

Unpleasant

Rude




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As seen from chart 3, 46% of the investors said that courtesy of the staff

pleasant , 42% said friendly , 9 % unpleasant and 3% claim about rude.

Table 4 and chart showing problem faced by respondents

regarding parking space

Table : 4

Responses No. of Persons Percentage (%)

yes 58 68

No 27 32




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As seen from table 4, Out of 85 respondents , 68% told that he faced the

problem while parking while 32% person told no.

0 10 20 30 40 50 60 70

yes

no

68

32

PROBLEM FACING IN PARKING




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Table 5 Showing Respondents opinion about the ambience of and comfort :

Table : 5

Particulars No. of Investors Percentage

Excellent 15 17.64

Good 28 32.94

Satisfactory 34 40

Not Satisfactory 8 9.42




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An analysis of chart 4 shows that 15 investors (17.64%) expressed the opinion

excellent about the ambience and comfort at the Depository Participant office of

Sharekhan. 28 Investors (32.94%) of the investor respondents feel the ambience

17.64

32.9440

9.42

No. of Investors

Excellent

Good

Satisfactory

Not Satisfactory




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and comfort of Sharekhan is good and 34 respondents (40%) say they are

satisfied and the rest (9.42%) are of the opinion not satisfactory.

Table 6 showing opinion about the brokerage charges.

Table : 6


Reasonable 13 15

Expensive 55 65

Normal 14 16

No comments 3 4




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As seen from chart 6 . out of the 85 respondent only 15% people told that

brokerage charge is reasonable and 65 % told it is expensive. 16% told it is

normal

Rest of them didnt give any comment

Table 10 showing experience for opening demat account in

sharekhan .

0

15

65

16

4

No. of respondents

Reasonable

Expensive

Normal

No comments




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Table : 10


Easy 15 18

Good 52 62

Satisfactory 8 9

Not Satisfactory 10 11

0

18

62

9

11

No. of respondents

Easy

Tedious

Vague

Difficult




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As seen from chart 10, 62% told tedious documentation while only 18% told

it is easy

Table 11 and chart showing status of the facility provided

Table : 11

Product / Service No. of Persons Percentage (%)

Happy 32 38

Satisfied 45 53

Not satisfied 8 9




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As seen from table 11, 38% person told that they are happy with the facility

And 53% are satisfied and 9% not satisfied.

38

53

9

0

happy

satisfied

not satisfied




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Table 12 and chart showing Investment in different products

of Sharekhan

Table : 12

Product / Service No. of Persons Percentage (%)

Equities 47 55

Derivatives 32 38

Commodities 6 7




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As seen from table 12, many respondents invest in derivatives and equities

compared to commodities. Almost 38% of the business is from derivatives and

55% of the business in equities and remaining 7% towards commodities.

55

38

7

0

Equities

Derivatives

Commodities




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Table 13 showing opinion about overall rating about

sharekhan .

Table : 13


Excellent 17 20

Good 33 39

Satisfactory 18 21

Not Satisfactory 17 20




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As seen from chart 13, 20% customer told Excellent , 39% told good And 18%

satisfactory

0

20

39

21

20

No. of respondents

Reasonable

Expensive

Normal

No comments




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FINDINGS :

1. The age group between 18-30 project both physical and dematerialized

shares. the age group from 46-60 prefer dematerialized shares. overall the

investors prefer dematerialized share.

2. The Businessmen, Executives and Professionals make up 50% of the total

respondents. They number of students, which is around 18%, shows that

young people want to start investing in shares.

3. Only 15% of the investors find the price tariff to be reasonable.

4. 42% of the investors find the curtsey of the staff to be friendly.

5. The investors, around 32.94% find the ambience and comfort satisfactory

6. Investors suffer for parking near Sharekhan

7. The majority of the investors are satisfied with the facilities provide by




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Sharekhan.

8. 38% of the business is given through derivatives in Sharekhan Ltd.

Remaining 55% is given by equities and 7% of business from commodities

trading.

9 The overall rating of the Sharekhan consultants is good.

SUGGESTIONS

Display the requirements to open an account

Additional staff to be provided due to work load

Firm can work on Sunday¶s to help professionals

Small payments to be paid in cash.

Reduction of charges

Emails should be answered

Statement of holdings should be send once in every fifteen days according to

the NSDL procedure.




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Provide adequate market news to online Inputs

Send the account holders statements on time.

Upgrade the net for checking accounts.




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CONCLUSION

The process of economic liberalization in India began in 1991. As part of

this process, several capital market reforms were carried out by the capital market

regulator securities and Exchange Board of India. One such measure was to allow

trading in equities. Based derivatives on stock exchanges in 2000. The step proved

to be a shot in the arm of the capital market and volumes board within three years.

The success of the capital market reforms motivated the government to kick off

refers in the secondary market. Indian Investor community has undergone sea

changes in the past few years. India now has a very large investor community now

has a very large investor population and shall increasing volumes of trades.

The growing importance of the Indian stock market place may be noted in terms

of increased mobilization of funds growing number of investors account.

Indian stock market industry has remained cantered around limited product

range. Efforts to expand and develop the market innovative products have beennegligible. This has happened due to the tendency to avoid risk, inability to

understand future market development and changes in investor preference.




SHAREKHAN LTD.


The absence of product diversification and a confused market situation has been

made more by the absence of an innovative marketing network. Online is

considered as one of the innovative network. The product range offered by stock

broking firms needs to be redesigned to cater the changes in the short term,

medium term and long term savings and investment markets.

The innovative product should meet the need of not only the conventionalrisk-averse type of investors. The future of the Indian economy belongs to the debt

market. Therefore security dealing firms should take early initiative to capture the

potential with innovative schemes and products.

Management is considered to be a key for the operational efficiency of any

business venture. This factory becomes even more crucial for service ventures such

as stock broking business venture. What stock broking and emerging market

potential, investor preference and macro-economic fundamentals.

The market success of any new product particularly financial product depends

largely on its acceptance by consumers, in the case investors. Stock market

industry must undertake a well-designed and comprehensive program of investor

education especially aimed at investors in rural and semi-urban area. However this

has been mostly neglected in India. In India most of the broking business comes




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from the small investors and efforts shall be concentrated about serving them

efficiently, and this would help them in being a good intermediary for providing

various financial services due to its reach to the mile.

SEBI has been playing a significant role in the regulation of stock market

SEBI¶s steps like dematerializing, and trading through net etc., has increased the

transparency of the trading than before.

Even though SEBI has taken so many steps to make our stock market trading

system more transparent, always we can see that one or another scams taking place

in stock market. The government has to take necessary steps to avoid all these kind

of bad things, which rule our stock market.

In the global market place no industry can afford to be struck by inertia. But it is

management, which is crucial to the success of any business operation.




SHAREKHAN LTD.


BIBLIOGRAPHY

Books

1. Dalal Street Journal¶s STOCK MARKET BOOK

2. How to make money trading with Charts Ashwani Gujral

2. Investing Rules From the Masters Philip Jenks

3. Intelligent Stock Market Investing N.J. Yasaswy

Journals & Magazines

1. Business World

2. Business India

3. Business Today

4. Capital Market

5. The Economic Times

6. Business Line




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INTERVIEW SCHEDULE

(For dealers and officers)

y Profile of the Company

y Growth and Development of the Company

y Present Status

y Various Departments and its functioning

y Process of functioning of Stock Market

y Process of Opening an account

y Different ways of Investment in shares

y Process of Buying and Selling securities

y Process of Settlement

y Process of Trading

y Process of General Selling in Financial Market




SHAREKHAN LTD.





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ANNEXURE - II

QUESTIONAIRE

1. Name :

2. Client ID (if you are the existing customer)

3. Age :

4. Your Preference :

a. Physical

b. Demat

c. Both

5. Occupation :

a. Business

b. Executive

c. Professional

d. Employed

e. Housewife

f. Student




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6. How would you rate the courtesy of the staff?

a. Pleasant

b. Unpleasant

c. Friendly

d. Rude

7. Do you have the problem for parking near Sharekhan Limited?(Yes/No)

8.Your opinion about the ambience and comfort at Sharekhan

a. Excellent

b. Good

c. Satisfactory

d. Not Satisfactory

9. Your view about the Price Tariff (brokerage charge):

a. Reasonable

b. Expensive

c. Normal

d. No Comments

10. Your experience for opening a Demat account is:




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a. Easy

b. Tedious

c. Vague

d. Difficult

11. Are you happy with the facilities provided?

a. Happy

b. Satisfied

c. Not Satisfied

12. Which type of service or product is best offered in Sharekhan?

a. Equities

b. Derivatives

c. Commodities

13. What would be your overall rating about Sharekhan?

a. Excellent

b. Good

c. Satisfactory

d. Not Satisfactory

Thank You for your valuable co-operation.




SHAREKHAN LTD.

share khan 2

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